Accounting 0452/12 May/June 2021: question paper and mark scheme

Question

Which statements about book-keeping and accounting are correct? 1 Accounting is performed periodically rather than daily. 2 Accounting relies on having accurate book-keeping records. 3 Book-keeping includes the preparation of financial statements. 4 Book-keeping involves the recording of financial transactions. A 1, 2 and 4 B 1 and 3 C 2, 3 and 4 D 2 and 4 only

Question

What increases owner’s capital? A bank loan extended from five to ten years B purchase of inventory on credit C purchase of machinery by cheque D transfer of vehicle to business from private use

Question

William paid $500 in cash to Sonia for rent. How did Sonia record this? account debited account credited A cash rent receivable B rent receivable cash C rent receivable William D William rent receivable

Question

Abdul buys all his machinery on credit. He provided the following information. at 30 April 2020 at 30 April 2021 $ $ machinery at cost 30 000 42 000 amounts owing to suppliers of machinery 19 000 ? During the year Abdul paid $25 000 to the suppliers of his machinery. How much did he owe them on 30 April 2021? A $6000 B $13 000 C $17 000 D $32 000

Question

Shula’s financial year ends on 31 March. On 1 April 2021 there was a credit balance of $100 on Yasmin’s account in Shula’s purchases ledger. What does this mean? A Shula had paid $100 to Yasmin. B Shula owed $100 to Yasmin. C Yasmin had paid $100 to Shula. D Yasmin owed $100 to Shula.

Question

Hasina buys radios from Nazneen at a list price of $10 each. Hasina bought 12 radios and was offered 20% trade discount and 4% cash discount. Two radios were faulty and were returned to Nazneen. What was the total of the credit note issued by Nazneen? A $15.36 B $16.00 C $19.20 D $20.00

Question

Jameel sold goods on credit. Where did he first record the invoice he issued? A general journal B general ledger C sales journal D sales ledger

Question

Which statements about a three-column cash book are correct? 1 It contains ledger accounts for bank and cash. 2 It contains ledger accounts for discounts allowed and received. 3 It records transactions before they are recorded in the ledgers. A 1 and 2 B 1 and 3 C 2 and 3 D 3 only

Question

Which statement is not true about a trial balance? A It is a list of ledger account balances at a certain date. B It can assist in finding arithmetical errors. C It is part of the double entry system. D It is useful in preparing financial statements.

Question

Which error is an error of original entry? A sale of surplus office equipment on credit to Janet for $230 entered as $320 in both the disposal account and Janet’s account B sale of surplus office equipment on credit to Janet for $230 entered in the office equipment account and Jason’s account C sale of surplus office equipment on credit to Janet for $230 entered in the sales account and Janet’s account D sale of surplus office equipment on credit to Janet for $230 not entered in any accounts

Question

A cheque, $85, received from Shakeel, was credited to the account of Shamz. Which journal entry corrects this error? debit credit $ $ A bank 85 Shakeel 85 B Shakeel 85 Shamz 85 C Shamz 85 bank 85 D Shamz 85 Shakeel 85

Question

Jamal’s bank statement at 1 May 2021 showed a bank overdraft of $1460. At that date there were unpresented cheques of $385 and uncredited deposits of $255. What was the cash book balance on 1 May 2021? A $1330 credit B $1330 debit C $1590 credit D $1590 debit

Question

What is included in a purchases ledger control account? A cash purchases B debts written off as irrecoverable C discount allowed D goods returned to credit suppliers

Question

Javid’s sales ledger control account had a debit balance of $12 000. Interest on an overdue account, $40, and discount allowed, $150, had been omitted. What was the correct balance on the sales ledger control account? A $11 810 B $11 890 C $12 110 D $12 190

Question

Which statements about capital expenditure are correct? 1 It is money spent on day-to-day business operations. 2 It is money spent on purchasing non-current assets. 3 It is recorded in the statement of financial position. 4 It includes expenses relating to non-current assets. A 1 and 3 B 1 and 4 C 2 and 3 D 2 and 4

Question

Nia sold equipment with a net book value of $200. The proceeds of the sale, $250, were credited to the sales account and debited in the cash book. What was the effect of this error on Nia’s gross profit and profit for the year? gross profit $ profit for the year $ A overstated 50 overstated 50 B overstated 200 understated 250 C overstated 250 overstated 200 D understated 250 understated 200

Question

Why does a business provide for depreciation on non-current assets? A to charge the cost of non-current assets against profit in the year of purchase B to ensure that non-current assets appear at book value in the statement of financial position C to ensure that the matching principle is applied when preparing financial statements D to retain cash in the business for replacement of non-current assets

Question

A machine with an original cost of $10 000 had been depreciated for two years at the rate of 10% per annum using the straight-line basis. It was then sold for cash with the loss on disposal amounting to $700. A replacement machine was bought on the same day for $12 400 cash. What was the net decrease in the cash balance? A $3700 B $5100 C $11 700 D $13 100

Question

Why would a bakery business not include a value for inventory of stationery in the statement of financial position? A It was expected it would be used in the next few months. B It was purchased regularly and paid for in cash. C It was not for resale. D It was of very low value.

Question

Shilpa’s financial year ends on 30 April. On 31 March 2021 she wrote off a debt owed by Tahir as irrecoverable. Which entry did Shilpa make on 31 March 2021? debit credit A income statement Tahir B irrecoverable debts income statement C irrecoverable debts Tahir D Tahir irrecoverable debts

Question

How should inventory be valued? A cost B higher of cost and net realisable value C lower of cost and net realisable value D net realisable value

Question

James is an accountant and operates as a sole trader. Which items would not appear in his statement of financial position? 1 long-term loan 2 retained earnings 3 trade payables A 1 and 2 B 1 and 3 C 2 only D 2 and 3

Question

Zaha is a consultant who receives fees from clients. How would Zaha calculate his profit for the year? A fees received – cost of sales B fees received – cost of sales + expenses C fees received + expenses D fees received – expenses

Question

What is added to owner’s capital to calculate capital employed? A current assets B current liabilities C non-current assets D non-current liabilities

Question

What is an advantage of forming a partnership? A Decisions have to be recognised by all partners. B Each partner is responsible for actions of other partners. C Profits have to be shared among the partners. D Responsibilities can be shared between the partners.

Question

Ann and Ben are in partnership sharing profits and losses equally. They provided the following information for the year ended 30 April 2021. $ profit for the year 20 000 interest on capital: Ann 5 000 Ben 4 000 drawings: Ann 8 000 Ben 7 000 What was Ben’s share of the residual profit? A $5500 B $10 000 C $13 000 D $14 500

Question

Which statement about a receipts and payments account is incorrect? A It includes amounts prepaid at the end of the year. B It shows the surplus for the year. C Non-monetary items are excluded. D The balance represents cash and bank balances.

Question

How does a manufacturer calculate prime cost? A direct material + direct labour B direct material + direct labour + direct expenses C direct material + direct labour + direct expenses + factory overheads D direct material + direct labour + factory overheads

Question

Nula provided the following information for the year ended 31 March 2021. $ drawings for the year 3 900 net assets at 1 April 2020 60 500 net assets at 31 March 2021 72 275 What was the profit or loss for the year ended 31 March 2021? A $7875 loss B $7875 profit C $15 675 loss D $15 675 profit

Question

A trader provided the following information. $ cost of sales 80 000 expenses 4 000 profit for the year 16 000 What was the profit margin? A 16% B 20% C 21.05% D 26.67%

Question

A trader provided the following information. $ $ revenue 3600 opening inventory 100 purchases 2600 2700 closing inventory 300 2400 gross profit 1200 It was found that the closing inventory should have been $400. What was the correct rate of inventory turnover? A 6 times B 8 times C 9.2 times D 14.4 times

Question

Sally’s business has reached the overdraft limit set by the bank of $1500 and is not able to pay its debts when they fall due. Sally is considering the following proposals. 1 asking the bank to increase the bank overdraft limit to $2000 2 borrowing $2000 from a relative and paying the money back in six months 3 obtaining a loan from the bank of $2000 repayable in two years 4 paying $2000 from Sally’s personal bank account into the business bank account Which proposals will improve the working capital of the business? A 1 and 2 B 1 and 4 C 2 and 3 D 3 and 4

Question

Company X and Company Y provided the following information. Company X Company Y gross margin 36.7% 42.6% profit margin 5.4% 5.4% Which statement is correct? A Both companies earned the same amount of profit for the year. B Company X had a better gross margin than Company Y. C Company Y had a larger proportion of expenses than Company X. D The cost of sales of Company X was lower than that of Company Y.

Question

The current ratio of X is 2 : 1. The current ratio of Y is 1.3 : 1. What does a comparison of these ratios show? A X has fewer liabilities than Y. B X has more liquidity than Y. C Y has fewer current assets than X. D Y has more inventory than X.

Question

Which international accounting objectives are described by the following statements? 1 Information in financial statements must be free from material error and bias. 2 Users must be able to identify differences and similarities between information in different financial statements. statement 1 statement 2 A comparability understandability B reliability comparability C reliability understandability D understandability reliability