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1

A business provides the following information. debit $ credit $ prepaid expenses 4 620 accrued expenses 8 125 bank balances 14 920 3 612 trade payables 18 148 loan (10 years) 15 000 What is the total for current liabilities?

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

The provision for doubtful debts at 1 January 2013 was $1580. Trade receivables at 31 December 2013 were $44 750. An irrecoverable debt of $12 500 had not been written off. The provision for doubtful debts was 5%. Which entry for doubtful debts was included in the income statement for the year ended 31 December 2013?

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

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

Open

3

On 1 October 2011 a company purchased machinery for $26 000. It was depreciated at a rate of 20% per annum using the reducing balance method. On 30 September 2013 the machinery was sold for $12 000. What is 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

On 1 January a business has prepaid $800 for four months’ motor insurance. It also has an outstanding invoice for fuel of $140. During January it pays the fuel invoice and a further $600 for fuel. At 31 January it has an outstanding fuel invoice of $160. What is the charge for motor expenses in the income statement for January?

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

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

Open

5

A business values its inventory at the lower of cost and net realisable value. Which accounting principle applies?

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

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

Open

6

A business provides the following information. $ cheque paid in 2013 for equipment bought in 2012 15 000 equipment purchased on credit in 2013 42 000 net book value of equipment at 1 January 2013 83 000 net book value of equipment at 31 December 2013 67 000 What was the depreciation charge in the income statement for the year ended 31 December 2013?

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

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

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

Open

7

When preparing the financial statements for the year the following errors are discovered. The sales journal was undercast by $300. No provision had been made for accrued wages of $200. No account had been taken of prepaid rent of $400. The draft profit for the year is $8050. What will be the profit when the errors are corrected?

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

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

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

Open

8

The correction of which error would require a suspense account?

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

Open

9

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 balance of $2600 Cr. 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

10

Which group of items would appear on the credit side of a 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

11

During the financial year a business paid its trade payables $295 000 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?

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

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

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

Open

12

Which rule does not apply in the absence of a partnership agreement?

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

Open

13

How are subscriptions in arrears recorded in the statement of financial position for a club?

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

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14

The following items appear in the subscriptions account of a club for a financial year. $ subscriptions received owed from the previous year 3 080 subscriptions paid in advance for next year 1 050 subscriptions income transferred to the income and expenditure account 50 000 subscriptions outstanding at year end 2 000 How much cash was received from members in the year?

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

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

Open

15

The equity of a limited company is as follows. at 31 December 2012 $ at 31 December 2013 $ ordinary shares of $0.50 each 400 000 400 000 7% preference shares of $1 each 200 000 200 000 retained earnings 4 000 ?

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

Open

16

A sole trader recovers a debt that had previously been written off as irrecoverable. How is this accounted for in his income statement?

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

Open

17

The following items appear in the books of a manufacturing company. factory wages maintenance of factory machinery direct materials interest on debenture secured on factory machinery factory cleaners’ wages Which items would be included in factory overheads?

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

Open

18

A business values its inventory using the FIFO method. The following transactions took place. month units $ April opening inventory at 190 each May purchases at 220 each June sales at 400 each What is the value of the closing inventory at the end of June?

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

19

X is admitted to a partnership sharing 20% of its profits and losses. The goodwill of the firm is valued at $30 000. X is to pay $25 000 into the partnership. What will be the balance on X’s capital account after adjusting for goodwill?

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

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

Open

20

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

21

The table shows equity and liabilities of a company at 31 December 2013. $ ordinary share capital 750 000 8% non-redeemable preference shares 250 000 6% debentures (2020) 150 000 bank loan repayable (2019) 75 000 bank overdraft 110 000 mortgage on buildings (repayable 2014) 120 000 What is the total of non-current liabilities in the statement of financial position at 31 December 2013?

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

Open

22

The table shows an extract from the statement of financial position of a limited company at 30 June 2014. $ 4% debenture (2018 – 2019) 30 000 5% preference share capital 20 000 ordinary shares of $1 each 80 000 The company declared a dividend of $0.05 per share. This was paid on 31 March 2014. What is the total amount of equity dividends paid for the year ended 30 June 2014?

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

Open

23

A company has the following assets and liabilities. current assets $ current liabilities $ inventory 55 000 trade payables 62 000 trade receivables 60 000 other payables 38 000 bank 40 000 non-current liabilities 10% debenture (2025) 40 000 What is the liquid (acid test) ratio?

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

24

A business has the following current assets and current liabilities. $ trade receivables bank overdraft cash in hand trade payables The only other item in the working capital is inventory. The current ratio is 2 : 1. What is the value of the inventory?

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)  →  1.3. Accounting for non-current assets

Open

25

The following information has been extracted from the financial statements of a sole trader for the year ended 31 March. $ $ revenue 198 200 opening inventory 22 200 purchases 86 900 purchase returns (2 600) carriage inwards 1 400 107 900 closing inventory (25 300) 82 600 gross profit 115 600 What is the inventory turnover for the year ended 31 March?

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

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

26

A company has been asked to prepare a quotation to print 100 leaflets for a customer. The total cost of direct materials, direct labour and a share of overheads is $820 and a profit of 25% on cost has been added. This is an example of which costing method?

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

Open

27

A company manufactures one product. During the year it produced 1000 units. Total costs were as follows. $ raw materials ?

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

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

Open

28

A product has a variable cost of $50 and a selling price of $80. Fixed costs are $90 000. Budgeted sales are 8000 units. What is the margin of safety?

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

29

A business has sales of $250 000, fixed costs of $50 000 and a contribution / sales ratio of 30%. What is the profit?

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

30

The table shows a company’s estimated sales. cash ($) credit ($) February 10 000 15 000 March 10 000 25 000 April 10 000 35 000 Trade receivables are expected to pay as follows: 60% in month following sale 40% in second month following sale How much cash from sales is received in April?

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

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

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

Open