Free CXC Principles of Accounts Paper 2 January 2025 past paper from 2025. 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 2025 - Free CXC Past Paper with Answers
Free CXC Principles of Accounts Paper 2 January 2025 past paper from 2025. Includes a worked answer key. Open the PDF, take a timed test, and study with AI on Caribbean AI.
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Brown Leggy Ltd manufactures animal feed and has many employees.
Define EACH of the following pay systems which Brown Leggy Ltd may use to calculate gross pay.
[5 marks]
Fixed rate
[1 mark]
Hourly rate
[1 mark]
Piece rate
[1 mark]
Commission plan
[1 mark]
Bonus plan
[1 mark]
Complete the table below to show the name of the account and ledger affected when posting totals from the journals identified below. In EACH case, the double entry rule must be observed. An example has been provided for you.
| Journal | Debit | Credit |
|---|---|---|
| Name of Account(s) |
| Ledger |
| Returns inward | Returns inward account | General ledger |
| Sales |
| Returns outward |
[6 marks]
State the accounting principle applied in the situations below, by writing the corresponding item letter from Table 1 in the spaces provided in the second table below.
| Item Letter | Accounting Principle |
|---|---|
| A | Prudence |
| B | True and fair view |
| C | Objectivity |
| D | Going concern |
| E | Accruals |
| Situation | Item Letter |
|---|---|
| Brown Leggy Ltd applies a depreciation charge on assets each year over their economic useful life. | |
| It is policy at Brown Leggy Ltd that all accounting information should be based on verifiable evidence such as invoices and cheques. | |
| Sales are NOT recognized when goods are paid for in advance. | |
| Brown Leggy Ltd ensures that all financial statements are accurate reports on the performance of the company. |
[4 marks]
Brown Leggy Ltd decided to compare the company's ratios on December 31, 2025 with those on December 31, 2024.
| Ratios | Year Ended December 31, 2025 | Year Ended December 31, 2024 |
|---|---|---|
| Collection period for receivables | 55 days | 45 days |
| Payment period for payables | 40 days | 30 days |
For EACH of the ratios shown above, suggest TWO possible reasons for the change between December 31, 2024 and December 31, 2025.
[4 marks]
Change in the collection period for the receivables ratio.
Reason 1 Reason 2
[2 marks]
Change in the payment period for the payables ratio.
Reason 1 Reason 2
[2 marks]
Identify ONE possible outcome which could result from the business not having adequate working capital.
[1 mark]
Define the term 'depreciation'.
[1 mark]
On January 1, 2023, Callie Jones, the owner of Callies Manufacturing Company (CMC), purchased a delivery truck costing $50 000. He is undecided on whether to charge depreciation using the straight-line or reducing balance method and has made the following decisions.
Complete the table provided below to show annual depreciation charges for the straight-line and the reducing balance methods for 2023 and 2024. Show all working.
| Year | Straight-line Method | Reducing Balance Method |
|---|---|---|
| Working | Depre. Charge per annum $ | |
| 2023 | ||
| 2024 |
[5 marks]
CMC's accounting staff presented the following information.
| January 1, 2024 | December 31, 2024 | |
|---|---|---|
| $ | $ | |
| Raw materials inventory | 47 500 | 60 000 |
| Work in progress inventory | 20 000 | 18 750 |
Additional Information
| Purchases of raw materials | $142 500 |
| Direct labour costs during the year | $197 500 |
| Factory overhead costs during the year | $141 250 |
Prepare CMC's manufacturing account for the year ending December 31, 2024. Use the form provided below.
(Table for Manufacturing Account is provided in the exam paper.)
[7 marks]
The company manufactured 22 500 units. Compute the unit cost of production.
[2 marks]
CMC has a mark-up policy of 60%. Calculate CMC's total unit selling price.
[2 marks]
The company sold all 22 500 manufactured units. CMC's operating expenses are 20% of sales. Calculate the value of the expenses.
[3 marks]
Ray's Appliances Shoppe sells small kitchen appliances including air fryers. He uses the AVCO method for inventory control and valuation of the air fryers.
(i) Identify ONE other method of inventory control and valuation that Ray could have used.
(ii) State briefly how the method identified in (a) (i) works.
[2 marks]
During the month of December 2024, the following information is available for the movement of air fryers.
| Date | Particulars | Number of Units | Cost Price $ |
|---|---|---|---|
| 2024 | |||
| Dec 1 | Balance on hand | 502 | 200 |
| 6 | Purchases | 125 | 230 |
| 13 | Sales | 257 | |
| 19 | Purchases | 175 | 245 |
| 23 | Sales | 322 | |
| 29 | Purchases | 200 | 260 |
| 30 | Sales | 410 |
Complete the form provided on page 16, to record the inventory valuation of air fryers for the month of December 2024, using the AVCO method. Round off all calculations to the nearest dollar.
| Date | Cost of Inventory In | Cost of Inventory Out | Unsold Inventory | Calculations of Average Cost | Value of Inventory on Hand |
|---|---|---|---|---|---|
| (Table continues for multiple rows in the exam paper.) |
[8 marks]
Calculate Ray's total cost for purchasing air fryers in the month of December 2024.
[2 marks]
Ray sells an air fryer at the price of $650. Calculate the total revenue from the sale of air fryers for the month of December 2024.
[2 marks]
Prepare the suspense account to correct the errors from the table above which require correcting by means of the suspense account. Start with the difference from the trial balance. Total the account.
COSTCO Sports Centre Suspense Account December 31, 2024
| Date | Details | Debit $ | Date | Details | Credit$ |
|---|---|---|---|---|---|
[6 marks]
Prepare journal entries to correct the errors which do NOT require correcting in a suspense account. Include a suitable narration for EACH entry.
| Date | Details | Debit $ | Credit $ |
|---|---|---|---|
[8 marks]
COSTCO Sports Centre's draft income statement for the year ended December 31, 2024 showed a net profit of $13 000. Prepare a revised profit statement for COSTCO Sports Centre for the year ended December 31, 2024, taking into consideration the correction of those errors which would have affected net profit.
[6 marks]