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1

The following information is taken from a trader’s statement of financial position. $ non-current assets 80 000 capital at start of year 75 000 drawings 16 000 profit for the year 13 000 non-current liability 6 000 current assets 12 700 What is the amount of trade payables?

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

2

A business wishes to create a new provision for doubtful debts. Which effect will this have in the financial statements of the business?

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)  →  1.3. Accounting for non-current assets

Open

3

Anna owns a plumbing business. Costs for the year were $49 500 for wages and $95 000 for materials. These included $2200 labour and $540 materials used by Anna in the extension of the business premises. Additional planning and legal costs of the extension were $450. What was Anna’s total revenue expenditure for the year?

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

Open

4

A building cost $340 000. The accumulated depreciation on the building was $47 600. It was decided to revalue the building to its market value of $560 000. What is the balance on the revaluation reserve?

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)  →  1.3. Accounting for non-current assets

Open

5

The table shows extracts from the statements of financial position of a business. $ $ non-current assets (at cost) 190 000 245 000 less accumulated depreciation 75 000 90 000 115 000 155 000 Other information for the financial year 2012 is as follows. $ depreciation charged 40 000 new non-current assets purchased (at cost) 105 000 loss on sale of non-current assets 10 000 Which amount was received from the sales of the non-current assets?

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

Open

6

An item can be converted easily into cash. In which section of the statement of financial position would this item appear?

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

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

Open

7

A company’s financial year ends on 31 December. At 31 December Year 1 the company carried forward a debit balance of $36 200 on the rent account. During Year 2 payments made for 12 months’ rent, to 31 March Year 3, were $157 200. What is the amount of rent to be charged in the income statement in Year 2?

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

Open

8

A trader buys inventory costing $6000. He is entitled to trade discount at 10% and cash discount of 5%. On the same day he discovers that he can only sell the inventory for $5000. Which amount should he record as the purchase price of the inventory?

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

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

Open

9

A business is preparing a bank reconciliation and finds the following. $ unpresented cheques uncredited bankings The cash book has a debit balance of $5000. Which adjustments should be made to the cash book balance to reconcile it to the bank statement?

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

Open

10

A company’s trial balance includes a suspense account. It was found that the only errors were discounts received of $240 and discounts allowed of $312, which had both been entered on the incorrect sides of the respective ledger accounts. What is the double entry required to clear the suspense account balance?

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

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

Open

11

During the month a company lost a quantity of inventory in a burglary. The table shows the company’s results for the month. $ opening trading inventory, at cost 30 000 purchases 210 000 revenue 330 000 closing trading inventory, at cost 4 000 A gross profit on all sales of 30% has been achieved. What was the cost of the inventory lost in the burglary?

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

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

Open

12

During the financial year a business receives $620 000 from its trade receivables after allowing cash discounts of $30 000. At the start of the year trade receivables owed $47 000. At the end of the year trade receivables owed $40 000. What was the amount of credit sales 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

Open

13

A business had a profit for the year of $450 000 before correcting the following errors. Closing inventory was undervalued by $15 000. Sales returns of $5000 had been recorded as purchases returns. The charge for depreciation was overstated by $20 000. What was the corrected profit?

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

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

Open

14

The following departmental accounts have been prepared for a limited company for the year ended 30 September 2013. department X $ department Y $ revenue 810 000 515 000 cost of sales 470 000 265 000 gross profit 340 000 250 000 overheads 210 000 295 000 profit / for the year 130 000 (45 000) The following errors have been found. Department X overheads include $10 000 for the purchase of goods for resale of department X. Revenue of $40 000 has been credited to department X when it should have been credited to department Y. What is the corrected profit for the year for department X?

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

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

Open

15

A company has the following expenses for the year. $ directors’ salaries 140 000 depreciation of delivery vehicles 87 000 office salaries 90 000 loan interest 33 000 discounts allowed 12 000 What is the total of the administration 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

16

Which items appear in the manufacturing account of a business?

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

Open

17

X becomes a partner in a business receiving a 25% share in the profits. He pays in $60 000 as his capital. The goodwill of the business is valued at $40 000. What is the balance on X’s capital account, if goodwill is not included in the books?

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

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

Open

18

A club has 190 members. The club charges an annual subscription of $240 per member. At the start of the year, 11 members had paid their subscriptions for the current year in advance. At the end of the year, 8 members had paid their subscriptions for the next year in advance, but 3 members had not yet paid their current year subscriptions. Which figures are recorded in the current year?

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

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

Open

19

The following financial information was provided at 31 December 2012. $ purchases 95 000 returns inwards 3 300 returns outwards 2 100 inventory withdrawn for personal use 5 000 Inventory on 31 December 2012 was valued at $1000 more than on 1 January 2012. What was the cost of sales?

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)  →  1.2. The accounting system

Open

20

A vehicle is sold for $1500. It cost $5000 and $3000 depreciation had been provided on it. Which entry is needed to close the disposal account?

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

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

Open

21

A business is reviewing credit limits for its customers. What would result in a customer’s credit limit being reduced?

Open

22

The table shows extracts from the trial balance of a business at 31 December 2012. $ ordinary share capital 20 000 share premium 40 000 long-term loan (repayable 2022) 30 000 bank overdraft 60 000 4% non-redeemable preference share capital 50 000 7% debentures 2017 70 000 What is the total of non-current liabilities in the statement of financial position?

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

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

Open

23

The trade receivables turnover for a company was 100 days in 2011. This reduced to 90 days in 2012, with no change in the sales revenue. Which statement explains this change?

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

Open

24

A company provides the following information. $ trade payables at start of year 38 000 trade payables at end of year 49 000 payments to credit suppliers 210 000 cost of sales 250 000 What was the trade payables turnover?

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

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

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

Open

25

A company makes three products. contribution per unit $ contribution per hour $ product 1 2.1 product 2 2.6 product 3 2.4 Total available labour hours are insufficient to make enough of each product to meet demand. In what order should the products be produced to maximise profit?

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

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

Open

26

The cost of using a mobile phone is made up of a monthly rental charge and the cost of individual phone calls. What type of cost is this?

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)

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

Open

27

A business sells its product for $10 per unit and has variable costs of $6 per unit. The table shows the fixed costs for the year. $ factory rent 30 000 other fixed costs 70 000 What is the break-even point?

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

28

A company’s financial information is as follows. $ selling price per unit variable costs per unit total fixed costs 33 000 If the selling price is reduced to $40, how many extra units need to be sold 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

29

A company is asked to make a new machine for a customer. It provides the following estimates. materials will cost $1100 labour will be 30 hours at a cost of $14 per hour The company charges overheads at $10 per labour hour and has a mark up of 30% on total cost. What is the price on the job cost sheet?

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

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

Ted plans to buy a motor vehicle for $12 000 on 1 May 2014. He intends to pay half in cash at the time of purchase and to take out a loan at 6% interest a year to finance the balance. This will be repaid on 1 November 2014. Which figures does Ted include in his cash budget for 2014?

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

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

Open