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FORM TP 2OI.4LO2 MAY/JLTNE 20I4

C;\ R t B B E A N EXAMINATIONS COUNCI L

CARIBBEAN SECONDARY EDUCATION CERTIFICATE@
EXAMINATION
PzuNCIPLES OF ACCOUNTS
Paper 01 - General ProficiencY
I hour 30 minutes

22 NI1rY 2014 (p.m.)

R.EAD THE FOLLOWING INSTRUCTIONS CAR"EFULLY.

l This test consists of 60 items. You will have I hour and 30 minutes to answer them.

2. In addition to this test booklet, you should have an answer sheet.

Each item in this test has four suggested answers lettered (A), (B), (C), (D). After reading
cach item you are about to answer, decide which choice is best.

4. On your answer sheet, find the number which corresponds to'your item and shade the space
having the same letter as the answer you have chosen. Look at how it is done in the sample
item below.

Samole ltem

Prime cost is calculated by adding direct factory expenses to the Sample Answer

(A)
(B)
cost of goods sold
sale of fixed assets
@@or
(C) sale of finished goods
(D) cost of materials used
'fhe best answer to this item is "cost of materials used", so answer space (D) has been shaded.

5. lI you want to change your answer erase it completely before you lill in your new choice.
6. When you are told to begin, turn the page and work as quickly and as carefully as you can.
If you cannot answer an item, omit it and go on to the next one. You can return later to the
item omitted. Your score will be the total number of correct answers.

7. l-he use of silent electronic calculators is allowed.

-
il
DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO.
I
I
t Copyright 'O 2012 Caribbean Examinations Council
,- .\ll rishts reserved.
il
 .t

1. A non-trading organization is MAINLY 4' Amalgamated Components was a private

concerned with company until it admitted additional
shareholders by selling shares on the Stock
(A) importing goods for resale Exchange. Amalgamated Components can
(B) trading only with wholesalers now be described as a
(C) providing various services for its
members (A) Partnership
(D) making maximum prolit fbr the (B) Statutory Corporation
proprietor (C) Public Limited ComPanY
(D) Private Limited ComPanY
-Ihe
2. term 'Accounting'refers to the
5' The purchase of equipment on credit will
(A) use of information in making alTect a firm's balance sheet bY
business decisions
(B) use of special waYs of recording (A) increasing assets and increasing
business information liabilities
(c) j ournalizin g, posting and balancing
(B) decreasing assets and increasing
ofaccounts in sPecial books liabilities
(D) recording, analYzing and inter- (C) increasing assets and decreasing
preting of business information liabilities
(D) decreasing assets and decreasing
liabilities
3. Which of the following accounts are
nominal?

(A) Wages and Rent

(B) Stock and Debtors
(c) Machinery and Plant
(D) Creditors and Fixtures

Item 6 refers to the balance sheet below'

4 000 Add Net Profit 13 450

Land
8 000 3 000
Motor vehicles
2 600 l6 450
Fixtures
300 Less drawings (l 000) r5 450
Stock
Debtors 450
2 100
Bank 2 000 Creditors
Cash 200

-lhe value of TOTAL fixed assets is

6.

(A) $12 ()00

(B) $14 600
(c) sl5 350
(D) sl9 6-50
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1:;il 7. The summarized position of Fosterr:.g1nd. 1t. Kim Smith purchases goods on credit
Scott Limited at 06 March 2012 was valued at $500. She pays ofT her bill
within the grace period and so receives a
s l0o/o cash discount. How much does she
Current Liabilities 60 000
pay for the goods'?
Current Assets 100 000
Fixed Assets
Liabilities
200 000
(A) $ s0
Long Term t50 000 (B) s4so
What was the capital of Foster and Scott
(c) $4eo
Limited at 06 March 20lT?
(D) $sso

(A) $ 40 000
ltem l2 ret-ers to the fbllowing infbrmation
(B) $ 90 000
(c) s lsO 000
from the books of a company.
(D) $190 000
s
Cash sales r0 000
Credit sales 4s 000
8. A business which owns goods valued at
Stock on hand 40 000
5500, has a van valued at $l 000 and owes
Drawings 8 000
S50 for goods. If it sells out at these prices
Cash purchases 12 000
the orvner's closing capital will be
Credit purchases 20 200
(A) Sl 5s0
(B) sl 5oo t2. From the information above, what is the
(c) $l 450 correct closing total for the SalesAccount?
(D) SI 050
(A) $47 ooo
(B) $49 000
9. Mr. Harry, a grocer, bought a computer on (c) $55 000
credit from Tan Company. Which of the (D) $se 000
following journal entries will be made for
this transaction in Mr. Harry's books'?
13. Which ofthe following would NOTappear
(A) Dr Purchases Account in a cash book?
Cr Tan Account
( B) Dr Computer Account (A) Payment fbr goods $100
Cr Cash (B) Goods sold on credit Sl00
(C) Dr Tan Account (C) Goods sold for cheque S t00
Cr Purchases Account ( D) Goods bought for cash S 100
( D) Dr Computer Account
Cr Tan Company

t0. In orderto avoid writingnumerous cheques

fbr small alnounts, a lirm may set up a
(A) general ledger
(B) general journal
(c) petty cash lirnd
(D) slandilrg order with a bank

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14. On 0lMay, a petty cashier received an Y,l'. K. Khan, a debtor of A and B Enterprises,
imprest of $ 150. During the month, petry settles her debt of $120 less discount, by
cash expenditures amounted to $77 ,and$2 cheque. The double entry in the books of
rvas received fiom a member of staff lvho A and B Enterprises should be
made a personal telephone call. How much'
cash is needed to restore the imprest on 3l
May? (A) Dr K. Khan $lr7
Dr Discount Received s3
(A) S 73 Cr Bank $r20
(B) S 7s
(c) s "77 (B) Dr K. Khan Sl 17
(D) Sl50 Dr Discount Allowed $ 3
Cr Bank $120

15. When a proprietor withdraws cash or other (C) Dr Bank S I 17

assets fiom a business. what effbct does it Dr Discount Allowed S 3

have on drawings or capital? Cr K. Khan Sl20

(A) Capital is decreased. (D) Dr Bank $l 17

(B) Capital is increased. Cr Discount Received $ 3
(C) Drawings are decreased. Cr K. Khan Sl20
(D) Neither drawings nor capital is
affected.
18. The ABC Company deposited a cheque
for $300 received from Mr Murray. How
16. Mr Ram, a shoemaker, bought a motor should this transaction be recorded inABC's
van for Sll 000 cash. In recording this books?
transaction he should
I. Debit the Cash Account.
(A) Dr Cash; Cr Motor Van Account II. Debit the BankAccount.
(B) Dr Cash; Cr Purchases Account III. Credit Murray's Account.
(C) Cr Cash; Dr Purchases Account
(D) Cr Cash; Dr Motor Van account (A) t and II only
(B) I and III only
(C) II and III only
(D) I,II and III

19. Which of the following is NOT a nominal

account'l

(A) Furniture
(B) Commission
(c) Carriage lnwards
(D) Discount Allowed

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20. Whichofthe'followipgaccountsareusually ltem 23 refers toine following balances at
transferred to the Trading and Profit and the end of a financial period. These were
Loss Account? from the books of J. Sammy, a sole trader.

(A) Rent, Premises, Drawings

$
(B) Drawings, Rent, Purchases Land 7 000
(C) Commission Received, Rent, Building 5 000
Purchases
(D) Purchases,Furniture,Commission
Stock I 100
Debtors 500
Received
Bank overdraft 400
Creditors 700

21. In Mr Chin's ledger, an entry on the debit

Cash 200
Capital (at start) l0 000
side ofthe drawings account followed by an
entry on the credit side of the bank account
Drawings 300
Net Profit 3 000
means that

(A) MrChinputsmoneyinthebusiness' 23. The current ratio of the business (rounded

bank account to 2 decimal places) is
(B) thebankputsmoneyintoMrChin's
personal account (A) t.4s I
(C) Mr Chin withdraws money from (B) 1.64 I
the bank for use in the business (c) 2.s7 I
(D) Mr Chin uses money from his (D) 3.14 I

business' bank account for his

personal use
24. The fbrmula fbr working capital is

Item22 refers to the balances below which (A) current assets less current liabilities
were extracted from Mrs Martin's ledger. (B) fixed assets less current liabilities
(C) fixed assets less current assets
$
(D) total assets less total liabilities
stock
Opening 7 000
Purchases 4 000
Sales I I 000
Item 25 refbrs to the following information.
Sundry expenses I 100
stock 3 400
A calculation to determine gross profit
percentage is as follows:
,) What was the cost of goods sold by
Mrs Martin2 $185 530
x 100
=35.02o/o
s529 800 I
(A) 52 400
(B) 52 600
25. What does the amount 5529 800 represenr,?
(c) s6 400
(D) $7 600
(A) Total sales
(B) Gross profit
(C) Cost of sales
(D) "lotal purchases

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Items 26-27 refer to tfie fotlowfng 28. During the year, a compi'riy bougtii
information supplied by a sole trader. stationery for $220 and used worth of
$ 120
it. What is the expenditure for stationery
Amaris One Stop S that would be posted to the Profit & Loss
Account?
$
Net sales I fO OOO (A) Sl00
Rentexpense | :OOO (B) Sl20
Discountreceived I ZOOO (c) $220
Gross profit I 12 000 (D) 5340
Discountallowed I +OOO

26. what is the Gross profit percentage (to the 29. An asset purchased for S I 000 depreciates
at the rate of 10Yo per annum using the
nearest whole number)?
reducing-balance method. What is the book
(A) value of the asset at the beginning of the
13%
(B) 20% third Year?
(C) 27Yo (A) $ 800
(D) 40Yo (B) S 810
(ci $ eoo
(D) $l leo
27. What is the Net Profit Percentage (to the
nearest whole number)?
30. B. Pascal, a sole trader, started the year
(A) l0% owing $6 000. The business paid only
(B) lToh $5000fortheyear.The$5000wasrecorded
(C) 23oA in theTradingand Profitand LossAccounr.
(D) 37oA Which account concept was breached?

(A) Accruals
(B) Prudence
(C) Consistency
(D) Separate entity

Item 3l ref'ers to the fbllowing table.

Period of Debt Amount of Accounts Provision for Bad Debts

Receivable

Over 3 years $6 000 3o/o of Accounts Rece vable

Over 2 years $4 000 2o/o of AccountsRece vable
Over I year $8 000 l'% of Accounts Rece vable

3l What is the TOTA L provision tbr bad debts'?

(A) S 180
(B) 5340
(c) s400
( D) 5500

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32. When a Trial Balance fails to agree, the 37. Ivlr Smith does not keep proper records. He
difference is entered in the began his business with $ l0 000 in its bank
account. He uses his vehicle and building
(A) Control Account worth $6 000 and $ l5 000 respectively as
(B) Provision Account part of his business. Customers owe him
(C) Reserve Account 54 000. He withdrew $1 500 fbr personal
(D) Suspense Account use and owed creditors $2 000.

What is the closing capital of the business'?

33. ControlAccounts are kept in order to assist
Management in (A) s2s soo
(B) $28 soo
(A) locating enors (c) s3l s00
(B) increasing profits (D) $33 000
(C) limiting drawings
(D) limitingexpenditure
38. In a partnership, which of the following
transactions is compulsory?
34. The net profit of a firm was shown as
$l 600 and it was later discovered that (A) Paying of salaries
discounts received were undercast by $ l0 (B) lnterest on capital
and purchases were understated by $36. (C) Interest on drawings
What is the corrected net Profit? (D) Sharing of profits or losses

(A) $l s74
(B) sl 610 ltem3grefers to the following information.
(c) $l 636
(D) sl 646 $
Inventory at 0l January 2013 l 500
Purchases during the month I 200
35. The inventory turnover ratio is 5 times.
Cost of goods sold I 400
Average stock is S28 000. What is the cost
of goods sold?
39. Whatis the inventoryatthe end ofJanuary?
(A) s s 600
(B) s 70 000 (A) s 300
(c) $140 000 (B) s 500
(D) s280 000 (c) s 700
(D) sl 300

36. The capital at the start ofa trading period was

$20 000, and at the end of the period it was
40. Tom, Percy and John formed a partnership
522 500. The net profit for the period was and agreed that prolits were to be shared
.56 500. How much monev was withdrawn
in the ratio of l:I:2 respectively. The net
fbr the period? profit for the year was $ 18 900. What was
John's share of the profit?
(A) s2 500
(B) 54 oo0 (A) s 4 725
(c) s6 ooo
(B) S e 4s0
(D) 59 000
(c) sl4 175
(D) Sl8 900

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{1. Which of the following items is NOT 15. The reward'bf profit receivecl bv a
recorded in the Appropriation Account of shareholder in a limited company is caile,l
a partnership?
(A) interest
(A) Drawings (B) drawings
(B) Salnies (C) dividend
(C) Strare of profits (D) commission
(D) lnterest on capital

46. Which of the fbllowing f'eatures is

12. According to the terms of a partnership associated with private limited companies,/
agreement, Partner A is to be credited with
a salary of $5 000 per year. How will this (A) Family owned
be recorded in the books? (B) Shares not sold publicly
(C) Financialstarementspublished
(A) Dr Profit and Loss Account (D) Government agencies purchase
Cr Cash shares
(B) Dr Appropriation Account
Cr Partner's Current Account
(C) Dr Partner's Current Account 47. When a company declares a dividend
Cr Cash of l5o/o, the dividend warrant sent to a
(D) Dr Partner's Current Account shareholder who owns I 500 ordinary $l
Cr Appropriation Account shares is

(A) S 100
-r3. Which of the following accounts shows (B) $ 22s
how profits and losses are shared among (c) $ r 500
partners? (D) Sl s t5
(A) Current
(B) Appropriation 48. A businessman incurred the followine
(c) Profit and Loss expenses.
(D) Income and Expenditure
s
repairs
Factory (r 000
{4. According to the PartnershipAct, ifthere is Machinery repairs 2 000
no Deed of Partnership, the amount ofprofit New machine I 000
to be received by EACH partner would be New vehicle 7 000

(A) in equal shares

(B) 57o of net prolit What is the TOTAL capital expenditr_rre'/
(c) 5%o on capital invested
(D) in proportion to capital invested (A) S 6 000
(B) t; 7 000
(c) s 8 000
(D) S l0 000

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49. ln a co-operative society, the dai_ly atlairs 51. Which of the tbllowing.,accounts BEST
are administered by describes the FinalAccounts ofa non-trading
organization?
(A) the chairman of the board
(B) a majority of shareholders
I. Receipts and Payments
(C) all members meeting together U. Income and Expenditure
(D) persons elected or appointed to do [II. Trading and Profit and Loss
SO
(A) I and II only
(B) I and III only
Item 50 refers to the following intbrmation.
(C) II and III only
(D) [,II and III
S
Beginning capital 30 000
Item 52 refers to the following summary
Ending capital 40 000
of receipts and payments for a club at 0l
Drawing during period 4 000
March.
Additional investment
during period 3 000
s
Subscriptions received 300
50. What is the amount of Net Income or Loss Rent paid 60
for the period? Purchase of games and equipment 150
Postage of circulars 20
(A) s 7000 Proceeds from book sale 250
(B) $ 9000
(c) $lr 000
(D) $17 000 52. What is the cash balance at 3l March?

(A) $ 180
(B) $ 280
(c) s 320
(D) S 620

Item 53 refers to the following infbrmation provided by a business.

S $
Bank balance at August2012 700 Inventory at 3l July 2013 000
Purchase of refreshments s00 Donations to charity 200
Purchase of furniture s00 Depreciation of fu rniture 50
Sale of equipment 600 Proceeds from raffie 500

53. What is the bank balance in the Receipts and Payments Account for the year ended 3l July 2013'!
(A) $ e00
{B) sr 600
(c) s2 850
(D) s3 550

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0t7390t0/F 20t4
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the Item 56 ret'ers to the fbllowing list of

54. The balancesoftheAssetAccounts of
Bayroe Club as at 30 June 201'2 wete as balances'
,
$
tbllows:
Work in Progress 0l January I 600
$ Work in Progress 31 December I 700
Premises 5 400 Cost of materials used 3 000
3 200
Equipment 1 825 Indirectexpenses
Furniture 960 Factory wages 5 000

Bank and cash | 640

Inventory of refieshments 72 56. What is the cost of goods produced'l

The amount of the accumulated fund

was
(A) s 8 000
(B) $ 8 700
(A) sl 640 (c) sll 100
(B) s4 4e7 (D) $11 200
(c) s8 18s
(D) se 8e7

Item 55 refers to the following information

provided by XY Manufacturing Company'

$
900 000
Sales
Op""i"g stock offinished goods I ?::::
ii*'e"',o"k of finished goods . I .19 999
+oo ooo
Produciion cost of goods completed |
pur"trut"t offinished goods I 100 000
55. What is the Gross Profit'l

(A) s390 000

(B) s5oo 000
(c) s7e0 000
(D) s800 ooo

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 ll -

Item 57 refers to the following information-.',,"

J. Baynes Manufacturing Accou"t f". p".mO rcta"

$
Inventory of raw materials 01 January 2013 800
Purchases of raw materials during year 4 500 Balance carried forward 6 800
5 300
Less closing inventory of raw
materials 31 December 2013 l 400
3 900
Productive wages I 300
Fuel and power 900
Lubricants 100
Rent and rates 400
Insurance 200
!_EAq -q_qa0

57. What is the cost of the raw materials consumed?

(A) s 8oo
(B) sl200
(c) s3 eoo
(D) 54 500

Item 58 refers to the following information relating to Harvard Sports Club for 2013.

Number of members 50

$
Annual subscriptions 50
year
Subscriptions owing at the beginning of the 450
Subscriptions owing at the end of the year 150

58. How much should be credited to the Club's Income and ExpenditureAccount as TOTAL subscription
fbr the year?

(A) sl s00
(B) Sl 9s0
(cr) s2 500
(D) 54 500

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i) t2190 t0ll 2011
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Item 59 refers to the fbllowing infbrmation 60. Which of the fbllowing is NOT considered
for V. Jones. a source document foitle payroll?
(A) Clock card
s (B) Attendance register
Net Pay 1200 (C) Medical certificate
Income Tax 300 (D) Electronic time card
National Insurance 50

59. What is the gross pay fbr V. Jones?

(A) S 850
(B) $ e5o
(c) $ I 4s0
(D) $l sso

END OFTEST

IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS

TEST:

t)t2390tqtF 20t4