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9706/1
ACCOUNTING
Paper 1 Multiple Choice
1 hour
Additional Materials:
1 and 2
2 and 3
2 only
3 and 4
account to be debited
account to be credited
customer
bank
customer
sales
sales
bank
sales
customer
A statement of financial position includes a 10% provision for doubtful debts totalling $7800. The
income statement shows bad debts written off of $750 and bad debts recovered of $150.
What was the original value of trade receivables?
A
$78 000
$78 600
$78 750
$78 900
A clubs income and expenditure account for 2012 showed rent and rates of $4000.
On 31 December 2012 rent owing was $600 and rates paid in advance was $800.
What was the amount shown in the receipts and payments account for rent and rates for the year
ended 31 December 2012?
A
$3800
SFX Greenherald
$4000
$4200
9706/01/Qualifying/Dec13
$5400
3
5
At the beginning of the year a business has a provision for doubtful debts of $2600. At the year
end the provision is to be 5% of trade receivables.
The balance on the sales ledger control account at the year end is $69 200, before writing off a
bad debt of $480.
The business operates a separate bad debts account.
What is the entry in the income statement for the provision for doubtful debts?
A
$836 credit
$836 debit
$860 credit
$860 debit
The table below shows how a non-current asset appears in the statement of financial position.
$
non-current asset at cost
120 000
accumulated depreciation
(18 000)
102 000
C
D
16 000
16 000
18 000
34 000
16 000
credit
$
16 000
34 000
34 000
16 000
account credited
cash
motor vehicles
disposal
motor vehicles
motor vehicles
cash
motor vehicles
disposal
SFX Greenherald
9706/01/Qualifying/Dec13
[Turn over
purchasing inventory on credit for $1000 and selling immediately for $2000 cash
A business has a bank balance of $4800. It pays for materials invoiced at $3000 less trade
discount of 30% and cash discount of 10%. A cheque for $450 is received from a customer.
What is the bank balance after these transactions?
A
$2250
$2460
$3360
$3450
10 A sole trader pays private expenses from the business bank account and records them as
drawings.
Which accounting principle is applied?
A
business entity
going concern
matching
prudence
11 A draft statement of financial position shows a bank balance of $1400. The following information
is now available.
$
cheques issued but not yet cleared by the bank
150
45
220
$1285
SFX Greenherald
$1355
$1425
9706/01/Qualifying/Dec13
$1515
[Turn over
300
balance b/d
120
Judy
180
300
300
Judy
13 At the start of the year a business had the opening trade payables of $13 000. At the end of the
year it owed $15 000 to trade payables.
During the year it paid them $190 000, after taking a cash discount of $10 000.
What was the amount of the credit purchases for the year?
A
$188 000
$192 000
$198 000
$202 000
a cheque entered in the cash book but not posted in a ledger account
a contra entry in the sales ledger control account not entered in the purchases ledger control
account
an error in the total value of sales ledger balances included in the trial balance
discount allowed entered in a customers account but not entered in the discount column in
the cash book
SFX Greenherald
9706/01/Qualifying/Dec13
6
15 A trader uses his bank statements and paying in books to produce a summary of his receipts and
payments for the year.
Why does he do this?
A
16 A trader has two departments in his clothes store mens and womens.
The following information is available.
mens
womens
13
floor space
81 m2
99 m2
$90 000
$135 000
$247 000
$403 000
annual sales
17
$23 835
$25 878
$27 240
$30 645
$2900
$1050
$1850
$2100
historical cost
replacement cost
SFX Greenherald
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7
19 A vehicle cost $12 000 and its estimated residual value was $2000. The vehicle was depreciated
at 25% per annum using the straight line method. After three years the vehicle was sold for
$3500.
What was the profit or loss on disposal?
A
20
$500 profit
$1000 loss
$1000 profit
$4500 loss
3 000
500
1 000
600
700
$200
$700
$900
$1400
The purchases ledger control account has a closing balance of $15 300. Discounts received of
$600 have been entered on the wrong side of the control account.
What is the corrected balance?
A
$14 100
$14 700
$15 900
$16 500
They may not agree since a trial balance is not a statement of financial position.
They will not agree because the trial balance does not include a figure for closing inventory.
23 A company discovers that its opening inventory was overvalued by $30 000.
Which effect will the correction of this error have on the financial statements for the year?
SFX Greenherald
profit for
the year
closing
inventory
$30 000
nil
nil
$30 000
+ $30 000
nil
+ $30 000
$30 000
9706/01/Qualifying/Dec13
current
liabilities
$
deferred
income
$
nil
nil
1400
A
B
70
nil
1330
70
70
1260
1400
nil
nil
quantity
unit cost
1 April
200
$250
1 September
400
$200
1 December
200
$300
$85 000
$155 000
$156 250
$165 000
26 A business sells a non-current asset for cash. The disposal account includes entries for the cost
of the asset and the sales proceeds.
Which books of prime entry are used?
cost
sales proceeds
cash book
general journal
cash book
sales journal
general journal
cash book
purchases journal
cash book
SFX Greenherald
9706/01/Qualifying/Dec13
[Turn over
9
27 A business buys a vehicle for $10 000 on 1 January Year 1 and sells it for $6500 on 1 January
Year 3, having depreciated it at 10 % a year using the straight line method.
The company provides a full years depreciation in the year of purchase and none in the year of
disposal.
Which amount for profit or loss will appear in the disposal account and on what side of the
disposal account will it be shown?
A
28 A company pays rates annually in advance on 1 April each year. $4000 is paid by them on
1 April 2009 and $4800 on 1 April 2010. The companys accounting year end is 31 December.
What is the charge for rates in the 2010 income statement?
A
$4000
$4200
$4600
$4800
29 At the end of its financial year a business had accounts receivable of $16 000 and had a bad
debts provision of $640. The provision is to be maintained at 5 % of accounts receivable.
Which amount is shown in the income statement?
A
30
$160 credit
$160 debit
$800 credit
$800 debit
A companys purchases ledger control account showed an opening balance of $24 640 credit.
The following information is available for the year.
$
purchases journal (including invoice for $910 entered twice)
receivables ledger control contra
17 100
850
1 250
420
discounts received
The purchases ledger control account balance at the year end was $19 870 credit.
How much cash was paid to creditors during the year?
A
$18 440
SFX Greenherald
$20 140
$20 940
9706/01/Qualifying/Dec13
$22 640