The Trott ve Oy ZIMBABWE SCHOOL EXAMINATIONS COUNCIL General Certificate of Education Advanced Level ACCOUNTING 6001/1 PAPER | Muhiple Choice NOVEMBER 2022 SESSION 1 hour 20 minutes Soft clean eraser Soft pencil (1ype B or HB is recommended) TIME | hour 20 minutes INSTRUCTIONS TO CANDIDATES Da not open this hooklet until you are told ta da so. Write your name, centre number and candidate number on the answer sheet in the spaces provided unless this has already been done for you. There are forty questions in this paper. Answer all questions, For each question there are four possible answers, A, B, C and D. Choose the one you consider correct and record your choice in’soft peneil on the separate answer sheet. Read very carefully the instructions on the answer sheet. INFORMATION FOR CANDIDATES Each correct answer will score one mark. A mark will not be deducted for a wrong answer. ‘Any rough working should be done in this booklet. Calculators may be used. The businesses in this question paper are intended to be fictitious, This question paper consists of 9 printed pages and 3 blank pages, Copyright: Zimbabwe School Examinations Council, N2022. asec ntont (Turn over Scanned with CamScanner2 1 Which of the following accounts has a eredit balance? A Discounts allowed. B Discounts received C Purchases. 3} D Sales returns, 2A business values inventory at the lower of cost and net realisable value. Which accounting concept is the business applying? Historical cost concept. Materiality concept.” Prudence concept, Realisation concept. + com> 3 KC (Pvt) Lid’s accounting year ends on 30 September. Annual rentals are paid in advance on 1 July as follows: Year s 1 3.000 2 3.600 Mow much is charged in the Income Statement in year A $3000.» B $3 1507 Cc $3600 < D $3900 7 4 James prepared his financial statements without adjusting for accrued expenses, ‘What effect will these omissions have on net profit, current assets and current liabilities? Net profit Current assets Current A overstated no effect understated B overstated understated y. no effect x C understated & no effect overstated D understated overstated no effect ¢ 5 Users of accounting information can be classified into ‘A creditors and external B intemal and external. C iinlemal and government. D trade unions and customers. conus N2022 Scanned with CamScanner10 W Ina statement of financial position, a loan payable a A B c D A credit balance of $250 ha ledger, 3 mie year is classified as current liabilityx — a non-current lial a short-term liab equitygs 's been omitted from the list of balances extracted from the sales ‘What is the effect on the trial balance? A B c D The eredit side is understated by $250, The credit side is overstated by $250. The debit side is understated by $250. The debit side is overstated by $250. A credit balance on Melody’s account in a trade receivables ledger means that A B c D Melody’s cheque has been dishonoured, the amount owed by Melody is irrecoverable, the firm owes Melody some money. provision for doubtful debts should be made for Melody, Repairs to machinery of $2 500 has been entered in the Machinery account. Which entries are required to correct the error? com> Debit Credit Machinery account $2 500 Repairs to Machinery account $2 500, Repairs to Machinery account $2 500 Machinery account $2 500 > Repairs to Machinery account $2 500 Suspense account $2 500 Suspense account $2 500 Machinery account $2 500 According to IAS 2, inventory should be valued at the lower of coeD> cost and net realisable va cost and replacement cost. Vv net realisable value and selling price a replacement cost and net realisable value.’ Cost of an asset includes pow> purchase price plus import duty plus trade discount. purchase price plus import duty minus carriage inwards.« purchase price plus import duty plus repairs. purchase price plus import duty plus legal fees. coon Naw {Turn over Scanned with CamScanner13 4 15 16 7 4 I¢depreciation of non-current assets was not included in the Income Statement, A B c D ‘gross profit would be overstated. gross profit would be understated net profit would be overstated net profit would be understated Accumulated fund represents cas the assets of the club less liabilities. the surplus of income over expenditure for the year: the surplus of receipts over payments for the year. the total assets of the club.“ ‘A club’s surplus of income over expenditure for a year is represented by com> ‘the balance on its Accumulated Fund at the beginning of the year. the decrease in the balance on its Receipts and Payments Account over the year. the increase in its net assets over the year. : ‘the increase in its liabilities over the year. A company has three inventory items with the following details: 1TEM COST PRICE] NET REALISABLE VALUE 3 5 Shoes 5000 7 35007 Jackets 10007 // 80007, Skins 6.000 4.000 What is the total value of inventory? A B c D $14 500 $15 500 $18,000 $19 000 A private limited company may not A B c D issue bonus shares. issue debentures. make a rights issue. offer its shares to the public. Prime cost includes poor carriage inwards. cost of oil to lubricate machinery, factory heating and lighting. x.” storekeeper’ wages soni Naor Scanned with CamScanner19 20 2 5 {Ina manufacturing company, loose tools wilFbe depreciated sing the ‘A machine-hour method. B _reducing-balance method. Nyasha and Takudzwa are partners sharing profits and losses in the ratio 3:1. The following information is available: Nyasha Takudewa s s Interest on capitals 5.000 5 500 Interest on drawings 500 1000 Net profit for the year $120 000 How will the profit be shared? Nyasha Takudewa $ s A $3250 27750 B 83250 36750 Cc 85500 24500 D 91125 30375 One of the reasons why businesses may use incomplete records is because ‘A they lack skills of double-entry principle. B they have knowledge of double-entry principle. they want to check the arithmetical accuracy of their records, D they want to reveal embezzlement of funds. Information about a manufacturing business is given below. s Production overheads 250 000 Opening inventory of raw materials 25.000 Purchases of raw materials 345 000 Closing inventory of raw materials 19000 Production wages 331 000 24.000 Production Supervisor's salary What is the prime cost? A $682000 B —_ $706.000 Cc $937000 D $956 000 woo NIO2 [Tura over Scanned with CamScanner2 23 24 25 26 6 When a manufacturing company adds factory profit tothe cost of goods transferred, it hhas no effect on the gross profit. increases gross profit reduces both the gross profit and the net profit. reduces the gross profi vas ‘A company may improve its bank balance by issuing bonus shares. making a rights issue. paying dividends. redeeming its debentures. one AA source of capital that gives an investor an option to turn it into shares at a future date is A convertible loan stock. B_ convertible preference shares, C debentures. D ordinary shares. A business purchased for $150 000 had the following balances. s s ‘Non-curreat assets 40.000 Net current assets 22000 Revaluation reserve 20.000 How much was paid for goodwill? A $62 000 B $68 000 c $88 000 D $108.00 Information for a partnership is shown below: s Net profit before interest 25.000 Interest on partner's loan to the firm 3.000 Interest on capital accounts 4000 Drawings 10 000 Which figure is to be apportioned between the partners? A $1800 B $21 000 Cc $2000 D —$25000 ‘on 2072 Scanned with CamScanner27 28 29 30 3 2 1 Which transaction would decrease short-term liquidit A Buying non-current assets for cash. B Paying creditors in cash, C Paying creditors using a bank overdraft. D Selling goods on credit. Which item accounts for the difference between the current ratio and acid-test ratio? A Cash and cash equivalents B Inventory C Trade payables D Trade receivables ‘When the purchase price exceeds the value of net assets taken over, the difference is known as A goodwill B_ inherent goodwill. c D negative goodwill. premium. Which one appears in a trade receivables control account? A Discounts allowed. B Discounts received. C Provisions for doubtful debts. D __ Retums outwards. Which one is a variable cost? A Bought in raw materials. B Depreciation of machinery. C Factory rent. D Factory supervisor’s wages. The expected volume of sales will determine material purchases budget. sales budget. trade receivables budget trade payables budget cae coun wea [Turn over Scanned with CamScanner33 34 8 The Following information relates to product X s Revenue at break-even point 12.000 Unit selling price 20 Fixed costs 4800 What is the marginal cost of each unit of product X’? A $250 BSB Cc $10,50 Diz The following information about a product is given: Per unit s Selling price 132 Direct materials 60 Direct labour 48 Fixed costs total $60 000. How many units must be produced to break-even” A 250 units B 715 units C834 units D 2500 units The following information is available about a product. Standard selling price per unit 518 Budgeted sales (units) 35.000 ‘Actual sales (units) 38.000 ‘Actual sales revenue $644 100 What is the sales price variance? A $14 100 Adverse. B $14 100 Favourable. C $39. 900 Adverse. D $39 900 Favourable. Scanned with CamScannerat 37 38 39 40 9 The net present values of a project have b n calculated as follows: NPV (S) at 10% 40.000 at 20% (18 000) ‘What is the internal rate of return on the project? A 10.69% B 13.10% Cc 16.90% Dd 20% Details of direct materials are as follows: Budgeted 31 S00kgs @ $12 per ke Actual 34 000kgs @ $13,20 per kg, What is the direct material price variance? A $37 800 Adverse. B $37 800 Favourable. C $40 800 Adverse. D $40 800 Favourable, Which of the following methods of investment appraisal is based on profits? A Accounting rate of return. B Internal rate of retum, C Net present value. D Payback Sensitivity analysis indicates ‘A capital rationing. B_ maximum acceptable margin of error. C payback period of the proje D profitability of the project. What is a master budge!” A budget based on a limited factor. A forecast Income Statement. A forecast Statement of Financial position, A set of budgeted financial statements, saePe coun ao Scanned with CamScanner