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1

Which statement contains the correct accounting treatment for accrued income?

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 trader made the following transactions. $ cash withdrawn from bank for business use cash banked What was the total effect on ledger accounts?

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

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

Open

3

Rent is paid by a business monthly in advance on the first day of each month. The payments during this financial year have been as follows. up to and including 1 June $500 per month from 1 July $600 per month Which amountwill appear 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)  →  1.5. Preparation of financial statements

Open

4

A business started on 1 January 2013. At 31 December 2014 the following information is available. 31 December 2013 $ 31 December 2014 $ trade receivables 80 000 100 000 increase in provision for doubtful debts in income statement 4 000 2 000 What is the rate for provision for doubtful debts in 2014?

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)  →  1.3. Accounting for non-current assets

Open

5

A business purchases inventory on a credit basis. Which item affects the amount paid to suppliers?

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

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

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

Open

6

A business depreciates its non-current assets at 20% using the straight-line method. Depreciation is calculated on a time basis in the year of acquisition and disposal. $ non-current assets, at cost, 31 December 2013 200 000 purchase of machinery 1 January 2014 50 000 disposal of machinery 30 September 2014 40 000 non-current assets, at cost, 31 December 2014 210 000 What is the depreciation charge for non-current assets for the year ended 31 December 2014?

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

Open

7

The table shows information for a business at 31 March in Year 1. $ inventory 16 100 trade payables 5 200 other payables 2 000 The information excludes the purchase of $3700 of goods. These goods were delivered on 31 March Year 1, but the invoice states that legal title to the goods does not pass until payment is received. Which values should appear in the statement of financial position on 31 March Year 1?

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

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

Open

8

The following information is available. $ prime cost 400 000 factory overheads 220 000 inventories: opening $ closing $ raw materials 25 000 28 000 work-in-progress 46 000 52 000 finished goods 84 000 72 000 What is the cost of production?

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

9

A business has extracted the following information from its books of account at 31 December 2014, its first year of trading. $000 carriage inwards carriage outwards closing inventory purchases returns inwards returns outwards revenue What is the gross profit for the year ended 31 December 2014?

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

10

A trader maintains a sales ledger control account. How can he calculate credit sales?

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

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

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

Open

11

How are closing inventory and loss for the year treated?

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

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

12

How should interest charged on a partner’s drawings account be treated?

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

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

Open

13

Kay and Lay share profits and losses in the ratio of 3 : 1. Capital account balances are Kay $100 000 and Lay $84 000. There was no goodwill account in the books. The partners change the profit sharing ratio to 4 : 1. Goodwill is valued at $54 000 and is not to be retained in the books of account. What is the balance on Lay’s capital account after the adjustment for goodwill?

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

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

Open

14

A cricket club provides the following information. $ subscriptions owing at 1 January 2014 subscriptions paid in advance at 1 January 2014 subscriptions received in the year ended 31 December 2014 subscriptions owing at 31 December 2014 subscriptions paid in advance at 31 December 2014 What is the value of subscriptions in the income and expenditure account for the year ended 31 December 2014?

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

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

Open

15

DEC Limited has produced the following information for the current financial year. department X $ department Y $ revenue 54 000 26 000 cost of sales 23 700 16 600 gross profit 30 300 9 400 The rent and insurance of buildings total is $13 000. Heating and lighting total is $12 500. The floor area occupied by each department: X 60%, Y 40%. What is the profit or loss for the year for department Y?

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

16

A business bought and sold the following items of inventory. month details units cost per unit $ January purchased 2.00 February purchased 2.50 March sold – It uses the AVCO method of inventory valuation. What was the value of inventory at the end of March?

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

17

The profits of Bronte Limited are as follows. year ended 31 December 2013 nil year ended 31 December 2014 $60 000 Bronte Limited has in issue 200 000 5% preference shares of $1 each. What is the profit available for distribution to ordinary shareholders for the year ended 31 December 2014, if the preference shares are cumulative or non-cumulative?

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

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

Open

18

A limited company issues 5000 ordinary shares of $2 each at a premium of $0.50. What is the effect on share capital and liquidity?

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

19

A new business was established with opening capital of $20 000. At the end of the first year, assets less liabilities were $26 000. The owner withdrew $7000 as drawings during the year and this resulted in a bank overdraft of $5000 at the end of the year. What was the profit during the first year?

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

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

Open

20

A company’s gross profit ratio for the year ended 31 December 2013 was 25%. This increases to 28% for the year ended 31 December 2014. What could have been responsible for the increase?

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

21

Which ratio will give the best indication of short term liquidity?

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

22

An investor is looking at the financial statements of a company in which he may decide to invest. Which item helps him to rely on the financial statements?

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

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

Open

23

The diagram shows a break-even chart. Y X number of units $ What is indicated by the line XY?

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

24

The following figures are given for a factory’s overheads and machine hours worked. machine hours total overhead costs overhead absorption rate budgeted 122 000 $268 400 $2.20 actual 116 000 $261 000 $2.25 What was the under or over absorption of overhead for the quarter?

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

25

Which costing method is used to calculate a break-even point?

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

Open

26

Which is not a characteristic of job costing?

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

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

Open

27

A business plans to replace its computer systems. Its existing hardware was bought seven years ago and its software five years ago. What type of cost is the existing system?

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 manufactures three products which all use the same material. The following information is available. X $000 Y $000 Z $000 selling price direct material direct labour variable overhead contribution Direct material is in short supply. In which order should the products be manufactured to maximise profits?

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

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

Open

29

A company is forecasting its profits at two levels of activity. sales units $ $ total fixed and variable costs 20 000 26 000 profit 15 000 30 000 sales revenue 35 000 56 000 Fixed costs and selling prices are unchanged within the above activity range. What is the forecast profit if sales were 7000 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

Open

30

Which statement about a cash budget 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