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MyStudyBro - Revision Exercise Tool

This Revision Handout includes the Questions and Answers of a total of 13 exercises!

Chapters:
Subsidiary Books - Paper 1 (Pearson Edexcel)
Page 1 (4AC0) 2019 Winter
Page 3 (4AC0) 2019 Winter - Answer
Page 4 (4AC0) 2018 Winter
Page 6 (4AC0) 2018 Winter - Answer
Page 8 (4AC0) 2018 Summer
Page 12 (4AC0) 2018 Summer - Answer
Page 15 (4AC0) 2017 Winter
Page 18 (4AC0) 2017 Winter - Answer
Page 20 (4AC0) 2017 Summer
Page 23 (4AC0) 2017 Summer - Answer
Page 25 (4AC0) 2016 Summer
Page 28 (4AC0) 2016 Summer - Answer
Page 30 (4AC0) 2014 Winter
Ratios

Page 34 (4AC0) 2014 Winter - Answer

Also Includes:
Ratios

Page 36 (4AC0) 2014 Summer

Ratios

Page 40 (4AC0) 2014 Summer - Answer

Also Includes:
Ratios

Page 42 (4AC0) 2013 Winter

Page 44 (4AC0) 2013 Winter - Answer
Page 45 (4AC0) 2013 Summer
Ratios

Page 49 (4AC0) 2013 Summer - Answer

Also Includes:
Ratios

Page 52 (4AC0) 2012 Winter

Business Documents

Page 55 (4AC0) 2012 Winter - Answer

Also Includes:
Business Documents

Page 57 (4AC0) 2012 Summer

Page 59 (4AC0) 2012 Summer - Answer
Page 60 (4AC0) 2011 Summer
Page 65 (4AC0) 2011 Summer - Answer
Winter 2019 www.mystudybro.com Accounting Paper 1
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SECTION B
Answer ALL questions.
11 John Paul is a trader who buys and sells mainly on credit terms.
(a) Complete the table below.
(12)

Source Book of Account to be Account to be

Transaction
document original entry debited credited

Sold goods on credit

to E Paige

Returned goods to
T Williams, a credit
supplier

Purchased fixtures and

fittings on credit from
Fixashop

On 30 November 2018 John Paul prepared the following incorrect sales ledger
control account.
Sales Ledger Control Account

Date Narrative £ Date Narrative £

Nov 30 Credit sales 132 789 Nov 1 Balance b/f 24 100

Credit purchases 87 045 Nov 30 Payments received 122 900

Cash sales 32 865 Bad debts 600

Discount allowed 876 Credit customer returns 5 213

Balance c/d 100 762

253 575 253 575

Dec 1 Balance b/d 100 762

6
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(b) Prepare the sales ledger control account for the month of November 2018.
Balance the account on 30 November 2018 and bring the balance down to
1 December 2018.
(8)
Sales Ledger Control Account

Date Narrative £ Date Narrative £

(Total for Question 11 = 20 marks)

*P55891A0724*
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Question Answer Mark

Number
11(a) Award marks as indicated
Book of Account Account
Source
Transaction original to be to be
document
entry debited credited
Sold goods Sales
Sales E Paige
on credit to (day) Sales (1)
invoice (1) (1)
E Paige book (1)
Returned Credit Purchase T Purchase
goods to T note (1) returns Williams returns
Williams, a (day) (1) (1)
credit book (1)
supplier
Purchase Journal Fixtures Fixashop
Purchased invoice (1) (1) and (1)
fixtures and fittings
fittings on (1)
credit from
Fixashop

(12)

Question Answer Mark

Number
11(b) Award marks for correct amounts as indicated.
Award 1 mark for ALL correct dates and narratives

Sales ledger control account

Date Narrative £ Date Narrative £

Nov 1 Balance b/d 24 100 (1) Nov 30 Cash book 122 900
(1)
Nov Sales day 132 789(1) Cash book 876 (1)
30 book
Journal/bad 600 (1)
debts
Sales 5 213 (1)
returns day
book
Balance c/d 27 300
156 889 156 889
Dec 1 Balance b/d 27300(1of)
(8)

(Total for Question 11 = 20 marks)

MSB - Page 3
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SECTION B
Answer ALL questions.
11 Selina Gomez owns a wholesale electrical supplies business. She buys and sells
mainly on credit terms.
(a) Complete the following table to show the book of original entry in which each
transaction would be entered.
(5)

Transaction Book of original entry

Sold goods on credit

Sold goods for cash

Purchased a fixed asset on credit

Returned goods to a credit supplier

Paid a credit supplier by bank transfer

On the 1 September 2017 her purchases ledger contained the following credit
balances:
A Alder £1 266
B Brown £3 478
N Carter £2 188
D Davis £1 068
At the end of September 2017 she extracted the following information from her
records.

Purchases on credit 21 786

Payments to credit suppliers 15 422

Returns to credit suppliers 1 731

Interest charged by credit suppliers 184

Sales ledger balance set off 650

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(b) Prepare the purchases ledger control account for the month of September 2017.
Balance the account on 30 September 2017 and bring the balance down to
1 October 2017.
(8)
Purchases Ledger Control Account

Date Details £ Date Details £

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

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

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

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

(Total for Question 11 = 15 marks)

*P53285A0720*
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Section B

Question Answer Mark

Number
11(a) Award 1 mark for each correct response.

Transaction Book of original entry

Sales book (1)

Sold goods on credit

Sold goods for cash

Cash book (1)

Purchased a fixed asset on

credit Journal (1)

Returned goods to a credit

supplier Purchase returns book
(1)

Paid a credit supplier by bank

transfer Cash book (1)

(5)

Question Answer Mark

Number
11(b) Award marks for correct amounts as indicated.
Award 1 mark for ALL correct dates and narratives

Purchases Ledger Control Account

Date Details £ Date Details £

Sept Cash book 15 422 Sept Balance b/f 8 000
30 (1) 1 (1)

Purchases 1 731 Sept Purchases 21 786

returns book (1) 30 book (1)

Sales ledger 650 Journal 184

set off (1) (interest (1)
charged)
Balance c/d 12167

29 970 29 970

Oct 1 Balance b/d 12167 (8)

(1 of)

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Question Answer Mark

Number
11(c) Award 1 mark for identification of type of error and 1 mark for (2)
developing the reason.

Eg
Commission
Where the correct amount has been entered but in the wrong
account of the correct classification.

Omission
Where a transaction has been completely omitted from the books.

Original Entry
Where the original figure is incorrect but the double entry is
correct.

(Total for Question 11 = 15 marks)

MSB - Page 7
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Past Paper This resource was created and owned by Pearson Edexcel 4AC0

SECTION B
Answer ALL questions.
11 Justin Horan, a trader, maintains a full set of accounting books.
On 1 April 2018 he provided the following information.

Sales Ledger Balances £ Nominal Ledger Balances £

A Alda 1 321 Sales 21 000

B Shah 2 564 Returns inwards 1 342

C Son 1 800 VAT 8 000 Cr

D Wong 1 789 Bank 4 200

The following are extracts from Justin’s books for April 2018. VAT is charged at 10%.
Sales Journal

Date Narration Goods £ VAT £ Total £

April 1 B Shah 920 92 1 012

April 5 D Wong 360 36 396

April 13 C Son 520 52 572

April 21 A Alda 1 450 145 1 595

April 28 D Wong 600 60 660

Totals for Month 3 850 385 4 235

Returns Inwards Journal

Date Narration Goods £ VAT £ Total £

April 3 C Son 90 9 99

April 8 A Alda 260 26 286

Totals for Month 350 35 385

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Cash Book (Debit side)

Date Narration Bank £

April 1 Balance b/d 4 200

April 5 A Alda 3 244

April 8 D Wong 2 000

April 15 Cash sales banked (including VAT) 660

April 21 B Shah 2 188

April 30 Commission received 500

April 30 C Son 1 280

The Journal

Date Narration Debit £ Credit £

April 21 C Son (Purchases Ledger) 450

C Son (Sales Ledger ) 450

Being transfer of balance in purchases ledger offset

against the balance in the sales ledger

(a) Prepare the following accounts in the books of Justin Horan for the month of
April 2018. Balance the accounts on 30 April 2018 and bring the balances down
to 1 May 2018.
(i) C Son Account
(6)

Date Details £ Date Details £

*P52333RA0720*
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(ii) Sales Ledger Control Account

(6)

Date Details £ Date Details £

(iii) Sales Account

(5)

Date Details £ Date Details £

(iv) Returns Inward Account

(3)

Date Details £ Date Details £

8
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(b) Evaluate how maintaining a sales ledger control account benefits Justin in the
management of his business.
(5)

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

(Total for Question 11 = 25 marks)

*P52333RA0920*
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Section B

Question Answer Mark

Number
11(ai) Award marks for correct date, details and amounts
in combination.

C Son Account
Date Details £ Date Details £
Apr Balance 1800 Apr Returns 99
1 b/d (1) 3 inwards (1)
(Book)
Apr Sales 572 Apr (PL) Set Off/ 450
13 (Book) (1) 21 Contra (1)
Apr Cash (Book) 1280
30 (Bank) (1)
Apr Balance c/d 543
30
2372 2372
May Balance 543
1 b/d (1of)
(6)

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Question Answer Mark

Number
11(aii) Award marks for correct date, details and amounts
in combination.

Sales Ledger Control Account

Date Details £ Date Details £

Apr 1 Balance 7474 Apr (PL) set 450(1)

b/d (1) 30 off/Contra

Apr Sales 4 235 Returns 385(1)

30 (Book) (1) inwards
(Book)
Cash 8712
(Book) (1)
(Bank)
Balance c/d 2162

11709 11709
May Balance 2162
1 b/d (1of)

(6)

Question Answer Mark

Number
11(aiii) Award marks for correct date, details and amounts
in combination.

Sales Account

Date Details £ Date Details £

Apr Balance 25450 Apr 1 Balance 21 000

30 c/d b/d (1)
Apr Cash 600/660
15 (Book) (2/1)
(Bank)
Apr Sales 3 850
30 (Book) (1)
25450 25 450

May Balance 25 450

1 b/d (1of)
(5)

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Question Answer Mark

Number
11 (aiv) Award marks for correct date, details and
amounts in combination.

(iv) Returns Inwards Account

Date Narration £ Date Narration £

Apr Balance b/d 1342 Apr Balance c/d 1692
1 (1) 30
Apr Returns 350
30 inwards (1)
(Book)
1692 1692
May Balance b/d 1692
1 (1of) (3)

Question Answer Mark

Number
11 (b) Award up to (4) marks for a discussion on the
benefits to the business of maintaining a sales
ledger control account and a final (1) mark for a
conclusion related to the scenario.

Sample reasons
The maintenance of a sales ledger control account can
bring many benefits to Justin as :

• He will find it easier to identify errors (1) in the

sales ledger (1).

• He will also find it easier to prepare his financial

statements (1) as the total of debtors will be
easily available (1).

• Fraud should be easier to identify (1) as the

control account is usually maintained by a
different person (1)

Conclusion (1)
Therefore the preparation of a sales ledger control
account will bring many benefits to Justin’s business.
(5)

MSB - Page 14
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SECTION B
Answer ALL questions.
11 Charlotte, a sole trader, sells goods only on credit, offering all customers a trade
discount of 10%. All sales are subject to VAT at the rate of 20%.
During the month of November 2016 she made the following transactions.

November Transaction

2 Sold goods to L Homer, list price £280

3 Sold goods to M Ward, list price £540

8 L Homer returned goods, list price £70

12 Sold goods to J Courtney, list price £850

21 M Ward returned goods, list price £60

27 Sold goods to C Lion, list price £290

30 Sold goods to L Homer, list price £350

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(a) Prepare Charlotte’s sales book and sales returns book for the month of November
2016, showing the totals for the month.
(9)
Sales Book

Date Name Net £ Vat £ Total £

Sales Returns Book

Date Name Net £ Vat £ Total £

(b) Complete the table below to indicate which side of the account the totals of each
day book would be posted.
(6)

Net Vat Total

Account Debit/Credit Account Debit/Credit Account Debit/Credit
Sales
Sales book Sales Vat ledger
control
Sales
Sales returns Sales
Vat ledger
book returns
control

*P48370A0720*
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On 1 November 2016 L Homer owed Charlotte £400. On 7 November 2016 L Homer

paid this amount by cheque after taking a cash discount of 5%.
(c) Prepare the account of L Homer for the month of November 2016. Balance the
account on 30 November 2016 and bring the balance down to 1 December 2016.
(7)
L Homer Account

Date Narrative Amount (£) Date Narrative Amount (£)

(d) Identify the source document Charlotte would use to record transactions in the
following books of original entry.
(3)

Book Source Document

Petty cash book

Purchases book

Purchases returns book

(Total for Question 11 = 25 marks)

8
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Section B

Question Answer Mark

Number
11(a) Award 1 mark for correct date, details and amounts in combination. Award 1 (9)
mark for total line

Sales Book
Date Name £ £ £
Nov Net VAT Total
2 L Homer (1) 252.00 50.40 302.40
3 M Ward (1) 486.00 97.20 583.20
12 J Courtney (1) 765.00 153.00 918.00
27 C Lion (1) 261.00 52.20 313.20
30 L Homer (1) 315.00 63.00 378.00
30 Total for month (1of) 2 079 415.80 2 494.80

Sales Returns Book

Date Name £ £ £
Nov Net VAT Total
8 L Homer (1) 63.00 12.60 75.60
21 M Ward (1) 54.00 10.80 64.80
30 Total for month (1of) 117.00 23.40 140.40

Question Answer Mark

Number
11(b) Award 1 mark for each correct side (6)

Net VAT Total

Account Debit/Credit Account Debit/Credit Account Debit/Credit

Sales Sales Credit (1) VAT Credit (1) Sales Debit (1)
book ledger
control
Sales Sales Debit (1) VAT Debit (1) Sales Credit (1)
returns returns ledger
book control

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Question Answer Mark

Number
11(c) Award marks for correct date, narrative and amounts in (7)
combination.

L Homer Account

Date Narrative £ Date Narrative £

Nov Balance 400 (1) Nov Cash book/Bank 380 (1)
1 b/f 7

Nov Sales 302.40 Cash 20 (1)

2 (book) (1 of) book/Discount
allowed

Nov Sales 378 Nov Sales returns 75.60

30 (book) (1 of) 8 (book) (1 of)
Nov Balance c/d 604.80
30
1080.40 1080.40

Dec Balance 604.80

1 b/d ( 1 of)

Question Answer Mark

Number
11(d) Award mark for each correctly identified document (3)

Book Document
Petty cash book Petty cash voucher/voucher (1)
Purchases book Purchase invoice/invoice (1)
Purchases returns book Credit note (1)

MSB - Page 19
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SECTION B
Answer ALL questions.
11 The following information was extracted from the books of Randall for the month of
March 2017.

Amount owing by debtors 1 March 2017 4 290

Credit sales 4 800

Cash sales 1 000

Returns inwards 320

Bad debts 253

Discount allowed 66

Customer’s cheque dishonoured 210

Receipts from debtors 5 421

(a) Prepare the sales ledger control account for the month of March 2017. Balance
the account on 31 March 2017 and bring the balance down to 1 April 2017.
(8)
Sales Ledger Control Account

Date Narrative Amount (£) Date Narrative Amount (£)

6
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Randall purchases goods from several suppliers who all offer him trade discount of
10%. All purchases are subject to VAT at the rate of 20%.
During the month of April 2017 the following transactions took place.

April Transaction

3 Purchased goods from T Hinds, list price £320

6 Purchased goods from R Tibbs, list price £1 390

10 Returned goods to T Hinds, list price £86

12 Purchased goods from W Brown, list price £890

24 Returned goods to R Tibbs, list price £210

28 Purchased goods from T Hinds, list price £450

30 Purchased goods from W Brown, list price £760

(b) Prepare Randall’s purchases book and purchases returns book for the month of
April 2017, showing the totals for the month.
(9)
Purchases Book

Date Name £ £ £

Purchases Returns Book

Date Name £ £ £

7
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1 ............................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........................................................................................................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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

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

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

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

(Total for Question 11 = 20 marks)

8
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Question Answer Mar

Number k
11(a) Award marks for correct amounts as indicated. (8)
Award 1 mark for ALL correct dates and narratives

Sales ledger control account

Date Narrativ £ Date Narrativ £

e e
Mar 1 Bal b/f 4290 Mar 31 Returns 320 (1)
(1) inwards
Mar 31 Sales 4 800 Bad 253 (1)
(1) debts
Bank 210 (1) Bank 5 421(1
Discoun for
t both)
allowed 66
Bal c/d 3 240
9 300 9 300
Apr 1 Bal b/d 3 240
(1) of

Question Answer Mark

Number
11 (b) Award 1 mark for correct date, details and (9)
amounts in combination. Award 1 mark for total
line

Purchases Book
Date Name £ £ £
Apr 3 T Hinds 288.00 57.60 345.60(1)
Apr 6 R Tibbs 1 251.00 250.20 1 501.20
(1)
Apr 12 W Brown 801.00 160.20 961.20 (1)
Apr 28 T Hinds 405.00 81.00 486.00 (1)
Apr 30 W Brown 684.00 136.80 820.80 (1)
Total for month 3 429.00 685.80 4 114.80
(1of)

Purchases Returns Book

Date Name £ £ £
Apr 10 T Hinds 77.40 15.48 92.88 (1)
Apr 24 R Tibbs 189.00 37.80 226.80 (1)
Total for month 266.40 53.28 319.68
(1of)

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Question Answer Mark

Number
11 (c) Award 1 mark for each correctly stated reason (3)
(max 3)

Sample responses

Purchasing large or bulk quantities

To encourage repeat business

For businesses in the same trade

Question Answer Mark

Number
12 (a) Award 1 mark for each correct figure (4)

R Hopkins
Balance Sheet as at 28 February 2017

£ £
Fixed assets
Motor vehicles 15 400
Fixtures and fittings 1 900
17 300 (1)
Current assets
Stock 5 521
Debtors 7 429
Cash at bank 3 126
Cash in hand 289
16 365
Current liabilities
Creditors 5 288
Working Capital 11 077(1 of)
28 377(1of)
Financed by
Capital 10 000
Net profit 23 698
33 698
Drawings 5 321
28 377(1)

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SECTION B
Answer ALL questions.

DO NOT WRITE IN THIS AREA

11 Marley sells goods on credit and allows all his customers trade discount of 25%.
(a) State two reasons why he offers trade discount.
(2)

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

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

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

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

During the month of April 2016 the following transactions took place. On 1 April 2016
Marley was owed £350 by B Cratchit and £780 by C Brown.

April

DO NOT WRITE IN THIS AREA

2 Sold goods on credit to B Cratchit, list price £240

5 Sold goods on credit to C Brown, list price £761

9 Sold goods on credit to B Cratchit, list price £400

15 B Cratchit returned goods, list price £60

B Cratchit paid the amount owing on his account on 1 April 2016 by
21
cheque
30 C Brown returned goods, list price £32

(b) State the source document Marley would have used to record the transactions on
April 2 2016 and April 15 2016.
(2)
DO NOT WRITE IN THIS AREA

April Document

6
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(c) Prepare the account of B Cratchit for the month of April 2016. Balance the account
on 30 April 2016 and bring the balance down on 1 May 2016.
(9)
DO NOT WRITE IN THIS AREA

B Cratchit Account

Date Narrative Amount (£) Date Narrative Amount (£)

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

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Marley supplied the following information relating to his credit purchases for the
month of April 2016.

DO NOT WRITE IN THIS AREA

Balance Payments
Name of Credit Purchases Cash
on to credit
Supplier purchases returns Discount
1 April 2016 suppliers
£ £ £ £ £

E Burgh 480 890 100 456 24

L Ondon 642 208 – 608 34

S Windon 327 793 80 400 16

M Chester 300 630 30 576 24

Marley had sold goods on credit, £200, to M Chester on 23 March 2016. During April
2016 Chester agreed to set this off against the amount owed to him by Marley.
(d) Prepare the purchases ledger control account for April 2016. Balance the account

DO NOT WRITE IN THIS AREA

on 30 April 2016 and bring the balance down on 1 May 2016.
(10)
Purchases Ledger Control Account

Date Narrative Amount (£) Date Narrative Amount (£)

DO NOT WRITE IN THIS AREA

(e) State what the closing balance of the purchases ledger control account represents
and where it would be shown in the financial statements.
(2)

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

(Total for Question 11 = 25 marks)

8
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Section B

Question Answer Mark

Number
11(a) To encourage repeat business/customer loyalty (1) (2)
Bulk buying (1)

Question Answer Mark

Number
11(b) Invoice (1) (2)
Credit note (1)

Question Answer Mark

Number
11(c) Award 1 mark for correct date, narrative and amount. (9)

B Cratchit Account
Date Narrative £ Date Narrative £
Apr Balance 350 Apr Returns in 45
1 b/d (1) 15 (2cf 1of)
Apr Sales 180 Apr Bank 350
2 (2cf 1of) 21 (1)
Apr Sales 300 Apr Balance 435
9 (2cf 1of) 30 c/d
830 830
May Balance 435 (1of
1 b/d for both)

Question Answer Mark

Number
11(d) Award 1 mark for correct dates, 1 mark for correct narratives (10)
and 1 mark for each correct amount on the correct side.

Purchases Ledger Control Account

Date Narrative £ Date Narrative £
Apr Returns 210 (1) Apr 1 Balance 1 749 (1)
30 Out b/d
Apr Bank 2 040 (1) Apr Purchases 2 521(1)
30 30
Apr Discount 98 (1)
30 Received
Apr SL set off 200 (1)
30
Apr Balance 1 722
30 c/d
4 270 4 270
May 1 Balance 1 722
b/d (2cf/1of
for both)

4AC0_01
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Question Answer Mark

Number
11 (e) The balance represents the creditors of the business (1) (2)
This would be shown as a current liability (on the balance sheet)
(1)

Question Answer Mark

Number
12 (a) Aaron Crow (12)
Trial Balance at 30 April 2016

Debit Credit
(£) (£)

Gross profit 240 000 (1)

General expenses 50 000(1)
Furniture and 35 000 (1)
fittings - cost
Furniture and 5 000
fittings – provision (1)
for depreciation
Stock – 30 April 2016 12 500(1)
Long term bank loan 10 000
(1)
Premises 360 000
(1)
Debtors 42 000 (1)
Creditors 18 750
(1)
Cash in hand 500 (1)
Bank overdraft 8 325
(1)
Capital 217 925
(1of)
500 000 500 000

Question Answer Mark

Number
12 (b i) 240 000 x 125/25 (1) = £1 200 000 (1) (2)

Question Answer Mark

Number
12 (b ii) GP 240 000 – (50 000 + 10 000) (1) = NP £180 000 (1of) (2)

Question Answer Mark

Number
12 (b iii) £180 000/1 200 000 (1of) x 100 = 15% (1of) (2)

4AC0_01
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Section B
Answer ALL questions.
11 Alcatraz, a sole trader, has a clothing business and sells goods for cash and on credit.
On 1 January 2013 the balances on his sales ledger control account were:

Debit balance £55 737

Credit balance £365

(a) State two reasons why it is possible to have a credit balance in a sales ledger
control account.
(4)

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

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

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

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

5
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Alcatraz provided the following information for the year ended 31 December 2013.

£ 000
Cash sales 6 734
Credit sales 340 095
Credit purchases 289 621
Returns from credit customers 6 987
Returns to credit suppliers 5 290
Receipts from credit customers 316 895
Payments to credit suppliers 216 423
Customers’ cheque dishonoured 242
Discounts allowed 15 419
Discounts received 10 821
Credit balance in purchases ledger transferred to sales ledger 500

(b) Select the relevant figures and prepare the sales ledger control account for the
year ended 31 December 2013. Balance the account at that date and bring down
the balance on 1 January 2014.
(9)
Sales Ledger Control Account

Date Narrative Amount (£) Date Narrative Amount (£)

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On 31 December 2013 the balance on the control account agreed with the sum of the
balances in the sales ledger.
Alcatraz allows his customers 30 days credit.
(c) (i) Using the closing balance calculated in (b), calculate the debtors’ collection
period in days. State clearly the formula used.
(2)

Formula Debtors’ collection period

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(ii) Comment on the debtors’ collection period, stating whether Alcatraz will be
satisfied with this figure.
(5)

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

(Total for Question 11 = 20 marks)

8
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Section B

Question Answer Mark

Number
11(a) Award up to 2 marks max per correct reason

Sample answers:

An overpayment (1) by a debtor (1)

The debtor returned goods(1) after paying the account (1)
The debtor paying in advance (1) for the goods (1)
Cash discount (1) not being deducted before payment was made (1) (4)

Question Answer Mark

Number
11(b) Sales Ledger Control Account

Date Narrative Amount Date Narrative Amount

(£) (£)
Jan 1 Bal b/f 55 Jan 1 Bal b/f 365(1)
737(1)
Dec 31 Credit 340 095 Dec 31 Returns In 6 987(1)
sales (1)
Dec 31 Cash Book 242 (1) Dec 31 Cash Book 316 895
(1)
Dec 31 Discount allowed 15 419
(1)
Dec 31 PL set off 500(1) (9)
Dec 31 Balance c/d 55 908
396 074 396 074
Jan 1 Balance 55 908
b/d (1)

Question Answer Mark

Number
11(c) Formula Debtors collection period

Debtors/Credit sales x 365 (1) 55908 /340095 x 365 =

60 days (1 of) (2)

(ii)

Answer must be consistent with answer to (i)

Award (1) mark for stating whether or not Alcatraz will be satisfied
with the debtors collection period calculated and a further (1) for
developing the response. An additional (2) marks can be awarded for
the implications for the business of debtors taking longer than they
should to pay their debts. (1) further mark for a concluding statement

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Sample Answer

The debtors ratio shows that the collection period for debtors was 60
days. Alcatraz will not (1) be satisfied with this figure as it is greater
than the 30 days credit he allows his customers (1)

If his debtors are not paying on time this could result in the business
suffering cash flow problems (1) or in some instances an increase in
the number of bad debts (1).

It is therefore very important for the business to monitor the payment

period of its debtors (1) (5)

Question Answer Mark

Number
12(a) Award (1) mark for each correct stated difference.

Sample Answers

A limited liability company has separate identity from its owners.

The owners (shareholders) in a company have limited liability, unlike a

partnership where each partner is liable for all debts of the partnership.

Companies can raise capital through the issue of shares.

Companies pay dividends to their shareholders (2)

Question Answer Mark

Number
12(b)
Cable and Carr
Appropriation Account
For year ended 31 October 2013

£ £
Net Profit 37 900 (1cf)
Appropriations
Salary Cable 7 000 (1cf)
Interest on capitals:
Cable 5 000 (1cf)
Carr 4 000 (1cf)
16 000
21 900
Share of profits:
Cable 10 950 (1of)
Carr 10 950 (1of)
21 900 (6)

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4
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3
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MSB - Page 38 $
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)
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Section B

Question Answer Mark

Number
11(a) Award (1) mark for a correctly stated benefit.

Sample answers.

Enable the total of debtors (and/or creditors) to be readily available.

Helpful when preparing final accounts.

Provide a check on the accuracy of the ledgers.

(1)
To help the prevention or detection of fraud.

(Do not accept ‘detects errors’)

Question Answer Mark

Number
11(b) Sales Ledger Control Account

Date Narrative Amount (£) Date Narrative Amount (£)

Dec 1 Bal b/f 6 878 (1) Dec 31 Returns in 5 931 (1)
Dec 31 Credit sales 81 257 (1) Dec 31 Bad debts 630 (1)
Dec 31 Dis cheque 500 (1) Dec 31 Cash book 68 975 (1)
Dec 31 Discount 3 200 (1)
allowed
Dec 31 PL Set off 650 (1)
Dec 31 Bal c/d 9 249
88 635 88 635
Jan 1 Bal b/d 9 249 (1of)

Purchases Ledger Control Account

Date Narrative Amount (£) Date Narrative Amount (£)

Dec 31 Returns out 2 497(1) Dec 1 Bal b/f 4 932 (1)
Dec 31 Cash book 39 874 (1) Dec 31 Credit 49 369 (1
purchases
Dec 31 Discount 4 587 (1)
received
Dec 31 SL set off 650 (1)
Dec 31 Bal c/d 6 693
54301 54 301
(16)
Jan 1 Bal b/d 6693 (1of)

4AC0_01
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Question Answer Mark

Number
11(c) (i)

Formula Creditors payment period

Creditors/(Credit) purchases x 365 (1) 6 693/49 369 x 365(1 for both of) (3)
= 50 days (1) of

(ii) Award (1) mark for stating whether the creditors would be satisfied with a
further (1) mark for developing this point. A further (2) marks can be awarded for
the implications of not paying your creditors on time. Conclusion (1)

Sample Answer

Fatimas’s suppliers will not (1) be happy with this figure as it exceeds the 30 day
period allowed by her creditors (1). Fatima may find it difficult to obtain credit in
the future from other suppliers (1) as her credit rating will be poor which could
affect her ability to purchase stock for resale (1).Therefore it is important for (5)
Fatima to pay her creditors on time (1)

4AC0_01
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SECTION B
Answer ALL questions.
11 The following transactions took place in November 2012 between Gregory and his
credit customer Roberto.

Nov Transaction
1 Roberto owed Gregory £500.
Roberto purchased goods, list price, £600, less 25%
4
trade discount.
12 Roberto returned goods with a list price of £80.
Roberto paid the balance due on November 1 by
24
cheque, after deducting a cash discount of 5%.

(a) Prepare Roberto’s account in Gregory's ledger for the month of November 2012.
Balance the account on 30 November 2012 and bring the balance down on
1 December 2012.
(8)
Roberto Account

Date Narration £ Date Narration £

(b) In what section of Gregory's balance sheet will the balance on November 30 be
shown?
(1)

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

6
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(c) Explain the meaning of the following terms.

(4)
Trade discount

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

Cash discount

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

(d) Show how the cash discount given to Roberto would be recorded in Gregory’s
books of account.
(2)

Debit

Credit

(Total for Question 11 = 15 marks)

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Section B

Question Answer Mark

Number
11(a) Roberto Account

Date Narration £ Date Narration £

Nov 1 Balance 500 (1 cf) Nov Sales returns 60 (2 cf)
b/d 12
Nov 4 Sales 450 (1 cf) Nov Bank 475 (1cf)
24
Nov Discount allowed 25 (1cf)
24 (1) (8)
Nov Balance c/d 390
30
950 950
Dec 1 Balance 390 (1of)
b/d

Question Answer Mark

Number
11(b) Current Assets (1)

Question Answer Mark

Number
11(c) Trade discount
Trade discount is an allowance given to businesses in the
same trade (1) and is given either to encourage loyalty
(1) or bulk buying (1) (Max 2)

Cash discount
Cash discount is given to customers as an incentive to pay
their accounts promptly (1) which may reduce the number (4)
of bad debts (1) and improve the cash flow of the
business (1) (Max 2)

Question Answer Mark

Number
11(d)
Debit Discount allowed (1)
Credit Roberto (accept customer) (1) (2)

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12 Johan is a sole trader who sells goods for cash and on credit. He provided the
following information for the year ended 31 December 2012.

1 January 2012 31 December 2012

£ £

Debtors 13 400 17 500

Creditors 9 600 11 200

Stock 3 400 4 500

His summarised bank account for the year ended 31 December 2012 revealed the
following:

Opening bank balance at 1 January 2012 2 460 (Dr)

Receipts from cash and credit customers 64 100

Payments for the year to suppliers, expenses and drawings 43 800

Closing bank balance at 31 December 2012 12 760 (Dr)

During the year ended 31 December 2012:

Cash sales banked during the year 11 600

Cash purchases during the year 14 250

Payments to credit suppliers 35 700

Discount received from credit suppliers 700

8
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(a) Calculate Johan’s credit sales for the year ended 31 December 2012.
(5)

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

(b) Calculate Johan’s credit purchases for the year ended 31 December 2012.
(5)

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

9
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(c) Prepare Johan’s trading account for the year ended 31 December 2012.
(8)
Johan
Trading Account
for the year ended 31 December 2012

10
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(d) Using the figures calculated in (c), and stating the formula used, calculate each of
the following ratios to two decimal places
percentage of gross profit to sales
(2)

Formula Calculation

rate of stock turnover

(2)

Formula Calculation

After the preparation of his trading account, Johan discovers that he has not yet
deposited additional cash sales of £1 350 into the bank. He has used this money to
pay for additional purchases of stock.
(e) Indicate by placing a tick (9) in the table below the effect (if any) of this
transaction on the following items.
(3)

Increase Decrease No Effect

Gross profit

Percentage of
gross profit to sales

Rate of stock
turnover

(Total for Question 12 = 25 marks)

11
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Question Answer Mark

Number
12(a)
£
Opening debtors 13 400 (1 cf)
Receipts from debtors (64100 (1cf) 52 500 (2 cf)
– 11600 (1cf)
Closing debtors 17 500 (1 cf)
Credit sales 56 600 (1 of) (5)

Alternative presentation acceptable

Question Answer Mark

Number

12(a) Sales Ledger Control Account

Date Narration £ Date Narration £
(5)
Jan Bal b/d 13400 Dec Bank 52 500
1 (1cf) 31 64100 (2cf)
(1cf) –
11600
(1cf)

Dec Sales 56 600 Dec Bal c/d 17 500

31 (1cf) 31 (1cf)
70 000 70 000

Question Answer Mark

Number
12(b)
£
Opening creditors 9 (1 cf)
600
Payments to creditors 35 700 (1 cf)
Discount received (1 cf)
700
Closing creditors 11 200 (1 cf) (5)
Credit purchases 38 000 (1 of)

Alternative presentation acceptable

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Question Answer Mark

Number

12(b) Purchases Ledger Control Account

Date Narration £ Date Narration £
(5)
Dec Bank 35700 Jan 1 Bal b/d 9 600
31 (1cf) (1cf)
Dec Disc Rec 700 Dec Purchases 38 000
31 (1cf) 31 (1of)
Dec Bal c/d 11200
31 (1cf)
47600 47600

Question Answer Mark

Number
12(c)
Johan
Trading Account
for the year ended 31 December 2012

£ £
Sales (56 600 + 68 200 (2 of )
11600)
Cost of goods sold
Opening Stock 3 400 (1for
both
stocks
cf)
Purchases (38 000 + 52 250 (2 of) (8)
14250)
55 650
Closing Stock 4 500
Cost of goods sold 51 150 (1 of)
Gross profit (1) 17 050 (1 of)

Question Answer Mark

Number
12(d)(i) Percentage of gross profit to sales

Formula Calculation

Gross profit 17 050

Sales x 100 (1) 68 200 x 100 = 25% (1 of) (2)

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Question Answer Mark

Number
12(d)(ii) Rate of stock turnover
Formula Calculation

Cost of goods sold 51 150

Average Stock 3 950 = 12.95 times
(1) (1 of)
(2)

Question Answer Mark

Number
12(e)
Increase Decrease No Effect

Gross profit 9 (1)

Percentage of 9 (1)
gross profit to
sales
Rate of stock 9 (1) (3)
turnover

Question Answer Mark

Number
13(a) It is necessary for Saul to produce a manufacturing account in
order to calculate the cost of production for his business (1).
This will then be used to calculate the cost of sales and the gross
profit (1). (2)

Question Answer Mark

Number
13(b) Direct labour is the cost of the wages of the people who are
involved with the manufacture of the product (1) whereas
indirect labour is the cost of the wages of the people who are not
directly involved in the production process such as supervisors
and managers. (1) (2)

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SECTION B

Answer ALL questions.

11 (a) Asha Burat has been in business for some years. During December 2011 the
following transactions took place. Complete the table by stating the correct source
document for each transaction.
(6)

Transaction Source Document

Purchased stock on credit from H Kumar

Paid for stamps in cash

Returned stock to a supplier which had

previously been bought on credit

Deposited takings into his bank account

Payment received from a customer by

credit transfer
Sent a customer a request for payment
for work completed in November 2011

The following information has been extracted from the books of account of Asha
Burat for the month ended 31 December 2011. VAT is charged at 10%.

£
Balance on VAT account – 1 December 2011 3 400 (Cr)
Cash sales (including VAT) 9 350
Payments to Revenue and Customs 3 400
VAT on credit purchases 867
VAT on credit sales 965
VAT on petty cash expenditure 34
VAT on returns inwards 89
VAT on returns outwards 54
Balance on VAT account – 31 December 2011 To be calculated

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(b) Prepare the VAT account for the month of December 2011. Balance the account
and bring the balance down on 1 January 2012.
(10)

VAT Account

Date Narration £ Date Narration £

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

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

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

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

(d) State and explain one error that would not be identified by preparing a sales
ledger control account.
(2)

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

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

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

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

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(e) Evaluate the way in which the use of control accounts can enable a business to
manage its sales and purchase ledgers more effectively.
(5)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(Total for Question 11 = 25 marks)

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Section B

Question Answer Mark

Number
11(a) Purchase invoice
Petty cash voucher (6)
Credit note
Paying in book/slip/counterfoil
Bank statement
Sales invoice

Question Answer Mark

Number
11(b) VAT Account
(10)
Date Narration £ Date Narration £
Dec 31 Cash Book (1) 3400 Dec 1 Balance b/f (1) 3400
Dec 31 Purchases Book (1) 867 Dec Cash Book (2) 850
31
Dec 31 Petty Cash (1) 34 Dec Sales Book (1) 965
Book 31
Dec 31 Returns In Book (1) 89 Dec Returns Out (1) 54
31 Book
Dec 31 Balance c/d 879
5269 5269
Jan 1 Balance b/d (1) 879
(Award mark for correct figure and appropriate narrative)

Question Answer Mark

Number
11(c) The closing balance will appear in the current liabilities section
(1) as it represents money owing to Revenue and Customs (1) (2)
(accept government)

Question Answer Mark

Number
11(d) Error of omission (1) where a transaction is completely omitted (2)
from the records (1).
Compensating error (1) where equal and opposite errors cancel
each other out (1).
Error of commission (1) where an amount is posted to an incorrect
account of the correct type (1).
Error of original entry (1) where an error is made transferring an
amount from the source document into the books of original entry
(1).
Error of principle (1) where the correct entry is made but in the
wrong type of account (1)

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Question Answer Mark

Number
11(e) Award up to 2 marks for points in favour and 2 marks for points (5)
against the effectiveness of control accounts. A further one mark
for an appropriate conclusion.

Sample answer

The uses of control accounts can enable businesses to improve the

management of their business as it can verify the arithmetical
accuracy of the ledgers (1) and also provide management with a
total figure for debtors and creditors (1) which can help in the
preparation of the balance sheet (1) they can also assist in the
prevention of fraud as they are normally prepared independently
of the sales and purchase ledger (1).

However the preparation of control accounts can be time

consuming (1) and there may be some errors in the accounts
which remain undetected by the preparation of the control
accounts (1).

Overall although there are many advantages to a business of using

a control account these may be outweighed by some of the
disadvantages (1).

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SECTION B

Answer ALL questions.

11 Ashak Solona maintains a full set of accounting records and provides the following
information for the month of March 2012.

£
Total debtors on 1 March 2012 12 800
Totals for the month of March 2012
Credit sales 26 780
Credit purchases 15 432
Returns from credit customers 2 453
Returns to credit suppliers 1 659
Bad debts written off 350
Dishonoured cheque 125
Receipts from credit customers 11 450
Payments to credit suppliers 8 760
Discount allowed 589
Discount received 357
Contra entry (set off ) 350

(a) Select the relevant figures and prepare the sales ledger (total debtors) control
account for the month of March 2012. Balance the account and bring down the
balance on 1 April 2012.
(10)
Sales ledger (total debtors) control account

Date Narration £ Date Narration £

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(b) Explain how a contra entry (set off ) between the sales ledger and purchases
ledger can arise.
(3)

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

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

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

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

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

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

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

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

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

Advantage 2

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

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

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

(Total for Question 11 = 15 marks)

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Section B

Questio Answer Mark

n
Number
11(a)
Sales ledger (total debtors) control account (10)

Date Narration £ Date Narration

Mar 1 Balance b/f (1) 12 Mar 31 Returns inwards
800
Mar 31 (Credit) Sales (1) 26 Mar 31 Bad Debts
780
Mar 31 Cash Book (1) 125 Mar 31 Cash Book
(Bank)
Mar 31 Discount Allowed

Mar 31 PL Set off

(Contra)
Mar 31 Balance c/d
39
705
Apr 1 Balance b/d (2cf) 24
(1of) 513

Questio Answer Mark

n
Number
11(b) A contra entry can arise when a customer is also a supplier of the
business (1). Instead of the customer paying us for goods supplied (3)
(1) their balance is offset against the amount owing to them for good
or services supplied (1).

Question Answer Mark

Number
11(c) Award one mark for each clear advantage identified

Sample answers:
Verifies the arithmetical accuracy of the sales ledger (1).
Assists in the prevention of fraud (1).
Provides management with total debtors (1)
Helps in the preparation of the balance sheet (1).
Detects errors in individual ledgers (1). (2)

Question Answer Mark

Number
12(a)(i) Assets (1) = Capital (1) + Liabilities (1) (must be correct (3)
direction)

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Throughout Question 12, assume that the rate of VAT is 10%

12 Rita Kaur is a wholesaler of footwear. She buys and sells mainly on credit terms. She
does not offer a cash discount to any of her customers.
On 1 April 2011 her sales ledger contained the following debit balances.
A Alpa £3 000
B Blach £5 000
C Caron £2 000
D Drake £6 000
On 1 April 2011 her nominal ledger contained the following balances:
Sales Account £23 400
Returns Inwards Account £2 360
Sales Ledger Control Account £16 000
VAT Account £3 200 (Cr)
The following are extracts from her books for April 2011.
Sales Book

Date Narration Goods VAT Total

April 1 A Alpa 600 60 660
April 7 B Blach 260 26 286
April 10 D Drake 1 520 152 1 672
April 17 A Alpa 1 450 145 1 595
April 25 C Caron 1 600 160 1 760
Totals for Month 5 430 543 5 973

Returns Inwards Book

Date Narration Goods VAT Total

April 13 B Blach 60 6 66
April 28 D Drake 340 34 374
Totals for Month 400 40 440

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Cash Book (Debit side)

Date Narration VAT Bank

April 1 Balance b/d 8 000
April 2 Cash sales (including VAT) 50 550
April 5 D Drake 6 000
April 8 C Caron 1 000
April 15 Cash sales (including VAT) 75 825
April 21 A Alpa 1 500
April 30 Rent received 500
April 30 B Blach 2 250
Totals for Month 125 20 625

The Journal

Date Narration Debit Credit

April 28 A Alpa (Purchases Ledger) 1 000
A Alpa (Sales Ledger) 1 000

Being transfer of balance in purchases

ledger offset against balance in the sales
ledger

The following totals were extracted from her books at the end of April:

Goods Vat Total

Purchases Journal 3 200 320 3 520
Returns Outwards Journal 260 26 286

Rita made cash purchases totalling £770 (including VAT) during the month of
April 2011.

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(a) Prepare the account of A Alpa in Rita Kaur’s sales ledger. Balance the account on
30 April 2011 and bring the balance down.
(6)
A Alpa Account

Date Narration £ Date Narration £

(b) Prepare the sales ledger control (total debtors) account for the month of
April 2011. Balance the account on 30 April 2011 and bring the balance down.
(6)
Sales Ledger Control (Total Debtors) Account

Date Narration £ Date Narration £

12
MSB - Page 62 *P38649A01228*
Summer 2011 www.mystudybro.com Accounting Paper 1
Past Paper This resource was created and owned by Pearson Edexcel 4AC0

(c) Prepare the sales account, returns inwards account and VAT account for the month
of April 2011. There is no need to balance the accounts.
(8)
Sales Account

Date Narration £ Date Narration £

Returns Inwards Account

Date Narration £ Date Narration £

VAT Account

Date Narration £ Date Narration £

13
MSB - Page 63 *P38649A01328* Turn over
Summer 2011 www.mystudybro.com Accounting Paper 1
Past Paper This resource was created and owned by Pearson Edexcel 4AC0

(d) Evaluate the usefulness to Rita Kaur of maintaining a sales ledger control account.
(5)

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

(Total for Question 12 = 25 marks)

14
MSB - Page 64 *P38649A01428*
Summer 2011 www.mystudybro.com Accounting Paper 1
Past Paper (Mark Scheme) This resource was created and owned by Pearson Edexcel 4AC0

Question Answer Mark

Number
11(c) Suspense Account
Date Narration £ Date Narration £ (3)
Capital 15 Balance b/f* 1 6882*
000
Rent and 882
Rates
Wages and 1
Salaries 000*
16 16 882
882

1 Mark for all three entries on debit side

Question Answer Mark

Number
12(a) A Alpa Account (6)
Date Narration £ Date Narration £
Apr 1 Balance b/f 3 000* Apr Cash Book 1 500*
21
Apr 1 Sales Book 660* Apr PL Set Off 1 000*
28
Apr Sales Book 1 595* Apr Balance c/d 2 755
17 30
5 255 5 255
May Balance b/d 2 755*
1

Question Answer Mark

Number
12(b) Sales Ledger Control (Total Debtors) Account (6)
Date Narration £ Date Narration £
Apr 1 Balance b/f 16 Apr PL set Off 1 000*
000* 28
Apr Sales Book 5 973* Apr Returns 440*
30 30 Inwards
Book
Apr Cash Book 10
30 750*
Apr Balance c/d 9 783
30
21 973 21 973
May Balance b/d 9
1 783*

MSB - Page 65
Summer 2011 www.mystudybro.com Accounting Paper 1
Past Paper (Mark Scheme) This resource was created and owned by Pearson Edexcel 4AC0

Question Answer Mark

Number
12(c) Sales Account (8)

Date Narration £ Date Narration £

Apr 1 Balance b/f 23 400
Apr Sales Book 5 430*
30
Apr Cash Book 1
30 250

1 Mark for both entries

Returns Inwards Account

Date Narration £ Date Narration £

Apr 1 Balance b/f 2
360
Apr Returns 400*
30 Inwards Book

VAT Account

Date Narration £ Date Narration £

Apr Returns 40* Apr 1 Balance b/f 3200
30 Inwards
Book
Apr Purchases 320* Apr Sales Book 543*
30 Book 30
Apr Cash Book 70* Apr Cash Book 125*
30 30
Apr Purchases 26*
30 Returns Book

MSB - Page 66
Summer 2011 www.mystudybro.com Accounting Paper 1
Past Paper (Mark Scheme) This resource was created and owned by Pearson Edexcel 4AC0

Question Answer Mark

Number
12(d) The key here is does the candidate clearly understand what a (5)
sales ledger control account is and what its value is to the running
of a business. The following sample answer identifies how you
should allocate the 5 marks.

Sample Answer

The balance of the control can be checked against the sum of the
individual balances in the sales ledger and discrepancies or errors
(1) identified. These errors could either be in the day books or in
the individual accounts in the sales ledger (1).

The balance of the control account can also assist in the

preparation of the balance sheet at the year end by providing a
total for debtors (1) .

The control account can also be used to identify and prevent

fraud in the business. (1)

However there are some disadvantages to maintaining a sales

ledger control account. It may be costly to maintain (1) and there
is no certainty that all errors will be located (1)
Overall there are several advantages to Rita of maintaining a sales
ledger control account but there may also be some disadvantages
(1)

MSB - Page 67

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