ALL QUESTIONS ARE COMPULSORY
TIME ALLOWED: 2 HOURS
SECTION A: MULTIPLE CHOICE QUESTIONS/ 30 MARKS
A trader’s net profit for the year may be computed by using which of the following formulae?
A Opening capital + drawings – capital introduced – closing capital
B Closing capital + drawings – capital introduced – opening capital
C Opening capital – drawings + capital introduced – closing capital
D Opening capital – drawings – capital introduced – closing capital
In which book of prime entry will a business record debit notes in respect of goods which have been sent back to suppliers?
A The sales returns day book
B The cash book
C The purchase returns day book
D The purchase day book
The following information relates to Eva Co’s sales tax for the month of March 20X3:
Sales (including sales tax) 109,250
Purchases (net of sales tax) 64,000
Sales tax is charged at a flat rate of 15%. Eva Co’s sales tax account showed an opening credit balance of $4,540 at the beginning of the month and a closing debit balance of $2,720 at the end of the month.
What was the total sales tax paid to regulatory authorities during the month of March 20X3?
Sales (including sales tax) amounted to $27,612.50, and purchases (excluding sales tax) amounted to $18,000. What is the balance on the sales tax account, assuming all items are subject to sales tax at 17.5%?
A $962.50 debit
B $962.50 credit
C $1,682.10 debit
D $1,682.10 credit
A company with an accounting date of 31 October carried out a physical check of inventory on
4 November 20X3, leading to an inventory value at cost at this date of $483,700.
Between 1 November 20X3 and 4 November 20X3 the following transactions took place:
1 Goods costing $38,400 were received from suppliers.
2 Goods that had cost $14,800 were sold for $20,000.
3 A customers returned, in good condition, some goods which had been sold to him in October for $600 and which had cost $400.
4 The company returned goods that had cost $1,800 in October to the supplier, and received a credit note for them.
What figure should appear in the company’s financial statements at 31 October 20X3 for closing inventory, based on this information?
Which of the following statements regarding payables and receivables are TRUE?
1 Payables represent money the business owes.
2 Payables are an asset.
3 Receivables represent money owed to the business.
A Statement 1 only
B Statements 1 and 2 only
C Statements 1 and 3 only
D Statement 3 only
Which of the following lists is composed only of items which would appear on the credit side of the receivables control account?
A Cash received from customers, sales returns, irrecoverable debts written off, and contras against amounts due to suppliers in the accounts payable ledger
B Sales, cash refunds to customers, irrecoverable debts written off, discounts allowed
C Cash received from customers, discounts allowed, interest charged on overdue accounts, irrecoverable debts written off
D Sales, cash refunds to customers, interest charged on overdue accounts, contras against amounts due to suppliers in the accounts payable ledger
At 1 July 20X2 the receivables allowance of Q was $18,000.
During the year ended 30 June 20X3 debts totalling $14,600 were written off. The receivables
allowance required was to be $16,000 as at 30 June 20X3.
What amount should appear in Q’s statement of profit or loss for receivables expense for the year ended
30 June 20X3?
Which of the following are not examples of payables of a business?
1 An estimation of tax owed to the tax authority for the year just ended
2 $500 owed to a supplier for invoiced goods
3 An estimation of probable repair costs under warranty claims
A 1, 2, and 3
B 1 only
C 1 and 3 only
D 2 only
Which of the following statements about contingent assets and contingent liabilities are correct?
1 A contingent asset should be disclosed by note if an inflow of economic benefits is probable.
2 A contingent liability should be disclosed by note if it is probable that a transfer of economic
Benefits to settle it will be required, with no provision being made.
3 No disclosure is required for a contingent liability if it is not probable that a transfer of economic benefits to settle it will be required.
4 No disclosure is required for either a contingent liability or a contingent asset if the likelihood of a payment or receipt is remote.
A 1 and 4 only
B 2 and 3 only
C 2, 3 and 4
D 1, 2 and 4
SECTION B: PRACTICAL/ 20 MARKS
From the following trial balance and additional information, prepare a statement of Profit and Loss and other comprehensive income (PL & OCI) and statement of financial position (SoFP) for the year ended 31 March 2017.
Trial balance as at 31 March 2017:
|Dr (Frw)||Cr (Frw)|
|Salaries & wages||180,000|
|Rent & rates||140,000|
|Water & electricity||21,000|
|Cash in hand||20,000|
|Cash at bank||134,000|
|Plant & machinery||440,000|
|Furniture & fittings||97,600|
|Long term investment||300,000|
|Accumulated depreciation for plant and machinery||20,000|
|Provision for depreciation – plant & machinery||30,000|
|Provision for depreciation – furniture & fittings||10,000|
- Closing stock amounted to Frw 70,000.
- Provision for depreciation is to be made:
- Plant & machinery @ 20,000
- Furniture & fittings @ 15,000
- Accrued expenses: Wages Frw 8,000.
Water & electricity Frw 3,000.
- Prepaid expenses: Rent & rates Frw 14,000
Insurance Frw 25,000.
- Accrued income: Accrued interest up to and including 31 March 2017: Frw 13,000.
- The annual depreciation for Plant and machinery is 10% reducing balance
END OF EXAM !!