5.
The issue was fully subscribed. How much capital did the company raise?
- (A)
$ 40 000
- (B)
$ 45 000
- (C)
$400 000
- (D)
$450 000
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CSEC Principles of Accounts Paper 1 May/June 2018 - Free CXC Past Paper with Answers
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A non-trading organization is MAINLY concerned with
importing goods for resale
trading only with wholesalers
making maximum profit for the proprietor
providing various services for its members
The term 'accounting' refers to the
use of information in making business decisions
use of special ways of recording business information
recording, analysing and interpreting of business information
journalizing, posting and balancing of accounts in special books
Rent expense which is still owing at the end of the period must be debited in the profit and loss account and shown in the balance sheet as a liability. Which accounting concept does this represent?
Accrual
Consistency
Going concern
Money measurement
Which of the following accounts are nominal?
Wages and Rent
Stock and Debtors
Machinery and Plant
Creditors and Fixtures
The issue was fully subscribed. How much capital did the company raise?
$ 40 000
$ 45 000
$400 000
$450 000
What does the amount $529 800 represent?
Total sales
Gross profit
Cost of sales
Total purchases
What was the capital of Foster and Scott Limited at 6 March 2015?
$ 40 000
$ 90 000
$150 000
$190 000
If the following lists 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, debtors
cash, fixtures debtors, bank, building, motor van
cash, bank, fixtures, debtors, motor van, building
cash, bank, debtors, motor van, fixtures, building
The items raw materials inventory, work-in-progress inventory and finished goods inventory are MOST likely seen together on the balance sheet of a
garage
shoe factory
supermarket
bus company
Item 10 refer to the following information about two partners.
Jane and Max are in partnership sharing profits in the ratio and respectively. The following balances are taken from their books.
Net profit $23 500 Interest on capital Jane $2 000 Max $1 000 Salary: Max $2 500 Drawings: Jane $1 500 Max $1 400 Interest on drawings Jane $ 150 Max $ 140
How much money should Max receive as his share of the residual profits?
$7 316
$6 556
$5 964
$3 876
In a cooperative society, the daily affairs are administered by
the majority of shareholders
all members meeting together
the chairman of the board only
persons elected or appointed to do so
Item 12 refers to the following information from the books of a company.
From the information above, what is the correct closing total for the sales account?
$59 000
$55 000
$49 000
$47 000
What conclusion could be drawn from the above appropriation account? I. The company is engaged in profitable enterprise. II. The company is not doing too well. III. More dividends can be given to the ordinary shareholders.
I only
II only
I and III only
II and III only
Which of the following accounts are usually transferred to the trading and profit and loss account?
Rent, premises, drawings
Drawings, rent, purchases
Commission received, rent, purchases
Purchases, furniture, commission received
On 2 March 2017, L. Lan bought goods worth $630 on credit. He received a 3% trade discount on this amount. The invoice also stated 2% 20 days, net 30 days. How much would L. Lan pay for the goods if he pays on 8 March 2017?
$595.00
$598.88
$611.10
$630.00
When a proprietor withdraws cash or other assets from a business, what effect does it have on drawings or capital?
Capital is decreased.
Capital is increased.
Drawings are decreased.
Neither drawings nor capital is affected.
The total credit of the bank column of a three-column cash book is greater than the total debit. The MOST likely reason for this situation is that
there was an overdraft
transactions were omitted from the debit side
some figures were overstated on the credit side
the incorrect transactions were entered on the credit side
If the stock turnover ratio is 5 times and average stock is $28 000, what is the cost of goods sold?
$ 5 600
$ 70 000
$ 140 000
$ 280 000
The proprietor of a business paid a personal car repair bill from the bank account of the business. The amount was debited to the Miscellaneous Expense Account. Which of the following concepts was violated by posting the bill to the Miscellaneous Expense Account?
Matching
Prudence
Going concern
Business entity
Which of the following documents acknowledges a loan to a company at a fixed rate of interest?
Debenture
Licence
Fliers
Stock
A motor van was credited from A.G Motors for use in the business. How should the buyer record this transaction?
Debit motor vehicle account; Credit bank account
Debit motor van expense account; Credit bank account
Debit purchases account; Credit A.G Motors account
Debit motor vehicle account; Credit A.G Motors account
What is the amount of total fixed assets?
$ 9000
$14 000
$14 600
$15 050
M. K. Trucking Company received a cheque from Mrs Henry. How must this transaction be recorded in M. K. Trucking's books? I. Credit the cash book II. Credit Mrs Henry's account III. Debit the bank account
I and II only
I and III only
II and III only
I, II and III
What is the gross profit of the hardware store?
$ 25 625
$ 31 645
$ 33 215
$ 34 023
An increase in drawings will result in
an increase in long-term liabilities
a decrease in capital
an increase in capital
a decrease in long-term liabilities
Item 26 refers to the following information. 40-Plus Golf Club (I) for the month ended 31 December 2010 Rent $ 1 000 $ Profit from bar 1 500 Electricity 500 (II) 500 Trips to Miami 5 500
Which of the following BEST describe (I) and (II) shown in the table?
(I) Profit and Loss A/c (II) Rent Received
(I) Trading A/c (II) Subscription Received
(I) Income and Expenditure A/c (II) Subscription Received
(I) Profit and Loss A/c (II) Subscription Received
Item 27 refers to the following information.
On 1 January 2016, $10 000 was paid towards an advertising campaign. Of this amount, $7 000 was used by 31 December 2016.
What was the amount of advertising prepaid at year's end?
$ 3000
$ 7000
$10 000
$17.000
During the year, a company bought stationery for $220 and used $120 worth of it. What is the expenditure for stationery that would be posted to the Profit and Loss Account?
$340
$220
$120
$100
To which account should depreciation of office machines be transferred?
Trading
Manufacturing
Profit and Loss
Appropriation
Item 30 refers to the following information provided by a business.
Current Assets $6 000 Current Liabilities $1 100 Acid Test Ratio 5:1
The value of closing stock is
$ 500
$5 500
$6 500
$7 200
Item 31 refers to the following extract from a trading account.
$ Opening inventory 200 Sales 900 Purchases 500 Closing inventory 300
What is the gross profit?
$100
$300
$500
$800
When a trial balance fails to agree, the difference is entered in the
Provision account
Suspense account
Reserve account
Control account
How does an increase in bad debt affect a sole trader's financial statements?
Decrease the gross profit
Increase the gross profit
Decrease the net profit
Increase the net profit
A trader had an opening capital of $3 900. If drawings were $900 and closing capital was $4 860, what was the net profit?
$ 900
$ 960
$1 860
$3 000
In a partnership, which of the following transactions is compulsory?
Sharing of profits or losses
Interest on drawings
Interest on capital
Paying of salaries
M. Brown wishes to increase his provision for bad debts from 8% to 10%. Accounts Receivable 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 and loss A/c $720 Cr provision for bad debts A/c $720
Dr profit and loss A/c $800 Cr provision for bad debts A/c $800
Dr profit &and loss A/c $1 000 Cr profit and loss A/c $1 000
Dr profit and loss A/c $200 Cr provision for bad debts A/c $200
What is the balance per Bank Statement?
$120
$150
$340
$530
Items 38-39 refer to the following balance sheet information provided for a firm as at 1 January 2017.
2017 1 January Bank Debtors Stock Creditors $ 3 000 (I) 1 000 500 (II) 5 500
What sum of money is represented by (I)?
$1 000
$2 000
$3 000
$6 000
Which of the following accounts is represented by (II)?
Liability
Capital
Cash
Loan
The following information relates to Harvard Sports Club for 2017.
Number of members 50 $ Annual subscriptions $50 per member Subscriptions owing at $450 the beginning of the year Subscriptions owing at $150 the end of the year
How much should be credited to the club's income and expenditure Account as TOTAL subscriptions for the year?
$ 450
$1 500
$1 950
$2 500
What is Z's share of a profit of $7 200?
$2 400
$1 800
$1 200
$ 800
Which of the following accounts shows how profits and losses are shared among partners?
Current
Appropriation
Profit and loss
Income and expenditure
The income and expenditure account shows the
expenditure incurred and liabilities owed for the period
income earned and expenditure incurred for the period
income earned and assets owned for the period
assests owned and liabilities owed for the period
Which feature is associated with private limited companies?
They are family owned.
Shares are not sold publicly.
Financial statements are published.
Government agencies purchase shares.
Item 45 refers to the following information.
What is the inventory at the end of January?
$ 300
$ 500
$ 700
$1 300
A businessman incurred the following expenses.
$ 6 000
$ 7 000
$ 8 000
$10 000
Amalgamated Components was a private company until it admitted additional shareholders by selling shares on the stock exchange. Amalgamated Components can now be described as a
partnership
statutory corporation
public limited company
private limited company
The main reason why a sole proprietor may consider joining with one or more persons to form a partnership is
the business would attract more customers
the business would be recognized by the government
he can work less if many people are involved in the business
the business would get additional capital and management skills
In order to avoid writing numerous cheques for small amounts, a firm may set up a
general ledger
petty cash fund
general journal
standing order with a bank
Which of the following accounts BEST describe the final accounts of a non-trading organization? I. Receipts and payments II. Income and expenditure III. Trading and profit and loss
I and II only
I and III only
II and III only
I, II and III
A business with more than one owner records the division of profit in which of the following accounts?
Capital Account
Trading Account
Appropriation Account
Profit and Loss Account
P. Amos is employed by a construction company at a rate of $7 per hour. During the week of 6 April, he worked his basic week of 40 hours. The income tax due on his pay is $ 20, and he is also liable to pay social security contributions of 5% of his gross pay. What is his net pay?
$ 246
$ 260
$ 266
$ 280
Item 53 refers to the following information provided by a business.
| $ | $ | ||
|---|---|---|---|
| Bank balance at August 2016 | 700 | Inventory at 31 July 2017 | 2000 |
| Purchase of refreshments | 500 | Donations to charity | 200 |
| Purchase of furniture | 500 | Depreciation of furniture | 50 |
| Sale of equipment | 600 | Proceeds from raffle | 1500 |
What is the bank balance in the receipts and payments account for the year ended 31 July 2017?
$ 900
$1 600
$2 850
$3 550
Item 54 refers to the following list of balances. J. Baynes Manufacturing Account for Period Ended 31 December 2017 $ Inventory of raw materials 1 January 2017 800 Purchases of raw materials during year 4 500 Balance carried forward 6 800 5 300 Less closing inventory of raw materials 31 December 2013 1 400 3 900 Productive wages 1 300 Fuel and power 900 Lubricants 100 Rent and rates 400 Insurance 200 6 800 6 800
From the list of balances above, what is the cost of goods produced?
$3 900
$5 200
$6 100
$6 800
From the list of balances above, what is the cost of goods produced?
$ 8000
$ 8 700
$11 100
$11 200
A business receives $5000 for rent revenue and deposits this amount into its bank account. How will this transaction be recorded?
Dr rent $5 000; Cr bank $5 000
Dr bank $5 000; Cr rent revenue $5 000
Dr cash $5 000; Cr rent revenue $5 000
Dr rent revenue $5 000; Cr rent expense $5 000
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 dividend proposed was $6 500. The value of the retained profits for the year was
$72 100
$80 100
$81 000
$89 000
P. Hawk has a manufacturing business. The cost of his raw materials was $1 900. Rates and rent totalled $2 000, and factory wages amounted to $2 500. The number of units produced is 640. What was the cost of ONE unit?
$4
$6
$10
$13
Item 59 refers to the following data which pertain to Tarisha Ali, an employee of a bank.
Monthly salary $3 500 Overtime $ 800
Income tax rate: 25% on every dollar above $2 000 of monthly salary 30% on overtime earned
The TOTAL income tax to be deducted from Tarisha Ali is
$615
$740
$875
$1 075
An employee works for 45 hours in a given week. The rate for a 40-hour week is $4 per hour. Overtime is paid at time and a half. What is his gross weekly wage?
$180
$190
$240
$270