IGCSE ACCOUNTING : TEST 2

March 2014

NAME:……………………………………………………....................MARKS : 40

STUDENT ID. NUMBER:……………………………………………

Question 1: Trial Balance (Answer Sheet provided) (17 Marks)

Trial Balance of Graf Traders as at 30 June 2020

Dr. Cr.
Capital 20 000
Returns In 400
Drawings 800
Vehicles 22 000
Machinery 4 000
Returns out 500
Equipment 3 000
Trade Receivables 3 000
Trade Payables 5 000
Bank Overdraft 3 700
Sales 20 000
Purchases 15 100
Insurance 500
Telephone ___400 ______
56 100 42 300

 The Trial Balance has some mistakes. The following errors/information was also
discovered.

1. Insurance account payment of $100 was debited to the Telephone

account by mistake.
2. Paid $1 000 to a creditor on account – this transaction has not been
entered into the accounting books.
3. Credit sales of $2 000 were debited to Sales and credited to Debtors.
4. Inventory at 1 July 2021 - $800.
5. Cheque for Drawings of $1 000 were recorded in the books as $100.

Instructions:

1. Name the type of errors made for each error.

2. Rewrite the Trial Balance to correct all the errors.
Question 2 (Answer Sheet provided) 13 Marks)

Balances on 1 September 2014 of Winter Traders:

Cash $ 400
Bank $ 1 600(cr.)
Capital $10 000
A.Smith $ 104
B.Chan $ 100
J. Jones $ 60

Transactions for September 2014.

Sept.
1. Mr Winter, the owner has deposited another $10 000 into his bank account.
2. $100 cash was withdrawn from the bank account for cash.
3. Cash Sales - $500.
4. A cheque from J. Jones in settlement of his opening balance was received and
banked.
5. Paid advertising account -$200 with cash.
6. Bought furniture with cheque for $3 000.
7. Paid wages from cash, $30.
8. Received $40 cash from A. Smith, a debtor after giving him $4 discount.
9. Paid a cheque of $50 to B. Chan, a creditor after receiving $ 5 discount.
10. Owner took cash for personal use, $20.
11. Deposited $50 cash received as a donation in the bank account.
12. Paid B. Chan a cheque in settlement of his account.

Instructions:
 Complete the Cash Book using the above transactions.
 Balance the Cash Book on 30 September 2014.
 Prepare the Accounts of A Smith and Discount Allowed.

Question 3 (3 Marks) (Answer on the paper - below in space provided)

The following are statements made to the owner of a business, by his accountant. Write
down which concept the statements are making reference to.

Statements:
1 You cannot include the costs of your overseas holiday as
the transactions of your business.
2 No, “big” “red” machine is not good enough. I need to
know how much it cost.
3 Yes, you have spent $2, 000 cash from your bank account,
but remember you have received a new computer of that
value.
Question 4 (7 Marks) : Circle the correct answer

1. Omar returns goods bought on credit from Abdul. How is this recorded in Omar’s
ledger?

Account debited Account credited

A Abdul Returns Inwards
B Returns Inwards Abdul
C Abdul Returns Outwards
D Returns Outwards Abdul

2. A business received cash from a trade receivable for goods sold on credit. What
entries record this transaction?

Account debited Account credited

A Cash Trade Receivable
B Cash Sales
C Trade Receivable Cash
D Trade Receivable Sales

3. Ali receives a cheque from Hassan, a trade receivable, in payment for goods
purchased by Hassan on credit. Where will Ali enter this payment

A cash book and sales ledger

B cash book and purchases ledger
C nominal ledger and sales ledger
D nominal ledger and purchases ledger

4. X sells goods with a list price of $5000 to a credit customer. The customer is
allowed a 5% trade discount and a further 2½ % cash discount if payment is
within 20 days of the invoice date. How much will the business pay if it settles
within 28 days?

A $4631
B $4750
C $4875
D $5000
5. A business purchases goods on credit for $800, less 25 % trade discount, with a
cash discount of 5 % if payment is received in full within 28 days. How much will
the business pay if it settles within 28 days?

A $560
B $570
C $600
D $760

6. The Bank account balance in the Cash Book was $150 debit. The following
transactions were then entered in the Bank account
$
Receipts from sales 4210
Commission received banked 180
Cheques paid to suppliers 3270

What was the new bank balance in the Cash Book?

A $790 credit
B $910 credit
C $970 debit
D $1270 debit

7. A business keeps a three column cash book. How is the total of the discount
column on the debit side posted?

A credit Discount Allowed account

B credit Discount Received account
C debit Discount Allowed account
D debit Discount Received account
ANSWER SHEET:
NAME:__________________________STUDENT ID NUMBER:________________

Question 1: Trial Balance errors

1. Type of Error

1. Name of error:_____________________________________

2. Name of error:_____________________________________

3. Name of error:_____________________________________

5. Name of error:_____________________________________

2. Corrected Trial Balance:

....................................................................................................................................

Dr. Cr.
Question 2 T - Accounts:

A. Smith

Discount Allowed

Question 4 Multiple Choice

Number Answer
1
2
3
4
5
6
7