---

---

1

The owner of a business has been told that work completed for a customer should be recorded in the books of account although the invoice has not yet been sent to the customer. Which accounting concepts are being applied?

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

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

Open

2

Adam’s financial year ends on 31 December 2017. On 1 January 2017 the net book value of machinery was $20 000. On 30 June 2017 he purchased a new machine for $6000. He paid 50% of the cost in cash and the balance by part exchange of an old machine, which had a net book value of $2500 on that date. He depreciates his machinery by 20% per annum on the net book value calculated on a time basis. What is the net book value of the machinery shown...

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

3

A business has an accounting year-end of 31 March. It purchased a car on 1 April 2014 for $15 000. The car was sold on 30 September 2017 for $5000. Depreciation is charged at 20% per annum. A full year’s depreciation is charged in the year of purchase. No depreciation is charged in the year of sale. What was the profit or loss on disposal?

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

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

Open

4

The accounting year-end for a company is 31 October. The table shows the company’s telephone invoice received on 2 December for the three months ended 30 November. $ telephone calls to 30 November rental of equipment for the period from 1 September to 30 November Which accrual should the company make 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)  →  1.2. The accounting system

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

Open

5

A business created a provision for doubtful debts at 31 December 2016. The provision was calculated as a percentage of the trade receivables at each year end as follows. year ended trade receivables $ provision for doubtful debts % 31 December 2016 32 500 31 December 2017 34 300 Which entry in the provision for doubtful debts account for the year ended 31 December 2017 was required?

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

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

Open

6

Errors can exist in the preparation of both the sales ledger and the sales ledger control account. Which error would require an adjustment in the sales ledger control account only to correct it?

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

Open

7

The trial balance of a business did not balance. The following errors were found. The total of the purchases journal of $33 030 had been posted to the purchases account in the general ledger as $33 000. Discount received of $50 had been entered on the debit side of the discount received account. What was the original balance on the suspense account?

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

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

Open

8

The bank column of a cash book showed a credit balance of $5000. There were unpresented cheques amounting to $1500. The bank statement showed bank charges, $700, which were not recorded in the cash book. What is the balance on the bank statement?

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

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

Open

9

During the financial year a business paid $295 000 to its trade payables, after taking a cash discount of $15 000. At the start of the year the trade payables balance was $25 000. At the end of the year $32 000 was owed to trade payables. What was the amount of credit purchases made during the year?

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

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

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

Open

10

What would not result in goodwill?

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

3. Financial accounting (A Level)  →  3.3. Business acquisition and merger

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

Open

11

At the beginning of the financial year inventory was valued at $15 000. During the year, sales of $21 000 and purchases of $18 000 were made. Unfortunately, all inventory was stolen on the last day of the financial year. Goods are marked up by 50% to calculate selling price. What is the cost of the stolen 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

12

A business does not keep complete accounting records. All transactions are in cash. Which item will not be required in order to calculate the owner’s cash drawings?

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

Open

13

The following summarised information has been taken from the statement of financial position of a partnership. $ non-current assets 42 000 capital accounts 36 000 current accounts 6 000 current liabilities 8 000 non-current liabilities 15 000 What is the value of current assets?

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

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

Open

14

X and Y had been in partnership for some years when Z was admitted as a partner. On that date the premises account was debited with $120 000 following a revaluation. Profits were shared equally both before and after Z’s admission. What were the credit entries recording the revaluation?

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 company reserves may not be used to pay dividends?

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

Open

16

A company issued 50 000 ordinary shares of $0.50 each at a price of $0.60 each. What were the accounting entries for the issue?

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

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

Open

17

What could be used to fund a bonus issue of shares?

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

Open

18

The following is an extract from an income statement. $ revenue 180 000 costs of goods sold (75 000) distribution costs (8 000) administrative expenses (22 000) profit from operations 75 000 debenture interest (2 500) profit for the year 72 500 What was the operating expenses to revenue ratio?

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

19

The following information is available for the year ended 31 December 2017. $000 revenue cost of sales machinery at net book value land and buildings at net book value motor vehicles at net book value current assets equity What was the non-current assets turnover?

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

Open

20

A baker receives one order for 350 loaves of bread. Which costing method will the baker use?

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

Open

21

A business pays a salesman a basic salary, plus commission based on how much he sells. Which type of cost is the salesman’s total earnings?

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

22

Which cost is treated as variable cost of a motor transport company?

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

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

Open

23

Adam is paid $4 per hour and his expected output is 500 units per week. He is also paid a bonus $1 for every 20 perfect units made above the total of 500. In one week he worked for 40 hours and made 880 units, but 40 were faulty and were scrapped. How much was Adam paid for the week?

Open

24

A business values their inventory using the AVCO method. The inventory on 1 June 2017 was 100 units valued at $2.40 each. The following took place. June 5 purchased 40 units at $2.50 per unit sold 60 units at $3.50 per unit What was the value of the inventory on 8 June 2017 to the nearest dollar?

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

25

The following budgeted information is available for a hotel for the next financial year. fixed overheads $192 000 direct costs $240 000 number of guests average guest stay 4 nights What is the overhead absorption rate per guest night?

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

26

The costs of producing 1000 units of a product are as follows. $ direct materials 20 000 direct labour 10 500 direct expenses 1 600 variable overheads 11 300 fixed overheads 7 500 The selling price is $60 per unit and 1000 units are sold. What is the contribution to sales ratio?

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

27

A business produces a single product. The following information is available for a month. budgeted sales quantity 200 units selling price per unit $40 variable cost per unit $24 budgeted monthly fixed costs $800 The business plans to rent a machine which will increase monthly fixed costs by $1200 to $2000 and reduce variable costs to $20 per unit. What would be the effect of this on the margin of safety?

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

28

A business hires machinery at a cost of $700 per machine per month. Each machine can produce 1000 units a month. A maximum of 10 machines can fit into the factory. The factory rent is $4900 per month. Other costs amount to $2 per unit. What is the unit cost if 8500 units are produced in a month?

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

29

The direct material cost of 20 000 units is $8000. 400 direct labour hours are required at a cost of $6000. Overheads are absorbed at 150% of the cost of direct labour. What is the cost per unit?

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

30

Why might a business prepare a budget?

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

Open