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1

What is the main function of book-keeping?

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

1. The fundamentals of accounting  →  1.1. The purpose of accounting

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2

Which components of a statement of financial position do descriptions 1, 2 and 3 relate to?

5. Preparation of financial statements  →  5.1. Sole traders

5. Preparation of financial statements  →  5.3. Limited companies

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3

A cheque received from Kate, a credit customer, was dishonoured. How was this dishonoured cheque recorded?

3. Verification of accounting records  →  3.3. Bank reconciliation

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4

What does the sales ledger of a business contain?

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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5

Which action is an example of double entry book-keeping?

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

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6

What is true about cash discounts received?

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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7

Tahir prepared a trial balance. He entered both the balance on the discount allowed account, $900, and the bank overdraft, $750, in the wrong column. Which total of the trial balance was higher and what was the amount of the difference between the debit total and the credit total?

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

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8

Goods sold on credit to J Sharp were debited in error to the account of T Sharpe. Which type of error has been made?

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

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

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9

Khalid made entries in a suspense account to correct two errors found in his ledger accounts. Once the errors were corrected, the suspense account was closed. error 1 $700 sales had been omitted from the sales account. error 2 The purchases journal had been overcast by $550. Which entry was made in the suspense account to balance the trial balance?

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

Maya depreciates her motor vehicle at 25% per annum using the straight-line method. The motor vehicle cost $15 000. The depreciation for the current financial year was incorrectly calculated at 15% per annum. How will correcting the error affect the profit for the year?

5. Preparation of financial statements  →  5.1. Sole traders

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

5. Preparation of financial statements  →  5.6. Incomplete records

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11

Waseem received a bank statement. He found that the bank had charged interest twice in error and that a dividend had been received on an investment. Waseem then updated the cash book and prepared a bank reconciliation statement. Where did he record these two items?

3. Verification of accounting records  →  3.3. Bank reconciliation

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12

Thembi is preparing her sales ledger control account. She needs to know: the total for goods which have been returned by credit customers the amount owed by credit customers which have been written off as irrecoverable. Where can she obtain this information?

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

3. Verification of accounting records  →  3.4. Control accounts

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13

On 1 August, the sales ledger control account had a debit balance of $1800. During August, a debt of $200 was written off as irrecoverable and $10 000 was received from credit customers. On 31 August, the credit customers owed $3000. What was the total of credit sales in August?

3. Verification of accounting records  →  3.4. Control accounts

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

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

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14

A wholesaler had the following transactions. sold goods, $30 000, on credit received cheque, $12 000, from sale of old fixtures at book value How would these amounts be classified?

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

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15

A trader debited the cost of repairing office equipment to the office equipment account. How did this error affect the financial statements?

5. Preparation of financial statements  →  5.6. Incomplete records

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

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16

A business bought two assets, X and Y, on 1 January 2022, for $2000 each. It depreciates asset X by 10% per annum using the straight-line method, and asset Y by 10% per annum using the reducing balance method. Which statements are correct?

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

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

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17

Ravi’s financial year ends on 30 April. Ravi bought a motor vehicle for $8000 on 1 May 2020 and sold it for $4050 on 1 May 2022. He uses the reducing balance method of depreciation at 20% per annum. What would be recorded in the income statement for the year ended 30 April 2023 for the disposal of the motor vehicle?

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

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18

On 2 January, Razia wrote off $450 owed to her by Annette, a credit customer, as irrecoverable. On 2 October, Annette paid $100 by cheque in part settlement of that debt. Which entries would Razia make on 2 October?

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

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19

Asha provided the following information about her inventory at the end of the financial year. product number of units cost price per unit $ selling price per unit $ P 2.50 2.00 J 3.00 3.50 What was the total value of Asha’s inventory?

4. Accounting procedures  →  4.5. Valuation of inventory

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20

Which group contains only service businesses?

6. Analysis and interpretation  →  6.3. Inter-firm comparison

5. Preparation of financial statements  →  5.1. Sole traders

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21

What does the statement of financial position of a business show?

5. Preparation of financial statements  →  5.1. Sole traders

5. Preparation of financial statements  →  5.3. Limited companies

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22

A trader pays her insurance premium on 1 January each year for the following 12 months. She made the following payments for insurance. $ 1 January 2022 1 January 2023 How much did the trader include for insurance in her income statement for the year ended 31 March 2023?

5. Preparation of financial statements  →  5.6. Incomplete records

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

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

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23

Which item is added to the profit for the year in a partnership appropriation account?

5. Preparation of financial statements  →  5.2. Partnerships

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24

Abi and Erni are in partnership. Erni is entitled to an annual partnership salary of $3000. They share residual profits and losses equally. The profit for the year ended 31 August 2022 was $12 600. On 1 September 2021, the partners’ current account balances were as follows. $ Abi 2500 credit Erni 1400 debit What was the credit balance on Erni’s current account on 1 September 2022?

5. Preparation of financial statements  →  5.2. Partnerships

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

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25

What is meant by the term equity?

5. Preparation of financial statements  →  5.3. Limited companies

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

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26

During the financial year, AB Limited paid debenture interest of $1400 relating to that financial year. At the end of the year, debenture interest of $700 was accrued. How was debenture interest shown...

5. Preparation of financial statements  →  5.3. Limited companies

5. Preparation of financial statements  →  5.6. Incomplete records

5. Preparation of financial statements  →  5.2. Partnerships

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27

Which items are included in an income and expenditure account prepared for a sports club?

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

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28

Melody is a music club. The club holds a music concert once every year. Prizes are awarded to musicians selected by a judge. The club provided the following information related to the latest music concert. $ sale of concert tickets 1 500 purchases of concert prizes sale of concert programmes payment of fee to the concert judge What was the profit from the concert?

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

5. Preparation of financial statements  →  5.6. Incomplete records

1. The fundamentals of accounting  →  1.1. The purpose of accounting

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29

A business provided the following information. $ opening inventory of raw material 50 000 closing inventory of raw material 60 000 purchases of raw material 80 000 carriage inwards on raw material 2 000 What was the cost of raw material consumed?

5. Preparation of financial statements  →  5.5. Manufacturing accounts

4. Accounting procedures  →  4.5. Valuation of inventory

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30

Ashwin started a business as a taxi driver on 1 January 2022. His taxi cost $5000 and he paid $100 into a business bank account. He did not keep any accounting records. On 31 December 2022, he had $1750 in the business bank account, his taxi was valued at $4000 and he owed $50 to the garage for repairs. During the year, he took $1600 out of the business bank account as drawings. What was the profit for the year?

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

5. Preparation of financial statements  →  5.6. Incomplete records

1. The fundamentals of accounting  →  1.1. The purpose of accounting

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31

A trader did not keep a complete set of accounts. He provided the following information for the year. $ opening trade payables 5 000 closing trade payables 9 800 payments to credit suppliers 35 000 cash discounts received 3 000 What were the purchases for the year?

5. Preparation of financial statements  →  5.6. Incomplete records

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

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32

T Limited provided the following information. $ net profit before interest 29 200 profit for the year 28 000 equity at the year-end 192 000 6% debentures 20 000 What was T Limited’s return on capital employed?

5. Preparation of financial statements  →  5.6. Incomplete records

5. Preparation of financial statements  →  5.3. Limited companies

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33

Sabelo’s liquid (acid test) ratio was higher on 1 January 2022 than it was on 31 December 2022. What could have caused this?

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

5. Preparation of financial statements  →  5.6. Incomplete records

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34

The following ratios relate to the businesses of Ewa and Max. Ewa Max current ratio 2.2 : 1 2.4 : 1 liquid (acid test) ratio 1.4 : 1 1.0 : 1 An accounting student made the following statements. Ewa can meet her current liabilities from her current assets more easily than Max. Ewa can meet her current liabilities from her liquid assets more easily than Max. Max has insufficient current assets to meet his current liabilities. Max has sufficient liquid assets to meet his current liabilities. Which statements are correct?

5. Preparation of financial statements  →  5.1. Sole traders

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

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35

A café owner made no entry in her accounts for increased competition when another café opened nearby. Which accounting principle was applied?

7. Accounting principles and policies  →  7.1. Accounting principles

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

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