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ACCOUNTING 0452 FIRST TERM Exam 2023

Candidate Name ___________________________

Paper 1+2

2 hour 45 minutes

IGCSE-I
Please use Blue and black pen/pointer

INSTRUCTIONS
Write your name and section clearly
Do not use correction fluid.
You may use a calculator.
Attempt all questions.

INFORMATION
The total mark for this paper is 100
Any rough working should be done on this question paper

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Question No.1 (20)
Show the effect of the following transactions on assets, owner’s equity and Liabilities:
1. Mr. Sultan invested cash into business Rs.30000/-
2. Bought Supplies for Cash Rs. 500/-
3. Purchased Furniture on account Rs.1000/-
4. Paid Salaries Rs.200
5. Earned Rs.2000/- by performing services to the clients.
6. Paid Rent of Rs.200/-
7. Supplies in hand at the end of the month Rs.300.

Sultan and Co.

Statement of Equation

Cash Supplies Furniture Liablities Capital

1. 30000
2.
Balance
3.
Balance
4.
Balance
5.
Balance
6.
Balance
7.
Balance
Total Assets= Total Equities=

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Question no.2 (34 marks)

1. Assets minus liabilities is:

A) Profit (B) Working Capital
C) Capital (D Long-term liabilities
2. The excess of assets over liabilities is:
A) Capital (B) Profit
C) Equities (D Drawings

3. The accounting equation is:

A) Liabilities = Assets + Capital (B) Assets = Liabilities + Capital
C) Liabilities = Assets – Capital (D None of these

4. If assets are Rs.8,000 and capital is Rs.6,000, liabilities will be:

A) 8,000 (B) Rs.2,000
C) 14,000 (D None of these

5. Assets must equal to:

A) Capital (B) Liabilities
C) Liabilities + Capital (D Liabilities + Bank Loan

6. Accounting records of a business enterprise is required by:

(a) Management of the business (b) Outsiders (c) All of the above (d) None of
them

7. Double Entry means:

(a) Entry for the two aspects of books (b) Entry at two dates
(c) Entry in two aspects of transaction (d) All of the above

8. Bookkeeping provides the:

a) Primary information (b) Secondary information) c) Final information (d) None of
them

9. Recording of the business transaction in a systematic way is called:

(a) Accounting (b) Recording (c) Journalizing (d) Bookkeeping

10. Modern system of bookkeeping is:

a) Single entry system b) Double entry system c) Modern system d) British system

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11. Double entry system of bookkeeping involves at least:
(a) One accounts (b) Two accounts (c) Three Accounts (d) None of them

12. The owner of the business is called:

A) Proprietorship (B) Ownership
C) Industrialist (D) Proprietor

13. Promise to pay a certain amount is called:

A) Account Payable (B) Notes Payable
C) Amount Payable (D) Discount Payable

14. Cash invested by the owner is called:

A) Asset (B) Liabilities
C) Capital (D) Loan
15.Cash or goods taken away by the proprietor is called:
A) Drawings (B) Sales
C) Charity (D) Expense

16. The rights and claims of outsiders/ owner against the asset is called:
A) Owner’s Equity (B) Liabilities
C) Equities (D) None of them

17. The things of value possessed by the trader is called:

A) Merchandise (B) Assets
C) Stock (D) Purchases

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Question no.3 (20 Marks)
Record the following transaction into General Journal during the month of
January,
2008.
Jan. 1 Mr. Khubaib
invested Rs.100,000 into the business.
2 Purchased
Land for Cash Rs.52000.
4. Purchased
Building Rs.36000, paid Rs.6,000 and issued note for the remaining
8. Purchased
equipment on credit Rs.13,800.
15 Sold a part
of equipment on credit Rs.1,800.
20 Paid
Rs.600. in partial payment of account payable..
25 Received
Rs.6,800 in partial collection of
account receivable.
26 Received
Rs.2,000 as advance fee for the work to be performed later on.
28. Withdrew
Rs.1,500 for personal use.
29 Paid
Utility bills Rs.800
30 Paid salary
to the employees Rs.3000.

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Solution:
Date General Journal L.F Debit Credit Rs.
Rs.
2008
Jan:1

2.

15

20

25

26

28

29

6
30

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Question 4. (16 marks) Solve all problems
1. The owner invests personal cash in the business.
Assets
Increase
Decrease
No Effect

Liabilities
Increase
Decrease
No Effect

Owner's (or Stockholders') Equity

Increase
Decrease
No Effect

2. The owner withdraws cash from the business for personal use.
Assets
Increase
Decrease
No Effect

Liabilities
Increase
Decrease
No Effect

Owner's (or Stockholders') Equity

Increase
Decrease
No Effect

3. The company receives cash from a bank loan.

Assets
Increase
Decrease
No Effect

Liabilities
Increase
Decrease
No Effect

Owner's (or Stockholders') Equity

Increase
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 Decrease
No Effect

4. The company repays the bank that had lent money to the company.
Assets
Increase
Decrease
No Effect

Liabilities
Increase
Decrease
No Effect

Owner's (or Stockholders') Equity

Increase
Decrease
No Effect

5. The company purchases equipment with its cash.

Assets
Increase
Decrease
No Effect

Liabilities
Increase
Decrease
No Effect

Owner's (or Stockholders') Equity

Increase
Decrease
No Effect
6. The owner contributes his/her personal truck to the business.
Assets
Increase
Decrease
No Effect

Liabilities
Increase
Decrease
No Effect

Owner's (or Stockholders') Equity

Increase

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 Decrease
No Effect

7. The company purchases a significant amount of supplies on credit.

Assets
Increase
Decrease
No Effect

Liabilities
Increase
Decrease
No Effect

Owner's (or Stockholders') Equity

Increase
Decrease
No Effect

8. The company purchases land by paying half in cash and signing a note payable for the other half.
Assets
Increase
Decrease
No Effect

Liabilities
Increase
Decrease
No Effect

Owner's (or Stockholders') Equity

Increase
Decrease
No Effect

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Question 5: (30 marks)
Answer all questions
1- What is difference between book keeping and accounting?

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2- Define Assets and Explain Current and Non-current assets?

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3- Define Liabilities and Explain Current and Non current liabilities of a business?
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4- Why Purchases are Account debit?

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5- What do you mean by cash sales and credit sales?

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6- What are drawings?

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