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1

Which accounting treatments illustrate the use of the matching concept?

1. Financial accounting (AS Level)  →  1.3. Accounting for non-current assets

Open

2

Which item should be treated as capital expenditure?

1. Financial accounting (AS Level)  →  1.3. Accounting for non-current assets

Open

3

During the year ended 31 December 2012 a business purchased a vehicle for $23 500. On 30 September 2015 it was sold for $3500. Depreciation was charged at 20% per annum using the straight line method. A full year’s depreciation was charged in the year of purchase and the year of disposal. What was the profit or loss on disposal of the vehicle?

1. Financial accounting (AS Level)  →  1.3. Accounting for non-current assets

3. Financial accounting (A Level)  →  3.1. Preparation of financial statements

Open

4

Why is a sales ledger control account used?

1. Financial accounting (AS Level)  →  1.4. Reconciliation and verification

1. Financial accounting (AS Level)  →  1.2. The accounting system

Open

5

A purchases ledger control account was prepared but contained a number of errors. purchases ledger control account $ $ balance b/d 45 750 cash paid to credit suppliers 19 730 credit purchases 20 380 cash discounts received 1 500 cash purchases 19 440 refunds from credit suppliers 3 500 balance c/d 60 840 85 570 85 570 What was the correct balance carried down?

1. Financial accounting (AS Level)  →  1.4. Reconciliation and verification

Open

6

A suspense account shows a debit balance of $350. What could have caused this?

1. Financial accounting (AS Level)  →  1.4. Reconciliation and verification

1. Financial accounting (AS Level)  →  1.2. The accounting system

3. Financial accounting (A Level)  →  3.1. Preparation of financial statements

Open

7

The following balances related to Ladha’s business. at 31 March 2016 $ at 31 March 2015 $ total assets 388 000 345 000 total liabilities 84 000 75 000 net assets 304 000 270 000 drawings during the year 22 000 20 000 What was Ladha’s profit for the year ended 31 March 2016?

3. Financial accounting (A Level)  →  3.1. Preparation of financial statements

1. Financial accounting (AS Level)  →  1.6. Analysis and communication of accounting information

1. Financial accounting (AS Level)  →  1.3. Accounting for non-current assets

Open

8

A trial balance showed a provision for doubtful debts as $1350. Trade receivables were $50 320 which included a debt of $500 which was irrecoverable. Which entry was required in the provision for doubtful debts account if the closing balance was to be 5% of trade receivables?

1. Financial accounting (AS Level)  →  1.4. Reconciliation and verification

1. Financial accounting (AS Level)  →  1.5. Preparation of financial statements

Open

9

A business provides the following information. $ revenue 140 000 opening inventory 22 000 closing inventory 24 500 purchases 120 000 Goods are sold at cost plus 25%. The owner has taken goods for own use but has not recorded these as drawings. What is the value of the goods taken for own use?

3. Financial accounting (A Level)  →  3.1. Preparation of financial statements

2. Cost and management accounting (AS Level)  →  2.1. Costs and cost behaviour

1. Financial accounting (AS Level)  →  1.3. Accounting for non-current assets

Open

10

The draft financial statements of a business show a profit for the year of $64 000 before taking account of the following: the reduction of the provision for doubtful debts by $300 the purchase of office stationery costing $2400 which has not been entered in the books; only one-sixth of this stationery was used by the year end. What is the corrected profit for the year?

3. Financial accounting (A Level)  →  3.1. Preparation of financial statements

1. Financial accounting (AS Level)  →  1.5. Preparation of financial statements

Open

11

The table shows transactions relating to a product during July. There was no opening inventory. units $ (per unit) purchased sold Of the remaining units, 8 are damaged and therefore have no value. What is the profit for July?

3. Financial accounting (A Level)  →  3.1. Preparation of financial statements

1. Financial accounting (AS Level)  →  1.3. Accounting for non-current assets

Open

12

A trader provides the following financial information for the year ended 31 December. gross margin 20% cost of goods sold $220 000 drawings $7 000 profit for the year $28 000 How much are expenses?

4. Cost and management accounting (A Level)  →  4.3. Budgeting and budgetary control

3. Financial accounting (A Level)  →  3.1. Preparation of financial statements

Open

13

Why is goodwill adjusted in the books of account when a new partner is admitted?

3. Financial accounting (A Level)  →  3.1. Preparation of financial statements

1. Financial accounting (AS Level)  →  1.5. Preparation of financial statements

Open

14

A partnership revalues its non-current assets upwards. What are the ledger entries to record this?

1. Financial accounting (AS Level)  →  1.3. Accounting for non-current assets

1. Financial accounting (AS Level)  →  1.5. Preparation of financial statements

3. Financial accounting (A Level)  →  3.1. Preparation of financial statements

Open

15

X and Y are in partnership. They admit Z as a new partner. The profit sharing ratio will be 2 : 1 : 1 respectively. Goodwill is valued at $100 000. Goodwill is not to be retained in the books of account. Other assets are revalued at $40 000 in excess of their net book value. Z introduces $250 000 cash and office equipment valued at $30 000. What is Z’s capital account balance after his admission?

3. Financial accounting (A Level)  →  3.1. Preparation of financial statements

1. Financial accounting (AS Level)  →  1.5. Preparation of financial statements

Open

16

Which facts about preference shares are correct?

1. Financial accounting (AS Level)  →  1.5. Preparation of financial statements

2. Cost and management accounting (AS Level)  →  2.1. Costs and cost behaviour

Open

17

The table shows year end information for a company. income statement $ statement of financial position $ profit from operations 14 000 5% debenture 2020 30 000 finance costs (1 500) ordinary share capital 70 000 loss on disposal of non-current asset (2 500) share premium account 15 000 profit for the year 10 000 retained earnings 35 000 What is the return on capital employed (ROCE)?

1. Financial accounting (AS Level)  →  1.3. Accounting for non-current assets

1. Financial accounting (AS Level)  →  1.5. Preparation of financial statements

Open

18

A company provided the following information. $ revenue for the year 390 000 year-end non-current assets at cost 260 000 year-end accumulated depreciation 65 000 What was the non-current asset turnover?

1. Financial accounting (AS Level)  →  1.3. Accounting for non-current assets

Open

19

The following information is given in the financial statements of a limited company. $ ordinary shares 1 200 000 general reserve 120 000 retained earnings 710 000 8% debentures 400 000 What is the value of total equity?

1. Financial accounting (AS Level)  →  1.5. Preparation of financial statements

Open

20

Which item is a direct cost?

2. Cost and management accounting (AS Level)  →  2.1. Costs and cost behaviour

4. Cost and management accounting (A Level)  →  4.3. Budgeting and budgetary control

3. Financial accounting (A Level)  →  3.1. Preparation of financial statements

Open

21

Samuel manufactures a single product. Total cost per unit is $70 when production is 100 units per week, and $62.50 when production is 160 units per week. What are the total fixed costs per week?

2. Cost and management accounting (AS Level)  →  2.1. Costs and cost behaviour

2. Cost and management accounting (AS Level)  →  2.2. Traditional costing methods

4. Cost and management accounting (A Level)  →  4.3. Budgeting and budgetary control

Open

22

How is the issue of inventory from stores valued when using FIFO?

2. Cost and management accounting (AS Level)  →  2.1. Costs and cost behaviour

3. Financial accounting (A Level)  →  3.1. Preparation of financial statements

1. Financial accounting (AS Level)  →  1.3. Accounting for non-current assets

Open

23

A business absorbs overheads based on machine hours. During the last quarter it had the following budgeted and actual results. actual overheads $118 505 actual machine hours 6 230 budgeted overheads $126 725 budgeted machine hours 6 850 By how much were overheads over or under absorbed?

2. Cost and management accounting (AS Level)  →  2.2. Traditional costing methods

4. Cost and management accounting (A Level)  →  4.3. Budgeting and budgetary control

Open

24

Actual output exceeds budgeted output. Which cost is higher than budgeted?

2. Cost and management accounting (AS Level)  →  2.1. Costs and cost behaviour

4. Cost and management accounting (A Level)  →  4.3. Budgeting and budgetary control

Open

25

A company manufactures three products. The following information is obtained in respect of next month’s budgeted production. product X product Y product Z contribution per unit $7 $6 $8 contribution per kilo $3 $4 $6 kilos of material required for production The company has been advised that only 1800 kilos of material will be available for production next month. What is the maximum contribution the company can earn?

2. Cost and management accounting (AS Level)  →  2.2. Traditional costing methods

4. Cost and management accounting (A Level)  →  4.3. Budgeting and budgetary control

Open

26

The following information is available. $ direct materials 20 000 direct labour 45 000 direct expenses 6 000 variable overheads 11 000 fixed overheads 38 000 sales 240 000 What is the contribution to sales ratio?

2. Cost and management accounting (AS Level)  →  2.2. Traditional costing methods

3. Financial accounting (A Level)  →  3.5. Analysis and communication of accounting information

Open

27

A company provides the following information. budgeted overheads $136 000 budgeted labour hours 10 568 actual overheads $146 000 actual labour hours 10 110 What is the overhead absorption rate per labour hour?

2. Cost and management accounting (AS Level)  →  2.2. Traditional costing methods

4. Cost and management accounting (A Level)  →  4.1. Activity based costing (ABC)

Open

28

The following information is for a business. $ budgeted fixed costs per month target profit per month budget variable cost per unit selling price per unit Fixed costs are expected to increase by $500 per month and variable costs increase by $5 per unit. Which value of revenue will be required to achieve the target profit?

2. Cost and management accounting (AS Level)  →  2.1. Costs and cost behaviour

4. Cost and management accounting (A Level)  →  4.3. Budgeting and budgetary control

Open

29

The costs of a company that annually sells 10 000 units are as follows. $ direct material 50 000 assembly labour 100 000 factory overheads 70 000 The normal selling price of each unit is $50. How many more units need to be sold to break even if the selling price is reduced to $35?

2. Cost and management accounting (AS Level)  →  2.2. Traditional costing methods

4. Cost and management accounting (A Level)  →  4.2. Standard costing

Open

30

Which statements identify a disadvantage of break-even analysis?

2. Cost and management accounting (AS Level)  →  2.2. Traditional costing methods

Open