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1

The table gives data about rental income for the year ended 31 March 2011. $ rents owing 31 March 2010 1 400 rents received in advance 31 March 2010 1 300 cash received 13 700 rents written off rents owing at 31 March 2011 1 750 rents paid in advance at 31 March 2011 1 600 Which value of rental income will appear in the income statement for the year ended 31 March 2011?

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

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

Open

2

Expenditure on a machine during a year has included the following. $ insurance costs 2 400 new engine – machine will now produce more products per hour 22 300 cleaning costs 7 200 How much of this expenditure should be treated as capital expenditure?

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

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

Open

3

What should companies not show as non-current assets in their balance sheets?

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

Open

4

Which accounting policies illustrate the matching principle?

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

Open

5

The table shows information for a business at 31 March in Year 1. $ inventory 16 100 trade payables 5 200 other payables 2 000 The information excludes the purchase of $3700 of goods. These goods were delivered on 31 March Year 1, but the invoice states that legal title to the goods does not pass until payment is received. Which values should appear in the balance sheet on 31 March Year 1?

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

A company values its loose tools for inclusion in its balance sheet. The tools are not very valuable and the company uses estimating when valuing them. Which accounting principle is being applied?

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

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

Open

7

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 overdraft of $2600. 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

8

A business provides the following information. $ cash received from customers 200 000 opening trade receivables 40 000 closing trade receivables 30 000 discounts allowed 5 000 provision for doubtful debts 4 000 How much are the credit sales?

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

9

Which error will cause a trial balance not to balance?

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

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

Open

10

A manufacturing company incurred the following costs. $ manufacturing labour 350 000 raw materials purchased 230 000 opening inventory of raw materials 40 000 closing inventory of raw materials 50 000 factory overheads 400 000 What was the prime cost of production?

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

A company has two departments X and Y. Management provides the following information. department X department Y total power used 7 500 kwh 17 500 kwh 25 000 kwh area 30 000 square metres 20 000 square metres 50 000 square metres The power bill for the year is $20 000 and the rent is $100 000. What is the total amount for rent and heating to be attributed to department X?

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

Open

12

If partners do not draw up a partnership agreement, the provisions of the Partnership Act apply. Which statement is true as a provision of the Partnership Act?

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

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

Open

13

X and Y have been business partners for several years, sharing profits in the ratio of 2:1. Y now wishes to retire and leave X to continue with a new business partner. Y’s capital account amounts to $15 800 and his current account shows a debit balance of $3500. Goodwill is valued at $6600. The book values of certain tangible assets are to be valued upwards by $3000. What is the amount due to Y on his retirement from the business?

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)  →  1.5. Preparation of financial statements

Open

14

Subscriptions received by a sports club were as follows. received year ended 31 December $ $ $ for membership in the year ended 31 December – – Note: all subscriptions for 2009 are included above. A receipts and payments account and an income and expenditure account have been prepared for the year ended 31 December 2009. What are the amounts of membership subscriptions shown...

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

Open

15

The treasurer has provided the following information relating to a golf club’s financial position at the year end. $ cash at bank 2 500 non-current assets 120 000 prepaid expenses inventory of refreshments subscriptions in advance subscriptions in arrears unpaid bills What is the accumulated fund at the year end?

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

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

Open

16

A trader buys and sells garden fertiliser in 50 kilo units. Inventory at 1 July was 250 units valued at $16 per unit. Purchases and sales during the month were as follows. date purchases sales 3 July sales 11 July purchases ($13 per unit) 14 July sales 25 July purchases ($14 per unit) 29 July sales The FIFO method is used to value inventory. What is the value of the closing inventory at 31 July?

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

17

Why is a provision for depreciation made in the financial statements?

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

Open

18

When is working capital most likely to increase?

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

19

What occurs in a rights issue of shares?

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

Open

20

A business has a rate of inventory turnover of 17 times a year. What is the numerator in the calculation?

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

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

Open

21

The following items appear on a balance sheet. $ 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)  →  1.6. Analysis and communication of accounting information

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

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

Open

22

Which ratio measures a business’ average payment period?

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

23

A firm has calculated the following accounting ratios for the year ended 30 June: year ended 30 June 2010 30 June 2011 gross profit on sales 30 % 33 % net profit on sales 15 % 14 % What could explain the changes in the percentages?

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

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

Open

24

What is a limitation of the use of accounting information that is totally outside the entity’s control?

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

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

Open

25

Which line represents total variable cost?

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

26

A company makes and sells one product that has a variable cost of $21 and a contribution to sales ratio of 30 %. Total fixed costs per month are $112 500. How many units need to be sold each month to break-even?

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 product has a contribution per unit of $20. Which action would increase the total contribution by the greatest amount?

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

28

What is a benefit of using absorption costing?

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

Open

29

What will cause under-absorption of fixed production 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

30

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 inventory valuation?

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