CSEC Principles of Accounts Paper 2 January 2024 - Free CXC Past Paper with Answers

Free CXC Principles of Accounts Paper 2 January 2024 past paper from 2024. Includes a worked answer key. Open the PDF, take a timed test, and study with AI on Caribbean AI.

Opening the interactive papers…

CSEC Principles of Accounts Paper 2 January 2024 Questions

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.

Question 1 (20 marks)

Easton Lyle is a trader. The trial balance prepared on 31 December 2023 failed to agree. The difference was entered in a suspense account.

The following errors were later discovered.

Error No.	Errors
I	Payment of $76 cash for utilities used for the year was entered in the cash book but not in the utilities expense account.
II	The purchases journal was overcast by $454.
III	The total for discounts allowed, $60, was not included in the trial balance.
IV	$200 cash received from Maveryln Adam, a trade receivable, was posted on the debit side of her account.
V	Drawings of $3 000 had been correctly entered in the cash book but posted to the drawings account as $1 800.

[20 marks]

(a)(i)

Prepare the entries in Easton Lyle's general journal at 31 December 2023 to correct the errors on page 4. Narratives are NOT required.

Question 3 (8 marks)

(a)

Simba United Sports Club was formed two years ago. All receipts were paid into the bank and all payments were made by cheque.

(a) The following is the receipts and payment account which was prepared by the club's secretary for the year ended 31 December 2023. The secretary has very little knowledge of accounting.

Simba United Sports Club

Receipts and Payments Account

For the Year Ended 31 December 2023

	S		S
Balance b/d — 1 January 2023 (bank overdraft)	4 500	Rent expense	7 200
Insurance expense	3 200	Sale of old equipment	6 700
Printing and stationery expense	290	Snack bar sales	7 430
Donations received	5 500	Snack bar purchases	1 300
General expenses	2 530	Subscriptions received from members	6 800
Purchase of computer desks	6 260
	22 280		7 150
Balance c/d	7 150

Prepare a corrected receipts and payments account for Simba United Sports Club for the year ended 31 December 2023. Balance the account at year end and show the opening balance for 1 January 2024. Use the form provided below.

[8 marks]

(b)

The bank columns of the Simba United Sports Club's cash book for the month of October 2023 were as follows.

Cash Book — Bank Columns

Date	Details	Debit $	Date	Details	Cheque Number	Credit$
2023			2023
1 Oct	Balance b/d	8 950	1 Oct	Petty cash fund	3000	200
11 Oct	Subscription from A. Elm	1 500	14 Oct	General expenses	3001	900
16 Oct	Ajani Plumes	5 400	21 Oct	Snack Supplies Ltd	3002	2 250
28 Oct	Sales	3 670	29 Oct	A.P. Wholesale Ltd	3003	4 400

Simba United Sports Club's bank statement for October 2023 was as follows.

Bank Statement for the Month of October 2023

		Balance $
2023
1 Oct	Balance b/d	8 850 Cr
3 Oct

Question 4 (17 marks)

(a)

Jasper Poppy is the owner of Bella Cutie Ltd, a private limited company.

(a) State THREE features of a private limited company.

[3 marks]

(a)(iii)

Bella Cutie Ltd purchased new premises on 1 December 2023. The following provides details of the total amount which was debited to the premises account on 1 December 2023.

	$
Cost of purchase of premises	119 200
Legal fees incurred for the purchase of the property. This included $300 legal fees paid for recovery of a bad debt.	10 800
Installation of upgraded water pipelines on the premises	5 600
Redecoration cost (half of which is payment made in advance for redecoration work to be performed in January 2024)	11 000
Labour cost to extend the office area	16 000
Insurance paid for the new premises for 12 months from 1 December 2023 to 30 November 2024	12 900
Total debited to the premises account	175 500

Calculate the amount which should have been debited to the premises account on 1 December 2023 for the purchase of the new premises.

	$
Correct total to be debited to premises account

[4 marks]

(a)(iv)

Calculate the total amount to be charged as "expense" to the income statement for the month of December 2023.

	$
Correct amount to be charged as expense to the income statement for the month of December 2023

[4 marks]

(b)

On 1 January 2022, Bella Cutie Ltd had purchased a heavy-duty machine costing $186 000 on credit from Chingsing Ltd. The machine depreciates at the rate of 40% per annum, using the reducing balance method. Calculate the depreciation expense for EACH of the following year ends. (i) Year ended 31 December 2022 (ii) Year ended 31 December 2023

[3 marks]

(c)

Complete the extract below to show how machinery would appear in Bella Cutie Ltd's statement of financial position as at 31 December 2023.

[6 marks]

(c)(i)

Complete the extract below to show how machinery would appear in Bella Cutie Ltd's statement of financial position as at 31 December 2023.

Cost	Accumulated depreciation	Net book value
$	$	$

[4 marks]

(c)(ii)

State TWO factors which cause non-current assets to depreciate.

[2 marks]

Question 5 (20 marks)

(a)

On 1 January 2023, Boo Bear Construction Ltd's books showed the following balances.

	$
Allowance for doubtful debts	2 300
Trade receivables	64 000

The following transactions took place during the year ended 31 December 2023.

2023

<![CDATA[Complete the following three accounts to show how these entries would appear in Boo Bear Construction Ltd's ledger for the year ended 31 December 2023. Balance and close off the accounts at year end, showing transfers to the final accounts where appropriate.

[14 marks]

(a)(i)

Shine Roberts' Account

Date	Details	$	Date	Details	$

[7 marks]

(a)(ii)

Bad Debts Expense Account

Date	Details	$	Date	Details	$

[2 marks]

(a)(iii)

Allowance For Doubtful Debts Account

Date	Details	$	Date	Details	$

[5 marks]

(b)

Identify THREE qualities you would expect of a person applying to be a bookkeeper at Boo Bear Construction Ltd.

[3 marks]

(c)

The following policy statements were implemented by the management of Boo Bear Construction Ltd. Each statement is identified by a unique letter code.

Letter Code	Statements
A	Boo Bear Construction Ltd has sold goods to Shine Roberts on credit. Shine Roberts has informed Boo Bear Construction Ltd that he has filed for bankruptcy. Boo Bear Construction Ltd wrote off the balance due.
B	Boo Bear Construction Ltd purchased an office building for $340 000. The market value of the building is $400 000. The accountant recorded the purchase price of the building as $340 000 in the company's books.
C	Mr Hals, the owner of Boo Bear Construction Ltd, owns three different types of businesses. The transactions of the three businesses are separately maintained.

Complete the following table to write the correct letter code which matches the accounting concept that corresponds to each policy statement implemented.