Provincial Department of Education

Northern Province
Third Term Examination - 2019
Business & Accounting Studies – Grade 11
Marking Scheme
PART I

1. (2) 11. (2) 21. (2) 31. (3)

2. (1) 12. (3) 22. (4) 32. (2)
3. (1) 13. (4) 23. (2) 33. (1)
4. (4) 14. (1) 24. (2) 34. (3)
5. (2) 15. (4) 25. (3) 35. (4)
6. (3) 16. (2) 26. (2) 36. (2)
7. (3) 17. (3) 27. (1) 37. (3)
8. (3) 18. (2) 28. (4) 38. (1)
9. (4) 19. (1) 29. (1) 39. (4)
10. (1) 20 (3) 30. (4) 40. (3)

PART II
Question No.1
(i) (a) Profit motive (½ mark)
(b) Service providing business (½ mark)
- No physical existence
- Intangible
- Perishable / Cannot be stored
- Verifiable (2×½ = 01 mark)
(ii) Land – The plot of land where the shop is located
Labour – Two employees
Capital – Furniture, equipment, money
Entrepreneurship – Repairing skill of Rathan (4×½ = 2 marks)

(iii) (a) Promotion – Advertising (01 mark)

(b) 1. Organizing
2. Planning (2×½ = 01 mark)

(iv) (a) Partnership business (01 mark)

(b) - Easy to start
- More capital can be collected.
- Various skills can be used.
- Liabilities can be shared.
- Collective decision making (2×½ = 01 mark)

(v) Rs. 170 000 (02 marks)

OR
(80 000 + 20 000 + 60 000 + 30 000) = 180 000
(½ mark) (½ mark)
OR
190 000 – 10 000 = 180 000
(½ mark) (½ mark)
(vi) (a) Accrued rent paid Rs. 10 000 (01 mark)
(b) Accrued rent account Dr. Rs. 10 000
Cash account Cr. Rs. 10 000 (01 mark)
(vii) Telephone charge account Dr. Rs. 2 000
Accrued telephone charge account Cr. Rs. 2 000
(To record accrued telephone charge paid Rs. 2 000) (01 mark)
Furniture depreciation account Dr. Rs. 600
Provision for furniture depreciation account Dr. Rs. 600
(To record furniture depreciation Rs. 600) (01 mark)

(viii) (a) Rs. 76 000 (01 mark)

(b) General journal (01 mark)

(ix) (a) Equity account – Capital

(b) Income account – Income received from repairs
(c) Assets account – Repair equipment, furniture, debtors, cash balance
(d) Liability account – Accrued telephone charge (4 × ½ = 02 marks)

(x) Income statement of Air-condition repairing business for the year ended 31.01.2019
Rs. Rs.
Income:
Repair income 150 000
Expense:
Transport expense 30 000
Electricity 5 000
Telephone charge 5 000
Advertising 6 000
Rent 5 000
Furniture depreciation 600
Equipment depreciation 1 600
Manager salary 15 000
Employee salary 20 000 (88 200)
Net profit 61 800
(4 × ½ = 02 marks)
Question No. 02
1. (a) A. Food B. Cloth C. Communication C. Leisure
(01 mark)
(b) According to the answer provided by the students (01 mark)
2. (i) False (ii) True (iii) False (iv) False
(4× ½=2 marks)
3. (a) Owner – Thesikan
Employee
Financial institution – People’s Bank
Customer (2× ½=1 mark)
(b) Service providing business (01 mark)
4. (a) Urbanization (01 mark)
(b) Capital (01 mark)

Question No. 03

1. (a) Selling goods for final consumption (01 mark)

(b) Fixed deposit, saving deposit, current deposit (2ù ½=1 mark)
2. (i) True (ii) True (iii) False (iv) False
(4ù ½=2 marks)
3. (a) Incorporated companies (01 mark)
(b) Advantages
1) More capital can be collected.
2) Having legal personality
3) Continuity
4) Limited liability (1ù ½ mark)
Disadvantages
1) More legal strictions
2) Profit and ownership can be shared. (1ù ½ mark)
4. (a) A co-operative society is a democratically controlled independent organization. Further, it aims to
achieve common needs of a group of individuals voluntarily gathered and enjoy a collective ownership.
(01 mark)
(b) Co-operative act No. 5 of 1972 (01 mark)

Question No. 04
1. (a) The process of planning, organizing, leading and controlling of organizational resources to achieve
business objectives efficiently and effectively. (01 mark)
(b) - Deposit of money at saving account
- Deposit of money at fixed deposit
- Purchase of properties
- Investment in share market
- Investment in treasury bills (2ù ½=1 mark)
2. (a) True (b) False (c) True (d) True (4ù ½=2 marks)
3. (a) Goods – Singer products, quality, loyalty for goods, Singer trade mart
Promotion – Selling at showroom, personal selling
Price – Installment basis, ready-cash sales (2 ù ½ = 1 mark)
(b) for mentioning goods (½ mark)
for mentioning relevant target consumer (½ mark)
4. (a) 1. Objective of investment
2. Nature of risk
3. Benefits of investment (2 ù ½ = 1 mark)
(b) 1. Fixed interest income
2. Can be converted into money at any time.
3. Government security (2 ù ½ = 1 mark)

Question No. 05
1. (a) Business transaction (01 mark)
(b) The transactions which can be measured in terms of money. (01 mark)
2. (a) Current assets – Debtors, cash balance, stock, receivable income (01 mark)
Non-current assets – Motor vehicle, furniture, equipment, machines (01 mark)
3.
 Motor Stock Debtors Cash = Equity Bank Creditors
van loan
300 000 100 000 75 000 100 000 300 000 200 000 75 000 01 Mark
1. +200 000 +200000
2. +50 000 + 50 000
3. -5 000 -5 000
4. -30 000 2 1/2 mark
5. +30 000
+ 3 000 |+3 000
300 000 150 000 45 000 378 000 598 000 200 000 75 000 01 mark

(04 marks)

4. (a) Sales journal

Date Invoice Purchaser Total amount
No.
10.06.2018 201 Geethanchali 1/2 4 500
22.06.2018 301 Kavithanchali 1/2 11 400
30.06.2019 transferred to sales account 1/2 ½ 15 900

(02 marks)
(b)
Details Amount Amount
Cash balance 50 000
Investment ½ 200 000
Machine 75 000
Other income ½ 3 000
Rent ½ 8 000
Land and building 100 000
Purchase 50 000
Sales 262 000
Capital 250 000
Salary 8 000
Discount received 2 000
Creditors 12 000
Debtors ½ 14 000
517 000 517 000

Question No. 06
1. (a) A statement forwarded by bank to a current accountholder commonly monthly. (01 mark)
(b) Yes. It functions a prime book because petty cash receipts and petty expenses are recorded first.
As there are two sides such as debit and credit, it functions as a ledger. (01 mark)
2. (a) - Time can be saved.
- More accuracy of account reports
- Updated information can be obtained. (2 ù ½ = 1 mark)
(b) 1. Rectifying errors
2. Adjustment entries (2 ù ½ = 1 mark)
3. (a) i. Rs. 3 000 (½ mark)
ii. In debit column (½ mark)
iii. Rs. 28 600 (1 mark)
(b) Administrative expense
Rent Rs. 10 000
 Salary Rs. 25 000 Rs. 35 000 (½ mark)
Sales and distribution expense
Advertising Rs. 10 000
Sales employee salary Rs. 5 000 Rs. 15 000 (½ mark)
Financial expense
Bank loan interest Rs. 8 000 Rs. 8 000 (½ mark)
Other expenses
Fire loss Rs. 2 000 Rs. 2 000 (½ mark)
4. (a)
Transactions Accrued expense Accrued income Total amount for
financial year
I. Rs. 60 000 Rs. 144 000 (½ mark)
II. Rs. 20 000 Rs. 240 000 (½ mark)
III. Rs. 100 000 Rs. 600 000 (½ mark)
IV. Rs. 30 000 Rs. 100 000 (½ mark)

(b) (1) Patent (½ mark)

(2) Watcher salary
Insurance
Machine operator wages (1 ½ mark)
Electricity charge

Question No. 07
1. 1) Rs. 28 500 (½ mark)
2) Rs. 20 000 (½ mark)
3) Rs. 2 000 (½ mark)
4) Expense exceeding income Rs. 7 000 (½ mark)

2. Income statement of Varsha business for the year ended 31.12.2018 ½

Rs. Rs. Rs.
Sales 210000
Cost of sales
Opening stock 20000
Purchase 110000
+ Carriage inwards 6000 116000
136000
- Closing stock (35000) ½ 101000
Gross profit ½ 109000
Discount received 3000
112000
Sales & distribution expense 2000
Bad debt 5000
Advertising 3500
Discount allowed 20000 ½ 30500
Delivery van depreciation

Administrative expense 10000

Furniture depreciation ½ 12000
Telephone charge 14000
Administrative salary 2500 38500
Electricity charge
 Financial and other expenses 7200 ½ 7200 76200
Bank loan interest ½ 35800
Net profit transferred to capital
account ½

Varsha business
Statement of financial position as at 31.12.2018 (½ mark)
Details (½ mark) Cost Acc.Dep. Net value
Non-current assets

Delivery van 200000 ½ mark 60000 140000

Furniture equipment 100000 ½ mark 20000 80000
300000 80000 220000

Current assets

Stock ½ mark 35000

Debtors 40 000
109 000
Cash balance 34 000 329 000

Equity

Capital 200 000

Net profit ½ 35 800 235 800
Non-current liability

Bank loan ½ mark 60000

Current liability

Accrued telephone charge ½ 2 000

Creditors 29 000
Accrued bank loan interest 2 200 33 200

329 000