BUSFF026-E1

University of Nottingham Malaysia

CENTRE FOR ENGLISH LANGUAGE & FOUNDATION EDUCATION

FOUNDATION IN BUSINESS & MANAGEMENT

SPRING SEMESTER EXAMINATION 2022-2023

BUSINESS ACCOUNTING

Time allowed ONE Hour THIRTY Minutes

Candidates must NOT start writing their answers until told to do so

Answer ALL questions in Section A and Section B

Answer ANY ONE question in Section C

Only a calculator from approved list A may be used in this examination.

Basic Models Scientific Calculators

Aurora HC133 Aurora AX-582 Casio FX82 family
Casio HS-5D Casio FX83 family
Deli – DL1654 Casio FX85 family Casio FX350 family
Sharp EL-233 Casio FX570 family
Casio FX 991 family
Sharp EL-531 family
Texas Instruments TI-30 family
Texas BA II+ family

Dictionaries are not allowed with one exception. Those whose first language is not English
may use a standard translation dictionary to translate between that language and English
provided that neither language is the subject of this examination. Subject specific
translation dictionaries are not permitted.

No electronic devices capable of storing and retrieving text, including electronic dictionaries,
may be used.

DO NOT turn examination paper over until instructed to do so

ADDITIONAL MATERIAL: MCQ Answer Sheet

Future Value and Present Value Tables

INFORMATION FOR INVIGILATORS:

The paper needs to be collected in at the end of the exam

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SECTION A
(50 marks)
Answer ALL questions.
The number of marks for a correct answer for each question is 2.
Zero marks are applied for each incorrect answer.

This section, containing 20 multiple-choice questions,

is not available.

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SECTION B
(40 marks)
Answer BOTH questions.

26. The following is the trial balance of S. Kim, a sole proprietor, as at 31 December 2022:

Debit Credit
£ £
Bank overdraft 1,300
Cash in hand 340
Drawings 16,000
Purchases 51,600
Rates and insurance 3,200
Rent 7,800
Salaries 22,000
Sundry expenses 970
Sales 99,490
Trade receivables 8,800
Trade payables 7,700
Furniture
at cost 6,200
accumulated depreciation 1,860
Capital: 1 January 2022 11,320
Inventory: 1 January 2022 5,100
Allowance for expected credit losses 340
122,010 122,010

The following additional information as at 31 December 2022 is available:

(i) Rates have been prepaid by £200.

(ii) Accrued salaries were £2,000.

(iii) Furniture to be depreciated at 10% per annum using the straight-line method.

(iv) Inventory at the close of business was valued at £6,700.

(v) The allowance for expected credit losses to be increased to £440.

Required:

(a) Prepare a statement of profit or loss for the year ended 31 December 2022.
(13 marks)

(b) Prepare a statement of financial position as at 31 December 2022.

(11 marks)

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27. H. Zafar is a sole proprietor who prepares financial statements annually to 31

December. His summarised statements of financial position for the last two years are
shown below.
2022 2021
£ £ £ £
Non-current assets
Equipment less depreciation 9,000 11,500

Current assets
Inventory 20,200 22,600
Trade receivables 18,370 20,470
Cash at bank 2,500 2,010
Cash in hand 140 41,210 130 45,210
Total assets 50,210 56,710

Current liabilities
Trade payables 15,040 17,840

Non-current liabilities
Loan 10,000 25,040 24,000 41,840
Net assets 25,170 14,870

Capital
Opening balance 14,870 6,830
Add: Net profit for the year 20,300 4,040
Additional capital introduced - 10,000
35,170 20,870
Less: Drawings 10,000 6,000
Total capital 25,170 14,870

Additional information:

Depreciation of equipment during the year was £3,000. Equipment costing £500 was
purchased during the year.

Required:

Prepare a statement of cash flows for the year ended 31 December 2022, using the
indirect method. (16 marks)

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SECTION C
(10 marks)
Answer ANY ONE question.

28. A trading business can choose between periodic inventory system and perpetual
inventory system to account for inventory. Explain the differences between the two types
of inventory system.
(10 marks)

29. Distinguish between process cost system and job order cost system.
(10 marks)

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