Cambridge International AS & A Level

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CANDIDATE GRADE-DIVISION

CANDIDATE ROLL NUMBER

Accounting Term 1 EXAMINATION OCTOBER 2023

Paper 2 Fundamentals of Accounting Time: 1 hour 45 minutes

Marks: 90

INSTRUCTIONS –

• Answer all questions.

• Use a black or dark blue pen.
• Write your name, center number and candidate number in the boxes at the
top of the page.
• Write your answer to each question in the space provided.
• Do not use an erasable pen or correction fluid.
• Do not write on any bar codes.
• You may use an HB pencil for any rough working.
• You may use a calculator.
• You should present all accounting statements in good style.
• International accounting terms and formats should be used as appropriate.
• You should show your workings.
 OCTOBER 2023 Page 1 of
13

• Saira is a trader. The following transactions took place in January 2023.

Jan 2 Rent received, $360, was paid directly into the bank account

4 Paid $343 to Jai by telephone transfer, having deducted 2% cash discount

from the amount due

7 Paid cash, $33, for motor expenses

13 Cash sales, $395, were paid directly into the bank account

17 Paid $194 to David, by electronic transfer, having deducted 3% cash

discount from the amount due

20 Received a cheque, $388, from Ivan, in full settlement of a debt of $400

27 Withdrew cash, $150, from the bank for business use

29 Paid $124, cash, for wages

REQUIRED

• Prepare Saira’s cash book on the page opposite.

Balance the cash book and bring down the balances at 1 February 2023.
 OCTOBER 2023 Page 2 of 13

Date

2023
Details
Discount allowed
$
Cash

$
Bank

$
Date

2023
Details
Discount received
$
Cash

$
Bank

Jan 1

Balance b/d

110

713

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OCTOBER 2023 Page 3 of 13 [13]

Saira has now started making ledgers and journals, in which ledger and journal the following
accounts will appear.

REQUIRED

• Complete the table by writing the ledger and journal names.

Account
Name of ledger
Name of journal
Telephone bill
David

Ivan

[6]

The going concern concept requires that Saira’s financial statements are prepared under the
assumption that her business will continue for an indefinite period of time.

REQUIRED

• State why each user of the accounting statements would be interested in Saira’s
business continuing indefinitely.

User
Reason
Bank manager

Government

Trade payables/Suppliers

Trade receivables/ Customers

Employees

[5]

(d) Explain the following accounting concepts -

• Business Entity -
_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

OCTOBER 2023 Page 4 of 13

 • Materiality –
_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

• Prudence –
_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

[6]

[Total – 30]

• Dalia Said is a trader. She maintains a full set of accounting records.

She purchases and sells goods on credit.
The following transactions took place in March 2012.

March 2 Bought goods, $1950, on credit from Essam Wholesalers

8 Bought goods on credit from Ramy El Din, list price $680, subject to a trade
discount of 20%
14 Returned goods, list price $120, to Ramy El Din
21 Paid the balance owing to Essam Wholesalers by cheque, less 2% cash discount
28 Paid a cheque for $300 on account to Ramy El Din

REQUIRED –

• Write up the purchases journal and the purchases returns journal for March
2012.

Total each journal and indicate the ledger account to which the total would be transferred.
 OCTOBER 2023 Page 5 of 13

Dalia Said
Purchases journal

Date

Details

$
$

[3]
Purchases returns journal

Date
 Details

$
 [2]

• State one advantage to Dalia Said of paying creditors after the due date.

[1

• State one disadvantage to Dalia Said of paying creditors after the due date.

[1]

• Dalia Said is concerned that some of her credit customers are

exceeding the period of credit allowed.

Suggest three ways in which Dalia Said could improve the collection period for
trade receivables.

(i)

(ii)

(iii)

[3]

• Pass the necessary journal entries dated March 21 & March 28 –

General Journal

Date
 Details

$ (Debit)
$ (Credit)

[5] - [Total: 15]

OCTOBER 2023 Page 7 of 13

• Simon Nyemba sells farm machinery. His financial year ends on 31

January.

Modi Traders Ltd pay Simon Nyemba a commission on any goods purchased from them
by Simon’s customers.

On 1 February 2011 Simon Nyemba was owed $280 in commission.

Simon Nyemba received cheques for commission as follows:
$
5 February 2011 280
3 August 2011 312

On 31 January 2012 Simon Nyemba was owed $296 commission.

REQUIRED

• Write up the commission received account as it would appear in

Simon Nyemba’s
ledger for the year ended 31 January 2012.

Simon Nyemba
Commission Account

Date
 Details

Date

Details

[6]
 OCTOBER 2023 Page 8 of 13
Simon Nyemba owns premises and pays property tax to the authorities.
On 1 February 2011 two months’ property tax, $520, was prepaid.
On 24 April 2011 Simon Nyemba paid $1620 by cheque for property tax
for six months to 30 September 2011.

On 4 October 2011 he paid a further cheque for $1620 for property tax
for six months to 31 March 2012.

REQUIRED -

• Write up the property tax account as it would appear in Simon Nyemba’s

ledger

for the year ended 31 January 2012.

Property tax account

Date

Details

Date

Details

$
 [6]

• Name the accounting principle applied in the preparation of

the commission received account and the property tax account.

[1]
 OCTOBER 2023 Page 9
of 13

Name the section of Simon Nyemba’s balance sheet on 31 January 2012 in which
each of the following balances would appear.

• Commission receivable account

[1]

• Property tax account

[1]

[Total: 15]

• The following trial balance was extracted from the books of Amir Sadiq as at
31 March 2003.

$ $
Capital 33000
Drawings 2500
Buildings 20000
Fixtures and equipment3400
Motor vehicles 8000
Debtors 4050
Creditors 6700
Bank overdraft 2880
Motor vehicle expenses1240
General expenses 2030
Wages 11940
Insurance 1470
Carriage inwards 700
Discount received 250
Sales 92100
Purchases 68500
Sales returns 1200
Stock 1 April 2002 9900
––––––– –––––––
134930 134930
––––––– –––––––
Additional information

• At 31 March 2003:
Stock was valued at $10200.
Wages outstanding amounted to $1080.
Insurance prepaid amounted to $210.

• During the year ended 31 March 2003 Amir took goods costing $300 for his own
use.

• Prepare the Statement of Profit and Loss Account of Amir Sadiq for the year
ended 31 March 2003.

• Prepare the Statement of financial position at 31 March 2003.

OCTOBER 2023 Page 10 of 13

Amir Sadiq

Statement of Profit and Loss Account for the year ended 31 March 2003.

Details

[10]

OCTOBER 2023 Page 11 of 13

Statement of financial position at 31 March 2003

Details

[10]

OCTOBER 2023 Page 12 of 13

• Complete the entries for the following table with the information taken
 from the accounts of a trader - (Amounts not required , just write the name of account
in the appropriate column)

Transactions

Account to be debited -

Account to be credited -

• Rent paid by cheque.

• Postage paid by cheque.

• Commission received in cash.

• Sold goods on cash.

• Purchases made by paying via cheque.

• Loan received from a friend, Emily.

• Business owner took cash from business for his personal use.

• Returned goods to supplier, John.

• Refunded money to customer by cheque for goods returned.

• Carriage outwards paid by cheque.

[10]

[Total – 30]

OCTOBER 2023 Page 13 of 13