18.
What was the capital at January 1, 2025?
- (A)
$ 95 000
- (B)
$110 000
- (C)
$130 000
- (D)
$180 000
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CSEC Principles of Accounts Paper 1 January 2025 - Free CXC Past Paper with Answers
Free CXC Principles of Accounts Paper 1 January 2025 past paper from 2025. Open the PDF, take a timed test, and study with AI on Caribbean AI.
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Every question from this paper as text. Questions are the property of the Caribbean Examinations Council; Caribbean AI is not affiliated with CXC.
Which of the following financial statements shows the value of a business' assets?
Trading account
Cash flow statement
Profit and loss account
Statement of financial position
Which of the following formulae is used to calculate take-home pay?
Gross pay - Deductions
Net pay + Deductions
Net pay + Gross pay
Gross pay - Net pay
Partnerships are formed for the purpose of I. combining capital from different persons II. benefitting from different skills and specializations III. sharing ideas, experiences and responsibilities
I and II only
I and III only
II and III only
I, II and III
Which of the following features of a partnership states that the actions of one partner binds all other partners?
Mutual agency
Unlimited liability
Voluntary association
Co-ownership of property
Into which of the following accounts is the difference entered when a trial balance fails to agree?
Control
Reserve
Suspense
Provision
Which of the following represents the correct statement of financial position equation for calculating the value of assets?
Assets - Capital
Assets + Liabilities
Capital - Liabilities
Liabilities + Capital
Which of the following entries would NOT appear in a cash book?
Payment for goods
Goods sold on credit
Goods bought for cash
Cheques received for goods
Which of the following types of partner has its indebtedness restricted to the amount of money invested by the partners?
Sleeping
Nominal
Limited liability
Unlimited liability
Which of the following financial obligations would normally be classified as a non-current liability?
Creditors
Debentures
Accrued wages
Bank overdrafts
In a partnership, which of the following is compulsory?
Salary
Interest on capital
Interest on drawings
Sharing of profits/losses
In order to avoid writing numerous cheques for small amounts, a firm may set up a
bank draft
standing order
general journal
petty cash fund
Which of the following lists of activities shows the correct order of the stages in the accounting cycle, before final accounts?
Posting to the ledger, journalizing, preparing a trial balance
Journalizing, posting to the ledger, preparing a trial balance
Posting to the ledger, preparing a trial balance, journalizing
Journalizing, preparing a trial balance, posting to the ledger
The profit a shareholder receives for his investment is called a
return
surplus
dividend
debenture
The MAIN internal users of accounting information are
managers
competitors
local communities
government agencies
Which of the following accounts is NOT nominal?
Discount allowed
Carriage inwards
Commission
Furniture
A trader had an opening capital of $3 900. If his drawings were $900 and his closing capital was $4 860, what was his net profit?
$ 900
$ 960
$1 860
$3 000
Which of the following ratios describes the liquidity position of a business?
Acid test
Net profit
Profitability
Inventory turnover
What was the capital at January 1, 2025?
$ 95 000
$110 000
$130 000
$180 000
The company's net profit is
$61 000
$66 000
$71 000
$76 000
Which of the following figures will be posted to the trial balance?
$150
$400
$405
$625
Item 21 refers to the information given in the following table about Ray's Pet Shop. S Opening inventory 500 Closing inventory 350 Sales 2.500 Purchases 850 Selling expenses 125 Administrative expenses 175
What is the net profit of Ray's Pet Shop?
$ 850
$1 200
$1 350
$2 200
A wholesaler gives a 20% trade discount and a 2% cash discount. How much would a customer pay for goods originally priced at $700.00?
$548.80
$571.20
$722.00
$851.00
In which of the following accounting books would personal accounts be found?
Sales journal
General ledger
Purchases return journal
Receivables and payables ledger
The purchase of a motor van on credit from Things Caricom Motors Co. for use in a business should be recorded as
debit motor vehicle account credit bank account
debit motor vehicle expense account credit bank account
debit purchases account credit Things Caricom Motors Co. account
debit motor vehicle account credit Things Caricom Motors Co. account
Item 25 refers to the information given in the following table. S Closing inventory 300 Accounts receivable 1700 Cash at bank 2000 Sales 5050 Purchases 3 020 Accounts payable 1000
The current ratio is
2:1
4:1
6:1
9:1
Item 26 refers to the following balances at the end of a financial period.
| $ | |
|---|---|
| Motor vehicles | 2 000 |
| Payables | 3 000 |
| Receivables | 2 000 |
| Capital | 11 000 |
| Building | 10 000 |
What is the TOTAL amount for assets?
$12 000
$13 000
$14 000
$15 000
The working capital of P. Young and Sons is $15 500, and current assets is $16 500. What is the TOTAL current liabilities?
$ 1 000
$15 500
$16 500
$32 000
Items 28 and 29 refer to the following balances from a retail company.
| $ | |
|---|---|
| Sales | 36 000 |
| Purchases | 22 000 |
| Gross profit | 11 000 |
| Closing inventory | 6 000 |
| Sales returns | 1 000 |
| Opening inventory | 8 000 |
What is the cost of goods available for sale?
$24 000
$30 000
What is the cost of goods sold?
$ 7 000
$ 9 000
$24 000
$30 000
Item 30 refers to the following statement of financial position provided for a firm as at January 1, 2024. $ Bank 3 000 Payables S 500 Receivables I 5 500 Inventory 1000
What sum of money is represented by I?
$1 000
$2 000
$3 000
$6 000
S. Thomas purchased a machine for $3 250 from Grell & Co. Ltd, paying $1 250 in cash and promising the balance in ten days. What is the correct procedure for recording this transaction?
Debit machinery account Credit cash account 3 250 2000
Debit purchases account Credit Grell & Co. Ltd 3 250 3 250
Debit machinery Credit cash account Credit Grell & Co. Ltd 3 250 1 250 2000
Debit Grell & Co. Ltd 2000 Debit cash account 1 250 Credit purchases account 3 250
What was the cost of goods sold by Mrs Martin?
$2 400
$2 600
$6 400
$7 600
What was the amount of advertising prepaid at the end of the year?
$ 3 000
$ 7 000
$10 000
$17 000
Which of the following features is associated with private limited companies?
Companies are family owned.
Financial statements are published.
Government agencies purchase shares.
Companies shares are not sold publicly.
M. Brown wishes to increase his allowance for doubtful debts from 8% to 10%. Accounts receivable at the end of the year totalled $10 000, whilst the balance in the allowance for doubtful debts account at the start of the year was $800. Which of the following would be the correct entries to record the provision for the year?
Debit profit and loss Credit allowance for doubtful debts 200 200
Debit profit and loss Credit allowance for doubtful debts 720 720
Debit profit and loss Credit allowance for doubtful debts 800 800
Debit profit and loss Credit profit and loss 1000 1000
What is the TOTAL capital expenditure?
$6000
$7000
$8000
$10000
Karen and Garth, partners in a business, share profits and losses in the ratio 2:1. What is their respective share if the business makes a net profit of $3 600?
Karen $1 200 : Garth $1 200
Karen $1 200 : Garth $2 400
Karen $1 800 : Garth $1 800
Karen $2 400 : Garth $1 200
What is the amount of insurance prepaid at the end of the year?
$600
$700
$8000
$8100
Goods were sold on credit to John Brown. Which of the following double entries is a correct record of this transaction?
Debit sales Credit John Brown's account
Debit John Brown's account Credit sales
Debit John Brown's account Debit cash
Debit cash Credit John Brown's account
Mr A. Jones paid $250 in cash for repairs to machinery. This transaction was entered in the cash book and posted to the ledger. The double entry involved would be
debit cash credit repairs
debit A. Jones credit cash
debit repairs credit cash
debit cash credit machinery
Ms Hoyte, a grocer, bought a computer on credit from Tan Company. In Ms Hoyte's books, which of the following journal entries would be made for this transaction?
Debit purchases Credit Tan Company
Debit computer Credit Tan Company
Debit Tan Company Credit purchases
Debit computer Credit cash
What is the closing capital of KD Ltd?
$1 000
$2 000
$4 000
$5 000
Item 43 refers to the following information for Jaco Ltd. Jaco Ltd sells canned tomato sauce. The following inventory information was available for the month ended May 31, 2022.
| Date | Transaction | Amount |
|---|---|---|
| May 1 | Beginning inventory | 40 cans @ $500 per can |
| 4 | Purchased | 80 cans @ $515 per can |
| 15 | Sold | 100 cans @ $650 per can |
| 20 | Sold | 10 cans @ $650 per can |
Using the FIFO method, what is the value of ending inventory?
$ 5 000
$ 5 150
$ 6 500
$20 000
A businessman offers a reduced amount for prompt payment for goods purchased. Under which column in his three-column cash book would this reduction be entered?
Bank
Cash
Discount allowed
Discount received
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 correct transactions were entered on the credit side
Item 46 refers to the following information. Ash Bicycle Shop recorded the following information about its insurance expenses for 2024.
| Date | $ | |
|---|---|---|
| Jan 1 | Prepaid insurance | 250 |
| Mar 31 | Paid insurance by cash | 1000 |
| Aug 31 | Paid insurance by cheque | 800 |
| Dec 31 | Prepaid insurance | 150 |
How much should be recorded as insurance expense at the end of the year?
$1 800
$1 900
$2 050
$2 200
Which of the following items are NOT recorded in the appropriation account?
I. Interest on loans from partners II. Interest on capital III. Withdrawals by partners
I and II only
I and III only
II and III only
I, II and III
Item 48 refers 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.
Which of the following amounts would Janice have to pay if she had missed the discount period?
$171
$180
$190
$200
Item 49 refers to the following information for KD Ltd.
PC Bank Bank Statement Debit Credit Balance $ $ $ Dec 1 Bal b/f 60 5 Cheque 90 14 Unit Trust: Standing order 100 20 P. Palmer: Credit transfer 30 29 Bank charges 85
What is the balance as per bank statement on December 29?
Debit $5
Credit $5
Debit $65
Credit $125
R. Stevens, a petty cashier, received a float of $350. He spends $320 out of it and requests that his float be increased to $400. If his request is granted, how much will he receive?
$320
$350
$370
$400
How much capital did the company raise?
$ 40 000
$ 45 000
$400 000
$450 000
The net profit of a firm was shown as $1 600. It was later discovered that discounts received were undercast by $10 and purchases were understated by $36. What is the correct net profit?
$1 574
$1 610
$1 636
$1 646
Credit sales which have not been paid up must be included in the total sales figure at the end of the period. Which accounting principle justifies this statement?
Prudence
Matching
Materiality
Consistency
Using the LIFO method, closing inventory would be valued at
$1 800
$2 250
$2 400
$4 000
Which debtors will receive a discount?
I and II only
I and III only
II and III only
I, II and III
How would the purchase of equipment on credit affect a firm's statement of financial position?
Increase asset; increase liability
Increase asset; decrease liability
Decrease asset; increase liability
Decrease asset; decrease liability
An asset purchased for $1 000 depreciates at the rate of 10% per annum using the reducing balance method. What is the book value of the asset at the beginning of the third year?
$ 800
$ 810
$ 900
$1 190
The TOTAL income tax to be deducted from Tarisha Ali's monthly salary is
$ 615
$ 740
$ 875
$1 075
The gross profit of a firm is $7 200. Bad debts is $200. Insurance paid is $1 240, which includes a prepayment of $40. What is the net profit of the firm?
$5 720
$5 760
$5 800
$7 000
In an effort to raise capital, a company offered 200 five per cent debentures at $100 each for subscription. Five per cent 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