Business Transactions MCQs

Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

Updated on March 26, 2023

This set of multiple choice questions (MCQs) focuses on business transactions, helping students in accounting and finance prepare for their exams and interviews.

This MCQ test consists of 13 multiple choice questions with 4 options for each question. Students need to choose one correct answer to move to the next question.

If you find it difficult to answer these MCQs, we recommend studying the articles on business transactions and analysis of business transactions from our explanation section.

If you're ready to take the test, let's start!

1. A business paid out $12,450 in net wages to its employees. In respect of these wages, the following amounts were shown in the statement of financial position.
Pay payable 2,480
National Insurance payable -employees' 1,350
-employers' 1,500
No other deductions were made. Employees' gross wages before deductions were:
2. Books of original entry in a double-entry system of accounting are used to list similar transactions, with the totals being posted to the nominal ledger.
3. Which of the following best explains the imprest system of petty cash?
4. Which of the following is a book of original entry?
5. The following data were extracted from the payroll records of Kleen Ltd. for the month of February 20x1.
Pay 17,000
Employers' NIC 7,500
Employees' NIC 6,000
Cash paid to employees 50,000
The wage expense for the month is:
6. When a purchase invoice is received from a supplier, which two of the following documents would the invoice be checked to?
7. G purchases goods on credit from H for $1,000. $100 of these goods are defective and G returns them to H. What document would H issue to G in respect of the returned goods?
8. In which book of original entry would discounts allowed be recorded?
9. In which book of original entry is VAT on credit sales recorded?
10. In which book of original entry is VAT on purchases from non-credit suppliers recorded?
11. The petty cash float in a business has an imprest amount of $200. At the end of March, vouchers in the petty cash box amounted to $136 and the amount of cash remaining in the box was $54. Which of the following explains the difference?
12. A business has the following payroll costs for a month:
Gross pay 38,600
Income tax 5,400
Employees' national insurance 3,100
Employer's national insurance 3,500
What is the wage cost for the business for the month?
13. Which TWO of the following are source documents that are recorded in an entity's books of original entry?

You can also check:

Business Transactions MCQs FAQs

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.