Free CXC Principles of Accounts Paper 2 January 2021 past paper from 2021. Includes a worked answer key. Open the PDF, take a timed test, and study with AI on Caribbean AI.
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CSEC Principles of Accounts Paper 2 January 2021 - Free CXC Past Paper with Answers
Free CXC Principles of Accounts Paper 2 January 2021 past paper from 2021. Includes a worked answer key. 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. See the answers and worked solutions. Questions are the property of the Caribbean Examinations Council; Caribbean AI is not affiliated with CXC.
John Oinstin is the owner of Oinstin's Barber Salon. On 31 December 2020, he provided the following trial balance.
| Details | Debit $ | Credit $ |
|---|---|---|
| Capital | 10 100 | |
| Accounts payable | 6 000 | |
| Cash at bank | 8 000 | |
| Drawings | 2 400 | |
| Rent expenses | 4 000 | |
| Electricity expenses | 1 200 | |
| General expenses | 1 200 | |
| Supplies expense | 1 000 | |
| Receipts from customers | 31 700 | |
| Wages expenses | 3 000 | |
| Furniture at cost | 10 000 | |
| Provision for depreciation — furniture | 1 000 | |
| Equipment at cost | 20 000 | |
| Provision for depreciation — equipment |
| 2 000 |
| 50 800 | 50 800 |
Additional information
Using the form provided below, prepare the income statement of Oinstin's Barber Salon for the year.
Using the form provided below, prepare the income statement of Oinstin's Barber Salon for the year.
[9 marks]
Using the information on pages 4 and 5, prepare an extract of the statement of financial position for Oinstin's Barber Salon to show the value of non-current assets as at 31 December 2020.
[3 marks]
Below are descriptions of accounting adjustments in Oinstin's Barber Salon. In the space provided, enter the letter code which represents the type of adjustment.
The adjustments are letter coded as follows: (A) Revenue expenditure (B) Net book value (C) Depreciation (D) Bad debts (E) Accrued expense (F) Prepaid expense
An example has been done for you.
| Adjustments | Letter Code |
|---|---|
| An account receivable is unable to pay the amount due | D |
| Outstanding invoices to be paid | |
| Non-current assets loss in value | |
| Expenditure incurred every day as daily operating expenses | |
| Cost less depreciation to date |
[4 marks]
Zaheeda received a cheque for the sum of $8 000 for a debt of $12 000 from one of her customers, Yoshida, on 31 December 2018. One year later Yoshida stopped all payments to Zaheeda. Two years later Zaheeda discovered that Yoshida is unable to clear the debt and that she must write off the debt.
Prepare the entry to record the bad debt written off in Zaheeda's book. No narrative is required.
| Date | Details | Folio | Debit $ | Credit $ |
|---|---|---|---|---|
[2 marks]
Identify TWO causes of depreciation.
[2 marks]
AK Electronics buys and sells its products on credit only. During the month of December 2020, the following information was extracted from the business' accounting records.
Opening balances: Accounts receivable/accounts payable
| Dr $ | Cr $ | |
|---|---|---|
| 8 500 | 8 800 |
Closing balances: Accounts receivable/accounts payable
| Dr $ | Cr $ | |
|---|---|---|
| 5 300 | ? |
| $ | |
|---|---|
| Payments to creditors | 56 000 |
| Receipts from debtors | 10 100 |
| Credit sales | 8 000 |
| Discount received | 1 400 |
| Credit purchases | 68 000 |
| Returns outwards | 1 500 |
| Bad debts written off | 500 |
| Sales returns | 200 |
| Total discounts allowed | 400 |
State THREE purposes of control accounts in the accounting process.
[3 marks]
Using the information on page 9, prepare the accounts payable control account for AK Electronics for the month ended 31 December 2020.
| Date | Details | Debit $ | Date | Details | Credit$ |
|---|---|---|---|---|---|
[6 marks]
Using the information on page 9, prepare the accounts receivable control account for AK Electronics for the month ended 31 December 2020.
| Date | Details | Debit $ | Date | Details | Credit$ |
|---|---|---|---|---|---|
[8 marks]
State THREE reasons why the company’s bank statement balance did NOT agree with the business’ cash book balance.
[3 marks]
Match the statements below with the correct terms by entering the appropriate letter code in the spaces provided.
The terms are letter coded as follows. A. Business entity B. Accrual C. Prudence D. Duality E. Consistency
| Statements | Letter code |
|---|---|
| Expenses and revenue are recorded when incurred or earned respectively. | |
| A company’s financial statements should follow the same accounting principles, methods, practices and procedures from one accounting period to the next. | |
| The personal transactions of the owner are kept separate from the business’ transactions. | |
| Assets should not be overstated and liabilities should not be understated. | |
| Every transaction affects at least two accounts. |
[5 marks]
Natural Stuff manufactures a single product. The following forecast are for the three months ending 31 December 2020.
| 2020 | Units |
|---|---|
| October | 4 000 |
| November | 10 000 |
| December | 12 000 |
The selling price of the product during the budget period will be as follows:
| October | $8 |
| November | $9 |
| December | $9 |
Prepare a sales budget for each of the three months ending 31 December 2020.
[3 marks]
The accounting staff of Natural Stuff prepares quarterly cash flow projections. Using the form on page 15, complete the cash flow statement.
| October $ | November $ | December $ | |
|---|---|---|---|
| Cash sales | 32 000 | 90 000 | 108 000 |
| Receipts from credit customers | 12 000 | 15 600 | 20 000 |
| Purchase of non-current assets | 7 000 | 86 000 | |
| Payments for credit purchases | 3 000 | 5 000 | 10 000 |
| Utilities | 3 600 | 4 000 | 4 000 |
| Salary expense | 25 000 | 25 000 | 30 000 |
| Advertising expense | 1 000 | 1 000 | 1 000 |
The company forecasts that the bank balance will be $10 000 on 1 October 2020.
[8 marks]
On 1 December 2020, Sheba's bank balance was $3 700 credit. The transactions for the month of December 2020 were as follows:
On 1 December 2020, Sheba's bank balance was $3 700 credit. The transactions for the month of December 2020 were as follows:
Use the form provided on page 19 to prepare the cash book for the month ending 31 December 2020. Bring down the balance on 1 January 2021.
[11 marks]
Sheba's books show a total discount received of $500 for the 11 months from 1 January 2020 to 30 November 2020.
Prepare the discount received account for the year ended 31 December 2020. Show the year end transfer to the appropriate financial statement.
Discount Received Account
| Date | Details | $ | Date | Details | $ |
|---|---|---|---|---|---|
[3 marks]
Identify the ledger in which the following accounts would be posted.
| Account | Ledger |
|---|---|
| Discount received | |
| Fray Ltd | |
| Harry |
[3 marks]
If the owner of Natural Stuff incurs a cost of $150 for each product and sets his mark-up at 25%, calculate the selling price.
[2 marks]
Using the information in (c)(i), calculate the gross profit margin for the product.
[2 marks]
Sheba provided the following summary of his utility expenses for the year ended 31 December 2020.
| 1 January 2020 | Accrued expenses |
| At year ended 31 December 2020 | Total utilities expenses paid |
| 31 December 2020 | Prepaid utilities expenses |
State the amount of the utilities expenses which would be recorded in the income statement and statement of financial position.
[2 marks]
Identify the document that is sent to a debtor to indicate the amount owed to a business.
[1 mark]
The following balances were extracted from the ledgers of Black Cake Enterprise Ltd on 31 December 2020.
| $ | |
|---|---|
| Revenue | 110 000 |
| Bank overdraft | 4 500 |
| Fixtures and fittings | 35 000 |
| Provision for depreciation — fixtures and fittings | 2 300 |
| Land | 59 000 |
| Capital | 60 000 |
| Inventory | 25 000 |
| Trade receivables | 13 000 |
| Trade payables | 27 000 |
| Purchases | 56 000 |
| Discount received | 8 700 |
| Wages and salaries | 12 000 |
| Discount allowed | 5 200 |
| Sundry expenses | 6 900 |
[20 marks]
Use the form provided on page 23 to prepare the trial balance for Black Cake Enterprise Ltd as at 31 December 2020. (Include the account and the amount to make both sides of the trial balance equal.)
[9 marks]
For each scenario, identify the following errors which were later discovered
A sale of goods on account for $1 800 to M. Mullins had been posted to the account of M. Millar.
[1 mark]
Office equipment sold for $2 000 had been posted to the sales account.
[1 mark]
Wages of $4 500 for the office workers had been debited to the bank and credited to the wages account.
[1 mark]
Prepare journal entries to correct the errors identified in (b) on page 24. Narratives are not required.
[8 marks]