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1

Which task would be carried out by a book-keeper?

5. Preparation of financial statements  →  5.1. Sole traders

5. Preparation of financial statements  →  5.3. Limited companies

2. Sources and recording of data  →  2.1. The double entry system of book-keeping

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2

What is the accounting equation?

1. The fundamentals of accounting  →  1.2. The accounting equation

5. Preparation of financial statements  →  5.1. Sole traders

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3

Sarah sold goods on credit to Zafar. How was this recorded in Sarah’s ledgers?

3. Verification of accounting records  →  3.4. Control accounts

2. Sources and recording of data  →  2.1. The double entry system of book-keeping

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4

Omar sent a credit note to Miriam for goods returned. How would Miriam record this transaction?

3. Verification of accounting records  →  3.4. Control accounts

4. Accounting procedures  →  4.4. Irrecoverable debts and provision for doubtful debts

2. Sources and recording of data  →  2.1. The double entry system of book-keeping

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5

The discount column on the debit side of a trader’s cash book totalled $1300 and the discount column on the credit side totalled $700. How much discount did the trader receive?

2. Sources and recording of data  →  2.3. Books of prime entry

4. Accounting procedures  →  4.1. Capital and revenue expenditure and receipts

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6

Kai bought office equipment from Meena and paid immediately by bank transfer. How should Kai record this in his accounting records?

3. Verification of accounting records  →  3.3. Bank reconciliation

2. Sources and recording of data  →  2.3. Books of prime entry

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7

Jabari maintains a petty cash book using the imprest system. The imprest is restored at the end of each month. Which amount restores the imprest at the end of a month?

2. Sources and recording of data  →  2.3. Books of prime entry

3. Verification of accounting records  →  3.1. The trial balance

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8

Which statement about a trial balance is correct?

3. Verification of accounting records  →  3.1. The trial balance

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9

What is an example of a compensating error?

3. Verification of accounting records  →  3.2. Correction of errors

3. Verification of accounting records  →  3.1. The trial balance

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10

After the preparation of Abdul’s draft financial statements, two errors were discovered. The purchase of a machine by bank transfer, $5000, was omitted from the accounts. The purchase of a motor vehicle, $15 000, was entered in the motor vehicle repair account. What effect will correcting these errors have on the non-current assets and the working capital?

4. Accounting procedures  →  4.1. Capital and revenue expenditure and receipts

3. Verification of accounting records  →  3.2. Correction of errors

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11

Raj had a debit balance of $10 800 in the bank column of his cash book. He discovered that purchases, $890, paid by cheque, had been recorded as $980. The following appeared in the bank statement but had not been entered in the cash book. $ bank charges interest received What was the debit balance in the bank column of Raj’s cash book after adjusting for these items?

3. Verification of accounting records  →  3.3. Bank reconciliation

2. Sources and recording of data  →  2.3. Books of prime entry

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12

Why is a sales ledger control account usually prepared by a different member of staff than the person who maintains the sales ledger?

3. Verification of accounting records  →  3.4. Control accounts

2. Sources and recording of data  →  2.1. The double entry system of book-keeping

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13

Tamal provided the following information for March, his first month of trading. $ credit purchases credit purchases returned total payments to credit suppliers During the month, Tamal overpaid a supplier by $94. He did not make any further purchases from this supplier in March. What were the balances on Tamal’s purchases ledger control account on 1 April?

3. Verification of accounting records  →  3.4. Control accounts

5. Preparation of financial statements  →  5.6. Incomplete records

4. Accounting procedures  →  4.1. Capital and revenue expenditure and receipts

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14

The following payments were made by John when he purchased a machine. $ purchase of machine 10 000 delivery charge 1 200 insurance installation charge pre-paid maintenance charge How much should have been debited to the machinery account?

5. Preparation of financial statements  →  5.5. Manufacturing accounts

4. Accounting procedures  →  4.1. Capital and revenue expenditure and receipts

1. The fundamentals of accounting  →  1.2. The accounting equation

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15

On 1 January, Zac entered the cost of repairing equipment, $420, in the equipment account. On 31 December, depreciation of 20% per annum, using the straight-line method, was charged on the balance of the equipment account. What was the overall effect on the book value of the equipment on 31 December?

4. Accounting procedures  →  4.1. Capital and revenue expenditure and receipts

5. Preparation of financial statements  →  5.1. Sole traders

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16

Atif depreciates his motor vehicles at a rate of 20% per annum using the reducing balance method. On 1 May 2021, Atif owned motor vehicles which cost $35 000. At that date, the motor vehicles had been depreciated by $12 600. What was the balance on Atif’s provision for depreciation account on 1 May 2022?

4. Accounting procedures  →  4.2. Accounting for depreciation and disposal of non-current assets

5. Preparation of financial statements  →  5.1. Sole traders

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17

The financial year of Yeung ends on 31 March. On 1 April 2021, he purchased a machine for $4000. He estimated that it would have a useful working life of 3 years and a residual value of $100. Yeung uses the straight-line method of depreciation. The machine was sold on 1 April 2022 for $1500. What was the loss on disposal?

4. Accounting procedures  →  4.2. Accounting for depreciation and disposal of non-current assets

5. Preparation of financial statements  →  5.6. Incomplete records

4. Accounting procedures  →  4.1. Capital and revenue expenditure and receipts

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18

On 1 April 2021, commission receivable, $210, was outstanding. Commission received during the year ended 31 March 2022 amounted to $4850. Which journal entry should have been made at the end of the financial year on 31 March 2022?

5. Preparation of financial statements  →  5.6. Incomplete records

5. Preparation of financial statements  →  5.4. Clubs and societies

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19

Which statement about a debts recovered account is correct?

4. Accounting procedures  →  4.4. Irrecoverable debts and provision for doubtful debts

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20

Nula’s financial year ends on 31 December. She maintains a provision for doubtful debts of 5% of trade receivables. On 1 January 2021, the provision amounted to $800. On 31 December 2021, trade receivables owed $13 400, of which $600 was regarded as irrecoverable. How much was the provision for doubtful debts on 1 January 2022?

4. Accounting procedures  →  4.4. Irrecoverable debts and provision for doubtful debts

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21

When preparing his financial statements, a trader valued his inventory at cost. He then found that 10 units of inventory, costing $12 per unit, were damaged. If he spent $2 per unit on repairs, he could sell them for $9 each. What was the effect on the income statement of the incorrect inventory valuation?

4. Accounting procedures  →  4.1. Capital and revenue expenditure and receipts

4. Accounting procedures  →  4.5. Valuation of inventory

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22

At the end of his financial year, Marek was owed $200 for interest on a loan he had made to an employee. He recorded this in his financial statements. How did the interest on this loan affect Marek’s profit for the year and where was it recorded in his statement of financial position?

5. Preparation of financial statements  →  5.1. Sole traders

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23

What is the purpose of preparing a partnership appropriation account?

5. Preparation of financial statements  →  5.2. Partnerships

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24

Raj and Seema are in partnership sharing profits and losses 2 : 1. Raj withdrew $5000 during the year and was charged interest at 3%. Seema did not make any withdrawals during the year. The profit for the year was $30 000. How much was credited to Raj’s current account at the end of the year?

5. Preparation of financial statements  →  5.2. Partnerships

5. Preparation of financial statements  →  5.6. Incomplete records

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25

A limited company raised funds from an issue of debentures. Which statement is correct?

5. Preparation of financial statements  →  5.3. Limited companies

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26

A limited company provided the following information. $ total equity on 1 January 2021 500 000 ordinary share dividend paid 30 June 2021 25 000 transfer to general reserve on 31 December 2021 12 000 total equity on 31 December 2021 558 000 What was the profit for the year?

5. Preparation of financial statements  →  5.3. Limited companies

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27

Which group contains only items included in the prime cost of a manufacturer?

5. Preparation of financial statements  →  5.5. Manufacturing accounts

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28

The work in progress of ZT Manufacturers on 1 January was valued at $6200. At the end of the year it was valued at $5400. What was the effect on the cost of production for the year?

5. Preparation of financial statements  →  5.5. Manufacturing accounts

4. Accounting procedures  →  4.1. Capital and revenue expenditure and receipts

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29

A trader does not keep full accounting records but was able to provide the following information. $ capital at 1 January 2021 26 000 capital at 31 December 2021 37 000 drawings made during year 6 500 During the year, $9500 was withdrawn from the owner’s private bank account to purchase a motor vehicle to be used by the business. What was the profit for the year?

5. Preparation of financial statements  →  5.6. Incomplete records

4. Accounting procedures  →  4.1. Capital and revenue expenditure and receipts

6. Analysis and interpretation  →  6.2. Interpretation of accounting ratios

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30

A business provided the following information. opening inventory $6800 closing inventory $6000 rate of inventory turnover 5 times What were the purchases for the year?

4. Accounting procedures  →  4.5. Valuation of inventory

6. Analysis and interpretation  →  6.2. Interpretation of accounting ratios

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31

Jerry started his business on 1 January 2022 with no opening inventory. On 19 April 2022, a fire destroyed all his inventory. Jerry provided the following information for the period 1 January 2022 to 19 April 2022. revenue $30 200 purchases $25 600 gross margin 25% What was the value of inventory destroyed on 19 April 2022?

4. Accounting procedures  →  4.5. Valuation of inventory

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32

A trader provided the following information. $ profit for the year 24 000 working capital 20 000 capital 120 000 non-current liability 30 000 What was the return on capital employed?

5. Preparation of financial statements  →  5.6. Incomplete records

6. Analysis and interpretation  →  6.2. Interpretation of accounting ratios

4. Accounting procedures  →  4.1. Capital and revenue expenditure and receipts

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33

Which actions could a clothing retailer take to improve his rate of inventory turnover?

4. Accounting procedures  →  4.5. Valuation of inventory

6. Analysis and interpretation  →  6.2. Interpretation of accounting ratios

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34

A trader is considering selling goods on credit to a new customer. What could be calculated from the customer’s financial statements to indicate the time normally taken to pay for goods purchased on credit?

6. Analysis and interpretation  →  6.1. Calculation and understanding of accounting ratios

6. Analysis and interpretation  →  6.2. Interpretation of accounting ratios

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35

Which accounting policy requires that the information in financial statements is free from significant errors and bias?

7. Accounting principles and policies  →  7.2. Accounting policies

7. Accounting principles and policies  →  7.1. Accounting principles

5. Preparation of financial statements  →  5.3. Limited companies

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