1. Multiple choice questions. Chose the correct option and put a tick mark.

(a) X receives a cheque from a customer and pays this into his business bank account. How
does this affect X’s current assets? (1)

(b) A business provides the following information for the year ended 30 September 2022.

What is the net profit for the year ended 30 September 2002? (1)
A $ 25 000
B $ 40 000
C $ 45 000
D $ 55 000

(c) Which document from a supplier reduces the amount owed by a customer? (1)
A credit note
B debit note
C invoice
D statement

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(d) X returned faulty goods to Y, the supplier.
What are the entries in Y’s books? (1)

(e) Which ledger account entries are made to record a credit buying of a motor vehicle? (1)

(f) In which columns of a trial balance do discounts allowed and discounts received appear? (1)

(g) On 1 January 2020 X bought a computer for use in his business. He sold the computer on 31
December 2020. How should the transaction of 31 December be classified? (1)
A capital expenditure
B capital receipt
C revenue expenditure
D revenue receipt

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 (h) What is net profit? (1)
A the amount of money taken out of the business by the owner during the year
B the cash in the business bank account
C the difference between sales and cost of sales
D sales revenue less cost of sales and expenses

(i) Money received from a customer must be recorded in the debtor’s account and the bank
account. What accounting principle is being applied? (1)
A business entity
B duality
C matching
D money measurement

(j) Annual sales figures are:

What should be the credit entry in the Sales account? (1)

A $77 000 credit
B $93 500 credit
C $110 000 credit
D $126 500 credit

(k) A seller has allowed a customer a cash discount. What did the customer do to earn this
discount? (1)
A agreed to become a regular customer
B introduced a new customer to the seller
C paid his account within a stated time
D placed a large order

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(l) On 1 June a business sold stock for $2000 cash and the money was paid into the business's
bank account. What was the overall effect? (1)

(m) Which is a capital receipt? (1)

A discount received
B interest received from bank account
C proceeds from sale of fixed asset
D sales income

(n) X purchases a supply of office paper on credit. How should this transaction be recorded? (1)

(o) Why does a business draw up a trial balance? (1)

A to balance off ledger accounts
B to calculate profit or loss
C to check the arithmetic accuracy of the books
D to summarise the sales and purchases ledgers
[Q1 Total Marks = 15]

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 2. Nazmeen makes all payments of less than $100 by petty cash. The imprest amount, which is
$200, is restored on the first day of each month from the bank account.

Nazmeen provided the following information for January 2022.

January 3 Paid for petrol, $35.

8 Paid for magazines for the reception area, $14.

17 Paid $60 to GL Limited, a trade payable.

26 Paid for vehicle cleaning, $9.

29 Paid $38 to Alim, a trade payable.

REQUIRED

(a) Complete Nazmeen’s petty cash book on the following page. Balance the petty cash book,

bring down the balance on 1 February 2022 and restore the imprest (10)

(b) State two reasons why Nazmeen maintains a petty cash book?

1. ……………………………………………………………………………………………………………

…………………………………………………………………………………………………………….

2. ……………………………………………………………………………………………………………

…………………………………………………………………………………………………………(2)

(c) Explain what is meant by the imprest system in relation to petty cash book?

…………………………………………………………………………………………………………….

…………………………………………………………………………………………………………….

……………………………………………………………………………………………………………………

…………..(2)

(d) Sate one advantage of the imprest system?

…………………………………………………………………………………………………………….(1)

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[Q2 Total Marks = 15]

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 3. Shilpa is a trader. The following transactions took place in January 2021.

January 2 Paid rent, $450 by cheque

3 Bought goods on credit from Dilip, list price $120, subject to a trade discount
of 25%

6 Sold goods on credit to Kabir, list price $200, subject to a trade discount of 20%
9 Sold surplus office fittings for $110 and received payment by cheque

10 Returned goods to Dilip, list price $20.

11 Paid $50 to Dilip in cash

15 Cash sales, $85

17 Paid office expenses, $30 by cheque

20 Sold goods on credit to Pari, $150

21 Kabir paid by cheque for the goods he purchased on 6 January, after

deducting cash discount of 7½%.

24 Pari paid $141, by cheque, in full settlement.

26 Sold goods on credit to Yash, $62.

REQUIRED

(a) Record the above transactions into Shilpa’s ledgers on the following page (24)
(b) Balance Dilip’s Account, Yash’s Account and Bank Account on 31 January 2021 and bring
down the balance on 1 February 2021 (6)
(c) What does the balance b/d on Dilip’s Account show? (1)

……………………………………………………………………………………………………………......

..........................................................................................................................................................

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(d) What does the balance b/d on Yash’s Account show? (1)

……………………………………………………………………………………………………………......

..........................................................................................................................................................

(e) What does the balance b/d on Bank Account show? (1)

……………………………………………………………………………………………………………......

..........................................................................................................................................................

(f) Can the Bank Account have a credit balance? (1)

……………………………………………………………………………………………………………......

..........................................................................................................................................................

Shilpa
Rent Account

10
 Shilpa
Bank Account

Shilpa
Dilip’s Account

11
 Shilpa
Purchase Account

Shilpa
Sales Account

12
 Shilpa
Kabir’s Account

Shilpa
Office Fittings Account

13
 Shilpa
Return Outwards Account

Shilpa
Cash Account

14
 Shilpa
Office Expense Account

Shilpa
Pari’s Account

15
 Shilpa
Yash’s Account

[Q3 Total Marks = 34]

4. Ame provided the following balances from his books at 31 March 2020.
$

Capital 13469
Drawings 4000
Equipment 15500
Inventory at 1 April 2019 1765
Trade receivables 1290
Bank overdraft 475
Trade payables 1600
Sales 31250
Purchases 18330
Purchases returns 910
Carriage inwards 640
Discount received 815
Commission receivable 1500
Rent and insurance 5700
Office expenses 2794

REQUIRED
Prepare Ame’s trial balance at 31 March 2020 on the following page (15)

[Q4 Total Marks = 15]

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5. Bari and Nada’s receipts and payments during the financial year ended 31 December 2018
included both capital and revenue items.
(a) State the meaning of each of the following terms and give an example of each.

Capital expenditure: ….....................................................................................................................

..........................................................................................................................................................
Example:
………………………………………………………………………………………………………………
……………………………………………………………………………………………………..

Capital receipt
…........................................................................................................................... ..........................
................................................................................................................................ Example:
………………………………………………………………………………………………………………
……………………………………………………………………………………………………..

Revenue expenditure: …..................................................................................................................

..........................................................................................................................................................
Example:
………………………………………………………………………………………………………………
……………………………………………………………………………………………………..

Revenue Receipt: …........................................................................................................................

..........................................................................................................................................................
Example:
………………………………………………………………………………………………………………
………………………………………………………………………………………………….(8)

[Q 5 Total Marks = 8]

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6. Bari stared business selling sports shoes on 1 January 2022. On 31 December 2022, it had
the following trading figures.
Revenue $14,000
Purchases $10,000
Sales Returns $200
Purchase Returns $300
Carriage inwards $120

Inventory (31 December 2022) $ 1100

REQUIRED

(a) Prepare Bari’s Trading Account as at 31 December 2022 (11)

Bari
Trading Account for the year ended 31 December 2022

$ $

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(b) Why Bari does not have an opening inventory?

……………………………………………………………………………………………………………

…………………………………………………………………………………………………………(1)

(c) When a business makes a loss?

……………………………………………………………………………………………………………

…………………………………………………………………………………………………………(1)

[Q6 Total Marks = 13]

END OF PAPER

Total Marks = 100

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