1. Financial accounting (AS Level)
A section of Accounting, 9706
Listing 10 of 1775 questions
Esarba has a financial year end of 31 December. On 31 March 2020, she transferred her private vehicle to the business at a value of $12 000. Her profit for the year ended 31 December 2020 was $7800 and her cash drawings amounted to $8000. Depreciation of $900 had been provided on the vehicle. She also took goods for her own use with a cost price of $1000 and a selling price of $2000. What was the increase in Esarba’s capital account balance in the year ended 31 December 2020?
9706_m21_qp_12
MCQ
2021
Paper 1, Variant 2
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Rafiq owns a retail business. When the business was opened a few years ago, Rafiq maintained only minimal accounting records. REQUIRED State two reasons why the owner of a business might maintain minimal accounting records. Identify four benefits of maintaining full accounting records. Additional information More recently Rafiq has been able to provide more detailed financial information. On 1 January 2021, the business’s assets and liabilities were as follows: $ Cash in hand Bank overdraft 1 390 Furniture and fittings at valuation 22 710 Trade payables 11 870 Inventory 14 430 Rent prepaid 1 250 The following summary of receipts and payments for the year ended 31 December 2021 has been prepared from the business’s bank statements. Receipts $ $ Cash sales banked 132 200 Disposal of furniture and fittings 3 480 Total receipts 135 680 Payments Drawings 18 390 Trade payables 93 100 Rent 14 750 Additional furniture and fittings 8 000 Installation costs for new fittings General expenses 5 940 Total payments 140 560 Rafiq purchases all goods for resale on a credit basis. All sales are on a cash basis. A cash discount of 5% was received when Rafiq settled debts with trade payables during the year ended 31 December 2021. At 31 December 2021 trade payables totalled $9230. REQUIRED Calculate the total purchases for the year ended 31 December 2021. Additional information During the year ended 31 December 2021: Some cash takings were not banked but were used to pay wages, $21 540, and drawings, $2580. Rafiq took goods costing $480 for private use. Furniture and fittings with a value of $2950 were sold. At 31 December 2021: Cash takings of $1200 had not yet been banked. The balance of cash in hand was $920. Inventory was valued at $11 920. Furniture and fittings were valued at $23 400. Rent of $1440 was prepaid. REQUIRED Prepare the income statement for the year ended 31 December 2021. Workings: Additional information Rafiq would like to expand his business but requires additional finance to carry out this plan. He is considering two options. Option 1: Invite a friend, Khaled, to become a partner in the business. Khaled would introduce capital of $10 000. Option 2: Apply for a bank loan of $10 000. REQUIRED Advise Rafiq which option he should choose. Justify your answer by discussing both financial and non-financial issues of each option.
9706_m22_qp_22
THEORY
2022
Paper 2, Variant 2
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Questions Discovered
1775