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CA RI BB EA N SE CO ND AR
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EXAMINATION

( 15 MAY 2023 (a.m.) )

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TEST CODE 0123902 0
MAY/JUNE 2023
7
CARIBB EAN EXAMIN ATIONS COUNCI L

CARIBBEA N SECONDAR Y EDUCATION CERTIFICATE®

EXAMINAT ION

PRINCIPLES OF ACCOUNT S

Paper 02 - General Proficiency

3 hours

READ THE FOLLOWIN G INSTRUCTI ONS CAREFULLY.

I. This paper consists of FIVE questions.

2. Answer ALL questions.

3. Write your answers in the spaces provided in this answer booklet.

4. DO NOT write in the margins.

5. Show ALL working clearly.

6. You may use a silent, non-programmable calculator to answer questions.

7. You are advised to take some time to read through the paper and plan your answers.

8. If you need to rewrite any answer and there is not enough space to do so on the
original page, you must use the extra lined page(s) provided at the back of this booklet.
Remember to draw a line through your original answer.

9. If you use the extra page(s), you MUST write the question number clearly in
the box provided at the top of the extra page(s) and, where relevant, include the
question part beside the answer.

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO.

Copyright© 2022 Caribbean Examinations Conncil

All rights reserved.

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1. Yahim, a sole trader, owns a printing firm called Yahim Printing Services. He has been re_cordi~g
his accounting information manually. Yahim intends to hire a bookkeeper to assist hun Wlth
incorporating a software program into his business to make his workload easier and to improve
his accounting system.

(a) (i) Identify ONE accounting software program that Yahim can use to help improve
the business .

..................................................................................................................................
..................................................................................................................................
(1 mark)

(ii) Identify ONE skill a bookkeeper should possess.

. ...
•••••••••••••••••••••••••••••••··········································•·•••••••••••••••••••••••••••••••••••••••••••••••••••••••
...
.................................................................................................................................. ...

(1 mark)

(b) The following table shows transactions that were omitted from the books.

Date Transactions

2022
2 April Bought goods on credit costing $400 from R. True.

8 April Sold goods valued at $600 on credit to U. Moon.

12 April U. Moon returned $50 worth of goods.

Received an invoice from B. Vic for goods worth $4 000 less a trade
18 April
discount of 33 %.

Goods returned to L. Son. These goods had been invoiced at $120 less
19 April
a trade discount of 20%.

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(i) Using the following general • I
page 4. Narrations are Noior:=i~::~ord the transactions from the table on

Yahim Printing Services

General Journal

Date Details Debit Credit

Folio
$ $

(5 marks)

(ii) Identify the source document that was issued for the transaction on 19 April 2022 .

.................................................................................................................................
(1 mark)

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(c) The following information is available for three of the employees
of Yahim Printing
Services.

Employee: Leila

Leila's annual salary was agreed at $84 000 for the year ended April
2023. Yahim has
agreed to give her a 2% pay raise on her annual salary for the new financi
al year ending
30 April 2024.

(i) Calculate Leila's monthly gross earnings for the new financial year
ending 30
April 2024.

(3 marks )
Employee: Samson

Samso n is paid $30 per hour. Yahmin has contracted him to work 35 hours
per week. For
the week ended 30 April 2023, he worked 49 hours. Overtime is paid at
time and a quarter.
(ii) Calculate Samson's gross wage for the week ended 30 April 2023.

(4 marks)
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Employee: Dolly

Dolly earns a basic salary of $3 400 per month. In addition, she is paid a commission
of 2% of the amount by which the revenue of the business exceeds $40 000 per month.

For the month of April 2023, the company's revenue was $58 000.

(iii) Calculate Dolly's gross pay for the month of April 2023.

(3 marks)

(iv) State TWO types of compulsory deductions that are normally deducted from
employees' gross pay.

.................................................................................................................................
.................................................................................................................................
(2 marks)

Total 20 marks

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Nyluc Consultanc y Services 0 -
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$ Date Details count - · (D
$ $ 1--1
$ $
$ ' < ()
-
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2023 2023 (l) E.
Balance b/d 450 Balance b/d c:, S'
]April 1 April 5 600 0.. ::s
(l) ..+
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4 K. Lima vJ r..n
250 20 000 1 Petty cash PCBB 200 0 c:r'
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= 60 000 6 000 N ....
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-= 12 Booker Centre Ltd 5 000 245 000 15 0. Maoris 1 500 18 000 c:r'
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!!!!!!!!!! 0
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28 Cash 14 500 28 Bank
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(a)
State the meaning of EACH of the balances on l April 2023.

(i) Balance b/d in the cash column

••••.•...........................................................................................................................
••....••.........................................................................................................................
(1 mark)
(ii) Balance b/d in the bank column

.•...............................................................................................................................
•................................................................................................................................
(1 mark)

(b) (i) State whether Nyluc Consultancy Services allowed or received a discount of
$1 500 on 15 April 2023 .

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

.................................................................................................................................
(1 mark)
(ii) State TWO reasons why the cheque from ADF Plc may have been dishonoured
on 9 April 2023 .

.................................................................................................................................
.................................................................................................................................
.................................................................................................................................
.................................................................................................................................
(2 marks)

(iii) State the reason for the two entries on 28 April 2023 .

..........................................................................................................................••••.••

·································································. ··............................................••c1. ~-;~k)

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(c) (i) Calculate the percentage discount on 12 April 2023.

(2 marks)

(ii) Suggest a reason why Nyluc Consultancy Services had to refund K. Lima on
29 April 2023.

•••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••

•••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••
(1 mark)

(iii) Calculate the yearly interest that Nyluc Consultancy Services would have to pay
for the bank loan shown on 10 April 2023.

(2 marks)
(iv) Calculate the balances in the cash book for 1 May 2023. State whether they would
be debit or credit balances.

Balance b/d in cash column on 1 May 2023 $ .................... .

Type of balance (debit/credit)

Balance b/d in bank column on 1 May 2023 $ .................... .

Type of balance (debit/credit) .......................

(4 marks)
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(d) Complete the following accounts in the books ofNyluc Consultancy Services for the month
of April 2023, using the information in the cash book on page 8. Close EACH account
at the end of the month.

(i) K. Lima

Date Debit Date Credit

Details Folio Details Folio
$ $

2023
Balance b/d 56 000
I April

(3 marks)

(ii) Discount Allowed

Date Debit Date Credit

Details Fo Details Fo
$ $

(2 marks)

Total 20 marks

i
.1

:!
,i

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3. The following information is available for Chevo n Manuf acturin
g Comp any.
I

·'
·.,•/
At 1 May 2022 $

Raw material inventory 23 000

Work-in-process inventory 14 000

Finished goods inventory 42 000

For the year ended 30 April 2023

Sales revenue 658 500

Purchases of raw materials 306 000
Factory wages - 60% of the factory wages are direct and the rest
are indirect. 123 000

Royalties
17 000
Returns inwards
1 600
Carriage inwards
2 000
Rates and insurance -The rates and insurance are to be apportioned
4: 1 between the factory and the office. 45 000

General expense - $3 500 apportioned to the office and the

remainder to the factory. 14 000

At 30 April 2023

Raw material inventory

33 000
Work-in-process inventory
29 000
Finished goods inventory
38 000

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Use the information from the table on page 12 to answer the following questions.

(a) (i) Identify TWO examples of direct costs used in the manufacturing of the product.

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

.................................................................................................................................
.................................................................................................................................
.................................................................................................................................
(2 marks)

(ii) Identify THREE examples of indirect costs used in the manufacturing of the
product.

•••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••

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

(3 marks)

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(b) (i) Using the form on page 15, prepare the manufacturing account for the year ended
30 April 2023 for Chevon Manufacturing Company, showing clearly

• the cost of raw materials consumed

• the prime cost
• total factory manufacturing overheads
• the production cost of goods completed for the year ended 30 April 2023.
(12 marks)

(ii) Calculate the net sales figure.

(1 mark)

Chevon, the owner, paid $2 300 for insurance. This amount covered the $1 200 insurance premium
on Chevon Manufacturing Company and the $1 100 insurance premium on Chevon's family house.

The accountant credited the bank account with $2 300, debited the insurance expense account
with $1 200 and debited the drawings account with $1 100.

(c) (i) Identify the accounting principle applied by the accountant in this transaction.

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

................................................................................................................................
(1 mark)

The accountant did not make any entries in the accounting records for orders received for
goods to be supplied in the next financial year on May 13 2023.

(ii) Identify the accounting principle the accountant has applied .

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

.................................................................................................................................
(1 mark)

Total 20 marks

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Chevon Manufacturing Company
Manufacturing Account
For the Year Ended 30 April 2023

s s $

.,
·.-1
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4. Brooklyn Sal is the owner of two businesses - Brooks Technologies and Brooky Computer
Supplies Ltd.

Brooks Technologies manufactures components used in the production of computer monitors.

The forecasts for sales of the components during each quarter of2023 are presented in the following
table.

2023 Units

Quarter 1 January - March 6000

Quarter 2 April - June 8 000

Quarter 3 July - September 12 000

Quarter 4 October - December 16 000

3,
.-....
3
:J
·.·.i
.-.1
.-.1

-:-i,
..
_. 1

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Brooklyn's policy is to maintain a closing inventory sufficient to cover 25% of the next quarter's
sales.

The opening inventory for the components on 1 January 2023 will be 1 500 units.

(a) (i) Prepare a production budget for EACH of the first TWO quarters of 2023 for the
components.

Quarter 1 Quarter 2

(6 marks)

(ii) The selling price of one component is $65. The cost of producing one component
is $50. Calculate the mark-up applied by Brooks Technologies for a component.

(2 marks)

,' ••.

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On 31 December 2022, BrookJyn discovered the following errors in the books of Brooky Computer
Supplies Ltd.

Error A: The balance of$12 436 for office furniture was recorded in the ledger account as $12 364.

Error B: An item of capital expenditure had been recorded as revenue expenditure.

Error C: An item of capital expenditure had been overstated in the books.

(b) (i) Complete the following table by putting in the correct columns to indicate
the effect of the errors on the non-current assets and the profit for the year.

An example has been provided for you.

Non-Current Assets Profit for the Year Ended

at 31 December 2022 31 December 2022
Error
Overstated Understated Overstated Understated No effect

(4 marks)

(ii) Identify TWO payment methods that Brooklyn can use to pay suppliers of Brooks
Technologies for tools purchased on credit.

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

2. . ...........................................................................................................................
(2 marks)

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Brooklyn maintains a full set of books of account. A purchases ledger control account and a sales
ledger control account are prepared at the end of every month.

(c) (i) State TWO uses of control accounts in the accounting process .

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

I
t t I It I I I I I I I I I It I It I I I I I I It t I I I I I I I I It It It t t I et t t t t t I I It t I It It It I I It I It I I It t t It t It I I It I I I It It t I It It It t I I It It t t t It I I I I I It t t

I I It I It It I I I I I It t It It I I I I I I I I It It t t I I It t It I It t t It t t t t I I I I I I I I I I I I It t t t I I I I I I I I It I I I I I I I I I I I t I I I I It I It t t t It t I I I I IJ I I It I I I

t I I I It I I I I I I I I It I I I• I It t t I I It I I I I I It t t t t I I It t It t It t It t t t t t t t t t t t I It t It I It I It t t t I I I It t t I I It I I I I I I I It I I I I It It I I I I I I It t I It• It It t It

(2 marks)

The following balances were extracted from the books ofBrooky Computer Supplies Ltd
at 30 April 2023.

Refunds to trade receivables I 400

Contra items transferred to purchases ledger 550

Bad debts 700

Interest charged on overdue accounts 2 600

(ii) Record the balances above as they would appear in the sales ledger/receivables
control account.

Debit Credit
Entry Entry

Refunds to trade receivables

Contra items transferred to purchases ledger

Bad debts

Interest charged on overdue accounts

(4 marks)

Total 20 marks

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5. The following is a list of some balances which were extracted from the books of the Caribbea
n •••
Teachers' Cooperative Credit Union for the year ended 30 April 2023.

Debit Credit
$ $

Membership fees due 15 000

Short-term loans to members 301 900

Building at cost 220 000

Investments 83 400

Motor vehicles at cost 140 000

Provision for depreciation on motor vehicles - as at 1 May 20 000

2022
•·
,. --
Accruals 4400
Member s' deposits (repayable at short notice) 20 000
Bank balance 40400
Educatio n statutory reserve
90000
Share capital 557 000
Undistrib uted surplus at 1 May 2022
33 400
Surplus for the year 75 900

Additional notes

The followin g adjustme nts had not been taken into consideration in arriving at the surplus
for the
year.

A The building insurance expense had not been adjusted for a prepayment of $500.

Motor·vehicles were not depreciated for the current year. The policy is to use the reducing
B balance method, at the rate of 25°/o per annum.

C The board of directors decided to transfer $12 000 to the education statutory reserve fund.

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o1239020 /MJ/CSE C 2023

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(a) Use the following form to prepare a statement of the corrected surplus for the Caribbean
Teachers' Cooperative Credit Union for the year ended 30 April 2023.

Caribbean Teachers' Cooperative Credit Union

Statement of Corrected Surplus
For the Year Ended 30 April 2023

$ $

(4 marks)

-
Q
Q
N

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(b) Use the following form to prepare a statement showing the appropriation of undistributed
surplus for the year ended 30 April 2023. The board of directors decided to transfer
$12 000 to the education statutory reserve fund.

Caribbean Teachers' Cooperative Credit Union

Appropriation Account
For the Year Ended 30 April 2023

$ $

(3 marks)

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(c) Use the following form to prepare a classified statement of financial position, in the order
ofpermanence, for the Caribbean Teachers' Cooperative Credit Union as at 30April 2023.

$ $ $

(13 marks)

Total 20 marks

END OFTEST

JFYOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.

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