Final Examination

Bookkeeping

Answers

© First Intuition Ltd, 2022

2 Final exam answers Bookkeeping

1  Debit note

2  1, 4, 5 and 7

3 Capital is the balancing figure in the accounting equation, total assets – total liabilities:
Assets Liabilities Capital
$ $ $
29,600 3,295
7,930 15,000
4,100 2,880
Accounting equation 41,630 21,175 20,455

4  $78.60
Petrol $39.00
Stationery ($21 plus VAT at 20%) $25.20
Tea, coffee $14.40
Total $78.60

5
Book of prime entry
Purchase of goods from credit supplier Purchases day book
Receipt of cash from credit customer Cash receipts book
Purchase of goods for cash Cash payments book
Payment for taxi fares in cash Petty cash book

6
$ Debit Credit
Sales invoice 3852 297 
Credit note 092 82 
Cheque received 370 
Contra with the payables ledger 75 

$ 472
Bookkeeping Final exam answers 3

Tonic Ltd (sales ledger account)

$ $
1 Oct Balance b/d 95
Sales invoice 3852 904 Credit note 092 82
Cheque received 370
Contra with the payables ledger 75
Balance c/d 472
999 999

3 marks (half mark awarded for each correct entry and 1 for correct c/f figure)

7 $ 1,511 Total amount owing

$ 1,314 Overdue amount (anything invoiced before the end of August)

Amount Total owing Overdue

18 Jul Sales invoice 297 539 539 Y
2 Aug Credit note 008 (96) 443 Y
14 Aug Sales invoice 384 871 1,314 Y
2 Sep Sales invoice 521 309 1,623 N
9 Sep Credit note 024 (112) 1,511 N

2 marks (1 for each correct figure)

8 Net VAT
 $1,230.00  $246
Net amount: 1,500 × $82/100 = $1,230.00
VAT amount: $1,230.00 × 20% = $246

9  $2,220
Output VAT owing to HMRC: 20% × ($51,400 - $3,200) = $9,640
Input VAT recoverable from HMRC: 20% × ($37,290 - $190) = $7,420
Net owing to HMRC: $9,640 - $7,420 = $2,220

10 $ 3,020

CHI: 20% × $7,100 = $1,420

XPO: 0% × $2,486 = $0
UMZ: 20% / 120% × $9,600 = $1,600
Total: $3,020
4 Final exam answers Bookkeeping

11
Wages expense Net pay
$ $
Gross wages 52,400 52,400
PAYE (8,836)
Employee’s National Insurance contributions (3,472)
Employer’s National Insurance contributions 4,984
 57,384 40,092

12 $ 574.50 Net pay

$ 171.42 Owing to HMRC

$
Gross wages: 36 hours × $18.50 666.00
PAYE and NI: $666 - $300 × 25% (91.50)
Net pay 574.50

$
PAYE and Employee’s NI: from above 91.50
Employer’s NI: 12% × $666 79.92
Owing to HMRC 171.42

13  Payables control, Purchases returns, Interest received, Bank overdraft

All are credit balances

14  Transposition error
This is the only one which results in unequal debit and credit amounts

15 $ 11,714

$3,582 + $9,429 - $1,297 = $11,714

16
$
Sales (12,900 × $2.50) 32,250
Cost of sales ($1,680 + 7,500 x $1.50 + 4,000 × $1.80) 20,130
Gross profit 12,120
Bookkeeping Final exam answers 5

17
$ Debit Credit
Motor vehicles 24,000 
Motor vehicle expenses 120 
Bank 24,120 

18 $ 2,000

$12,000 / 3 × 6/12 = $2,000

19  $1,174 loss
NBV: $18,000 × 0.7 × 0.7 x 0.7 = $6,174
Proceeds $5,000 – NBV $6,175 = -$1,174

20
Debit Credit
$ $
Depreciation expense 8,057
Accumulated depreciation – plant and machinery (W1) 3,060
Accumulated depreciation – motor vehicles (W2) 4,997

W1 NBV at start of year: $21,800 - $14,160 = $7,640 plus additions of $4,600 gives total value of
$12,240 to be depreciated at 25% = $3,060
W2 NBV at start of year: $24,500 - $9,510 = $14,990 to be depreciated at 33% = $4,997

21 $ 280

Accrual needed for the months of July and August. Using the most recent bill of $420 which
covered a 3 month period, the accrual would be calculated as 2/3 × $420 = $280.

22  $3,000 prepayment
At 31 July Smeeta has prepaid one month of rent, or 1/3 × $9,000 = $3,000. (The $9,000 paid on
1 June will have covered the months of June, July and August).

23
$ Debit Credit
Gas expense 576 
Accruals 576 

Work backwards from year end date of 30 September: the last billing period ended on 30 June,
so 3 months worth of gas expense has to be accrued. The last bill of $960 covered a 5 month
period (1 February to 30 June) so the accrual is calculated as 3/5 × $960 = $576.
6 Final exam answers Bookkeeping

24 $ 43,870 Gross profit

Sales $110,760 – Cost of sales ($16,250 + $61,040 - $10,400) = $43,870

$ 740 Net profit

Gross profit $43,870 – all other expenses ($43,130) = $740

$ 24,650 Current assets

$14,100 + $150 + $10,400 year end inventories = $24,650

$ 9,990 Current liabilities

$5,790 + $4,200 = $9,990

25  1 and 3

26  Unpresented cheques totalling $1,634

Be careful with your debits and credits: a credit balance in the bank statement means a debit
balance in the cash book, so the cashbook balance is $1,634 less than the bank statement. All
the other answers would result in a higher cashbook balance.

27 $ -4,485 Corrected cash book

$ -3,947 Bank statement

Cashbook
$ $
Balance at 31 May 4,294
Dishonoured cheque 154
Corrected cash book c/d 4,485 Bank charges 37
4,485 4,485

$
Balance per bank statement (balance) (3,947)
less: unpresented cheque 538
Corrected cash book = overdraft (4,485)

28 $ 2,090

Bad debt written off $1,200 + provision $890 = $2,090

Bookkeeping Final exam answers 7

29
$ Debit Credit
Purchases day book total 48,409 
Purchases returns day book total 2,497 
Payments to credit suppliers 53,029 
Contra entry with sales ledger 1,000 
Balance owing at 1 March 14,290 

$ 6,173

Simply add the total debits and total credits and take one from the other. Total credits: $48,409
+ $14,290 = $62,699. Total debits: $2,497 + $53,029 + $1,000 = $56,526
6 marks (1 for each correct entry and 1 for correct figure)

30  Omission of the irrecoverable debts balance from the trial balance

 Recording a purchase invoice of $1,839 as $1,389 in the purchases account
The suspense account is a debit balance of $9,719, so we are looking for errors that would
result in a debit entry to the suspense account, as per the above correct answers.
Misposting an invoice for motor vehicle repairs in the motor vehicles cost account still results in
equal debits and credits so does not affect the suspense account
Failing to record the top up of petty cash in the bank account in the general ledger will result in
a credit entry to suspense as the double entry should be Dr petty cash, Cr bank
Undercasting the sales account in the general ledger results in a credit entry to suspense as
sales is a credit balance
Including the VAT liability owing to HMRC on the wrong side of the trial balance means we have
a debit instead of a credit – the missing credit amount will be in suspense

31 $ 340

Net VAT
Sale standard rated goods $4,200 $840 Payable to HMRC
Sale zero rated goods $1,100 Nil
Purchase standard rated goods $2,500 $500 Recoverable from HMRC
($3,000 / 120 × 100)

32  $136,550
Receivables control account
1 Nov balance b/d 76,300
Credit sales 360,750 Cash received 297,500
Sales returns 3,000
30 Nov balance c/d (bal.fig.) 136,550
437,0500 437,050
8 Final exam answers Bookkeeping

33  $3,850 prepayment
At 30 June, 7 months of insurance have been paid in advance for the period 1 July to 1 February
the following year. So there is a prepayment of 7 / 12 × $6,600 = $3,850.

34  $2,000
The irrecoverable debts and contra amounts should be recorded on the credit side of the T-
account

35 $ 2,900

$800 + $12,100 – X = $10,000

X = $2,900

36 $ 3,750

$15,000 × 25% ignore residual value!

37
Capital Revenue
expenditure expenditure
Motor vehicle servicing and insurance 
Extension to factory 
Petrol for a car 
Purchase of factory machinery 
Repair of faulty machinery 
Purchase of motor vehicle 