Professional Documents
Culture Documents
1. Beth is a trader. Her financial year ends on 31 March. The trial balance prepared on 31 March
2014 failed to agree. The difference was entered in a suspense account.
1 The total of the discount received column in the cash book, $96, had not been posted to
the ledger.
2 Cash received from a tenant, $340, had been entered in the cash book but had not been
posted to the rent received account.
3 Stationery returned to supplier, $24, had been correctly entered in the supplier’s
account but had been entered in the purchases returns journal.
4 The balance of the petty cash book, $100, had not been included in the trial balance.
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IGCSE YEAR 11 ACCOUNTING – AUG/SEPT 2021 MOCK EXAM PAPER 2
REQUIRED
(a) Prepare the entries in Beth’s journal to correct the above errors.
Narratives are not required.
The first one has been completed as an example.
Beth
Journal
Debit Credit
$ $
1 Suspense 96
Discount received 96
2
[8]
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IGCSE YEAR 11 ACCOUNTING – AUG/SEPT 2021 MOCK EXAM PAPER 2
Before the errors were discovered Beth calculated that she had made a profit for the year ended 31
March 2014 of $14 940.
REQUIRED
(b) Prepare a statement to show the effect of correcting errors 1 – 5 on the original profit for the
year.
If the error does affect the profit for the year write “No effect”.
Beth
Statement of corrected profit for the year ended 31 March 2014
$
Profit for the year before corrections 14 940
Effect on profit
Increase Decrease
$ $
Error 1 96
2
3
4
5
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Corrected profit for the year
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[6]
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IGCSE YEAR 11 ACCOUNTING – AUG/SEPT 2021 MOCK EXAM PAPER 2
REQUIRED
(c) Calculate the quick ratio. The calculation should be corrected to two decimal places.
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(e) Explain why the quick ratio is more reliable as an indicator of liquidity than the current ratio.
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[Total: 20]
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IGCSE YEAR 11 ACCOUNTING – AUG/SEPT 2021 MOCK EXAM PAPER 2
2. (a) Ravi provided the following information about inventory held at the end of his financial year.
Product Units held Cost per Selling and distribution Selling price
unit cost per unit per unit
$ $ $
A 600 15 2.00 21
B 100 12 1.50 13
C 50 18 2.00 17
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(b) Name two business documents used to make entries in the accounting records of a business.
(i) …………………………………………………………………………………………………………………………………………….
(c) Tapac Limited has issued 200 debentures of $100 each. Interest at the rate of 3% per annum
is payable in two equal instalments on 30 June and 31 December each year.
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IGCSE YEAR 11 ACCOUNTING – AUG/SEPT 2021 MOCK EXAM PAPER 2
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(iii) Mary maintains a provision for doubtful debts at 3% of her trade receivables.
On 1 September 2016 Mary’s provision for doubtful debts was $1350.
On 31 August 2017 Mary’s trade receivables amounted to $48 000.
By mean of a provision for doubtful debts account, show the amount that would be charged to
Mary’s income statement for the year ended 31 August 2017?
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(e) Smart ordered 300 computer components from Raj. The price of each component was $10.30.
Raj allowed a trade discount of 4% and a cash discount of 5% if paid within credit period.
Calculate the total of the invoice Smart received. Show your workings.
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[Total: 20]
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IGCSE YEAR 11 ACCOUNTING – AUG/SEPT 2021 MOCK EXAM PAPER 2
The manufacturing account of GMM Limited for the year ended 31 December 2012 showed the
following:
$
Inventory of raw materials – 1 January 2012 5 000
- 31 December 2012 7 500
Purchases of raw materials 112 500
Production labour 82 000
Factory overheads excluding depreciation of machinery 41 800
Depreciation of machinery 6 000
REQUIRED
(a) Calculate the following for the year ended 31 December 2012.
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IGCSE YEAR 11 ACCOUNTING – AUG/SEPT 2021 MOCK EXAM PAPER 2
GMM Limited provided the following additional information for the year ended 31 December 2012.
$
Revenue 550 000
Inventory of finished goods – 1 January 2012 51 000
- 21 December 2012 47 300
Purchases of finished goods 95 200
Distribution costs 61 800
Administration costs 95 100
Finance charges 16 100
REQUIRED
(b) Prepare the income statement for the year ended 31 December 2012.
GGM Limited
Income Statement for the year ended 31 December 2012
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IGCSE YEAR 11 ACCOUNTING – AUG/SEPT 2021 MOCK EXAM PAPER 2
The directors of the company know that the factory machinery is very old and they are considering
replacing it at a cost of $100 000. They provided the following information.
1 The old machinery was being depreciated at $6000 per annum. This machinery would
be sold at net book value.
3 The purchase of the new machinery would be financed by a loan on which annual
interest of 8% would be paid.
4 The cost of raw material used would decrease by 4% if the new machinery was
purchased.
5 Machinery repairs would be reduced by $9000 a year if the new machinery was
purchased.
REQUIRED
(e) Complete the following table to calculate the change in profit for the year if the new machinery
was purchased. [6]
Savings $
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Increase/(decrease) in profit
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[Total: 20]
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IGCSE YEAR 11 ACCOUNTING – AUG/SEPT 2021 MOCK EXAM PAPER 2
During the year ended 31 August 2016 the company paid the following:
1 Final dividend of $0.10 per share on ordinary share, for the financial year ended
31 August 2015
2 Interim dividend of $0.05 per share on ordinary share
The profit for the year ended 31 August 2016 before the preference share dividend was
$174 000.
REQUIRED
(a) Calculate the profit for the year ended 31 August 2016 after taking into account the preference
share dividend.
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IGCSE YEAR 11 ACCOUNTING – AUG/SEPT 2021 MOCK EXAM PAPER 2
(b) Prepare the Statement of Changes in Equity for the year ended 31 August 2016.
Kapitan Ltd
Statement of Changes in Equity for the year ended 31 August 2016
Ordinary General Retained Total
share reserve earnings
capital
$ $ $ $
On 1 Sept 2015
[9]
(c) (i) Explain how the proposed final dividend of $0.08 per share on the ordinary shares of Kapitan
Ltd on 31 August 2016 would be treated in the accounts?
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IGCSE YEAR 11 ACCOUNTING – AUG/SEPT 2021 MOCK EXAM PAPER 2
Kapitan Ltd requires extra finance. It is considering increasing the total preference share capital to
$100 000 by the issue of additional 5% preference share of $1 each.
REQUIRED
1……………………………………………………………………………………………………………………………………………………
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(ii) State how much money the company could raise from the issue of the preference shares.
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(iii) State the amount of additional preference dividend which would have to be paid each year if
the extra shares are issued.
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(iv) State one way in which the issue of preference shares may affect the existing ordinary
shareholders.
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[Total: 20]
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IGCSE YEAR 11 ACCOUNTING – AUG/SEPT 2021 MOCK EXAM PAPER 2
1.95 : 1
1.15 : 1
27 days
32 days
[8]
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IGCSE YEAR 11 ACCOUNTING – AUG/SEPT 2021 MOCK EXAM PAPER 2
(b) Suggest two reasons for the change in the current ratio.
1 …………………………………………………………………………………………………………………………………………………..
2 ……………………………………………………………………………………………………………………………………………. *2+
(c) Complete the following table by placing a tick (√) in the correct column to show how each of the
following courses of action would affect Melany’s current ratio.
[4]
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IGCSE YEAR 11 ACCOUNTING – AUG/SEPT 2021 MOCK EXAM PAPER 2
(f) (i) Suggest one advantage to Melany of the change in the trade payables payment periods.
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(ii) Suggest one disadvantage to Melany of the change in the trade payables payment period.
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[Total: 20]
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