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1

Inventories are valued at the lower of cost and net realisable value in the statement of financial position. Which accounting concept is being applied?

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

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

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2

The table shows extracts from the statements of financial position of a business. $ $ non-current assets (at cost) 190 000 245 000 less accumulated depreciation 75 000 90 000 net book value 115 000 155 000 Other information for the financial year 2015 is as follows. $ depreciation charged 40 000 new non-current assets purchased (at cost) 105 000 loss on sale of non-current assets 10 000 Which amount was received from the sale of the non-current assets?

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

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3

What would be treated as part of the capital cost of the purchase of a building?

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

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

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

Open

4

The total of trade payables balances in Konrad’s purchases ledger was $57 400. The following errors were then discovered. $ discount allowed overcast in cash book returns outwards omitted in a supplier’s account payments to trade payables undercast in cash book purchases journal overcast What is the correct total of trade payables balances?

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

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5

The debit balance on a company's sales ledger control account was $125 000. The following errors were then discovered. A bad debt of $800 had not been entered in the sales ledger control account. An increase in the provision for doubtful debts of $500 was required. The sales journal had been overcast by $1000. What was the total of the balances in the sales ledger?

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

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

Open

6

A business’s suspense account appears as follows. $ $ discount allowed opening balance sales Which statements are correct?

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

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

Open

7

A bank statement shows a credit balance of $1500. A payment of $500 and a receipt of $1250 were included in the cash book but have not yet appeared on the bank statement. Bank interest payable of $1100 had been correctly recorded in the cash book but due to a bank error had been recorded in the bank statement as $1000. What is the cash book balance?

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

Open

8

A company calculates a draft profit for the year of $88 000. This includes the profit margin of $3000 on goods sold on credit but not yet paid for. It also includes $500 profit taken on goods sold to a customer on a sale or return basis. What is the correct gross profit?

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)  →  1.3. Accounting for non-current assets

Open

9

The draft profit for the year for a sole trader was $108 000 before the following were taken into account. The provision brought forward for doubtful debts was $1850. The provision to carry forward should be $2250. Depreciation of non-current assets had been undercharged by $2000. An accrual of $600 for repairs had been treated as a prepayment. What was the correct profit for the year?

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

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

Open

10

The following balance appeared on a trial balance at 31 December 2015, after the preparation of the company’s financial statements. $ stationery 8000 debit What did this represent?

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

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

Open

11

At 31 December the following information was available. $ non-current assets at net book value 10 000 current assets 5 000 provision for doubtful debts (1 500) current liabilities (3 000) It was decided to reduce the provision for doubtful debts to $800. Which effects will this adjustment have on the profit for the year and on net assets?

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

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

Open

12

The table shows information relating to closing inventory. $ cost 50 000 realisable value 45 000 costs of realisation 5 000 replacement cost 35 000 What is the value of the closing inventory?

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

13

A business provides the following information. $ accrued expenses 9 350 accrued income 24 750 prepaid expenses 14 250 prepaid income 32 650 What is the total amount to be included in current liabilities?

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

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

Open

14

The statement of financial position showed the following balances at 31 December 2015. X $ Y $ capital accounts 20 000 10 000 current accounts 1 000 debit 2 500 credit Net assets at 1 January 2015 were $14 000. Property had been revalued upwards by $12 000 during the year ended 31 December 2015. No drawings had been made during the year. What was the profit for the year ended 31 December 2015?

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

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

Open

15

Smith and Jones are in partnership sharing profits and losses in the ratio 3 : 2 respectively. Profit for the year was $152 000. Smith was charged interest on drawings of $1650. Jones had a partnership salary of $40 000. What was Smith’s share of residual profit?

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

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

Open

16

X, Y and Z have been in business sharing profits in the ratio 3 : 2 : 1. Y decided to retire at the end of the year when the balance on his capital account was $39 400. On that date the assets were revalued upwards by $57 000. The partnership does not account for goodwill. Y took a car valued at $4800 as part of the amount due to him. How much cash did Y receive?

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

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

Open

17

A company has a bank balance of $20 000. The company’s equity and reserves are shown...

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

Open

18

Which statement about rights issues is true?

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

Open

19

A limited company's financial statements contain the following items. bonus issue of ordinary shares debenture interest profit for the year profit on disposal of non-current assets Which items would be found in the statement of changes in equity?

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

Open

20

A company issued 25 000 ordinary shares of $0.50 each at a premium of 25%. They had a market value of $1.50 each. What is the value of ordinary share capital in the statement of financial position?

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

Open

21

A company provides the following information. $ ordinary share capital 50 000 retained earnings at the end of the year 11 000 8% debentures (2020-2022) 15 000 bank overdraft 8 000 profit from operations 17 700 profit for the year 16 500 What is the return on capital employed?

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

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

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

Open

22

A business purchases inventory by cash. Which effects will this have on liquidity 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

Open

23

X supplies goods on credit. He looked at the financial statements of two other businesses to see if he wanted to trade with them. He found the following information. business credit purchases $ trade payables $ G 21 800 H 49 500 X only trades with businesses with a trade payables turnover of 42 days or less. With which businessdid X decide to trade?

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

Open

24

A business pays its employees $2 for each unit of X they assemble and $3.20 for each unit of Y. Monthly output is 1800 units of X and 1000 units of Y. The factory supervisor is paid $1000 per month. What is the direct labour cost per month?

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

Open

25

A garage owner paid the following costs. mechanics’ wages garage equipment repairs spare parts used to repair vehicles rent paid for garage premises Which of these are direct costs?

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

Open

26

A business incurs the following costs. direct material and direct labour costs indirect factory production overheads administrative expenses distribution costs Which costs are included in the cost per unit using absorption costing?

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

A company absorbs overheads using machine hours. The following information is available. overheads machine hours budgeted $200 000 40 000 hours actual $240 000 60 000 hours What was the over or under absorption of overheads?

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

28

How is margin of safety calculated?

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

29

A company incurs total costs of $2200 for producing 100 units and $4600 for 300 units. The selling price per unit is $20. What is the total profit or loss at a production level of 200 units?

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

30

A company provides the following information in respect of its carriage costs. units carried total cost $ 2 000 6 000 5 000 13 500 When more than 5000 units are carried the cost will increase the fixed charge by a further $2000. What will be the cost to carry 6000 units?

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