-2-

1. Which of the following is entered in Item S refers to the following list cf

the Purchases Account of a Grocery? balances•

(A) Goods for sale $ .

(B) Duplicating Machines Work in progress Jan 1 160G71
(C) Typewriters Work in progress Dec 31 1 700 1
(D) Office stationery Cost of materials used 3 000 ;
Indirect expenses 3 200 i
Factory wages 5 0001
2. The folloWing correcting entries
appear in the general journal: From the above list of balances, what
is the cost of goods produced?
GENERAL JOURNAL
DR CR (A) $ 8 000
R. Scott $20 $ 8 700
(B)
S. $20 (C) $11 100
Scott (D) $11 200

Which of the following gave rise .to

the correcting Entry? 6. Which of the following statements
BEST describe the purpose of
(A) S. Scott paid R. Scott. Accounting?
(B) R. Scott's account was debited
instead of S. Scott's I. Keeping proper records
account. business Transactions
(C) R. Scott paid S. Scott. II. Keeping proper control of =. -•
(D) R. Scott's account was finances of a business
credited instead of S. Scott's Assisting management ire
Account. making decisions
• IV. Using the accounting
transactions to make ploo ,.
3. Which of the following transactions decisions
should be debited in the Cash
Account? (A) I and H only
(B) II and IV only
(A) Bought goods for cash from J. (C) 1, II and HI only
Jones (D) I, III and IV only
(B) Sold goods for cash
(C) Paid office cleaner cash
(D) Paid on loan account 7. John Jones buys goods on credit from
Henry Stokes for $15. The correct
entry for recording this transaction in
Patrick is to join Dennis and Tony in the books of Henry Stokes is a
partnership. Patrick brings to the
partnership furniture valued at $3 000 (A) credit entry in the account Pf'
and a motor van worth $5 000. How Henry Stokes
much would be the amount of (B) credit entry in the account o
Patrick's capital? John Jones in the Ledger
(C) debit entry in the account 4...!*
(A) $4 000 Henry Stokes
(B) $6 000 (D) debit entry in the account o
(C) $8 000 John Jones in the Ledger
(D) $9 000

GO ON TO THE NEXT PAGE

01239010/SPEC 2006
8. The recording and analysis of Item 13 refek to the following journal
financial records is called entry:

(A) accounting Bad Debts $70

(B) adjusting K. Lamb $70
(C) record keeping
(D) decision making 13. How would the above journal entry be
posted in the Ledger?

9. A trader started with a capital. of (A) Debit Profit & Loss;

$20,000 and 'used $12 000 of it to Credit Bad Debts
purchase building and plant. What is (B) Debit K. Lamb;
his new capital balance? Credit Profit & Loss
(C) Debit K. Lamb;
(A) $32 000 Credit Bad Debts
(B) $20 000 (D) Debit Bad Debts;
(C) $12 000 Credit K. Lamb
(D) $ 8 000
Item 14 refers. to the following
information obtained from a petty
10. A trade discount can be described cashier.
as an amount deducted from the
$ i
(A) catalogue price in determining linprest amount 200
the actual price Petty cash expenses. 150
(B) selling price when the Received for stamps 10-
customer pays within a
specific period 14. - What amount will be reimbursed to
(C) invoice price because a large restore the imprest?
quantity of goods is bought
(D) selling price when an article (A) $ 40
has a flaw (B) $140
(C) $150
(D) $200
11. If a buyer's invoice has been
overstated the seller should send him a
Item 15 refers to the following
(A) debit note information.
(B) corrected invoice
(C) credit note
(D) returns voucher 8 2001
Debtors at start of the year
Cash received from debtors
during the year 17 400
In a partnership a partner, Mr. B., 9 30
Debtors at end of the year
takes home merchandise costing $80.
This amount should be charged to
15. The above information was provided
by a trader. What was his credit sales
(A) Merchandise/Purchase
for the year?
Account
(B) Sales Account
(A) $16 300
(C) Mr. B's Drawings Account
(B) $18 500
(D) Mr. B's Capital Account
(C) $25 600
(D) $26.700

01239010/SPEC 2006 GO ON TO THE NEXT PAGE

73net'v7;77 4.4 - -57.•

 -4 -

Which of the following statements Item 19 refers to the journal entries

best describe principles concerning the below showing credit sale of a
distribution of profits and losses in a machine to John Brown.
Partnership?
Dr$ Cr$ I
All profits are appropriated' July 1 John Brown 500
Each partner is entitled to a
share of the profit or loss
L Machine 500

III. Profits are retained for the 19. Which of the following are the
next accounting period • corresponding ledger entries?
IV. Only losses are distributed
I.
(A) I and H only Machine A/c
(B) I and 111 only John Brown
(C) 11 and III only 500
(D) Hand IV only

II.
17. You are required to reconcile the debit John Browne's A/c
balance in the Cash Book with the Machine
balance found in the Bank Statement. 500
A credit entry recorded on the Bank
Statement, but not in the Cash Book
should be III.
Machine A/c
(A) added to the Cash Book John Brown
balance 500
(B) deducted from the Cash Book
balance IV.
(C) added to the balarice•from the Sales A/c
Bank Statement John Brown
(D) deducted from the balance
from the Bank Statement
(A) I and H only
(B) l andIVonly
18. A. Gill purchased a machine for (C) II and Monty
$3 500 from Wayne and Co. Ltd. (D) Ill and IV only
paying $1 500 in cash and the balance
in 10 days. Which is the CORRECT
procedure for recording this 20. The Gross Profit of a firm is $3 600;
transaction? bad debts $100; rent paid $120 which
includes rent prepaid $20; general
(A) Debit machinery a/c $3 500 expenses $80; discount received $110.
Credit cash a/c $2 000 What is the net profit?

(B) Debit purchases a/c $3 500 (A) $3 400

Wayne & Co. Ltd $3 500 (B) $3 410
(C) $3 430
(C) Debit Machinery $3 500 (D) $3 710
- Credit cash a/c $1 500
Wayne & Co. Ltd $2 000

(D) Debit Wayne & Co.a/c $2 000

Debit cash a/c $1 500
Credit purchases a/c $3 500
co ON TO THE NEXT PAGE
01239010/SPEC 2006
 -5-

21. The accounting cycle consists of a 24. Which of the . following describe
sequence of steps • beginning with methods used in inventory valuation?
analysis and recording of raw
transactions. Which of the. following i. LIFO
sequences BEST - describes the other II. Straight Line
steps in the cycle? FIFO
IV. Periodic
Take Trial Balance
Close the Accounts 1 and II only
Posting Transactions I and III only
Adjust the Accounts v II and III only
Prepare Trading and Profit II and IV only
and Loss Account
VI. Prepare Balance Sheet
25. A trader sent Mr. Jones an invoice for
(A) III, I, IV, II, V, VI $68 instead of $65. Which note
(B) 1,111, IV, 11, V, VI should the trader subsequently send to
(C) III, 1, IV, II, VI, V Mr. Jones?
(D) IV, I. Vi, V, II
(A) Promissory note
(B) Advice note
Item 22 refers to the following (C) Debit note.
information which relates to the (0) Credit note
business of T & T Ltd.

$ Which of the following is shown in

1 Opening stock (cost price) l 3 500 the Appropriation account of a
Closing stock (cost price) 4 200 Limited Liability Company?
Cost of sales 34 650
Proposed dividends
22. What is the rate of stoc 0 Debenture interest
Transfers to general reserves
(A) 4.5 Directors' renumeration
(B) 9
(C) 101 (A) I and II only
(D) 81 (B) I and Ill only
(C) If and IIT only
(0) III and IV only
( 23 Which of • the following are
characteristics of a public limited
company?
The excess of income over
expenditure of a non-profit-making
I. The minimum number of organization is called
members is -two.
It restricts the right to transfer (A) gross profit
• shakes.- (B) net profit
It offers shares for sale to the accumulated fund
public. (C)
(D) surplus
IV. There is no limit to the size of
its membership.

(A) I and II only

(B) III and IV only
(C) I, II and IV only
(D) I; lII and IV only
GO ON TO THE NEXT PAGE
01239010/SPEC 2006
 -6-

( 7-\
.28.1 Which of the following is a prime cost 32. A vehicle was bought on January 1,
in Manufacturing Accounts? 2005 for $30 000. It is depreciated at
the rate of 10% per annum using the
(A) Depreciation diminishing balance method. What
(B) General expenses will be the depreciated charge for the
(C) Direct wages year ended December 31, 2006?
(D) Production overhead
(A) $2 700
(B) $2 970
In preparing an Income and (C) $5 970
Expenditure Account, subscriptions (D) $6 000
paid in advance should be

(A) added this year and subtracted 33. Nate began his retail business with
next year $80 000 capital. Drawings during the
(B) subtracted this year and added year amount to $15 000 and his
next year closing capital was $70 6011 NV1151-
(C) subtracted this year and was the amount of his net profit?
entered into the Receipts
and Payments Account next (A) $ 5 600
year • (B) $24 000
(D) added this year and entered (C) $55 000
into the Receipts and (D) $65 000
Payments Account this year

34. An asset purchased for $1,000

depreciated at 10% per annum usil
30. Which .of the following documents the diminishing balance method
should NOT be used when calculating What would be the value of the
total wages? at the beginning of the third year?

(A) Employees' Register (A) $ 800

(B) Income Tax Return Forms (B) $ 810
(C) Pay Sheet (C) $ 900
(D) Time Sheet (D) $1 190

Item 31 refers to the information 35. A form on which details of employce,

below. earnings and deductions for each PZI“'
period are assembled and summarize-..
$ $ is frequently referred to as
Stock 2 000 Bank 3 000
overdraft (A) payroll register
Machinery 4 000. Debtors 1700 •
(B) payroll distribution
(C) employees' earnings record
Creditors 500 Cash 5 000
(D) payroll
31. What is the working capital?

(A) - $2 200
(B) $4 200
(C) $7 200
(D) $8 200

01239010/SPEC 2006 GO ON TO THE NEXT PAGE

 -7

On January 01, 2005 a firm owed $60 40. The sum of $375 imprest cash was
for electricity. During the year $1 250 advanced to the petty cashier on
was paid towards electricity. - On February 1. During the month the
December 31, 2005 total electricity following payments were made:
usage for the year amounted to $1 800.
What is the amount owing for Travelling expenses $46; postage $20;
electricity for year ending December and stationery $123. -
31, 2005?
On February 28 the petty cash was
(A) $ 550 reimbursed and no further payments
(H) $ 610 were made. What was the petty cash
(C) $1 190 balance after reimbursement?
(D) $1 800
(A) $186
(B) $189
37. The credit entry- rent of $80 in the (C) $375
cash book is posted to the ledger as (D) $564

(A) a credit rent account $80

(B) a debit rent account $80 41. A firm .has sales of $24 000 during the
(C) a debit in the cash account • peried and it adds a mark-up of 20%.
(D) a credit in the cash account What is the Gross Profit?

(A) $4 000
38. Which of the following is NOT a book (B) $4 800
of original entry? (C) $6 000
(D) $6 800
(A) General Journal
(B) Cash Book
(C) Sales Day Book A public limited liability company
(D) Ledger wishes to increase its share capital.
The company may do so by issuing
39. Which of the • following errors would the following:
NOT affect the profit of a business?
ordinary shares
(A) Purchase of a motor van preference shares
debited in Purchases debentures
account dividends
(13) Sale of machinery credited in
Sales account (A) I and II only
(C) An amount credited to (B) HI and IV only
Discount received instead of (C) II and III only
debited to discount allowed (0) I, II and IV only
(D) Jim Khan's account debited
instead of Joe Khan's
account

GO ON TO THE NEXT PAGE

01239010/SPEC 2006
 -8-

Items 43 and 44 refer to the following information_

Acme Co-operative Society

Appropriation A/c
for year ended December 31, 2005

$ S $
.
Transfers to reserves: Net income for the year 35 000

Statutory reserve 4 000 Undistributed income

from
Special reserve 2 500 7 500 last year 1 600
Debenture interest 3 000
Honorarium 6 000
Proposed dividend 15 000
Undistributed income earned 5.100
36 000 36 000

C4
( Which item should NOT have been 45. Edward Broomes has just started a
included in the Appropriation business. He owns a motor car
account? valuing $20,000 and a truck valuir
$45,000. He decides to bring the
(A) Debenture interest $ 3 000 truck into the business:
(B) Statutory reserve $ 4 000 determining the total value of ti,.t
(C) 'Honorarium $ 6 000 business's fixed assets he does ft:3i
(D) Proposed dividend $15 000 include the value of the motor c-nr
Which accounting concept ,z•
Edward Broom observing?
Which of the following items will
be carried forward to the (A) Money measurement
Appropriation Account in the new (B) Separate entity
accounting period? (C) Prudence
(0) Matching
(A) Undistributed income from
last year, $1 600
(B) Statutory and special Albert and Bernard are in
reserves, $7 500 partnership with capitals of $6 000
(C) Honorarium, $6 000 and $4 000 respectively. Interest on
(D) Undistributed income capital is charged at the rate of 5%
earned $5 100 per annum. The firm's net profit
was $12 500. .

What was Albert's share of the net

profit?

(A) $4 800
(B) 55 200
(C) $6 000
(D) $6 500

GO ON TO THE NEXT PAGE

01239010/SPEC 2006
 -9-

From which of the following does the accumulated fund arise?

I. Initial contributions of members of a club

Ii. Several years' surplus of income over expenditure
Gifts and donations to a club
IV. Special fund of a club
Gifts and-donations for a

(A) I and II only

(B) Ill and IV only
(C) 1, it and Ill only
(D) 11, III and IV only

Items 48 — 49 refer to the following information.

Assets .$ Liabilities 1S

ash-in-hand 55 Batik overdraft 1 750

Pre aid rent 120 Creditors I 250 _1
Furniture & Fittings 800 Wages due 75
Debtors i 650
Land & Bui!dinv, 8 000
Bank Account I 500
Motor Vehicles 4 000
Stock 800

48. What is the value of the current 49?( What is the capital?
assets?
(A) $13 750
(A) $2 625 (B) $13 850
(B) $3 125 (C) $14 750
(C) $4 005 (D) $14 850
(D) $4 125

GO ON TO THE NEXT PAGE

01239010/SPEC 2-
 Under which heading & by what amount would rent be shown in the Balance
Sheet?
A Current Assets $6 000
B Current Liabilities $6 000
C Current Liabilities $2 000
D Current Assets $2 000

la Balance b/d of rent unpaid since last year 140

Rent paid during the current year 1 800
Annual rent payable 2 100
Calculate the amount of Rent unpaid at the end of the current year?
A $1 940 B $440 C $ 2100 D $160

51, Amount accrued due for payment of electricity on 01May 1998 500
The Cash Book for the year to 30 April 1999 showed the payment
for electricity 1 650
Amount still accrued due on 30 April 1999 300
Calculate the charge for electricity to the Profit and Loss Account.
A $1 450 B $2 450 C $1 850 D $1 950

gi Leo maintains a Bad Debts Account and a separate Provision for Doubtful De
Account. He wishes to write off an amount of $60 due from Teo: What entries v-A
Leo make?
Debit Credit
A Bad Debts Teo •
B Teo Bad Debts
C Teo Profit and loss account
D Profit and Loss Account • Provision For Doubtful Debts
Item 53 refers to the following information.

Balance Sheet of Boots' Sports Store

as at December 31, 2005

$ $
Ca ital 12 000
Add net proIt 41100
Land and building 9 000
16 000 Motor van 5 000
500 Fixtures & Fittings 600
Less drawings 15 500 Stock 450 •
__. Creditors - 2100 Debtors 250
Bank 2 000
Cash 300

17 600 17 600 _

53. What is the acid test ratio?

(A) .1.2: 1
(B) 1.4: 1
(C) 7.0: 1
(D) 8.4: 1

54 refers to the following bank statement information.

Dr Cr Balance
$ $
Dec 1 Bal bit' 60
5 Cheque 90
14 Unit Trust: Standing order 100
20 P. Palmer: Credit Transfer
29 Bank C haes 85 30

54. The Balance as per Bank Statement was

(A) a credit balance of $5

(B) a debit balance of $65
(C) a credit.balance of $125
(D) a debit balance of $5

GO ON. TO THE NEXT PAGE

01239010/SPEC 2006
 0

- 12 -

55. Which of the following lists of A company's net income for th

assets are arranged in the order of year is $109 000. The comany
liquidity? proposes to transfer $16 000
general reserve, pay $11 000
(A) Land, machinery, stock, ordinary dividends and $5 000
debtors, bank, cash preference dividends. What will be
(B) Land, stock, machinery, the value of the company's retained
cash, debtors, bank profit for the year?
(C) Cash, bank, debtors, stock,
machinery, land (A) $77 000
(D) Bank, debtors. stock, cash, (B) $82 000
land, machinery (C) $88 000
(D) $93 000

56. Mr. Dee's gross earnings is $9 500

per month, his income tax is 8% on 59. From which of the following items
gross • earnings and national in the Trading Account should
insurance contribution is $145 Return Outwards be deducted?
monthly. What is his net pay for
June 2005? (A) Carriage outwards
(B) Carriage inwards
(A) $9 355 (C) Purchases
(B) $8 595 (D) Sales
(C) $8 740
(D) $7 687
60. Which of the following transactions
should be treated as a capttif
57. Use the information below to expenditure in the accounts?
determine credit purchases for the
period ending December 31, 2005. (A) Paid $275 for cleaning the
office
Creditors at Jan 2005 $ 6 000 (R) Purchased a new printing
Creditors at Dec 2005 $ 4 200 machine' for use in the
Receipts from debtors $12 300 Printing Department
Payments to creditors $15 000 (C) Purchased four computers
for resale
(A) $16 000 (D) Paid for repairing the air
(B) $14 100 • conditioner.
(C) $10 500
(D) $13 200

GO ON TO THE NEXT PAGE

01239010/SPEC 2006