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1

Which list is a long-term source of additional funds for a limited company?

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

1. Financial accounting (AS Level)  →  1.1. Types of business entity

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2

Which statements describe advantages of maintaining full accounting records?

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

3

Maria recorded a cheque for $475 received from Josh, a credit customer. Josh had deducted a 5% cash discount. The cheque has now been returned as dishonoured. What is the correct entry to record the return of the cheque in Maria’s books?

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

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4

A business purchased a shop and incurred the following costs. $ purchase price of the shop 680 000 legal fees incurred in the purchase of the shop 7 200 cost of initial inventory 12 500 cost of installing air conditioning 47 300 What was the total capital expenditure?

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

5

A used motor vehicle was part exchanged for a new motor vehicle. The balance of the purchase cost of the new motor vehicle was settled by cheque. What were the entries to record the part-exchange value?

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

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

Open

6

A non-current asset of a business cost $300 000 in 2021. It is depreciated using the reducing balance method at the rate of 40% per annum. A full year’s depreciation is provided in the year of acquisition but none in the year of sale. The financial year of the business ends on 31 December. In 2023, the item was sold for $150 000. Disposal costs of $15 000 were incurred. What was the profit on disposal?

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

Open

7

A business received $100 cash from a credit customer in settlement of a debt. When recording it, an error of commission was made. Which statement about the debit and credit columns of the trial balance is correct?

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

Open

8

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

9

Which statements describe the benefits of preparing a bank reconciliation statement?

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

Open

10

A trader’s cash book shows a debit balance of $12 460 at 30 April. Bank charges of $4500 have not been entered in the cash book. A cheque for $14 470 received from a credit customer and a cheque for $1740 paid to a supplier appear in the cash book but not on the bank statement. What is the balance shown...

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

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

Open

11

A credit customer gave cash to a sales ledger clerk in part settlement of her debt. The clerk was dishonest and kept the cash for himself. He entered the receipt in the customer’s sales ledger account but made no entry in the cash book. What caused the theft to be discovered?

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

Open

12

The following information is available. $ balance of trade receivables at the start of the year 48 000 balance of trade receivables at the end of the year 65 300 trade discount given to credit customers 3 000 cash discount taken by credit customers 4 500 irrecoverable debt written off during the year 6 200 increase in allowance for irrecoverable debts for the year 2 700 cash received from credit customers during the year 516 000 What is the total value of credit sales 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

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

Open

13

At a business’s financial year-end there were expenses owing, expenses prepaid, income owing and income received in advance. How will the ledger account balances brought down at the start of the new financial year appear in the general ledger?

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

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

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

Open

14

A business prepared its statement of profit or loss for the year ended 31 December. During that year, on 30 April, a non-current asset had been sold. The following information is available in respect of this item. cost $130 000 sale proceeds $53 500 residual value $10 000 carrying value at 1 January $52 500 expected life 8 years Non-current assets are depreciated using the straight-line method, with depreciation being charged for each month of ownership. No accounting entries had been made in respect of this non-current asset for the year ended 31 December. What was the effect of this omission on the profit for the year?

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

Open

15

The owner of a trading business prepared draft financial statements for the year ended 31 December. It was then discovered that the following transactions occurring during the year had not been recorded. A cheque for $500 had been received for commission earned. Cash amounting to $2900 was received for a sale of goods which had cost $3000. Inventory costing $5000 had been taken from the business by the owner for personal use. Non-current assets with a carrying value of $6500 had been sold for $7000 cash. Which transactions will affect both the gross profit for the year and the total value of net assets on the statement of financial position?

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

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

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

Open

16

A business sells some inventory for $80 on credit. This originally cost $50. How does this affect the statement of financial position?

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

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

Open

17

Which entries are made to record interest on capital in partnership accounts?

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

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

Open

18

L and M are in partnership, sharing profits and losses in the ratio of 3 : 2 respectively. For the year ended 31 March, their statement of profit or loss showed a profit for the year of $68 000. The following information relates to the partnership for the same period. $ interest on loan from L total for both partners: interest on capital 2 600 interest charged on drawings 1 200 salaries 20 000 How much of the residual profit will L receive?

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

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

Open

19

Which reserves are revenue reserves?

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

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

Open

20

A limited company has the following in its statement of financial position at 31 March. equity $ ordinary share capital 200 000 retained earnings 82 500 share premium 80 000 Ordinary shares have a par value of $0.40 each. A bonus issue is made on the basis of 3 shares for every 8 shares held at 31 March. The issue is made so that reserves are kept in their most flexible form. What are the balances on the reserve accounts after the bonus issue has been made?

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

Open

21

A company has calculated inventory turnover periods for two successive years. year inventory turnover in days Company directors have suggested the following reasons for the change. Purchases have decreased. Purchases have increased. Sales have decreased. Sales have increased. What are the possible reasons for the change?

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

22

The following information is available for a business at the end of its financial year. $ credit purchases 140 000 credit sales 220 000 total purchases 160 000 total sales 250 000 trade payables 15 000 trade receivables 16 000 What is the trade receivables 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

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

Open

23

A business commenced trading on 1 January. The purchases and sales of inventory for January were as follows: date purchases sales January 4 3 at $200 each – – 2 at $400 each 3 at $250 each – – 2 at $400 each The business used the first in first out (FIFO) method of inventory valuation. What was the gross profit for January?

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

24

A company has been asked to quote a price for a specific job. Estimated costs are as follows: $ direct materials direct labour Overheads are charged at 50% of labour cost. Profit is 20% of the total job cost. What is the total of the quotation for the job?

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

4. Cost and management accounting (A Level)  →  4.2. Standard costing

Open

25

A manufacturing business has a service department, X, and production departments, Y and Z. Department Z is labour intensive. How is the overhead absorption rate set for department Z?

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

What would cause overheads to be under 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

27

A business produces two types of product, P and Q, for the month of January. Overheads are absorbed using direct labour hours. The production details are as follows: P Q units manufactured and sold direct labour hours per unit 1.5 Direct costs for the month were $23 750. The fixed overheads were $6500. What was the overhead absorption rate per hour?

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

28

Which statements about marginal costing are 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

The following information relates to a manufacturing business. production for the period 2400 units closing inventory 400 units $ direct material costs 12 000 direct labour costs 6 000 factory fixed expenses 4 080 There was no opening inventory. Closing inventory is valued using marginal costing. What is the marginal cost per unit of the finished goods?

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

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

Open

30

Which statement reflects how cost–volume–profit (CVP) analysis can help with management decision-making?

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