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1

Hedley has 100 items of inventory in his warehouse and five more with a customer on a sale or return basis. He provides the following information. $ per unit historic cost paid selling price current replacement cost Which value should appear in the statement of financial position for inventory?

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)  →  1.5. Preparation of financial statements

Open

2

When preparing a sole trader’s annual accounts, no adjustment was made for a prepayment at the end of the year. What is the effect of this omission?

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

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

Open

3

Which statement is correct?

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

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

Open

4

A trader took out a 6% bank loan of $30 000 on 1 November 2013, to be repaid in full in 10 years’ time. Interest is to be paid annually. No interest had been paid by 30 April 2014. How should this be recorded in the statement of financial position at 30 April 2014?

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

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

Open

5

A non-current asset is depreciated due to passage of time. Which type of non-current asset is it?

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

Open

6

On 1 June 2011, a company purchases machinery for $18 000. The company depreciates machinery at 20% per annum using the reducing balance method. The machinery was sold on 1 June 2013 for $9400. What is the profit / loss on the disposal of the machinery?

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

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

Open

7

A trial balance failed to agree. A suspense account was opened. The following errors were then discovered. The sales returns journal had been undercast by $850. The purchases journal had been overcast by $975. What was the opening balance on the suspense account before the correction of the errors?

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

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

Open

8

The bank column of a cash book showed a credit balance of $5000. There were unpresented cheques amounting to $1500. The bank statement showed bank charges of $700 not in the cash book. What is the balance on the bank statement?

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

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

Open

9

What would cause a trial balance not to balance?

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

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

Open

10

X buys from and sells goods to Y. At the end of the month, X owes Y $3200 and Y owes X $1941. Which double entry records the contra entry in X’s books?

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

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

Open

11

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

12

For the eleven months ended 31 August 2013, snack bar takings were correctly recorded at $109 340. For September 2013, the snack bar takings were mixed up with other income. The snack bar profit margin was 30%. The table shows figures for the snack bar for September 2013. $ opening inventory at cost purchases closing inventory at cost What was the gross profit of the snack bar for the year ended 30 September 2013?

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

13

A sole trader runs a retail store. Which department is most likely to close?

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

14

A business owner suspects a loss of cash has occurred. He provides the data shown...

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

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

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

Open

15

Which items would appear in a partnership’s appropriation account, in the absence of a partnership agreement?

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

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

Open

16

A partnership makes a profit for the year of $108 000 before taking account of appropriations. Other financial information is as follows. X Y Z salary – – $10 000 capital balance $50 000 $40 000 $10 000 profit sharing ratio Interest on capital is allowed at 8% per annum. What is Z’s share of the 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

17

A business has settled a legal dispute with a customer and expects to pay him $10 000 before the end of the next financial year. Which heading is this amount included under in the company’s statement of financial position for this financial year?

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

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

Open

18

Simon provides the following information about his costs for the year. $ raw materials 16 100 factory depreciation 2 400 production labour 18 000 factory supervisor 8 500 factory heating 1 100 carriage in 1 500 rent 12 000 administration costs 11 500 Half of the rent relates to the factory and half to the offices. What is the total of indirect manufacturing costs?

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

19

A shareholder sells some shares for less than he paid for them. What happens to the share capital of the company?

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

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

Open

20

Which shares are entitled to have arrears of dividend carried forward to future years?

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

Open

21

A company issues shares at a premium. Which effect does the issue have on the company’s statement of financial position?

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

Open

22

A company’s financial statements include the following. $ profit before interest 200 000 profit for the year 140 000 issued share capital 500 000 reserves 160 000 non-current liabilities 380 000 What is the return on capital employed?

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

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

Open

23

A business sells a single product. This year the gross profit margin and net profit margin were both lower than last year. What is the reason for this change?

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

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

25

A company’s non-current asset turnover figure rises from 3.4 times in Year 1 to 4 times in Year 2. Sales revenue has been constant. What explains the change?

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

Open

26

Gordon sells goods on credit to Sybil. Which information from Sybil’s financial statements is of greatest interest to him?

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

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

Open

27

A company uses absorption costing and makes and sells one product. In the last month budgeted overheads totalled $60 000. Budgeted production was 15 000 units and budgeted sales were 14 000 units. The company now decides to apply marginal costing principles for last month. Which effect will this have on profits?

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

Open

28

A business has the following total overheads for two different output levels. total overheads $ output 200 000 20 000 216 000 30 000 What is the total fixed overheads cost?

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 data relates to the production of three products. product X $ product Y $ product Z $ contribution per unit fixed overhead per unit labour hours per unit 1.25 0.75 The company is experiencing a shortage of labour. In which order should the products be ranked to maximise profit?

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

Open

30

Sybil owns a vehicle which on 1 August 2014 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