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1

Which item is revenue expenditure?

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

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

Open

2

A customer paid a deposit in advance for goods to be supplied at a later date. How should this be recorded in the seller’s books?

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

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

Open

3

On 1 October 2004 a company purchased machinery for $26 000. It was decided to depreciate the asset using the reducing balance method at a rate of 20 % per annum. On 30 September 2006 the asset was sold for $12 000. What is the profit or loss on disposal?

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

A trial balance shows: Dr $ Cr $ provision for doubtful debts debtors 28 000 $2100 of the debtors are irrecoverable and are to be written off. The owner of the business wishes to make the provision for doubtful debts equal to 5 % of his outstanding debtors. What is the amount debited to the profit and loss account for the provision for doubtful debts?

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

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

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

Open

5

An item of stock originally cost $5000, but has deteriorated badly and is written down to its estimated net realisable value of $2000. Which accounting principle has been applied?

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

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

Open

6

A company changes from the straight-line method of depreciation to the reducing balance method. Which accounting principle has not been applied?

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

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

Open

7

The cost of a new machine has been debited to the repairs account. What error is this an example of?

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

Open

8

The following information relates to a business: $ opening debtors 280 000 cash received during the year 520 000 discounts allowed during the year 30 000 bad debts written off during the year 15 000 closing debtors 265 000 What were the sales during the year?

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

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

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

Open

9

The total of the balances in the purchases ledger does not agree with the balance on the purchases ledger control account. It is found that a credit balance of $3100 on a supplier’s account has been listed as a debit balance. What is the effect of correcting the error on the total of the purchases ledger balances?

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

Open

10

Which error would affect the balancing of a trial balance?

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

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

Open

11

A trader, whose purchases are all on credit, does not keep double entry records. The following information is available: $ opening creditors 51 660 payments to suppliers during the year 212 760 closing creditors 56 340 The discount received for the year amounted to $1000. What were the purchases for the period?

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

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

Open

12

A business has two items in stock which need to be repaired before sale. cost $ selling price $ repair costs $ item 1 2 160 2 450 item 2 3 190 3 060 What is the total stock value of these items?

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

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

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

Open

13

A business does not keep complete accounting records. The following information is known: $ capital at start of year 52 000 capital at end of year 55 000 owner’s drawings in year 13 000 capital introduced during the year 25 000 What is the net profit/loss for the year?

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

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

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

Open

14

The following information is available for the partnership of Atul and Mansoor at 31 December: $ net profit before appropriations 60 000 salary of Atul 9 000 drawings: Atul Mansoor 12 000 13 000 interest on capital: Atul Mansoor Residual profits are shared between Atul and Mansoor in the ratio 2 : 1. What is Mansoor’s share of total profit for the year?

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

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

Open

15

At the beginning of the financial year stock was valued at $15 000. During the year, sales of $21 000 and purchases of $18 000 were made. Unfortunately, all stock was stolen on the last day of the financial year. Goods are marked up by 50 % to calculate selling price. What is the cost of the stolen stock?

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)  →  1.2. The accounting system

Open

16

A company transfers manufactured items from factory to warehouse at cost plus 10 %. This year the transfer value was $93 500 and at the end of the year the closing stock was 20 % of the year’s production. How will the stock of finished goods be shown...

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

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

Open

17

A company receives payment for 20 % of its sales in the month of sale, 50 % in the following month and 30 % two months after the month of sale. The table shows sales for four months. $ January 180 000 February 240 000 March 270 000 April 220 000 How much were total cash receipts in April?

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

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

Open

18

A company makes a bonus issue of shares. What is the effect on the net assets and the reserves in the balance sheet?

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

Open

19

The capital structure of a company is shown...

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

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

Open

20

What does the ratio of current assets / current liabilities show?

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

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

Open

21

A business turns over its stock 5 times a year. Average stock is $54 000 and sales are made at a mark-up of one third. How much are the sales?

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

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

Open

22

A company has the following information in its balance sheet: $000 taxation due debtors bank overdraft stock proposed dividend creditors What is the liquidity (acid test or quick) ratio?

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

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

Open

23

A business has cash sales of $69 030 and credit sales of $1 406 070 in a year (360 days). The debtors’ collection period is 40 days. What is the closing debtors’ balance?

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

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

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

Open

24

A firm has calculated the following accounting ratios for the year ended 30 June: year ended 30 June 2005 30 June 2006 gross profit on sales 30 % 33 % net profit on sales 15 % 14 % What could explain the changes in the percentages?

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

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

Open

25

The break-even chart for a product is shown...

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

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

Open

26

What will cause under-absorption of fixed production overheads?

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

27

The cost of producing 2000 units of a product is shown...

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

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

Open

28

A company makes two products. product X Y $ $ selling price variable costs per unit maximum sales 4 000 14 000 Fixed costs are $48 000. 4000 units of X are sold. How many units of Y must be sold to break even?

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

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

Open

29

A hospital budgets for overheads totalling $11 500 000 for a financial year. It expects to treat 25 000 patients in the year. Each patient stays an average of 10 days and the hospital absorbs overheads on a patient/day basis. Its direct costs for the year are budgeted at $25 000 000. What is its overhead absorption rate?

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

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

Open

30

A video cassette has a selling price of $10. cost per video cassette $ direct materials 1.20 direct labour 0.80 factory overhead 1.40 royalty payment 1.00 administration overhead 0.60 What is the contribution per video cassette?

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

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

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

Open