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Book-keeping and Accounts Level 2/series 2-2009

Book-keeping and Accounts Level 2/series 2-2009

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Published by Hein Linn Kyaw

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Categories:Business/Law, Finance
Published by: Hein Linn Kyaw on Jul 01, 2010
Copyright:Attribution Non-commercial

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10/28/2013

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Model Answers
Series 2 2009 (2006)
For further informationcontact us:Tel. +44 (0) 8707 202909Email. enquiries@ediplc.comwww.lcci.org.uk
LCCI International Qualifications
Book-keeping and AccountsLevel 2
 
Page 1 of 10
 
Book - Keeping and Accounts Level 2
Series 2 2009
How to use this booklet
Model Answers have been developed by EDI to offer additional information and guidance to Centres,teachers and candidates as they prepare for LCCI International Qualifications. The contents of thisbooklet are divided into 3 elements:(1) Questions reproduced from the printed examination paper (2) Model Answers – summary of the main points that the Chief Examiner expected tosee in the answers to each question in the examination paper,plus a fully worked example or sample answer (where applicable)(3) Helpful Hints where appropriate, additional guidance relating to individualquestions or to examination techniqueTeachers and candidates should find this booklet an invaluable teaching tool and an aid to success.EDI provides Model Answers to help candidates gain a general understanding of the standardrequired. The general standard of model answers is one that would achieve a Distinction grade. EDIaccepts that candidates may offer other answers that could be equally valid.© Education Development International plc 2009All rights reserved; no part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwisewithout prior written permission of the Publisher. The book may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover, other than that in which it ispublished, without the prior consent of the Publisher.
 
2006/2/09/MA Page 2 of 11
QUESTION 1
The Trial Balance of M Mae at 31 January 2008 showed a difference which was posted to a suspenseaccount.Draft final accounts for the year ended 31 January 2008 were prepared showing a net profit of £94,480.The following errors were subsequently discovered:(1) The sales journal had been undercast by £4,000(2) Repairs to a machine amounting to £980 had been charged to the machinery account(3) Purchases, from P Wong, amounting to £1,530, had been received on 31 January 2008 andincluded in the closing stock on that date, but the invoice had not been entered in the purchases journal(4) Sales of £900 to C Choo had been debited to S Chung(5) A payment of £350 for telephone expenses had been entered on the debit side of the telephoneaccount as £550(6) A cheque for £3,000 in respect of rent received had only been entered in the cash book.
REQUIRED
(a) Show the journal entries necessary to correct the above errors. Narratives are
NOT
required.(12 marks)(b) Prepare the Suspense Account to correct the above errors. (5 marks)(c) Calculate the revised net profit for the year ended 31 January 2008 by showing the effects of theabove adjustments.(6 marks)(d) What is meant by the term ‘errors of reversal’? Give an example to support your answer.(2 marks)
(Total 25 marks)

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