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1

Which asset is often revalued in a business’s accounts?

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

Open

2

Which statement is correct?

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

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

Open

3

The principle of prudence in the preparation of financial statements is practised through the application of which action?

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

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

Open

4

What is evidence that a company’s financial statements are true and fair?

3. Financial accounting (A Level)  →  3.2. Regulatory and ethical considerations

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

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

Open

5

The following items appear in the books of a builder. $ rent of own home 3 000 rent of builder’s yard 2 500 housekeeping expenses 2 000 overalls loose tools equipment 3 000 lorries 1 500 rates on business premises rent of business premises 3 500 assistant’s wages 3 000 What is the total business expenditure?

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

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

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

Open

6

The table shows details relating to a company’s banking transactions at 31 December. $ balance at bank as per bank statement 22 650 uncleared lodgements 3 110 unpresented cheques 6 290 bank credit recorded twice by bank in error Which balance for cash at bank should appear in the statement of financial position at 31 December?

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

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

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

Open

7

A company’s accounts showed a gross profit for the year of $32 500. After the draft financial statements were prepared it was found that the opening inventory had been overstated by $2400 and the closing inventory had been understated by $3400. What is the corrected gross profit for the year?

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

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

Open

8

A manufacturing company has the following information for the year ended 31 December. $ purchase of raw materials 58 000 wages of machine operators 97 000 depreciation on factory plant 15 000 opening inventory of raw materials 10 000 closing inventory of raw materials 8 000 wages of factory supervisor 18 000 factory light and heating costs 22 000 What is the prime cost for the year?

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

9

The table shows information about four partners in a partnership. Which partner has the greatest net reward from interest on capital and interest on drawings?

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

Open

10

In which account should a partner’s drawings appear in the partnership’s end-of-year financial statements?

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 the assets and liabilities of a club. $ non-current assets 10 000 cash at bank 6 400 electricity owing rent prepaid subscriptions: in arrears 5 700 in advance 3 800 How much is the accumulated fund?

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 company purchases a product that costs $120. The company expects to make a gross profit margin of one-third. What is the company’s mark-up?

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

13

The inventory records of a business show the following information for product X. units cost per unit $ 1 January opening balance 3 January receipts into inventory 8 January inventory issued – What is the value of the inventory issued on 8 January using the first in first out (FIFO) method?

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

14

A company has an issued share capital of 200 000 6 % cumulative preference shares of $1 each fully paid and 800 000 ordinary shares of $1 each fully paid. Assuming that the company earns no profit in the year, which statement is correct?

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

Open

15

A company raises finance by issuing debentures. What is the effect on net current assets and short term profits?

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

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

4. Cost and management accounting (A Level)  →  4.4. Investment appraisal

Open

16

A business finds that it is unable to pay its trade payables because of a poor cash flow. What should it do to improve its cash flow?

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

17

Which accounting ratio is used to assess working capital management?

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

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

Open

18

The following are extracts from a company’s financial statements. $ profit for the year before finance charges 100 000 issued share capital 200 000 reserves 80 000 non-current liabilities 260 000 What is the company’s return on capital employed?

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

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

Open

19

Owusu Limited has a constant level of annual sales and a constant gross margin. Each year the inventory increases. What effect does this have on inventory holding and inventory turnover?

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

20

Which item accounts for the difference between the current and liquid ratios?

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

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

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

Open

21

Arun wishes to invest in a business with a skilled workforce which will make a profit in each of the next five years. Which aspect of financial statements helps Arun to decide where to invest?

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

Open

22

Which statement best describes a sunk cost?

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

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

Open

23

A business has the following costs. raw materials $3 per unit direct labour $2 per unit stepped costs of $5000 for every 10 000 units What is the cost of producing 15 000 units?

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

Open

24

Which statement best describes fixed costs?

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

Ehsen Nadeen manufactures one product, the miji. Each miji has a selling price of $10 and variable costs of $8 and annual fixed costs total $12 000. Ehsen wishes to make a profit of $14 000 a year. How many mijis should Ehsen make each year?

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

26

Which costing method is most suitable for fixing a selling price and which for deciding whether to make or buy in a product?

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

Open

27

A business provides the following data. output level direct labour hours 8 500 9 250 total overheads $123 250 $124 563 The variable overhead cost is $1.75 per direct labour hour. What is the fixed overheads cost when 8500 labour hours are used?

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

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

Open

28

The following information is forecast for May. units opening inventory 25 200 closing inventory 28 200 $ marginal cost profit 100 800 absorption cost profit 120 300 What is the overhead absorption rate?

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

29

The manufacture of which product is best suited to job costing?

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

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

Open

30

What is the purpose of a job cost sheet?

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

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

Open