Professional Documents
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Source booklet
Instructions to Candidates
In the boxes above, write your centre number, candidate number, your surname, initial(s) and signature.
Answer FIVE questions, choosing TWO from Section A and THREE from Section B.
Indicate which question you are answering by marking the box ( ).
If you change your mind, put a line through the box ( ) and then indicate your new question with
a cross ( ).
All calculations must be shown.
Write your answers in the spaces provided in this question paper.
Do not return the source booklet with the question paper.
Advice to Candidates
Write your answers neatly and in good English.
Total
This publication may be reproduced only in accordance with
Edexcel Limited copyright policy.
2011 Edexcel Limited.
Printers Log. No.
H37994A
W850/6001/57570 1/1/1/
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SECTION A
Answer TWO questions from this section.
If you answer question 1, put a cross in this box (
).
1.
(a) Explain two differences between a receipts and payments account and an income
and expenditure account.
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(4)
(b) Prepare for the year ended 31 December 2010, the:
(i) Subscriptions account
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Worle Social Club is considering offering a 10 year membership to existing members for
250, starting in 2011.
(d) Evaluate, from the perspective of Worle Social Club, whether it should offer a 10 year
membership for 250.
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(Total 52 marks)
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2.
(a) Explain two reasons why a business should record depreciation in the annual
accounts.
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(4)
(b) Prepare, for the year ended 31 December 2010, the:
(i) motor vehicle account
(ii) motor vehicle provision for depreciation account
(iii) motor vehicle disposal account.
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(14)
The owner of Maruf Garage has suggested revaluing the remaining half of the land to
80 000 in the balance sheet.
(d) State two accounting concepts that do not support the owners suggestion.
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(f) The owner of Maruf Garage has stated that by charging annual depreciation, the
business will have sufficient cash to replace the fixed assets at the end of their useful
life.
Evaluate this statement.
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Q2
(Total 52 marks)
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3.
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(18)
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On 1 January 2011, Athula admitted Chandra as a partner into her business. Chandra
brought the following assets and liabilities into the new partnership business at the agreed
valuations of:
Goodwill
Motor vehicle
Stock
Creditors
Bank loan (repayable 31.12.2015)
Bank
15 000
8 000
12 000
6 000
5 000
15 000
profits and losses would be shared in the ratio 2:1 respectively to Athula and
Chandra
goodwill would not be retained in the books of the new partnership.
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(c) Prepare journal entries, with suitable narratives, at 1 January 2011 to record the:
(i) entry of Chandra into the partnership
(ii) removal of goodwill from the books of the partnership.
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(d) Prepare the opening balance sheet of the new partnership at 1 January 2011.
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Q3
(Total 52 marks)
TOTAL FOR SECTION A: 104 MARKS
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SECTION B
Answer THREE questions from this section.
If you answer question 4, put a cross in this box (
).
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(b) Prepare the profit and loss account for the month of December 2010.
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(c) Evaluate the statement that if the trial balance for Classic Design balances, this
ensures that the books of accounts are accurate.
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(4)
Q4
(Total 32 marks)
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23
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5.
(a) (i) Distinguish between perpetual inventory and periodic inventory in stock
valuation.
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(4)
(ii) Explain two characteristics of job costing.
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(b) Prepare the quotation for Job 792, showing the price to be charged to the customer for
100 dresses. The quotation should show clearly the:
(i) raw material cost
(ii) labour cost
(iii) total quotation price.
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Athina is considering changing the method of remuneration for the Cutting and Machining
Department from payment by day rate to payment by piecework.
(c) Evaluate the use of piecework as a method of remuneration for the Cutting and
Machining Department.
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(4)
Q5
(Total 32 marks)
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6.
(a) Suggest three advantages of applying accounting concepts when preparing the final
accounts of a business.
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(6)
(b) Prepare the following ledger accounts for the year ended 30 November 2010. Each
account should include the transfer to the profit and loss account for the year, and the
balance to be carried down.
(i) Electricity account
(ii) Marketing expenses account
(iii) Provision for doubtful debts account.
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(22)
(c) Evaluate the role of social accounting in decision making for a business.
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7.
(a) Explain why it is essential that a new business has good short term liquidity.
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(c) State, giving one reason for each answer, which of the businesses of Andeas or
Dimitris has the better:
(i) profitability
(ii) liquidity.
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(4)
(d) Evaluate the usefulness of accounting ratios in assessing the success of a business.
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(4)
Q7
(Total 32 marks)
TOTAL FOR SECTION B: 96 MARKS
TOTAL FOR PAPER: 200 MARKS
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