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1

A trader keeps a full set of accounting records. Which statement is correct?

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

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

Open

2

The totals of the discount columns in a three-column cash book were debit side $320 and credit side $140. What entries are made when these totals are posted to the nominal ledger?

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

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

Open

3

A company sold one of its delivery vehicles for $2800 after two years of use. The original cost of the vehicle was $6500. The company depreciates its vehicles at 30% per annum using the reducing balance method. What was 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

A trader depreciates loose tools using the revaluation method. Which account is credited at the end of the year to record depreciation on loose tools?

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

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

Open

5

A business sold one of its non-current assets. The following information relates to this asset. $ purchase price 50 000 depreciation to date of sale 20 000 sale price 60 000 What was the effect of this transaction on the net assets in the year of sale?

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

Open

6

Which items will be found 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

7

A business omitted discounts allowed of $700 from its trial balance. During the year a machine had been sold for cash, $500, but the only accounting entry made was a debit in the bank account. What is the balance on the suspense account before these errors are corrected?

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

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

Open

8

Felix drew $200 out of his business bank account in order to top up his petty cash float. When recording this transaction in his cash book he reversed the entries. Despite this error the bank balance showing in his cash book was equal to the balance on his bank statement at the same date. How was this possible?

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

Open

9

A business had calculated a draft profit for the year. The following items have been discovered. A customer has been declared bankrupt and is unable to pay the amount they owe. Unsold goods on sale or return basis have been included in inventory. Rent paid in advance has not been included. The owner's cash drawings have been entered into the owner’s capital account. Which of these need to be adjusted to calculate the correct profit for the period?

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

10

The following information has been extracted from the statement of financial position of a sole trader at 31 March 2021. $ non-current assets 130 000 current assets 32 000 current liabilities 18 000 non-current liabilities 25 000 profit for the year ended 31 March 2021 20 000 drawings 15 000 What was the balance on the capital account at 31 March 2021?

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

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

Open

11

At the start of the year the balance on a sole trader’s capital account was $183 000. During the year the following took place. The owner introduced a motor vehicle into the business. This had a cost of $90 000 and had a market value of $74 000. The owner took cash drawings of $15 000. The owner took inventory for personal use. This had a cost of $24 000 and a selling price of $32 000. After recording these and the profit for the year, the closing balance on the capital account was $265 000. What was the profit for the year?

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

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

Open

12

Why might a sole trader form a partnership?

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

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

Open

13

X and Y are in partnership. The following information relates to the partnership. current account start of the year $ end of the year $ X 12 000 credit 17 500 credit Y 6 000 credit 4 000 debit The following transactions took place during the year. drawings $ X 13 000 Y 19 000 X received a salary of $5000. What was the profit for the year before appropriation?

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

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

Open

14

L, M and N were partners sharing profits and losses equally. N’s capital account was as follows. $ $ motor vehicle 7 000 balance 14 000 bank 8 000 current account 1 000 15 000 15 000 What explained the entries in the capital account?

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

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

Open

15

A shareholder sells some ordinary shares for more than he paid for them. What is the effect on the company statement of financial position?

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

Open

16

The equity of X Limited at 30 June 2021 was as follows. $ share capital 600 000 share premium 100 000 revaluation reserve 90 000 general reserve 50 000 retained earnings 80 000 What was the maximum total dividend that could be paid to shareholders?

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

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

Open

17

The value of inventory for a limited company at 31 May 2020 was overstated by $20 000. What was the effect of this error on retained earnings?

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)  →  1.3. Accounting for non-current assets

Open

18

What are limitations of using accounting ratios for comparisons between firms in the same industry?

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

19

Abdul is assessing the profitability and efficiency of his business and is using these figures from the financial statements. $ non-current assets at cost 70 000 net book value of assets 53 000 revenue 340 000 profit from operations 84 000 What is the non-current asset turnover?

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

Open

20

The following information was available for a business for the year ended 31 December. annual sales $400 000 gross margin 20% rate of inventory turnover 4 times opening inventory $60 000 What was the value of closing inventory?

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

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

A manufacturing business is currently operating at full capacity. As part of an expansion programme to increase production capacity, the business intends to employ an additional factory supervisor. How are total supervisory salaries classified?

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

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

Open

22

The following budgeted information is available. production total costs $ 20 000 240 000 32 000 326 400 What are the fixed costs?

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

23

A business absorbs its overheads on the basis of direct labour hours. The following information is provided. actual budgeted overheads $560 000 $546 000 direct labour hours 19 300 18 200 By how much are overheads under or over absorbed?

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

24

Which would be a suitable basis to apportion depreciation to production departments?

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

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

Open

25

The following information is available. per unit $ selling price variable costs Budgeted break-even sales volume is 15 000 units. Budgeted sales volume is 20 000 units. What were the fixed costs?

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

26

A business increased its profits by changing from marginal costing to absorption costing. Which statement is correct?

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

27

A company makes and sells a single product. The following budgeted information is available for one month. selling price per unit $750 variable costs per unit $550 total monthly sales 600 units total fixed costs $80 000 The directors are able to reduce the variable costs to $500 per unit. By how many units can budgeted sales reduce to achieve the same monthly profit?

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

28

Which assumption of cost–volume–profit analysis is not correct?

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 manufactures four products: A, B, C and D. Information relating to these products is shown...

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

30

Why might a business use budgets?

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

Open