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1

A business’s year end is 31 March. On 31 March 2016 the business received an order from a credit customer. The goods were not sent to the customer until 5 April 2016. This sale was not included in the financial statements for the year ended 31 March 2016. Which accounting conceptare being applied?

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

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

Open

2

Why does a business charge depreciation on its non-current assets?

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

Open

3

How is depreciation calculated using the straight-line method?

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

Open

4

A business depreciates its machinery at 10% per annum using the straight-line method on a month-by-month basis. The business’s financial year end is 30 June. Machinery which had cost $6600 on 1 April 2014 was sold on 30 November 2015. The profit on sale was $350. What were the sale proceeds?

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

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

Open

5

The table shows information relating to the non-current assets of a business. $ net book value at beginning of year 28 000 net book value at end of year 25 000 depreciation charge for the year 4 000 disposals at net book value 9 000 What is the cost of the additions in the year?

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

Open

6

At the year end a cash book shows a credit balance of $4800. The bank statement included bank charges of $25 which had not been included in the cash book. Cheque payments entered in the cash book before the year end to the value of $250 had not yet cleared the bank. How would the bank balance be shown...

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

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

Open

7

A purchases ledger control account has been reconciled with the purchases ledger balances as follows. $ balance of the control account 70 000 total of a page in the purchases journal not posted to general ledger 2 000 discount allowed by trade payables not posted to the purchases ledger 1 500 total of balances in the purchases ledger 73 500 Which value for trade payables should be shown...

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

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

Open

8

Trade receivable balances at the start of a period were $30 000 and were $38 000 at the end. During that period: $ credit sales 60 000 irrecoverable debt written off 1 000 customer discounts allowed 2 000 How much did the company receive from its customers in the period?

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

9

At the start of the year the provision for doubtful debts was $19 600. During the year irrecoverable debts of $12 300 were written off. The provision for doubtful debts at the year end was $15 500. What was the net effect of these items on 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

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

Open

10

The following financial information is available. $ inventory at 1 January 2016 inventory at 31 December 2016 1 010 purchases 9 260 carriage inwards revenue 18 000 discount received other costs 3 880 What are the values of gross profit and profit for the year?

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

11

The following information is extracted from the records of a business. $ at 1 January 2016 rent paid in advance 4 000 during the year ended 31 December 2016 rent paid 41 000 at 31 December 2016 rent paid in advance 7 000 How much will be charged for rent in the income statement for the year ended 31 December 2016?

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

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

Open

12

The assets of a partnership were revalued when a partner retired. Which ratio is used to divide the surplus or deficit on revaluation?

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

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

Open

13

X and Y are in partnership sharing profits and losses in the ratio 2 : 1 respectively. Capital account balances are X $80 000 and Y $50 000. Z joins as a new partner and introduces capital of $30 000. Goodwill is valued at $18 000. Goodwill is not to remain in the books of account. The new profit sharing ratio will be 5 : 3 : 2 respectively. What is the balance on X’s capital account after the introduction of Z?

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

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

Open

14

L, M and N were in partnership sharing profit and losses in the ratio 4 : 3 : 1 respectively. N retired from the partnership on 31 October 2016 when the balance on her capital account was $142 000. Goodwill was valued at $54 000 and would not remain in the books of account. Non-current assets were revalued from $180 000 to $144 000. N was paid all amounts due to her from the business bank account. How much was N paid on retirement from the partnership?

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

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

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

Open

15

A company makes a 1 for 4 bonus issue of ordinary shares. What happens to share capital and total equity?

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

Open

16

A company has the following: 12 000 ordinary shares of $1 each 10% debenture $10 000 It made a loss of $15 000 for the year ended 31 December 2016. An interim ordinary dividend of $0.20 per ordinary share was paid on 30 September 2016. An ordinary dividend of $0.40 per ordinary share was proposed at 31 December 2016. The retained earnings balance in the statement of changes in equity at 31 December 2016 was $20 000. What was the retained earnings balance at 1 January 2016?

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

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

Open

17

On 1 May, a trader lost all of his inventory in a fire. He has values for sales and purchases and wishes to calculate the value of the inventory lost. Which ratio should he use?

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

18

The following information was available for a business. $ equity 90 625 non-current liabilities 36 250 profit from operations 24 375 profit for the year 18 125 What was the return on capital employed?

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

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

Open

19

A business provided the following information. $ non-current assets at cost 525 000 non-current assets at net book value 350 000 revenue 800 000 profit for the year 160 000 What was the non-current asset turnover?

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

Open

20

A company’s sales during a 365-day year are shown...

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)  →  1.6. Analysis and communication of accounting information

Open

21

The following details are for the inventory of a company. kilos cost per kilo $ total cost $ inventory 1 January 2016 10 000 purchased January 2016 21 000 purchased 1 February 2016 33 000 400 kilos remained as inventory at the end of February 2016. The company used FIFO to value its inventory. What was the value of inventory at the end of February?

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

22

Which item is a direct cost?

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

23

A business has the following information available. selling price per unit $35 direct labour per unit $9 direct material per unit $6 budgeted sales 8000 units margin of safety 2000 units What is the value of fixed costs?

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

24

A company has allocated its costs between different departments as shown...

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

Vikram is paid $10 an hour for a 40-hour week and at time and a half for overtime. He is expected to produce four units an hour. If he produces more than this, a bonus of $2 per extra unit is paid. Last week Vikram worked 41 hours and produced 161 units. How much was Vikram paid?

Open

26

A business operated a staff canteen at a cost of $12 000. What is the most appropriate basis of apportioning this overhead 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

27

A business apportions some of its overhead expenses across its production departments. Why might building maintenance costs not be included with the other overheads being apportioned?

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

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

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

Open

28

The following information is available for a business. budgeted manufacturing overhead $234 000 budgeted direct labour hours 45 000 actual manufacturing overhead $243 600 actual direct labour hours 42 000 How much overhead was under or over absorbed?

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

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

Open

29

A company manufactures and sells 10 000 units. Details of the revenues and costs are as follows. total $ sales revenue 200 000 variable costs 80 000 fixed costs 90 000 profit 30 000 What is the break-even point in units?

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

The data in the table relates to a business. $ sales variable costs fixed costs profit for the year What is the contribution to sales ratio?

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

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

Open