SECTION A

Answer ALL questions in this section. Write your answers in the spaces provided.

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For questions 1–10, choose an answer A, B, C or D, and put a cross in a box .
If you change your mind about an answer, put a line through the box
and then mark your new answer with a cross .
1 Which document issued by the seller summarises the transactions for the month?

A Credit note

B Purchase invoice

C Sales invoice

D Statement of account

(Total for Question 1 = 1 mark)

2 Which is not an accounting concept?

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A Business entity

B Confidentiality

C Consistency

D Materiality

(Total for Question 2 = 1 mark)

3 Which of these accounts always has a credit balance?

A Carriage inwards

B Carriage outwards

C Discount allowed

D Discount received
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 4 Which accounts are maintained in the payables ledger?

A Creditors
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B Debtors

C Purchases

D Sales

(Total for Question 4 = 1 mark)

5 Which statement is incorrect?

A Assets = liabilities + capital

B Capital = assets – liabilities

C Capital – liabilities = assets

D Liabilities = assets – capital

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(Total for Question 5 = 1 mark)

6 Which should be entered on the credit side of the trade receivables control account?

A Credit sales

B Discount allowed

C Interest charged

D Returns outwards

(Total for Question 6 = 1 mark)

7 What is the effect if capital expenditure is treated as revenue expenditure?

A Gross profit overstated

B Gross profit understated

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C Profit for the year overstated

D Profit for the year understated

(Total for Question 7 = 1 mark)

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8 Identify when a customer would receive a cash discount.

A Bulk purchases

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B Payment made by cash

C Payment made within agreed time

D Regular purchases

(Total for Question 8 = 1 mark)

9 Where is the total of the discount column on the debit side of a three-column cash
book posted?

A Credit discount allowed

B Credit discount received

C Debit discount allowed

D Debit discount received

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(Total for Question 9 = 1 mark)

10 What is the effect when a trader does not account for rent paid in advance?

A Gross profit overstated

B Gross profit understated

C Other receivables overstated

D Other receivables understated

(Total for Question 10 = 1 mark)

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 11 Complete the document.

Invoice
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GLK Ltd
Moreton Road
Norwich NR1 2BP
Frank Waites Number: S2703
22 Redland Drive
Lewes BN7 2DH Date: 14 April 2020
Description Quantity Unit cost Total cost
$ $

Filing cabinets 8 64.55

………………………………………………

Office chairs 22 19.80

………………………………………………

Subtotal
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Trade discount 15%

………………………………………………

Total
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Terms: 2% discount for 30 days settlement.

(Total for Question 11 = 5 marks)

12 State the book of original entry for each transaction.

Transaction Book of original entry

Sales to a credit customer
Returns from a credit customer
Purchases from a credit supplier
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Purchase of a non-current asset on credit

Payment to a credit supplier

(Total for Question 12 = 5 marks)

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13 On 31 December 2019, Lewin sold a motor vehicle, cost $20 000, with a carrying
value of $16 000. The proceeds of the sale, $16 400, were received by cheque.

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(a) Prepare the disposal account for the year ended 31 December 2019.
(4)
Disposal Account

Date Details $ Date Details $

(b) State one cause of depreciation of a non-current asset.

(1)

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(Total for Question 13 = 5 marks)

TOTAL FOR SECTION A = 25 MARKS

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 SECTION B
Answer ALL questions in this section. Write your answers in the spaces provided.
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14 (a) State two reasons for maintaining a trade payables ledger control account.
(2)

1 ............................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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2 ............................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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 On 31 March 2020 Gali provided the following information related to credit suppliers.

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Balance at 1 March 2020 16 250
Totals for the month
Credit purchases 18 230
Returns outwards 615
Interest charged 30
Trade receivables ledger balance set off 465
Payments made 14 540
Discount received 235
Refund received 55

(b) Prepare the trade payables ledger control account for the month of March 2020.

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Balance the account on 31 March 2020 and bring the balance down on
1 April 2020.
(10)
Trade Payables Ledger Control Account

Date Details $ Date Details $

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 (c) State three reasons why a business may receive a refund from a credit supplier.
(3)
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1 ............................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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2 ............................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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3 ............................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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(Total for Question 14 = 15 marks)

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15 Raheem has prepared the following incorrect trial balance.
(a) Prepare the corrected trial balance.

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(10)
Trial balance at 30 April 2020

Account Debit Credit Debit Credit

$ $ $ $
Bank overdraft 3 850
Carriage inwards 260
Carriage outwards 830
Discount allowed 1 010
Drawings 8 400
Equity 27 460
General expenses 18 470

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Inventory at 1 May 2019 6 960
Irrecoverable debts 380
Property at cost 36 000
Motor vehicles
– cost 18 300
– provision for depreciation 10 980
Purchases 44 310
Rent received 1 650
Returns outwards 570
Revenue 96 740
Trade payables ledger control account 9 150
Trade receivables ledger control
15 480
account
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Suspense 17 740 DO NOT WRITE IN THIS AREA

Totals 159 270 159 270

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 (b) Evaluate the benefits of preparing a trial balance.
(5)
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(Total for Question 15 = 15 marks)

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16 (a) State two reasons why a business maintains a petty cash book.
(2)

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1 .. ............................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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2 .. ............................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Juliet maintains a petty cash book with a float of $150

The following transactions took place during April 2020.

Voucher
April Transaction $
number
5 401 Paid taxi fare 15.20
9 402 Purchased postage stamps 14.60

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13 403 Paid employee travel expenses 25.00
22 404 Purchased envelopes 18.30
29 405 Paid cleaner’s wages 30.00
To be
30 Restored float to petty cash
calculated

(b) Prepare the petty cash book for the month ended 30 April 2020.
Balance the petty cash book on that date and bring the balance down on
1 May 2020.
(11)

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Petty cash book

Receipts Date Details Voucher Payments Cleaning Stationery Travel Postage

$ 2020 number $ $ $ $ $

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13
 (c) State one reason why the balance of the petty cash book at 1 May 2020 may be
different to the cash held.
(1)

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(d) State where in the statement of financial position at 1 May 2020 the balance of
the petty cash book would be shown.
(1)

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(Total for Question 16 = 15 marks)

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17 (a) Complete the table below, indicating with a tick () which account will be debited
and which account will be credited when writing off an irrecoverable debt.
(2)

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Account Debit Credit
Trade receivables control
Irrecoverable debts

(b) State two accounting concepts that apply when writing off an irrecoverable debt.
(2)

1 .. ............................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2 .. ............................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Nyan maintains a provision for irrecoverable debts of 5% of trade receivables.

On 1 March 2019 the balance of the provision for irrecoverable debts account

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was $1 845
On 29 February 2020 trade receivables were $42 520. This included $380 that Nyan
considered to be irrecoverable.
(c) Calculate the balance of the provision for irrecoverable debts at 29 February 2020.
(2)

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 (d) Prepare the provision for irrecoverable debts account for the year ended
29 February 2020. Balance the account at this date and bring down the balance
on 1 March 2020.
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(4)
Provision for Irrecoverable Debts Account

Date Details $ Date Details $

(e) Evaluate the reasons why it is necessary for a business to create a provision for
irrecoverable debts.
(5)
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................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............................................................................................................................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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(Total for Question 17 = 10 marks)

17
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18 Ahmed and Malik are in partnership sharing profits and losses equally.

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DO NOT WRITE IN THIS AREA
Their partnership agreement allows for interest on capital at 5% per annum and a
partnership salary to Ahmed of $10 000 per annum.
The partners provided the following information for the year ended 31 March 2024.

Account $
Capital accounts – Ahmed 50 000
– Malik 30 000
Current accounts – Ahmed 4 500
– Malik 8 600
Carriage inwards 645
Carriage outwards 1 300
Discount allowed 678
Discount received 663

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DO NOT WRITE IN THIS AREA

Drawings – Ahmed 3 600
– Malik 2 800
Motor expenses 1 854
Motor vehicles – cost 35 000
Motor vehicles – provision for depreciation 15 000
Opening inventory 12 260
Purchase returns 3 298
Purchases 86 321
Rent, rates and insurance 9 750
Revenue 192 000
Trade payables 23 921

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Trade receivables 36 000

Wages and salaries 44 448

Additional information
• Closing inventory was valued at $14 265
• On 31 March 2024, rates, $500, were owing and insurance, $250, was paid
in advance.
• Depreciation is charged on motor vehicles at 25% per annum using the reducing
balance method.
• A provision for irrecoverable debts of 2% of trade receivables is to be created.

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 (a) (i) Prepare the income statement for the year ended 31 March 2024.
(15)
DO NOT WRITE IN THIS AREA
DO NOT WRITE IN THIS AREA

Ahmed and Malik

Income statement for the year ended 31 March 2024

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DO NOT WRITE IN THIS AREA

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DO NOT WRITE IN THIS AREA

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3
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DO NOT WRITE IN THIS AREA
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DO NOT WRITE IN THIS AREA

DO NOT WRITE IN THIS AREA

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(ii) Prepare the appropriation account for the year ended 31 March 2024.
(5)
Ahmed and Malik
Appropriation Account for the year ended 31 March 2024

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DO NOT WRITE IN THIS AREA
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4
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