Accounting 0452/12 October/November 2020: question paper and mark scheme

Question

A trader prepares financial statements each year. What do these assist the trader to do? A calculate the amount owing to credit suppliers B calculate the cash drawings C check the bank statement balance D make decisions about the future

Question

What is not an example of a book-keeping entry? A an entry made in the bank column of the cash book for a cheque received B cost of goods purchased on credit entered in the supplier’s account C expenses paid during the year entered in the income statement D goods returned by a customer entered in the sales returns journal

Question

The following balances appeared in Hussein's books. $ fixtures 6000 inventory 3300 trade receivables 3000 trade payables 4500 other receivables 500 other payables 300 loan to Imran 1000 bank overdraft 1400 What was the total of the liabilities? A $4800 B $6200 C $6400 D $7200

Question

What does the owner’s equity consist of? A the amount of money in the business bank account B the amount owed by the business to the owner C the total of the assets owned by the business D the total of the current assets less the current liabilities

Question

Which entries did Sally make to record the following transaction? Rashid, a credit customer, returned damaged goods. account to account to be debited be credited A purchase returns Rashid B Rashid purchase returns C sales returns Rashid D Rashid sales returns

Question

The following account appeared in the books of Mary. Paul account $ $ April 1 balance b/d 90 April 21 returns 25 14 sales 150 30 bank 88 discount 2 balance c/d 125 240 240 Which statement is correct? A On 1 April Paul owed Mary $90. B On 14 April Paul sold goods, $150, to Mary. C On 21 April Mary returned goods, $25, to Paul. D On 30 April Mary owed Paul $125.

Question

In which sections of Zamir’s ledger would the following accounts be maintained? 1 the sales account 2 the account of Harjit, a trade receivable sales account Harjit account A nominal (general) ledger purchases ledger B nominal (general) ledger sales ledger C purchases ledger sales ledger D sales ledger purchases ledger

Question

Sue allows 2% cash discount to credit customers who settle their account within 28 days. Jane purchased goods, list price $200, on 10 September. She returned these goods on 15 September. Which entry would Sue make on 15 September? A purchases returns journal $196 B purchases returns journal $200 C sales returns journal $196 D sales returns journal $200

Question

A transaction was posted to the wrong account of the same class. Which type of error was made? A commission B original entry C principle D reversal

Question

Motor vehicle expenses, $50, were incorrectly debited to the motor vehicles account. Which journal entry corrects this error? debit credit $ $ A motor vehicle expenses 50 motor vehicles 50 B motor vehicles 50 motor vehicle expenses 50 C motor vehicles expenses 50 motor vehicles 50 suspense 100 D suspense 100 motor vehicles expenses 50 motor vehicles 50

Question

Kate calculated her draft profit for the year at $28 400. She later discovered the following errors. 1 Rent prepaid by Kate was understated by $1000. 2 Closing inventory was understated by $1500. What was the correct profit for the year? A $25 900 B $27 900 C $28 900 D $30 900

Question

A trader’s bank statement showed a credit balance of $2940. The following items had not been entered in the cash book. $ bank interest received 70 credit transfer 280 What was the debit balance in the cash book before it was updated? A $2590 B $2730 C $3150 D $3290

Question

What is a purpose of preparing a sales ledger control account? A to identify irrecoverable debts B to make fraud more difficult C to provide the total owed to trade payables D to show the total of cash and credit sales

Question

George is preparing his purchases ledger control account. Which information would he obtain from his general journal? A contra entries with the sales ledger B goods returned to credit suppliers C irrecoverable debts written off D refunds received from credit suppliers

Question

A trader debited the cost of repairing office equipment to the office equipment account. How did this error affect the financial statements? profit for non-current the year assets A overstated overstated B overstated understated C understated overstated D understated understated

Question

Rashid provided the following information at 31 December. $ machinery at cost 52 000 provision for depreciation of machinery 23 000 Depreciation for the year is calculated at 20% on cost. After the statement of financial position was prepared it was found that the machinery repairs costing $2000 had been debited to the machinery account. What is the correct balance on the provision for the depreciation of machinery account? A $21 000 B $22 600 C $23 400 D $25 000

Question

A machine which cost $32 000 was sold for $14 000. The total depreciation at the date of disposal was $15 000. What was the profit or loss on disposal? A $3000 profit B $3000 loss C $18 000 profit D $18 000 loss

Question

Beena maintains a provision for doubtful debts of 3% of the trade receivables at the end of each financial year. On 1 September 2019 the provision for doubtful debts was $900. On 31 August 2020 the trade receivables amounted to $42 800. Which journal entry did Beena make on 31 August 2020? debit credit $ $ A income statement 384 provision for doubtful debts 384 B income statement 1284 provision for doubtful debts 1284 C provision for doubtful debts 384 income statement 384 D provision for doubtful debts 1284 income statement 1284

Question

Nirmal sells two products, product G and product H. The following information is available about his inventory at the end of the financial year. number cost price net realisable product of units per unit value per unit G 1000 $2.00 $2.50 H 800 $1.50 $1.20 It was found that 100 units of product G were damaged and were unsaleable. What was the total value of Nirmal’s inventory? A $2760 B $3000 C $3260 D $3460

Question

What is not a service business? A hairdressing salon B accountant’s practice C supermarket D computer repair shop

Question

The financial year of Peter ends on 30 September. On 1 August 2020 Peter received rent $1000. This covered the period from 1 July to 30 November 2020. Which entry will be made in Peter’s statement of financial position on 30 September 2020? A current asset $400 B current asset $500 C current liability $400 D current liability $500

Question

In addition to a share of the profit a partner receives interest on capital, a salary and is charged interest on drawings. How are these recorded in the ledger accounts of the partner? interest on capital salary interest on drawings A credit capital account credit current account debit capital account B credit current account debit capital account credit current account C credit current account credit current account debit current account D debit current account debit current account credit current account

Question

A sports club provided the following information. $ subscriptions for the year 26 800 profit on sale of refreshments 4 200 depreciation 1 500 rent and insurance 12 600 wages 3 200 What was the total income for the year? A $15 800 B $17 300 C $22 600 D $31 000

Question

A club was formed on 1 July 2019. During the year ended 30 June 2020 subscriptions received from members totalled $2500. This included $120 paid in advance for the next financial year. Subscriptions outstanding on 30 June 2020 amounted to $280. How much was recorded for subscriptions in the income and expenditure account for the year ended 30 June 2020? A $2100 B $2500 C $2660 D $2780

Question

Anthony does not keep a full set of accounting records. He knows his opening and closing cash balances and wishes to calculate his cash sales. Which item does Anthony not need in order to calculate his cash sales? A cash banked B cash discount C cash drawings D cash expenses

Question

A trader has not maintained a full set of accounting records. How can she calculate the credit sales for the year? A receipts from credit customers + closing trade receivables – discount allowed – opening trade receivables B receipts from credit customers – closing trade receivables + discount allowed + opening trade receivables C receipts from credit customers – closing trade receivables – discount allowed + opening trade receivables D receipts from credit customers + closing trade receivables + discount allowed – opening trade receivables

Question

A trader made the following forecasts for the business for the next financial year. average inventory $80 000 rate of inventory turnover 6 times mark-up 25% What are the forecast sales for the next financial year? A $360 000 B $480 000 C $576 000 D $600 000

Question

A company provided the following information about its current ratio. year 1 2.3 : 1 year 2 2.4 : 1 year 3 2.5 : 1 What would explain the changes in the ratio? A Inventory is decreasing. B Other payables are increasing. C Other receivables are increasing. D Trade receivables are decreasing.

Question

A trader wants to improve his gross margin. How can this be done? A Reduce administrative expenses. B Reduce depreciation of equipment. C Reduce rate of cash discount allowed. D Reduce rate of trade discount allowed.

Question

Meesha provided the following information for her first year of trading. $ sales (1000 units at $10 each) 10 000 cost of sales (1000 units at $4.50 each) 4 500 gross profit 5 500 In her second year of trading, Meesha reduced the selling price and sold 1500 units. Her gross profit decreased by $250. There was no change in the cost per unit. What was the total value of sales in the second year of trading? A $9750 B $10 250 C $12 000 D $12 500

Question

AB Limited and CD Limited both started business on 1 January 2019 with an ordinary share capital of $100 000. Neither company had any debentures or loans. Both companies had the same profit in 2019. Only AB Limited paid a dividend. The return on capital employed (ROCE) was calculated using closing capital employed. Which statement about AB Limited’s ROCE is correct when compared to that of CD Limited? A It is higher because the dividend reduced retained earnings. B It is lower because the dividend reduced capital employed. C It is lower because the dividend reduced the profit for the year. D It is the same as that of CD Limited.

Question

Which interested party uses the financial statements of a business to assess current performance and plan for future activities? A banks B employees C government D managers

Question

The special skills of the employees are not recorded in the financial statements of a business. Which accounting principle is being applied? A historic cost B materiality C money measurement D realisation

Question

How can a business comply with the accounting principle of prudence? assets losses A avoid overstating avoid overstating B avoid overstating avoid understating C avoid understating avoid overstating D avoid understating avoid understating

Question

What is not an aim of international accounting standards? A to ensure accounting standards in different countries agree B to establish an organisation to set standards in every country C to make it easier to compare companies’ financial statements D to reduce the variety of accounting practices worldwide