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1

A company decided not to capitalise the purchase of a stapler for use in its office. Which accounting concept was the company applying?

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

Open

2

A trader had the following transactions in March 2017. $ cash sales for the month 6 900 credit sales invoiced in March 46 200 credit sales in March not yet invoiced customer orders received on 31 March 1 200 goods sent to a customer on 1 March on sale or return 1 400 What is the amount of revenue to appear in the income statement for March 2017?

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

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

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3

Which statements explain why depreciation might be charged on a non-current asset?

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

Open

4

A trader bought a machine on 1 January 2015. He depreciated it at the rate of 10% per annum using the straight-line method, and he sold it on 1 January 2017 for $4000. The profit on disposal was $200. How much had the machine cost on 1 January 2015?

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

Open

5

The following information relates to non-current assets. $ net book value at 1 January 2016 20 000 net book value at 31 December 2016 18 000 receipts from disposals 3 500 assets bought 9 700 loss on disposal What is the depreciation charge for the year?

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

Open

6

The purchases ledger control account had a closing balance of $20 000. Purchases returns of $1500 had been entered on the wrong side of the control account. What was the correct balance?

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

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

Open

7

The cash book of a business shows a debit balance of $4200 at 30 April. A direct debit payment of $200 for insurance appeared on the bank statement but had not yet been entered in the cash book. A cheque paid to a supplier, correctly entered as $650 in the cash book, appeared as $690 on the bank statement. What is the value of bank shown...

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

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

Open

8

A bookkeeper prepared a sales ledger control account. The following errors were then discovered. An invoice posted to an individual customer’s account had been recorded as $95 instead of $59. The total of receipts from customers had been undercast by $200. Discount received from suppliers had been included in the control account. A provision for doubtful debts had been included in the control account. Which errors would result in the closing balance on the control account failing to agree with the total of the customers’ account balances?

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

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

Open

9

A business maintains a mark-up of 40%. The following information was available for the year. $ revenue 280 000 inventory at start 44 000 purchases 175 000 What was the value of 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

10

A business does not include a prepayment for rent receivables in its financial statements at the end of the year. Which effects does this have?

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

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

Open

11

The following is an extract from the trial balance of a business at 31 May 2017. $ trade receivables 72 000 provision for doubtful debts 3 250 A customer owing $5000 has been declared bankrupt. The provision for doubtful debts is to be maintained at 5% of trade receivables. Which amount should be included in the financial statements at 31 May 2017?

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

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

Open

12

Where should a partner’s drawings be recorded?

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

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

Open

13

L and M are in partnership. Their profit and loss appropriation account shows the following. L $ M $ total $ interest on capital 1 600 1 800 3 400 interest charged on drawings partners’ salaries 2 000 3 000 5 000 share of profit 8 000 12 000 20 000 What is the profit for the year before appropriations?

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

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

14

X and Y were in partnership sharing profits equally. Z became a partner and all three partners shared profits equally. Goodwill was valued at $90 000. No goodwill account is to be retained in the books of account. Which statement describes the effect on capital accounts when Z was admitted?

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

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

Open

15

A company has a debenture (2020). Which description of this is correct at 31 December 2016?

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

Open

16

A limited company made the following issues of shares. bonus issue of 20 000 ordinary shares of $0.50 each rights issue of 10 000 ordinary shares of $0.50 each at a price of $0.75 each By how much did the issues increase the equity of the company?

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

Open

17

What would not be included in a statement of changes in equity for a limited company?

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

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

Open

18

The following items appear on a statement of financial position. $ inventory 20 000 balance at bank 2 000 cash in hand 1 500 trade payables 11 000 provision for doubtful debts The current ratio is 3 : 1. How much do the trade receivables owe?

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)  →  1.6. Analysis and communication of accounting information

Open

19

A company’s financial statements show the following. $ sales 570 000 cost of goods sold 210 000 operating expenses 65 000 non-current assets 250 000 capital employed 310 000 What is the non-current asset turnover?

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

Open

20

The manufacture of product X incurs a specific cost. Data relating to this is as follows. units produced cost per unit $3 $2 Of which cost is this an example?

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

21

A business values inventory using the AVCO method. The following information is available. August 1 inventory of 6 units at $14.40 each 4 purchased 9 units at $18.40 each 6 sold 5 units at $20.20 each What was the cost of the goods sold?

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

The labour costs of a company are based on hours worked plus a bonus scheme. The production workers all earn the same rate and bonus. The daily rate is $6 per hour for an 8-hour day, 5 days per week. The bonus is based on the number of units produced above 2000 units in a week at a rate of $2 per 100 units. In one week each worker produces 2600 units. All workers work the full number of hours. What will be the week’s gross wage for one worker?

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

23

Actual production is less than forecast production. Which cost is higher than forecast?

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

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

Open

24

The following information is available for a business. budgeted sales per month 500 units selling price per unit $30 variable cost per unit $24 budgeted monthly fixed costs $600 The business plans to rent a machine which will increase monthly fixed costs to $2400 and reduce variable costs to $18 per unit. What will be the effect on the margin of safety of the business?

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

25

The following information concerning a product is available. $ per unit selling price 10.00 variable labour costs 3.50 production material costs 2.50 break-even point 2500 units What is the total fixed cost?

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

26

The data shows the budget of a small manufacturing company. sales in units 6 000 12 000 $ $ direct materials 18 000 36 000 direct labour 6 000 12 000 production overheads 33 000 45 000 administrative overheads 27 000 27 000 The units are sold for $16 each. What is the break-even point in units?

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

Open

27

A company uses direct labour hours to calculate the overhead absorption rate. What results in over-absorption?

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’s limiting factor is production materials. It manufactures three different products. Which product should it manufacture first in order to maximise profits?

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

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

Open

29

The following information has been provided for the year. $ sales 400 000 variable costs 240 000 total contribution 160 000 fixed administrative expenses 90 000 fixed selling expenses 50 000 profit for the year 20 000 The company plans to increase the selling price by 10%. By how much will profit for the year increase?

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 is not a function of a budget?

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

Open