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1

Which 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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2

The accounting year end of a business is 31 October. On 1 April the business rents out part of its warehouse for an annual rent of $6000. Payments were received in equal instalments on 1 April, 1 July, 1 October and 1 January. At 31 October what would the financial statements show?

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

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

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3

Which transaction would increase the current assets of a business?

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

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4

A new machine is purchased at a price of $75 000. In addition, delivery and installation cost is $2500. The business depreciates all non-current assets at a rate of 20% per annum using the straight line method. By how much would this transaction decrease the profit for the year?

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

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5

Which costs may be capitalised as land and buildings?

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

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6

A business had current assets and current liabilities as follows. $ inventories trade receivables trade payables rent receivable A fire destroyed the inventories, but 75% of the loss is covered by an agreed insurance claim. What are the net current assets after the fire?

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

Open

7

The accounting year end for a company is 31 October. The table shows the company’s telephone bill received on 2 December for the three months ended 30 November. $ telephone calls to 30 November rental of equipment for the period from 1 September to 30 November Which accrual should the company make in the financial statements for the year ended 31 October?

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)  →  1.5. Preparation of financial statements

Open

8

A company’s purchases ledger control account showed an opening balance of $24 640 credit. The following information is available for the year. $ purchases journal (including invoice for $910 entered twice) 17 100 sales ledger control account contra credit notes issued by suppliers 1 250 discounts received The purchases ledger control account balance at the year end was $19 870 credit. How much cash was paid to creditors during the year?

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

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

Open

9

A suspense account was opened when a trial balance failed to balance. It was then discovered that returns of $200 had been correctly entered in the supplier’s account but debited in the sales returns account. This was the only error. What was the balance on the suspense account before this error was corrected?

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

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

Open

10

Trade receivables at 31 December 2013 were $350 000. It is later found that $33 000 should be written off as bad debt. The provision for doubtful debts at the year end includes a specific provision of $2500 and a general provision of 4%. What is the net amount of trade receivables at 31 December 2013?

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

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

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

Open

11

A business has a draft profit for the year of $182 750. The following adjustments have not yet been included in the financial statements. a decrease of $2800 in the provision for doubtful debts a prepayment of $3900 for rent receivable What is the actual profit for the year?

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

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

12

June purchased a new machine. She depreciated it at a rate of 40% a year on the reducing balance basis. After two years its net book value was $3600. What was the purchase price?

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

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

Open

13

Which basis should be used to calculate the amount of advertising to be charged to a store with two departments?

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

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

Open

14

The following information relates to the motor vehicles of a business. 1 January 2013 $ 31 December 2013 $ net book value 398 000 480 000 During 2013 the following occurred. Additional motor vehicles costing $195 000 were purchased. A motor vehicle (original cost $80 000) was sold for $24 000 at a profit of $2000. What was the depreciation charge for 2013?

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

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

Open

15

Fred and Perry are in business sharing profits and losses in the ratio 3 : 1. Fred’s capital account balance is $90 000 and Perry’s is $60 000. Bill is introduced as a new partner and invests $50 000 as capital. Goodwill is valued at $20 000 and is not to be retained in the books of account. The new profit sharing ratio will be 2 : 2 : 1. What is the capital account balance of Fred after making the goodwill adjustments?

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

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

Open

16

What is the treatment of life membership subscriptions?

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

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17

What is not considered a source of finance?

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

1. Financial accounting (AS Level)  →  1.1. Types of business entity

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

Open

18

A company issues 500 000 ordinary shares of $1 each for $3 each and $250 000 6% debentures. By which amount will the net assets of the company increase?

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

Open

19

An investor owns 10 000 5% preference shares in Howdo Limited. One year Howdo Limited does not have enough profits to pay the preference dividend. The investor expects the profits to improve and he thinks the directors will pay the missed dividend the following year. Which type of preference shares does the investor own?

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

Open

20

The following financial information is available for a business. All purchases and sales are made on credit. $ raw materials purchased 121 980 revenue 209 980 trade payables 45 448 trade receivables 28 765 What is the average collection period?

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

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

Open

21

The following items appear on a statement of financial position. $ inventory 20 000 balance at bank 2 000 cash in hand 1 500 trade payables 11 000 provision for doubtful debts The current ratio is 3 : 1. How much do the trade receivables owe?

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)  →  1.6. Analysis and communication of accounting information

Open

22

A company’s financial statements show the following. $ profit before interest 125 378 profit for the year 120 426 200 000 shares $1 each 200 000 retained earnings 191 982 debentures 150 000 What is the return on capital employed (ROCE)?

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

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

Open

23

The gross profit ratio of a business has increased. Which statement is correct?

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

24

Which cost is less than budgeted, when actual production is higher than budgeted?

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

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

Open

25

The following information is available about a customer order. $ direct material cost 75.00 direct labour cost 42.00 cost per labour hour 7.00 fixed overhead absorption rate per direct labour hour 6.50 The order has a mark-up calculated at 20% of total cost. What is the selling price?

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

26

What can be used to apportion production overheads to cost centres?

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

27

The following information relates to two production departments of a manufacturing business. assembly polishing prime cost ($000) indirect overheads ($000) machine hours (000) labour hours (000) What are the overhead absorption rates?

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

A manufacturer has a total production cost of $50 000 to make 20 000 units. This increases to $60 000 if production is increased to 25 000 units. What is the total cost of 35 000 units?

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

29

A company provides the following information about its product. selling price $100 variable cost per unit $40 fixed costs $21 600 break even point 360 units If the business changes its production method, contribution will increase by 10% and fixed costs will increase by 5%. What would be the effect on the break even point?

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 business is preparing its budget for July 2014. Customers pay in the month following sales and suppliers are paid in the month following purchase. The following information is available. June 2014 $ July 2014 $ credit sales 80 000 90 000 credit purchases 56 000 48 000 wages 18 000 18 000 drawings 1 000 depreciation What is the budgeted bank balance at 31 July 2014 if the opening balance is expected to be $6000 debit?

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

Open