CSEC Principles of Accounts Paper 1 January 2017 - Free CXC Past Paper with Answers

Which of the following groups of persons monitors a company's financial statements to discover a desirable rate of return on capital?

Which of the following terms describes a report which indicates whether the business has made a profit or loss?

Which of the following lists of activities shows the stages of the accounting cycle in the correct order?

Posting to Ledger, Journalizing, Trial Balance, Final Accounts

Posting to Ledger, Trial Balance, Journalizing, Final Accounts

Journalizing, Posting to Ledger, Trial Balance, Final Accounts

Journalizing, Trial Balance, Posting to Ledger, Final Accounts

Which statement BEST explains the term 'consistency' as used in accounting?

Procedures in accounting are subject to change each year.

Firms can choose different methods each year to reflect the best financial results.

Separate methods of depreciation can be used in determining profits for taxation purposes.

The accounting treatment for depreciation, once fixed, must be treated in the same way thereafter.

A statement of the balances of the accounts taken from the Ledger and arranged under assets and liabilities is called

a Statement of Account

Items 6-8 refer to the following Balance Sheet.

Balance Sheet of Beta Shoe Store as at 30 September 2016 $ $ $ $ Leasehold Premises 10 000 Furniture, Fittings and Capital at start Less loss for year 24 000 2 200 Equipment 4 500 14 500 21 800 Less Drawings 1 800 20 000 Inventories (stock) 2 500 Creditors 2 100 Debtors 3 700 Accrued Expenses 1 200 Bank Current Account 2 100 3 300 Cash in Hand 500 8 800 $23 300 $23 300

The total assets are

The working capital is

The closing capital is

If the following list of assets found on the Balance Sheet of a retail trader were to be arranged in order of liquidity, the sequence would be

Motor Van, Building, Bank, Fixtures, Cash and Debtors

Cash, Fixtures, Debtors, Bank, Building and Motor Van

Cash, Bank, Debtors, Motor Van, Fixtures and Building

Cash, Bank, Fixtures, Debtors, Motor Van and Building

Items 10-11 refer to the following information.

Janice purchased 20 items priced at $10 each, receiving a 5% trade discount. One month later, she paid her bill by cheque, taking advantage of a 10% cash discount offer.

Calculate the value of the trade discount.

What amount would Janice have paid if she had missed the discount period?

Ram Singh purchased goods valued at $500 on credit. He paid off his bill within the grace period and so received a 10% cash discount. How much did he pay the firm?

Items 13-14 refer to the following information.

The group below consists of four lettered headings followed by two numbered statements. For each numbered statement select the one heading which is MOST closely related to it. Each heading may be used more than once, once or not at all. (A) Invoice (B) Credit Note (C) Debit Note (D) Advice Note

You wish to inform a customer that you have dispatched his goods.

You find that you have undercharged a customer and need to adjust the charge.

On 1 May, a petty cashier received an imprest of $150. During the month, petty cash expenditures amounted to $77, and $2 was received from a member of staff who made a personal telephone call. How much cash is needed to restore the imprest on 31 May?

Mrs Green is a dry goods merchant. Which of the following transactions would result in a debit to her cash account?

Bought goods for cash

Paid instalment on loan

Paid cash to office cleaner

A motor van was bought on credit from AG Motors for use in the business. How should this be recorded?

Dr Motor Vehicle Account; Cr Bank Account

Dr Motor Vehicle Account; Cr AG Motors Account

Dr Purchases Account; Cr AG Motors Account

Dr Motor Van Expense Account; Cr Bank Account

A businessman bought a new computer for $6 000. He paid $4 000 in cash and traded in his old computer. What is the entry to record this transaction?

Dr new computer $6 000 Cr old computer $2 000 Cr cash $4 000

Dr new computer $2 000 Cr old computer $4 000 Cr cash $2 000

Dr new computer $4 000 Cr old computer $6 000 Cr cash $6 000

Dr new computer $2 000 Cr old computer $4 000 Cr cash $6 000

Which of the following is entered in the purchases account of a grocery store?

Duplicating machines

The ABC Company received a cheque from Mr Murray for $300. How must this transaction be recorded in ABC's books? I. Credit the Cash Book $300. II. Credit Mr Murray’s account. III. Debit the Bank account. IV. Debit Mr Murray’s account.

What is the closing balance of the Bank Account?

The balance in a cash account indicates

how much profit was made

the cash held by the business

the true worth of the business

how much is owed to the business

What is the value of the inventory (stock)?

Items 24-25 refer to the following information from a sole trader for the month of April.

Purchases 05 April 10 April Sales 12 April 17 April

Using the FIFO method, closing stock would be valued at

Using the LIFO method, closing stock would be valued at

Items 26-27 refer to the following information.

A calculation to determine gross profit percentage is as follows.

$\frac{$185 530}{$529 800} × \frac{100}{1} = 35.02%$

What does the $529 800 represent?

The value $185 530 represents

The working capital of P. Young and Sons is $15 500, and current assets are $16 500. What is the TOTAL current liabilities?

A credit balance of $45 on the electricity expense account indicates that

$45 was paid in electricity

electricity is prepaid by $45

electricity is accrued by $45

the firm is owed $45 for electricity

P. John has a credit balance b/f of $25 on his rent revenue account. This means that for the year $25 rent revenue

M. Brown wishes to increase his provision for bad debts from 8% to 10%. Debtors at the end of the year totalled $10 000, whilst the balance in the provision for bad debts account is presently $800. Which of the following would be the correct entries to record the provision for the year?

Dr Profit & Loss A/c, Cr Provision for Bad Debts A/c $720 / $720

Dr Profit & Loss A/c, Cr Provision for Bad Debts A/c $800 / $800

Dr Profit & Loss A/c, Cr Profit & Loss A/c $1 000 / $1 000

Dr Profit & Loss A/c, Cr Provision for Bad Debts A/c $200 / $200

If closing stock was overstated by $100, profit would be

On 1 June, P. Shark, a sole proprietor, owed creditors $4 300. During the month he paid $13 100 by cheque and at the end of the month his balance owing was $2 700. Cash purchases for the month are $3 500. What is P. Shark's total purchases for the month?

A firm records a net profit of $5000. It was later discovered that sales were undercast by $860 and purchases were overcast by $230. What is the revised net profit?

The debit side of the trial balance exceeds the credit side by $1200. A suspense account should therefore be opened with a balance of

$1 200 on the debit side

$1 200 on the credit side

$2 400 on the debit side

$2 400 on the credit side

Under which of the following conditions would a Trial Balance still balance?

I. A debit entry was left out. II. A transaction was completely left out. III. Both a debit and a credit entry were overstated by the same amount.

Item 37 refers to the following information from the sales book of R. Lewis.

2015 02 Jan H. Rick 30 @ $1.50 Less 33 1/3 % Trade discount

How would R. Lewis record this information in his ledger?

Dr Rick's Account Cr Sales Account $45 $45

Dr Rick's Account Cr Sales Day Book $30 $30

Dr Rick's Account Cr Sales Account $45 $30

Dr Rick's Account Cr Sales Account $30 $30

Item 38 refers to the following information.

Inventory at 1 January 2016 $1 500 Purchases during the month $1 200 Cost of goods sold $1 400

What is the inventory at the end of January?

The amount of drawings is

Mrs Allen invested $20 000, Mrs Brown invested $5 000 and Mr Cable invested $5 000 in the same business. The loss sustained during the year was $1 000. The partnership agreement is silent on the item of losses, although profits are to be split in the ratio 2:2:1 in favour of Allen, Brown and Cable respectively. How much of the loss must be borne by Mr Cable?

Which of the following are reasons why partnerships are formed?

I. To combine capital from different persons II. To benefit from different skills and responsibilities III. To enjoy limited liability

The total capital in a partnership is $30000. Rose contributed $7000 in cash and a vehicle worth $3 000. Rose's contribution to the partnership would be recorded in the journal as

Cash $10 000 Rose's capital $10000

Rose's capital $ 7000 Cash $ 7000

Cash $ 7000 Motor Van $ 3000 Rose's capital $10000

Rose's capital $10.000 Cash $ 7000 Motor van $ 3000

Items 43-44 refer to the following information.

Jane and Mary are in partnership sharing profits in the ratio 3:2 respectively. The following balances are taken from their books.

Net Profit $23 500 Interest on Capital Jane $ 2000 Mary $ 1000 Salary: Joan $ 2.500 Drawings: Jane $ 500 Mary $ 1500 Interest on Drawings Jane $ 15 Mary $ 45

How much money should Jane receive as her share of the residual profits?

How much money should Mary receive as her share of the residual profits?

Which of the following features is associated with private limited companies?

Shares not sold publicly

Financial statements published

Government agencies purchase shares

In an effort to raise capital, a company offered 200 five per cent (5%) debentures at $100 each for subscription. Five per cent (5%) is an indication that the company will

increase its capital by 5%

receive 5% of $20 000 as capital

pay 5% of $20 000 in interest to the debenture holders

receive 5% of $20 000 in interest from the debenture holders

A public limited company issued a prospectus offering the shares described in the following table for sale at par value.

The issue was fully subscribed. How much capital did the company raise?

When a company declares a dividend of 15%, the dividend warrant sent to the shareholder who owns 1 500 one dollar ordinary shares is

A business receives $5 000 for rent and deposits this amount into its bank account. How will this transaction be recorded?

Dr bank $5 000; Cr rent $5 000

Dr rent $5 000; Cr bank $5 000

Dr cash $5 000; Cr rent $5 000

Dr rent $5 000; Cr expense $5 000

The MAIN objective of co-operatives is to

provide goods and services

maximize the welfare of members

The Non-Such Cricket Club has operated over the last 12 months, and its members are anxious to know the financial position of the club. Which of the following statements would be appropriate to reveal this?

I. Statement of Accumulated Funds II. A Receipts and Payments Account III. An Income and Expenditure Account

The excess of the income over the expenditure of a non-profit-making organization is called

What is the organization's accumulated fund at the end of the year?

S. Johnson and Company Limited has a net profit of $10 000 for the year ended 31 December 2015. The directors propose to appropriate $2 000 to the general reserve and 10% of the net profit to the fixed assets replacement reserve. What is the maximum amount which can be proposed as dividends?

Which of the following will result when opening inventories of raw materials are added to net purchases of raw materials?

Raw materials available for use

Item 56 refers to the following information of Harvard Sports Club for 2015.

Number of members	50
Annual subscriptions	$ 50
Subscriptions owing at the beginning of the year	450
Subscriptions owing at the end of the year	150

How much should be credited to the club's Income and Expenditure Account as total subscription for the year?

S & B Limited's net income for the year was $89 000. Of this amount, $8 000 was transferred to the general reserve, preference dividend paid was $2 400 and ordinary dividends proposed was $6 500. The value of retained profits for the year was

CSEC Principles of Accounts Paper 1 January 2017 - Free CXC Past Paper with Answers

CSEC Principles of Accounts Paper 1 January 2017 Questions