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1

A bank statement showed an overdraft of $750. A cheque issued in payment of rent for $570 had not been presented, and a cheque for $624 received was omitted from the statement. The statement included a bank charge of $50 but it had not been entered in the cash book. What amount should appear in the balance sheet?

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

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

Open

2

A company pays rates annually in advance on 1 April each year. $4000 is paid by them on 1 April 2009 and $4800 on 1 April 2010. The company’s accounting year end is 31 December. What is the charge for rates in the 2010 income statement?

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)  →  1.2. The accounting system

Open

3

At the end of its financial year a business had accounts receivable of $16 000 and had a bad debts provision of $640. The provision is to be maintained at 5 % of accounts receivable. Which amount is shown...

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

4

What might stop financial statements showing a true and fair view?

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

3. Financial accounting (A Level)  →  3.2. Regulatory and ethical considerations

Open

5

A company has been depreciating its IT equipment over 5 years, but now finds that it is becoming obsolete in 3 years. What does the consistency principle permit the company to do?

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

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

Open

6

Which error would cause an entry 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

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

Open

7

A company’s purchases ledger control account showed an opening balance of $24 640 credit. The following information is available for the year. $ purchases journal (including invoice for $910 entered twice) 17 100 receivables ledger control contra credit notes issued by suppliers 1 250 discounts received The purchases ledger control account balance at the year end was $19 870 credit. How much cash was paid to creditors during the year?

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

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

Open

8

At 31 December 2010 a business provides the following information. $ balance per cash book (bank column) 790 credit balance per the bank statement 800 debit unpresented cheques The only other reconciling item between the cash book and the bank statement is bank charges recorded on the bank statement but not in the cash book. How much are the bank charges?

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

Open

9

An analysis of a business’s record of inventory for an item shows the following: On 1 January the business had an inventory of 100 units at a cost of $10 each. units purchased units sold February 50 units March 60 units at $11 each April 70 units at $12 each 100 units May 30 units All sales are made at $13 per unit. The business values its inventory on a FIFO basis. What is the value of the inventory at the end of May?

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

X, Y and Z are in partnership, sharing profits in the ratio 2 : 2 : 1. X is allowed an annual salary of $10 000. Y has made a loan to the partnership on which the partnership pays interest of $5000 each year. Profit for the year before appropriations is $150 000. What is Z’s total appropriation of profit for 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

11

There are 75 members of a tennis club, paying an annual subscription of $95 each. The treasurer has provided the following information for the year. $ subscriptions received 7 305 overheads: tennis balls - purchased - opening inventory - closing inventory other overheads 4 700 How much surplus will the club’s income and expenditure account for the year show?

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

12

A businessman marks up his cost of sales by 50 %. At the end of his trading year the following data is available. $ opening inventory 5 000 closing inventory 4 000 ordinary goods purchased 35 000 What is his sales figure for the year?

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

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

13

The financial year of a manufacturer ends on 31 December. Finished goods are valued at factory cost plus 20 %. The following information is available: 1 January $ 31 December $ inventory of finished goods What is the amount to be deducted for the provision for unrealised profit in the income statement?

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

The following information relates to the non-current assets of a business formed three years ago. $ cost at start of year 1 10 000 accumulated depreciation at end of year 3 6 000 profit for year 3 18 000 Depreciation has been consistently charged using the straight line method. What would the profit be in year 3 if the method of depreciation for that year is changed to the reducing balance method at a rate of 25 %?

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

Open

15

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

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

Open

16

An investor owns 10 000 5 % preference shares in Howdo Limited. One year Howdo does not have enough profits to pay the preference dividend. The investor is not too worried as he expects the profits to improve and he thinks the directors will pay the missed dividend the following year. Which type of preference shares does the investor own?

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

Open

17

A balance sheet shows the following information. $ 100 000 ordinary shares of $0.50 each 50 000 50 000 5 % preference shares of $0.10 each 5 000 share premium 10 000 revaluation reserve 20 000 retained earnings 35 000 120 000 What is the balance sheet value of one ordinary share?

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

Open

18

A business has a gross profit ratio of 40 %, and a net profit ratio of 10 %. The business has significant fixed costs. If the sales volume increases by 8 %, which of the following will generally be correct?

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

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

Open

19

The following data is available for a business for the year ended 30 September 2010. opening inventory $1 000 000 purchases for the year $2 500 000 closing inventory $1 500 000 mark up 50 % trade receivables collection period 60 days Sales are on credit and accrue evenly over a 360-day accounting period. What is the value of trade receivables at 30 September 2010?

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

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

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

Open

20

A company is operating in a very competitive market. Which ratios represent the reaction to the competition?

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

21

The balance sheet of a business at 30 June includes the following items: Year 1 Year 2 trade receivables 47 000 63 000 other receivables 1 900 2 700 Total sales for Year 2 amounted to $450 000 of which $85 000 were cash sales. What is the average trade receivables collection period during the year ended 30 June Year 2?

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

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

22

The opening inventory of a business is $10 000 and the cost of goods sold is $200 000. Using the average figure of opening and closing inventory, what value of closing inventory is needed to give an inventory turnover of 10 times?

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

23

What are major assumptions in contribution / sales (c / s) analysis?

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

24

Which statements about marginal costing are correct?

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

Open

25

A company absorbs overheads on machine hours which are budgeted at 11 250. The budgeted overhead is $281 250. Results show actual hours of 10 980 and overhead of $276 652. What is the under/over-absorption?

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

A company uses absorption costing and makes and sells one product. In the last month budgeted overheads totalled $60 000. Budgeted production was 15 000 units and budgeted sales were 14 000 units. The company now decides to apply marginal costing principles for the last month. Which effect will this have on profits?

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

27

What does the diagram show about costs?

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

Open

28

A DVD has a selling price of $10. cost per DVD $ direct materials 1.20 direct labour 0.80 factory overhead 1.50 royalty payment 1.00 administration overhead 0.60 What is the contribution per DVD?

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

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

29

A business has the following budgeted and actual results for a period. $ budgeted fixed overheads 354 000 actual fixed overheads 360 000 under absorption of overheads 3 000 The fixed overheads are absorbed per unit. The budgeted number of units was 118 000. What is the actual level of activity in units?

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 purchases a machine for $3200. It is estimated that it will have a useful life of 5 years and a residual value of $700. Straight line depreciation is charged each year. What is the net book value at the end of year 2?

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

Open