Cambridge IGCSE and O Level Accounting

Exam-style questions
1 Which task is performed by a book-keeper?
A analysing the trading results
B entering transactions in the ledger
C preparing year-end financial statements
D providing information for decision-making

2 A trader provided the following information:

$
Premises 180 000
Inventory 23 420
Trade payables 26 180
Trade receivables 21 710
Office fixtures and fittings 32 600
Loan from bank 80 000
Cash at bank 2 550
Motor vehicles 15 900

a Calculate the value of the assets.

b Calculate the value of the liabilities.
8 c Use the accounting equation to calculate the trader’s capital.

3 What is a statement of financial position?

A a calculation of the amount owed to the owner of the business
B a list of assets and liabilities of a business on a certain date
C a list of everything owned by and owed to a business
D a summary of money paid to and received by a business

4 A business had $9 420 in its bank account. The following transactions took place:

$
Bought goods on credit 250
Sold goods on credit 1 100
Repaid a loan by cheque 5 000

How much was there in the bank after these transactions?

A $3 570 B $4 420 C $4 670 D $5 270
 Chapter 1: Introduction to accounting

5 Complete the following table to show the effect of each of the following transactions.
The first one has been completed as an example.

a Bought a motor vehicle and paid by cheque

b Bought goods on credit from a credit supplier
c Received a cheque from a credit customer
d Sold goods on credit
e Paid off a loan in cash

Effect on assets $ Effect on liabilities $

a Motor vehicles Increase No effect
Bank Decrease
b

6 The statement of financial position of Bharwani Traders on 31 October 20–4 is shown below.
9
Bharwani Traders
Statement of financial position at 31 October 20–4
Assets $ Liabilities $
Machinery 19 000 Capital 35 000
Motor vehicles 6 000 Trade payables 8 000
Inventory 4 900
Trade receivables 3 000
Bank 10 100 20 000
43 000 43 000

On 1 November 20–4 the following transactions took place:

A cheque for $3 000 was paid to a credit supplier.
A credit customer paid $500 in cash.
A loan for $8 000, which was paid into the bank, was received from Lenders Limited.
A cheque for $7 000 was paid for an additional machine.

Prepare the statement of financial position of Bharwani Traders on 1 November 20–4 after
the above transactions have taken place.
 Chapter 2: Double entry book-keeping – Part A

Exam-style questions
1 Mahela is a trader. He took goods costing $100 for his own use.
How would Mahela record this in his ledger?

Account to be debited Account to be credited

A drawings inventory

B drawings purchases

C inventory drawings

D purchases drawings

2 Jaswant purchased goods from Ali and paid in cash.

Which entries would Ali make in his ledger?

Account to be debited Account to be credited

A cash sales

B Jaswant sales

C sales Jaswant
27
D sales cash

3 Dinesh returned goods to his credit supplier, Thisara.

How would Dinesh record this in his ledger?

Account to be debited Account to be credited

A sales returns Thisara

B purchases returns Thisara

C Thisara sales returns

D Thisara purchases returns

4 On 1 July 20–6 Mumtaz started a business. The following are her transactions for the first
two weeks of trading:
July 1 Mumtaz paid capital, $50 000, into the business bank account
2 Bought premises, $25 000, and paid by cheque
4 Bought equipment, $4 000, and paid by cheque
6 Bought goods, $1 500, on credit from Mayur Vihar Traders
7 Paid advertising expenses, $60, by cheque
9 Sold goods, $200, and received a cheque
 Cambridge IGCSE and O Level Accounting

12 Sold goods, $310, on credit, to Ridhima

13 Ridhima returned damaged goods, $20
14 Paid $1 000 by cheque on account to Mayur Vihar Traders

Enter these transactions in the ledger of Mumtaz. Balance the bank account and the
accounts of Mayur Vihar Traders and Ridhima on 14 July and bring down the balances on
15 July 20–6.

5 Katie is a trader. On 1 October 20–4 she had the following balances in her ledger:

$
Capital 15 000
Inventory 3 400
Fixtures and fittings 10 100
Trade receivable – Daisy 1 110
Trade payable – Zara 1 760
Loan from AB Finance 2 000
Bank 4 150 debit

a Enter these balances in the appropriate accounts.

The following transactions took place in October 20–4:

October 2 Bought goods on credit from Zara, $1 500

28
7 Returned goods to Zara, $80
10 Repaid the loan by cheque
14 Paid Zara a cheque for the amount owing on 1 October 20–4
21 Cash received from sales of goods, paid directly into the bank, $940
28 Katie took goods for her own use, $140
30 Daisy paid the amount due by cheque

b Enter these transactions in Katie’s ledger. Balance the bank account and Zara’s
account and bring down the balances on 1 November 20–4.

6 The following account appeared in the ledger of Marine Drive Stores:

Central Wholesalers account

Date Details Folio $ Date Details Folio $
20–4 20–4
May 17 Returns 120 May 1 Balance b/d 180
20 Bank 300 10 Purchases 410
31 Balance c/d 170 170
590 590

Explain each entry in this account and also state where the double entry for each entry
will be found.