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ZHONGHUA SECONDARY SCHOOL

PRELIMINARY EXAMINATION 1 2011


Name of Pupil

_______________________________ (

Class

5N1

PRINCIPLES OF ACCOUNTS 7092

Paper No.

Level

Sec 5 Normal Academic

Date

6 July 2011

Duration

1 hour

Set by

Mr Eric Lam

Ms Noraini Mohamed and Ms Wong Li Qing

Subject / Code

Vetted by

INSTRUCTIONS TO CANDIDATES
Write your name and index number on all the work you hand in.
Write your answer in dark blue or black ink in the spaces provided on the question paper.
You may use a soft pencil for any rough working.
Answer all questions.
You may use a calculator.
INFORMATION FOR CANDIDATES
The businesses mentioned in this question paper are fictitious.
The number of marks is given in brackets [ ] at the end of each question or part question.
The total number of marks for this paper is 40.

Question

Score

1
2
3
4
Total
___________________________________________________________________
This question paper consists of 6 printed pages, including this cover page.

2
Answer all questions
1

Jiayi maintains a full set of accounting records and prepares control accounts at the end of
each month. He provided the following information for the month of February:
Sales ledger control, 1 February 2011
Purchases ledger control, 1 February 2011
Credit sales
Credit purchases
Return inwards
Return outwards
Discount allowed
Discount received
Bad debts
Cheques received from credit customers
Cheques paid to credit suppliers
Balances transferred from Purchases Ledger

$
12 400
9 800
87 900
76 400
5 300
4 200
1 800
2 100
3 300
63 700
52 100
6 500

REQUIRED
(a) Prepare Jiayis Debtor Control account for the month of February 2011.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
... [7]

3
(b) State two advantages of maintaining Control accounts.
.
.
.
... [2]
[Total: 9]
2

Edwin provided the following ledger account balances on 1 January 2010:


Machinery
Provision for Depreciation

$
84 000
12 800

Edwin charges depreciation at the rate of 10% on net book value. A full years depreciation
is charged in the year of purchase but no depreciation is charged in the year of sale.
A machinery bought for $20 000 in April 2008 was sold for $15 500 on 30 September 2010.
REQUIRED
(a) Write up and balance Edwins Provision for Depreciation account for the year ended 31
December 2010. Show all necessary workings.
.
.
.
.
.
.
.
.
.
.
.
.
.
... [6]

4
(b) Prepare Edwins Disposal account.
.
.
.
.
.
... [4]
[Total: 10]
3

Jie Sheng intends to start his own business but is unsure of what are source documents
and certain accounting terms.
REQUIRED
(a) Explain the difference between Net Book Value and Net Realizable Value.
.
.
.
... [4]
(b) State the purpose of each of the following source documents.
(i) Invoice
...
............ [2]
(ii) Credit note
...
............ [2]
(c) Jie Sheng does not understand the importance of keeping source documents. Based on
your understanding of accounting concepts, advise Jie Sheng accordingly.
.
.
... [2]
[Total: 10]

5
4

Hui Ming provided the following information for the year ended 31 March 2011:
Stock
Debtors
Prepayments
Cash
Creditors
Bank overdraft

$
10 500
3 600
1 500
400
7 200
800

REQUIRED
(a) Calculate the following accounting ratios.
(i)
Working Capital

(ii)
Current Ratio
(iii)
Quick Ratio
[3]
(b) Comment on Hui Mings liquidity position.
.
.
.
.
.
.
.
.
.
.
.

6
... [5]
(c) Suggest three ways to improve Hui Mings Working Capital.
.
.
.
.
... [3]
[Total: 11]
End of Paper

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