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1

When a businessman introduces capital into his business, the transaction is debited in the cash book and credited to his capital account. Of which accounting concept is this an example?

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

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

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2

Which are examples of the accounting equation?

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

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

Open

3

Amitav purchased a van costing $20 000. He provided an old van with a net book value of $8000 in part exchange. There was a profit on disposal of $1500. What was the cash outflow arising from the purchase?

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

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

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

Open

4

The net book value of a company’s non-current assets was as follows. $ at 1 January 2016 100 000 at 31 December 2016 80 000 During 2016 assets were sold for $20 000, realising a profit on disposal of $5000. Depreciation charged for 2016 was $8000. What was the expenditure on new assets in 2016?

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

Open

5

The following errors were found after a suspense account was opened. Motor repairs of $400 were credited to the motor vehicle at cost account. A payment for electricity was debited in the electricity account as $2500 instead of $5200. A $450 cash purchase of goods for resale had been completely omitted from the books. Discount allowed of $50 had been debited to the discounts received account. Which items would be entered in the suspense account?

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

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

Open

6

Which items appear in a sales ledger control account?

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

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

Open

7

The following information is extracted from the statement of financial position of a business at 31 December 2016. $ bank loan (repayable 2025) 16 200 other payables 1 880 bank overdraft 11 600 capital 20 710 drawings 19 100 inventory 14 610 other receivables 1 420 trade payables 14 110 trade receivables 9 050 What is the value of the net current liabilities?

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 items are recorded in the cash book of a business but not yet recorded in its bank statement. $ cheques drawn amounts banked The cash book shows a bank balance of $2600 credit. What is the balance on the bank statement?

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

Open

9

Finn provides the following information. $ capital at the start of the year 19 800 profit for the year 24 000 drawings 19 500 drawings (goods for own use) 1 100 private vehicle transferred to business use 6 000 What was Finn’s capital at the end of 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

A business provides the following information. year 1 $ year 2 $ profit for the year 30 000 40 000 cost of goods sold 240 000 320 000 The owner then discovers that at the end of year 1 the value of inventory was overstated by $2000. What are the correct profits for the year and cost of goods sold figures?

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

11

Sam was unable to conduct a physical count of inventory at 31 December 2016. On 3 January 2017 inventory had been sold to Abdul for $11 950. The cost price of this inventory had been $9560. On 4 January 2017 inventory had been returned by Sita. It had been sold for $2390. The cost price of this inventory was $1912. Sam valued his inventory at 5 January 2017 at cost, $59 750. What was the value of inventory at 31 December 2016?

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

12

Which item is not taken into account when a partner joins a partnership?

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

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

Open

13

Ali, Bharti and Chan were in partnership sharing profit and losses in the ratio 3 : 2 : 1. Bharti retired from the partnership on 30 June 2016. The following were the balances available at 30 June 2016. Ali ($) Bharti ($) Chan ($) capital accounts 60 000 Cr 40 000 Cr 20 000 Cr current accounts 18 650 Cr 6 100 Dr 8 950 Cr On her retirement, Bharti retained a partnership motor vehicle at an agreed valuation of $4000. Goodwill was valued at $39 000. How much was payable to Bharti on her retirement?

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 partnership maintains both capital and current accounts for its partners. What is the correct accounting entry for recording interest on capital for partner X?

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

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

Open

15

Which statement describes the treatment of purchased goodwill for a limited company?

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

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

Open

16

A company’s equity is made up as shown...

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

Open

17

Which statement about ordinary shares is correct?

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

Open

18

Who are internal users of accounting information?

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

Open

19

A company provides the following information. $ profit from operations 16 000 finance costs 4 000 ordinary share capital ($1 shares) 50 000 non-current liabilities 4 000 retained earnings 20 000 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

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

Open

20

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

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

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

How are stepped costs best described?

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

Open

22

Jamal uses the AVCO system to value his inventory. He provides the following information: March 1 no opening inventory 60 units were purchased at $120 per unit 100 units were purchased at $116 per unit 110 units were sold for $150 per unit What was the cost of sales for 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

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

Open

23

A business makes wedding dresses. Each machinist is paid $30 a day and each supervisor $40 a day. Each supervisor can work with up to 10 machinists and each machinist can produce one wedding dress a day. If 95 wedding dresses a day are produced, what is the daily labour cost?

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

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

Open

24

Which statement best describes variable costs?

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

Open

25

A company manufactures and sells chairs. The following per unit information is available. $ selling price direct material and labour other variable production costs variable selling costs fixed costs The company has the option of buying in the chairs for resale instead of making them. At which purchase price would the company’s profit be unchanged?

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

Open

26

The budgeted income statement of J Limited shows the following. $ sales 400 000 variable costs 240 000 fixed costs 132 000 profit for the year 28 000 What is the margin of safety in dollars?

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

27

The following details are supplied by a company for the month of August. budgeted machine hours 36 000 budgeted overheads $162 000 actual machine hours 36 500 actual overheads $155 000 What is the under or over absorption of the 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

A company has fixed costs of $40 000 per month. It provided the following information. March units April units production 30 000 15 000 Total production costs for March were $90 000. What were the total production costs for April?

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

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

Open

29

A company’s profits using marginal costing and absorption costing principles were identical. Which statement is true about the company’s production units?

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

Open

30

Which statement is not a reason why a business prepares budgets?

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

Open