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1

Which item should be treated as capital expenditure?

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

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2

A loan due for repayment in 20 months’ time has been included as a current liability. What will be the effect when this is corrected?

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

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3

An item of machinery cost $60 000. The machinery was later sold for $8000 and the loss on disposal was $3000. What was the accumulated depreciation on the machinery 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

Interest receivable account shows interest of $17 500 received during the year. Interest of $1600 is due at the year-end. How will this be shown...

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

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

Open

5

The table shows how a property appears in the balance sheet. $ land and buildings 100 000 accumulated depreciation (40 000) net book value 60 000 The land and buildings are revalued to $150 000. What is the journal entry to record the revaluation?

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

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

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

Open

6

Why do businesses charge depreciation on their fixed assets?

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

Open

7

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 principle is this an example?

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

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

Open

8

A creditor for $720 transferred from the purchases ledger has been entered on the wrong side of the sales ledger control account. The sales ledger control account has a closing balance of $92 460, before correcting the transfer. A provision for doubtful debts of £1000 is to be made. What is the correct balance on the 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

9

Closing stock has been undervalued. What is the effect on the financial statements?

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

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

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

Open

10

A trader’s cash book shows a debit balance of $12 460 at 30 April. Bank charges of $4500 have not been entered in the cash book. A cheque for $14 470 received from a debtor and a cheque for $1740 paid to a creditor appear in the cash book but not on the bank statement. What is the balance shown...

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

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

Open

11

How can net profit be calculated?

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

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

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

Open

12

A company’s capital expenditure of $200 000 has been debited in error to the purchases account. Depreciation is provided at the rate of 15 % per annum on the cost of all fixed assets held at each year end. How will this affect the net profit?

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

13

A business sells some of its stock for $80 on credit to a customer. The stock originally cost $50. Which statement reflects the effect of this transaction on the balance sheet?

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

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

Open

14

Which transaction would appear in both the receipts and payments account and the income and expenditure account of a cricket club?

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

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

Open

15

The stock records of a business show the following information for product X. amount in units cost per unit $ 1 January opening balance 3 January receipts into stock 8 January stock issued - What is the value of the stock issued on 8 January using the First In First Out (FIFO) method?

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

16

A business uses the weighted average cost (AVCO) method of stock valuation. During March the following transactions took place. $ 1 March opening stock 200 units at $6.00 per unit 14 March received 300 units at $6.50 per unit 20 March issued 250 units to production at $7.00 per unit 28 March received 100 units at $6.70 per unit What is the value of stock at 31 March?

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

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

Open

17

A business has the following assets and liabilities. $ short-term investment 6 000 loan interest owing 1 500 loan repayable within one year 12 000 deposits from customers for orders 4 500 creditors 27 000 debtors 39 000 pre-payments 3 500 What is the amount of net current assets?

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

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

Open

18

Information about the final accounts of a partnership is given. $ net profit before interest 160 000 interest on bank loan 14 000 interest credited to capital accounts 15 000 drawings 70 000 partnership salaries 24 000 What is the remaining balance of profits to be appropriated amongst the partners?

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

Open

19

What is the effect on a company’s balance sheet of issuing bonus shares?

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

Open

20

A company, with an existing issued share capital of 200 000 ordinary shares of $0.50 each, made a one for four bonus issue. This was later followed by a one for two rights issue at $1.20 per share. What will be the balance on the share capital account after these transactions?

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

Open

21

Which ratio indicates how efficiently a company controls its overheads?

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

22

The following information has been taken from a recent balance sheet. fixed assets $30 000 working capital ratio 5 : 1 capital $34 000 current liabilities $1000 What is the amount of the current assets?

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

Open

23

The following data is available at the end of a financial year. opening stock $500 000 purchases $2 250 000 closing stock $750 000 gross profit margin 50 % debtors collection period 60 days Sales are all on credit and accrue evenly over a 360-day accounting period. What is the value of debtors at the year-end?

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

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

Open

24

The profit margins of a company over two years showed: 31 March year 1 31 March year 2 gross profit margin 37.2 % 39.1 % net profit margin 12.2 % 11.8 % What combination of factors could have caused these changes?

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

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

Open

25

The data in the table relates to a small business. $ sales variable costs fixed costs net profit 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

26

The graph shows a break-even chart. units of sales $000 sales revenue total costs What are the fixed costs?

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

What is a benefit of using absorption costing?

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

Open

28

A business provides the following data for the year. budgeted output 10 000 actual output 8 000 $ budgeted fixed production costs 1 200 000 budgeted variable production costs 800 000 budgeted fixed selling overhead 600 000 What is the absorption cost per unit used for stocktaking?

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

Open

29

The following data applies to a business. budgeted labour hours 10 000 actual labour hours 9 500 budgeted overheads $150 000 actual overheads $160 000 What is the amount of overhead under-absorbed?

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

30

A company manufactures one product. Variable costs are $600 000. Fixed costs are $300 000. If it bought the product from another supplier, it could use existing machinery to make a total contribution of $400 000. Fixed costs would not change. What is the maximum price it should pay to obtain the product from another supplier?

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