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1

Why does a trader account for accrued income?

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

Open

2

A trader sends his staff on a training course costing $100 per person. 10 staff attended in April and 4 in May. Half the total cost had to be paid at the start of April and the balance at the end of May. Which entry for training was made in the statement of financial position on 30 April?

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

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

Open

3

A business paid $10 000 for motor expenses in the year. The opening prepayment was $1500 and the closing accrual was $2000. What was the charge for motor expenses for the year?

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

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

Open

4

An item of revenue expenditure is wrongly treated as capital expenditure. What is the effect of this error?

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

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

Open

5

A trader prepares a disposal account. On which sides do the cost of the asset and sale proceeds appear?

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

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

Open

6

A trial balance at 30 June, before making end of year adjustments, showed the following. debit $ credit $ trade receivables 35 600 – provision for doubtful debts – 1 160 At 30 June, it was decided to write off a bad debt of $1600 and to make a provision for doubtful debts equal to 2% of trade receivables. What was the total decrease in the profit for the year ended 30 June arising from the bad and doubtful debts?

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

7

Land and buildings are shown...

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

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

Open

8

At 1 January 2014 a business had prepaid rent of $700. In July it paid an invoice for $9300 and on 31 December it transferred an expense of $9000 to the income statement. Which value appeared in the statement of financial position at 31 December 2014?

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

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

Open

9

Which cost should be treated as revenue expenditure?

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

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

Open

10

A sales return of $400 has been credited to the customer’s account as $40. A suspense account is created to complete the trial balance. What is the balance on the suspense account?

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

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

Open

11

The creation of a provision for doubtful debts is an example of which accounting concept?

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

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

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

Open

12

A business provided the following information. $ 1 April purchases ledger credit balance 16 725 30 April credit purchases for the month 42 653 30 April payments made to trade payables 37 324 30 April purchases returns What is the balance on the purchases ledger control account at 30 April?

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

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

Open

13

A business depreciates its motor vehicles over four years using the straight-line method. A full year’s depreciation is charged in the year of purchase, but none in the year of sale. A vehicle purchased on 1 July 2011 for $18 000 had an estimated residual value of $4000. The vehicle was sold for $5000 on 31 December 2014. Which entry appeared in the income statement for the year ended 31 December 2014?

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

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

Open

14

Rachel’s trial balance did not agree and she placed the difference in a suspense account. The following shows how four errors have been corrected using the suspense account. suspense account $ $ difference in trial balance discount received discount allowed sundry expenses cash The profit for the year before the errors were corrected was $35 400. What is the correct profit for the year?

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

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

Open

15

A bank reconciliation statement has been prepared by an inexperienced book-keeper. $ bank statement balance (68 100) cheques received not paid in 141 200 209 300 cheques paid to suppliers, not yet presented (41 800) cash book balance (167 500) What is the correct bank balance according to the cash book?

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

Open

16

An invoice for purchases was credited to the purchases account. How is the balance on the purchases account corrected?

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

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

Open

17

Which item may appear in the manufacturing account of a business?

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

Open

18

Inventory is valued at the lower of cost and net realisable value. What is net realisable value?

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

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

Open

19

A trader runs a manufacturing business. Which department should it close?

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

20

A club provides the following information. $ opening subscriptions in advance 1 200 subscriptions received during the year 25 000 closing subscriptions in arrears 1 500 How much are subscriptions for the year in the income and expenditure account?

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

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

Open

21

Which items increase when a company issues new shares?

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

Open

22

When is working capital most likely to increase?

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)  →  1.3. Accounting for non-current assets

Open

23

John failed to write off a bad debt of $8000. What was the effect of this omission?

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

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

Open

24

A customer places an order for 20 000 bricks. Which costing method will the supplier use to price the order?

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

Open

25

Which item is classed as a direct cost?

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

Open

26

A business sells its product for $50 a unit and has variable costs of $30 per unit. Its fixed costs for this year were $200 000. Next year, fixed costs are expected to be $260 000. How many more units will have to be sold next year to make the same profit as this year?

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

27

A manufacturer produces 100 000 tins of paint with a total direct materials cost of $300 000. Direct labour is 2000 hours at a cost of $400 000, and overheads are absorbed at the rate of $100 per direct labour hour. What is the cost of a tin of paint?

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 business provides the following information. month number of machine hours total overheads $ August 72 000 842 000 September 84 000 938 000 The variable overhead rate per machine hour was $8. What was the monthly fixed cost?

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 produces a single product. number of units opening inventory 5 000 production 15 000 closing inventory 2 000 The variable production cost per unit is $10 and the fixed production cost is $60 000. The sales revenue is $360 000. Profit is $108 000 based on full absorption costing. What is the profit based on marginal costing?

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 information for a cost centre. apportioned overhead costs $160 000 re-apportioned service department costs $60 000 total labour hours 25 000 total machine hours 40 000 What is the overhead absorption rate for the cost centre?

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