Accounting 0452/11 October/November 2021: question paper and mark scheme

Question

Why does a trader calculate the profit of his business? A to calculate the interest payable on a loan B to calculate the provision for doubtful debts C to know the total expenses of the business D to know whether drawings are at a reasonable level

Question

Hassan is a trader. During the financial year he took goods from the business for his own use. How should he record this? debit credit A drawings inventory B drawings purchases C income statement inventory D income statement purchases

Question

Where are the accounts of credit suppliers maintained? A purchases journal B purchases ledger C sales journal D sales ledger

Question

Which document does a trader issue to remind a credit customer that payment is due? A credit note B debit note C receipt D statement of account

Question

What is a cheque counterfoil used for? A to pay a cheque into the bank account B to pay for goods purchased by cheque C to record a cheque payment in the cash book D to record a cheque received in the cash book

Question

Farouk sells goods on credit. A cheque from Khalid, a credit customer, was dishonoured by the bank. How should Farouk record this? account to be debited account to be credited A bank Khalid B irrecoverable debts Khalid C Khalid bank D Khalid irrecoverable debts

Question

Tumelo sells on credit. The terms of trade are listed. list price: $200 per unit credit period: 60 days trade discount 15% if 10 units or more are purchased cash discount 3% if the debt is paid within one month A credit customer purchased 20 units and paid the debt within 15 days. What was the total of the invoice? A $3298 B $3400 C $3880 D $4000

Question

Jane purchased goods and paid by credit transfer. How should this be recorded in Jane’s accounting records? account to account to be debited be credited A bank purchases B purchases bank C purchases trade payable D trade payable purchases

Question

What is shown in a trial balance? A capital and profit on a particular date B financial transactions for a particular period C ledger balances on a particular date D receipts and payments for a particular period

Question

At the end of each year, PT Limited transfers 20% of the profit for the year to the general reserve. Draft financial statements were prepared for the year ended 30 September 2021. It was then discovered that the inventory at 30 September 2021 had been overstated by $1500. Which effects did the correction of this error have on retained earnings and general reserve at 30 September 2021? retained earnings $ general reserve $ A decrease 300 increase 300 B decrease 1200 decrease 300 C increase 300 increase 1200 D increase 1500 no effect

Question

The bank columns in a trader’s cash book and the bank statement both showed positive balances. A comparison revealed the following differences. $ uncredited cheque 200 bank charges not included in cash book 10 What was the difference between the balance shown in the bank column of the cash book and that shown on the bank statement? A The cash book balance was $190 higher than the bank statement balance. B The cash book balance was $190 lower than the bank statement balance. C The cash book balance was $210 higher than the bank statement balance. D The cash book balance was $210 lower than the bank statement balance.

Question

What is a reason for preparing a sales ledger control account? A to calculate total sales revenue B to ensure trade receivables pay on time C to help prepare the income statement D to summarise the accounts of the trade receivables

Question

Two companies each purchased a motor vehicle for $10 000 at the beginning of year 1. Company G used the straight-line method of depreciation at a rate of 15% per annum, while Company H used the reducing balance method at a rate of 20% per annum. What was the difference in the depreciation charge between the two companies for year 2? A $100 greater for G B $100 greater for H C $500 greater for G D $500 greater for H

Question

Amit’s financial year ends on 31 December. The following account appeared in his sales ledger. Dipak account 2020 $ 2020 $ Jan 7 sales 3200 Jun 3 bank 1700 Oct 30 cash 230 Nov 21 ? 1270 3200 3200 What does the entry on 21 November represent? A an irrecoverable debt B discount allowed C the balance carried down D the recovery of a debt previously written off

Question

Sally wished to increase the balance on the provision for doubtful debts account at the end of the financial year. How should this increase be recorded? debit credit A income statement provision for doubtful debts account B irrecoverable debts account provision for doubtful debts account C provision for doubtful debts account income statement D provision for doubtful debts account irrecoverable debts account

Question

The following errors were found after a statement of financial position had been prepared. 1 A loan repayable in two year’s time had been included as a current liability. 2 A provision for doubtful debts should have been created. What is the effect of correcting these errors? current current non-current owner’s assets liabilities liabilities equity A decrease decrease increase decrease B decrease increase decrease increase C increase decrease decrease increase D increase increase decrease decrease

Question

John maintains a full set of accounting records. Why does he also prepare a statement of financial position? A to calculate the profit for the year B to check if assets equal capital plus liabilities C to show the transactions which took place during the year D to summarise what the business owns and what it owes

Question

What are advantages of operating as a sole trader? 1 The owner can keep all the profit. 2 The owner can raise finance by issuing debentures. 3 The owner can make decisions independently. 4 The owner is protected by limited liability. A 1 and 3 B 1 only C 2 and 3 D 2 and 4

Question

Anwar is a sole trader making annual profits of $24 000. He decides to admit Dilip as a partner. They agree that Anwar would receive a salary, and profits and losses would be shared equally. The forecast appropriation account for the partnership’s first year of trading is: $ profit for the year 50 000 salary Anwar 10 000 profit available for distribution 40 000 By how much will Anwar’s total income increase? A $1000 B $6000 C $16 000 D $26 000

Question

Kasi and Ravi are in partnership. The financial statements for the year ended 31 August 2021 showed that Ravi was entitled to interest on capital and interest on loan and was charged interest on drawings. Which entries would be made in Ravi’s current account? interest on capital interest on loan interest on drawings debit credit debit credit debit credit A B C D

Question

BCD Limited provided the following information. $ ordinary shares 300 000 retained earnings 200 000 debentures 170 000 How much was the equity and the capital employed? equity capital employed $ $ A 300 000 470 000 B 300 000 670 000 C 500 000 470 000 D 500 000 670 000

Question

The issued share capital of CD Limited consists of ordinary shares. Retained earnings were $86 000 on 1 September 2020 and $88 500 on 31 August 2021. The company made a profit during the year of $26 000 and made a transfer to general reserve of $5000. What was the total ordinary share dividend paid during the year? A $18 500 B $23 500 C $28 500 D $33 500

Question

A sports club was formed on 1 August 2020. During the year ended 31 July 2021 the club purchased equipment costing $5000, paying by cheque. In which of the club’s financial statements did this appear? receipts and payments income and expenditure statement of financial account account position A B C D

Question

What is not part of the prime cost of a manufacturing business? A raw material B royalties C wages of factory supervisors D wages of production workers

Question

The value of Thato’s work in progress increased during the year. This was recorded in his financial statements. How did this affect the cost of production and the cost of sales? cost of cost of sales production A decreased decreased B decreased no effect C increased increased D increased no effect

Question

What are advantages of keeping a full set of accounting records? 1 Financial statements will be free from errors. 2 It is impossible to make fraudulent entries. 3 More informed decision-making is possible. 4 The calculation of profit is more accurate. A 1 and 2 B 1 and 3 C 2 and 4 D 3 and 4

Question

Beth provided the following information. 1 January 31 December net assets $28 000 $24 000 Her drawings during the year amounted to $3000. What was Beth’s profit or loss for the year? A $1000 loss B $1000 profit C $7000 loss D $7000 profit

Question

Roshan’s sales for his first year of trading were $55 000. His gross profit margin was 20%. The closing inventory was $3200. What were the purchases for the year? A $41 250 B $44 000 C $44 450 D $47 200

Question

Which information is required to calculate the return on capital employed for a sole trader? A gross profit, non-current liabilities, owner’s capital B gross profit, non-current liabilities, working capital C operating profit for the year, non-current liabilities, owner’s capital D operating profit for the year, non-current liabilities, working capital

Question

What is the best indicator of the liquidity of a business? A current ratio B liquid (acid test) ratio C return on capital employed D working capital

Question

A trader provided the following information for the year ended 31 May 2021. $ trade payables on 1 June 2020 12 250 trade payables on 31 May 2021 42 000 credit purchases for the year 319 375 What was the trade payables turnover (days) for the year ended 31 May 2021? A 31 days B 34 days C 48 days D 62 days

Question

A business provided the following information about its gross margin. Year 1 40% Year 2 38% Year 3 35% What could explain the changes in the gross margin? A Cost of sales is decreasing. B Expenses are decreasing. C Quantity of goods sold is decreasing. D Selling price is decreasing.

Question

What is not a limitation of inter-firm comparison? A Accounting records do not include the skills of the workforce. B Businesses may have different accounting policies. C Businesses may have different sales prices. D The available information may not relate to a typical year.

Question

Why would a supplier be interested in the financial statements of a credit customer? A to know if the customer can pay what he owes B to know the amount owed by trade receivables C to know the profit for the year D to know the value of the inventory

Question

What does the objective of understandability assume users of financial statements will possess? A a reasonable knowledge of accounting B full knowledge of accounting C knowledge of book-keeping but not accounting D no knowledge of book-keeping or accounting