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1

An item of capital expenditure has been incorrectly treated as revenue expenditure in the accounts of a business. What is the effect of this error on the accounts of the business?

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

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

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2

A business has a bank overdraft of $4800. It pays for materials invoiced at $3000 less a trade discount of 20 % and a settlement discount of 5 %. A cheque for $500 is received from a debtor. What is the bank balance after these transactions?

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

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

Open

3

Which of the following items will be debited to accounts in the purchases ledger?

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

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

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4

The personal spending of the owner of a business is not recognised as a business expense. Which accounting principle is being applied?

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

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

Open

5

A business obtained a machine by means of a hire purchase agreement. It showed the machine in its balance sheet at the cash price of $30 000 although only $10 000 has been repaid. Which accounting principle is involved?

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

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

Open

6

The table shows information from the books of a business at 30 April 2010. details $ credit sales invoiced during financial year 79 000 goods sent to customers on 28 April 2010 and invoiced 4 May 2010 6 100 goods sent to customers during April 2010 on sale or return basis but not sold by 30 April 2010 8 300 What is the amount of sales for the year ended 30 April 2010?

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

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

7

Which item will be entered in a purchase ledger control account?

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

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

Open

8

The total of the list of individual balances in the purchase ledger does not agree with the balance on the purchase ledger control account. When listing the individual suppliers’ accounts a credit balance had been shown...

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

Open

9

Which error will cause an entry in the suspense account?

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

Open

10

A trial balance at 31 December shows: debit $ credit $ trade receivables control account 48 500 2 900 trade payables control account 3 600 34 800 It is then found that an invoice, $900, issued to a debtor on 27 December, has not been entered in the accounting records. What is the correct figure for trade receivables in the balance sheet at 31 December?

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

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

Open

11

During the year ended 31 December, a sports club received $10 860 for subscriptions. The following further information is available. year ended 31 December start of year $ end of year $ subscriptions owing subscriptions received in advance 1 640 1 220 What is the figure for subscriptions in the Income and Expenditure Account for the year ended 31 December?

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

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

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

Open

12

A firm has incomplete accounting records. The following figures are known. $ capital at start of year 20 000 owner’s drawings 7 000 capital at end of year 30 000 How much profit has the firm made during the year?

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

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

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

Open

13

A company calculates factory profit at a mark-up of 20 % on the cost of production. The following information is available. $ inventory of finished goods at cost at 31 December 2007 40 000 cost of goods produced for the year to 31 December 2008 240 000 closing inventory of finished goods at cost plus factory profit at 31 December 2008 54 000 How much will be shown...

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

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

Open

14

The table shows transactions relating to an inventory item during a period. number of units per unit bought cost $16 sold selling price $25 Of the remaining units, 20 are damaged and can only be sold for $10 each. What is the profit for the period?

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

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

Open

15

X, Y and Z are in partnership sharing profits and losses in the ratio 5 : 2 : 3. Y is entitled to a salary of $18 000 per annum. Partners receive interest at 6 % per annum on their capital account balances at the start of the year. At the beginning of the year, capital account balances were: X $30 000 Y $22 000 Z $20 000 The net profit before salary and interest for the year is $140 000. What is Y’s share of the total profits?

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

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

Open

16

L and M are in partnership. Which item should appear in the partnership appropriation account?

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

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

Open

17

A company is set up with an authorised share capital of $3 million. It plans to purchase immediately a factory for $1 million. Preliminary expenses will be $100 000 and the immediate requirement for working capital will be $800 000. It will also require new equipment costing $600 000 in 12 months time. What is the minimum amount the company needs to raise now?

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

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

Open

18

At 1 January 2009 the capital structure of a company was as follows. $ issued share capital 100 000 ordinary shares of $1 each 100 000 share premium account 30 000 On 1 April 2009 the company made a rights issue of 20 000 shares of $1 each for $36 000. On 1 June 2009 a bonus issue of one share for every six in issue was made. The share premium account was used for this purpose. What is the balance on the share premium account at 31 December 2009?

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

Open

19

When is a share premium account opened?

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

Open

20

A company buys and re-sells goods. It has a higher gross profit margin than its rivals. Which reason could explain this?

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

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

Open

21

A business has trade payables of $8000 and a bank overdraft of $2000. Its current ratio is 2 : 1 and its quick (acid test) ratio is 1.5 : 1. What is the value of its inventory ?

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

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’s sales during a 365 day year are shown...

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

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

Open

23

The following information is given about four products. Which product makes the most gross profit?

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

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

24

A soup manufacturer uses batch costing. It produces a batch of 10 000 tins of soup with a direct materials cost of $2500. Direct labour involved 200 hours at a cost of $2000, and overheads are absorbed at the rate of $15 per direct labour hour. What is the cost of a tin of soup?

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

25

The table shows costs at three activity levels. activity levels 65 units 90 units 100 units $ $ $ fixed cost ?

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

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

Open

26

A customer places an order for 20 000 bricks. Which costing method will the supplier use to price the order?

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

Open

27

A company has total production costs of $6000 to make 10 000 units, and $13 000 to make 24 000 units. What is its total cost to make 20 000 units?

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

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

Open

28

A business makes wedding dresses. Each machinist is paid $30 a day and each supervisor $40 a day. Each supervisor can work with up to 10 machinists and each machinist can produce one wedding dress a day. If 95 wedding dresses a day are produced, what is the daily labour cost?

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

29

The graphs show projected sales and cost information for products X and Y. $ quantity product X total cost fixed cost sales $ quantity product Y total cost fixed cost sales Which statement most accurately interprets the graphs?

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

30

A business purchases a vehicle for $10 000. The business depreciates its non current assets at 20 % using the diminishing value method. What is the depreciation charge for year 2?

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

Open