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02 hours G.C.E. ADVANCED LEVEL 2024 ACCOUNTING 03

Instructions
1. Select the correct answer and underline it.
2. Marks will be deducted if you select the answer for question no.01

01. What is the main purpose of financial accounting in a firm?

(1) To provide information to managers to take decisions.

(2) To provide information to government to charge taxes on the income.

(3) To provide information to auditors to express an opinion on financial statements.

(4) To provide information to monitor compliance of financial statements with accounting standards.

(5) To provide information to external stakeholders to take decisions.

02. Which of the following statement/statements is / are correct in relation to the general purpose financial
statement.
A - Provides information to the all stakeholders to make decisions.
B - Provides historical information.
C - Prepared according to the standards and other legal requirement.
1. Only A 2. A and B Only 3. A and C Only
4. B and C Only 5. A,B and C
03. The following information which is related to the year ended 31.03.2023 is taken from the books of
Janahitha traders.
Rs.000
Increase of liability during the year 850
Additional capital contribution 275
Drawings 25
Loss for the year (100)

According to the above information what is the increase of assets during the year?
1. Rs. 950 000
2. Rs. 1 000 000
3. Rs. 1 025 000
4. Rs. 1 050 000
5. Rs. 1 250 000

SATHINI PATHIRANA
ACCOUNTING – PAPER CLASS
BBA(UNIVERSITY OF COLOMBO)
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04. Below given information has been revealed for the year ended 31st March 2023 from a business which

had not been maintain proper books of accounts.

Rs
Sales 500 000
Purchases 400 000
Drawings - Cash 30 000
- Goods 70 000
31.03.2023 Stock 80 000
Gross profit margin is 40%.

Stock value as at 01.04.2022 is;

1. Rs 20 000 2. Rs 50 000 3. Rs 80 000

1. Rs 90 000 5. Rs 120 000

05. What is the Prime entry book and source document for purchase of office equipment on credit for the
business of Arun PLC which is manufacturing and selling furniture?
1. Purchase journal and invoice
2. General journal and journal voucher
3. General journal and payment voucher
4. Cash book and payment voucher
5. Petty cash book and petty cash voucher

The following information has been provided by Nisal Limited for the year ended 31.03.2023

Rs (000)
Creditors balance as at 01.04.2022 40
Total cheques issued to creditors during the year 150
Return outwards 10
Cash purchases 30
Dishounured cheques issued to creditors 15
Creditors balance as at 31.03.2023 30

SATHINI PATHIRANA
ACCOUNTING – PAPER CLASS
BBA(UNIVERSITY OF COLOMBO)
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06. What is the value of total purchases for the year ended 31.03.2023?
1. Rs.100 000
2. Rs.120 000
3. Rs.125 000
4. Rs.135 000
5. Rs.165 000
07. The following information is related to a business entity.

As at 31.03.2023 (Rs) As at 01.04.2022 (Rs)

Creditors 32 500 26 250
Inventory 20 000 22 500

Payment to creditors during the year were Rs.112 500. The business determines the selling price of stocks
by keeping a profit of 20% on cost of sales. According to the above information what is the sales value to be
recorded in the statement of profit or loss for the financial year 2022/2023?
1. Rs.124 500
2. Rs.130 500
3. Rs.135 625
4. Rs.139 500
5. Rs.145 500

08. A dishonored cheque that was received from a debtor and deposited is recorded in the,
1. Sales journal and cash receipts journal
2. Cash receipt journal
3. Cash Payment journal
4. Sales journal.
5. General journal

09. The debtors control account in the ledger and the discount received account is,
1. Asset and Equity
2. Liability and Income
3. Asset and Income
4. Liability and Equity
5. Asset and Expense

SATHINI PATHIRANA
ACCOUNTING – PAPER CLASS
BBA(UNIVERSITY OF COLOMBO)
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Write short answers

10. State appropriate prime entry books to record following transaction held in a business.

1) Business uses Rs 300 000 worth owner’s own furniture. ………………………

2) Returned cheque by bank when it was received from a debtor then deposited in the bank.

……………………………………………..

3) Paid reimburshment to petty cashier Rs 2 350 …………………….............

4) Received cheque value Rs 30 000 from right issues. ………………………

11. The information of petty cash imprest of a business are as follows.

Petty cash balance as at 2023.01.01 Rs 800

Petty cash balance as at 2023.01.31 Rs 400

Petty cash reimbursement on 2023.01.01 Rs 2200

If the value of the petty cash imprest will be increased by Rs 500, how much is the

reimbursement value on 01.02.2023 …………………………………………

12. The cash control account of Anoma business as at 31.03.2023 was Rs 80 000. On that day,

bank statement balance was deviated due to the following reasons.

 Deposited cheque value Rs 20 000 has been dishonoured by bank.

 Direct deposit Rs 50 000 has not been recorded in cash control account.

 Unpresented cheque and unrealized cheque are Rs 80 000 and 55 000 respectively.

 Standing order payments for lease installment Rs 1000 has not been recorded in cash control

account.

a) Adjusted cash control account balance as at 31.03.2023 ………………………….

b) Bank statement balance as at 31.03.2023 …………………………………………..

SATHINI PATHIRANA
ACCOUNTING – PAPER CLASS
BBA(UNIVERSITY OF COLOMBO)
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13. State two differences between the financial accounting and management accounting.
Financial Accounting Management Accounting
…………………………………………………………………………………………………………........................
........................................................................................................................................................................

…………………………………………………………………………………………………………......................
......................................................................................................................................................................

14. Roshan Brothers is a Vat registered business and the summery of the VAT control account for the
year ended is as follows. All purchases and sales are occurred through cash.
VAT receivables as at 01.04.2022 1200
VAT on sales 6500
VAT on purchases 1130
Cash paid for VAT 3400
Calculate the closing balance of VAT control account as at 31.03.2023.
…………………………………………………………………………………………………………………
15. A part of inventory of a company held at 31.03.2023 was destroyed due to fire. The cost of remaining
stock is Rs. 50,000.
The following information is provided for the year ending 31.03.2023
• The cost of inventory as at 01.03.2023 Rs. 300,000
• Total sales during the month of March 2023 Rs. 150,000
• If the policy of the company to sell goods keep in a Mark-up of 20% on cost
• There is no any purchase and during the period

What is the value of inventory destroyed?....................................................................................

SATHINI PATHIRANA
ACCOUNTING – PAPER CLASS
BBA(UNIVERSITY OF COLOMBO)
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Paper 02

1) AB traders is a VAT registered organization and the following transactions were taken place for the
month of January 2024.
1. Purchase of goods Rs.220 000 including VAT on credit
2. Sale of goods on credit Rs.440 000 including VAT
3. Purchases returns Rs.19 800 including VAT
4. Sales returns Rs.165 000 including VAT
5. Cash Purchases Rs.85 000 excluding VAT
6. Sale of goods on credit. The list price is Rs.100 000 and 5% trade discount. The cost of the
inventory is Rs.80 000 (VAT should be calculated based on the invoice value)
7. Paid VAT Rs.32 000 to inland Revenue department
8. Commission income received Rs.57 500 including 15% VAT
9. Paid internet charges Rs.13 440 including 12% VAT
10. Electricity charges Rs.9 000. 18% VAT should be calculated based on this. Total paid in
cash
11. Purchase of a machinery Rs.250 000 and 5% VAT should be calculated on this value.

Additional information
1. 10% VAT should be calculated on all purchases and sales

Required

1) Enter the above transactions into the following format

NCA + Debtors + Inventory + VAT receivables + Cash = Capital Acc + R/Earnings + VAT payables +Creditors

2) Prepare VAT control account and calculate the balance should be shown in the statement of
financial position as at 31.01.2024

(40 Marks)

SATHINI PATHIRANA
ACCOUNTING – PAPER CLASS
BBA(UNIVERSITY OF COLOMBO)
 7

2) The debit balance of bank statement of a business on 31 May 2023 was Rs. 3,200. When cash
control account balance was compared, the following information was revealed.

1) The cheques deposited during April but not realized were Rs. 7,500 and Rs. 5,800. Out of
these cheques Rs. 5,800 was credited in May month bank statement. The other cheque was

returned by bank. It has not been recorded in the books.

2) Dividend Rs. 9,500 and bank charge Rs. 1,500 and insurance paid by bank on standing

order Rs. 4,500 which were in May bank statement have not been recorded in the cash

payment journal.

3) Cheque issued to creditor on May 18 Rs.12,200 has not been presented for payment at
bank.
4) Total value of cheques deposited during May was Rs.45,000. Out of these cheques Rs.
30,000 only has been realized by bank.

5) Cheque Rs. 6,500 deposited by another business in its account has been incorrectly credited
by the bank in the current account of this business as Rs. 5,600.

Required

1) What is the bank account balance should be recorded in financial position statement as at
31.05.2023?
2) Calculate cash balance before adjustments in cash control account for May 2023.

(10 marks)

SATHINI PATHIRANA
ACCOUNTING – PAPER CLASS
BBA(UNIVERSITY OF COLOMBO)
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1. The Following transactions occurred during the month of January 2023 of Samuditha's Business
which is registered VAT.

Above purchases and return outwards are indicated without 15% VAT
Required
1) Purchases journal and return outward journal
2) Creditors control account, VAT control account and the purchases account
3) Accounts in the sub ledger and the balances list
(20 Marks)

SATHINI PATHIRANA
ACCOUNTING – PAPER CLASS
BBA(UNIVERSITY OF COLOMBO)