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CAPE Accounting 2014 U1 P1
CAPE Accounting 2014 U1 P1
%. NOTtr'I
CANNIITATT'- PI R,AS['.
MAY/JUNE 20I4
FORM TP 2OL4I
CARIBBEAN EXAMINATIONS COUNCIL
CARIBBEANADVANCEDPROFICIENCYEXAMINATIoN'!,
ACCOUNTING
Unitl-PaPer0l
I hour 30 minutes
READTHEFoLLowINGINSTRUCTIoNSCAREFULLY.
.
I Ihis test bonsists of 45 items. You will have I hour and 30 minutes to answer them'
Sample ltem
6. lf you want to change your answer, erase it completely before you fill in your new choice'
as you can.
7. When you are told to begin, turn the page and work as quickly and as carefully
lf you cannot answer an item, go on to the next one. You may return to this item later. Your
score will be the total number of correct answers'
a business to
., One clerk is responsible for keeping
l. lnternal controls are used in inn"n,o.y records and another for receiving
and issuing inventory items' This
is an
( A) produce correct financial statemens of
example
and deter emPloYee dishonestY
(B) enhancetheaccuracyandreliability
and to (A) division of labour
of, its accounting records' segregation of duties
prevent fraud
igl
conduct iCi mJniioring inventory levels
(C)
\- / esiablish responsibility and (D) inventorYvaluation
independent checks on employee
Perfbrmance
(D) --;";
\v' sai'eguard the business' assets
the accuracY and
enhance
reliability of accounting records
Dr $20 000
(A) Treasury Stock Cr $20 000
Cash
Dr $20 000
(B) Share CaPital Cr $20 000
Cash
Dr $20 000
(c) Cash Cr $20 000
Treasury Stock
Dr $20 000
(D) Treasury Stock Cr $20 000
Share CaPital
(benefit) of
What would be the advantage
Stock' is the term used to describe all countries adopt and follow the
4. 'Treasury ;;;i;g
shares that are ,"rn. u""ounting standards?
(A) sPeed
(B) access
(C) securitY
(D) emPloYment
NOT a feature
12. Which of the following is 15. The conceptual framework of
accounting
.i tetizedaccounting system? stans with a set of
" ""tp"
\''l The recording of
1a) business
(A) principles for guiding accountants
transactions is more efficient' (B) assumPtions about the accounttng
from
rB)
\-/ Different principles are used orofession
those in a manual accounttng (c) objectives of financial reporting. .
sYstem' (D) for recording fi nancial
access to
(C) lt Provides faster "onn"ntions
information
accounrlng information and
rePorts'
(D) - large
\v' Both and small comPanles
16. Which of the following is NOT
a feature
,"iliu the benefits of such of not-for-Profi t organizations?
"*
a system'
(A) Provide services to make a profit'
i;i organization is owned bv all of its
ordinary shares
t3. Stephen's lnc' issues 3 000 members'
;;Tio ;"t value for $4s ooo' How should (C) Source of revenue is donations
and
statements?
it,ir L"l*""d in the financial subscriPtions'
(D) Activitiei are usually spread to
(A) Cashshouldbedebitedfor$15000'
be
cover rural areas'
iei ordinary share capital should
credited for $45 000'
(C) Paid-in caPital in t**:t :f, P"t
(share Premium; should be
debited for $10 000'
put
(D) Paid-in capital in elce.ss :l
(share Premium) should be
credited for $ l5 000'
!'
5-
2013 2014
18. Ashley Manufacturing Company received 20. An event that is classified on the income
net proceeds of $82 000 on the sale of statement as an extraordinary item should be
an investment that cost $69 500. This (A) unusual in natute, infrequent and
transaction should be reported in the income
material in amount
statement as a
(B) unusual in nature, infrequent and
immaterial in amount
(A) loss of $12 500 under OPerating
(C) infrequent and material in amount
Expenses
but not unusual
(B) gain of $12 500 under OPerating
(D) unusual in nature, material in
Revenues
amount but not infrequent
(C) gain of $ 12 500 under Other
Revenues and Cains
(D) loss of $12 500 under OPerating
2t. The Rampaul ComPanY estim ated at
Expenses and Losses
I January 2013 that its income before taxes for
the year ended 3 I December 2013 would be
$5 500 000. The Rampaul Company's tax
19. The ability to raise t'unds fiom the stock
rate for the year is 42%o. The company
exchange is a distinguishing feature of
made quarterly tax payments on 30 April,
which of the following types of business
30 June, 30 September and 15 December.
organizations? '[he actual income for the year ended
(A) StatutorycorPoration
ll December 2013 was $5 700 000. The
amount of income tax payable at 3 l December
(B) Public corporation
20l3 is
(C) Private comPany
(D) PartnershiP (A)$0
(B) $ 84 0oo
(c) $100000
(D) $144 000
6-
(A) $ 2s 000
(B) $ 50 000
(c) $400 000
(D) $425 000
Debit Credit
$ $
2 000
(A) Cash 2 000
Service Revenue
2 000
(B) Service Revenue
2 000
Cash
2 000
(C) Cash
4 500
Service Revenue 6 500
Accounts Receivable
2 000
(D) Cash
4 500
Accounts Receivable
6 500
Service Revenue
Regarding issued share capital in financial 38. Dominica Company reported net income
34.
statements, a company is required to of $45 000; net sales of $650 000; and
average assets of $400 000 for 2013. What
disclose the
is Dominica Company's percentage return
(A) par value on assets for2013?
(B) market value
(C) names of the shareholders (A) 6.e2
(D) numberofsharesheldbyemployees (B) rt.25
(c) 6s.s4
(D) t62.s0
35. The change in cash for the Year for a
particular company is $4 500. If cash
flow from investing activities is M6 200 39. During periods of infl ation and defl ation, the
and cash flow from financing activitie" is historical cost model forfi nancial reporting
$34 400, what is the cash fl ow from oporating is deficient because
activities?
(A) it uses numerous estimates for
(A) ($70 loo) revenues and exPenses
(B) ($76 l0o) (B) itrecognizesrevenuesandexpenses
(c) ($80 100) before they are usuallY realized
(D) ($8s loo) (C) comparative financial statements
are published only for the three
years prior to the rePort date
Item 36 refers tothe following information' (D) it adds and subtacts dollars with
different purchasing Power
Alata's financial position at the end of the without adjusting for those
year is given as follows: differences
$
Cash l0 000
Accounts Receivable 15 000 40. A runaway truck crashed into a firm's
Inventory 25 000 warehouse and destroyed inventory costing
Accounts Payable 20 000 $ I 00 000. Thefirm does nothave insurance.
Long-term Notes PaYable 150 000 How should this event be recorded in
the firm's Statement of Comprehensive
Income?
36. What is the current ratio?
(A) Other loss $100 000
(A) 0.20:l (B) Selling expense $100 000
(B) 0.30:l (C) Increase cost of sale by $50 000
(c) r.25:l (D) Decrease cost of sale by $50 000
(D) 2.50:l
(A) historicalcost
(B) long-term growth
(C) short-term growth
(D) relevance
I 9-
accounting Policies?
(C) debt to equitY ratio
(D) earnings Per share
I. DePreciation method
II. MinoritY interest claims
45. The Mangoes-by-the-Sea Company had net
lll. Valuation basis followed
credit sales of$8 800 000 and cost ofgoods
sold totalling $6 600 000 for the year' The
(A) I onlY
average inventory for the year amounted
(B) Il onlY
to $2 640 000. What was the inventory
(C) I and II onlY
turnover ratio for the Year?
(D) Il and III onlY
(A) 2 times
(B) 2.5 times
(C) 3.3 times
(D) l0 times
END OF TEST