Questions and Answers of Accounting For Cambridge International AS And A Level

The directors of Esplan Ltd have agreed to take over the business owned by Rakesh on 1. March 2015. Rakesh plans to retire. Both businesses operate as retailers of electrical goods. The
Kingsdown Doors Ltd has been manufacturing doors for many years. The following information relates to the year ended 30 June 2014. Additional information: Inventories at 30 June 2 014 were:
Prepare a reconciliation of profit from operations to the net cash from operating activities for the year ended 31 March 2015. 2015 (向| 2014 ($) Operating profit for the year 95 242 98 514
The following situations have arisen affecting the financial affairs of MOP Ltd. The company's year-end was 31 December 2014. The company's financial statements were authorised by the directors for
Explain what is meant by the term 'stewardship' in respect of a company's financial affairs.
Computerised accounting systems are used to record the day-to-day financial transactions of a business. They can also provide managers with information to assist with decision-making. Describe in
The following information is available for two companies for the year ended 31 October 2014.a. Calculate the following investment ratios for the two companies:i. Gearing ratioii. Dividend coveriii.
The published accounts of Kranak plc included the following information.Notes to the accounts: 1. Schedule of non-current assets at 31 March 2015Proceeds from the sale of equipment amounted to
Walking Fit, a club for walkers over the age of 50, has the following information available for the year ended 31 March 2015.Additional information:• The cost of maps should be regarded as revenue
The last two years' statements of financial position of TFR Lid at 31 March are as follows.Additional information:• The operating profit for the year ended 31 March 2015 was $60,000 (2014:
Describe three aspects of a company's financial statements which would confirm that they represent a true and fair view of the company's financial affairs.
Describe five key issues to be considered by the manager of a medium-sized business which is considering the introduction of a computerised accounting system.
The following information relates to the business of Lozon Ltd for the year ended 31 March 2015.Requireda. Working to the nearest dollar, prepare an income statement for the year ended 31 March 2015
Persad plc is a manufacturing business. The following figures have been extracted from the company's ledgers as at 31 May 2014.Additional information: • At 31 May 2014, inventories were valued
The following information is available for a sailing club.What is the value of the club's accumulated fund at 1 January 2015? Cash in hand at 1 January 2015 20 Sailing equipment valuation Prepaid
The last two years' statements of financial position of STB Ltd at 31 March are as follows.Additional information:• The operating profit for the year ended 31 March 2015 was $30 000 (2014: $85
Full cost of a product A company manufactures several products, one of which is the Danthea. The factory has two production departments (machining and finishing) and one service centre (the canteen).
Donaldson Ltd manufactures only two products, Alto and Bass. At present, the factory has one machine which is operating at 100 per cent capacity. Only 520,000 labour hours are available in the
Metato Ltd is asked to prepare a quotation to supply 500 identical parts for an engineering company. The company bases its quotation on the following estimated data.In order to complete the job,
Explain three limitations of a system of budgets and budgetary control.
Which cost will fall as production is reduced? A. Fixed cost per unit B. Variable cost per unit C. Total fixed costs D. Total variable costs
What will cause under-absorption of fixed production overheads? A. Absorption of overheads is based on actual expenditure and actual activity. B. Actual activity is above budgeted
Target profits Sid owns a business in a seaside resort. He sells greeting cards. On average, each card costs $0.50 to buy and is sold for $1.20. The annual bushess fixed costs are $110,000. Sid sets
Explain three benefits of a system of budgets and budgetary control.
Calvin owns a business manufacturing electrical parts. The business operates two production departments — machining and assembly.The business also has two service departments stores and
A hospital budgets for overheads totalling $11 500,000 for a financial year. It expects to treat 25,000 patients in the year. Each patient stays an average of ten days and the hospital absorbs
Cilin Ltd manufactures two products, the Qi and M. The Qi currently has a selling price of $20 per unit and it has a marginal cost of $15. The Xi is selling well. The economic climate
Flash Limited manufactures three products, X, Y and Z. The following budgeted information is available for March 2014. Fixed overheads are estimated to be $21,000 per month. Fixed
The following table shows figures for a week's production.What is the actual amount of production in the week? A. 9000 units B. 9167 units C. 11,000 units D. 13,000 units.
The cost of producing 2000 units of a product is:What is the variable cost of one unit? A. $20 B. $22 C. $23 D. $24 $ Insurance 2 000 Labour 30 000 Materials 10 000 Rent 6 000
Novak manufactures garden benches. Each bench passes through two departments, machining and finishing. Budgeted sales for the year ending 31 March 2015 are 5000 benches. The following information is
A firm has three jobs performed in separate production departments: A, B, C and D. The overheads of the service departments K, L and M are apportioned to the production departments using the
A DVD has a selling price of Si 0. Associated Wets are:What is the contribution per DVD? A. $5.00 B. $6.00 C. $7.00 D. $8.00 $ Direct materials 1.20 Direct labour 0.80 Factory
Hernandez Limited produces three models of suitcase: Basic, Deluxe and Excel. The company's profit statements for the year ended 31 December 2014 for each model show the following.Requireda.
A company has sales of $192,000, fixed costs of $40,000 and a contribution/sales ratio of one-third. What are its profits? A. $24,000 B. $50,667 C. $64,000 D. $88,000
A firm sells its product for $10 per unit and has variable costs of S6 per unit. Its fixed costs for the year are:What is the break-even point? A. 10,000 units B. 16,667 units C.
A business provides the following information.What is the total sales revenue needed to break even?A. $2500B. $7500C. $10,000D. $40,000 $ Total fixed costs 10 000 Unit selling price Variable unit
A company manufactures a product. Information for the last two years is as follows. In both years, production has been at break-even level. What is the increase in production in year 2
Alpha Ltd manufactures one product. Budgeted production is 8000 units per year. During the year, the budgeted costs are expected to be: The opening inventory was expected to be 200 units and
The following information is available for a manufacturing business. What is the amount of the actual overhead expenditure? A. $58,900 B. $64,900 C. $68,200 D. $70,900
Explain the term 'budgetary control'. Why is it helpful to the management of a business?
PL Printing Ltd has been asked by a customer to prepare a quotation to produce 50,000 printed sales leaflets. The following information is available for PL Printing Ltd for the current year.Overheads
Toby owns a small property repair business and has one employee. He has been asked to prepare a quotation to paint a customer's house. Toby adds 25 per cent to the total costs of each job undertaken
The managers of Kerry Kent Ltd base their profit margin on the formula: contribution per unit x 50%. The company has received an order for 20 units of product 104A and wishes to make a profit of
The following information relates to the production departments of Springson Ltd.The factory overheads for the year ended 31 March 2014 were:Requireda. Prepare an overhead apportionment schedule
If the fixed costs of a business increase but all other costs remain the same, what will happen to the break-even point? A. Decrease B. Increase C. Remain the same D. Unable to be
Under a system of responsibility accounting, a manager's performance is evaluated on which one of the following matters? A. Directly controlled matters B. Directly and indirectly controlled
Explain the difference between job costing and batch costing.
Ron owns a business that manufactures kettles at a marginal cost of $18 each. The selling price is $22.50 per kettle. The fixed costs are currently $90,000 per annum. Requireda.
Explain what the terms 'allocation', 'apportion' and 'absorption' mean.
The following information is a available for a company.What is the overhead absorption rate per machine hour? A. $5.61 B. $5.70 C. $6.13 D. $6.23 Budgeted overheads $180 200
Which one of the following is not a function of a budget? A. Control B. Decision-making C. Motivating D. Planning
Jule and Keith do not have a partnership agreement. The following information is available. The partnership made a loss of $60 000 during the year ended 30 September 2014. Loan interest had been
Preference share dividends TJZL Ltd has an authorised capital that includes 200,000,10 percent $1 preference shares, of which 160,000 are issued. These shares are currently being sold for $2 each.
The following balances have been extracted from the books of account of Lightowler Ltd at 30 April 2015.Additional information:• Premises should be depreciated by $540 000.• Vehicles should be
Ishaka and Joshua are in partnership, sharing profits and losses as follows: Ishaka 60 percent and Joshua 40 percent. At the end of the financial year, 30 September 2014, the following balances were
The financial statements for Lucky Ltd for the year ended 31 December 2014 were as follows.Additional information: • Dividends paid during the year $60, 000 • Retained earnings al 1
Urban and Victoria are in partnership. They do not maintain separate current accounts.The following information is available concerning Urban for the year ended 31 December 2014.What is the balance
Renea and Stephen agreed to go into partnership. Renea was a sole trader and her business's statement of financial position before the formation of the partnership was:Renea is to transfer her
The following table shows information for a business at the year end. What is the payment period for trade payables, to the nearest day? A. 68 days B. 73 days C. 92 days D.
In the books of a partnership, what should interest on drawings be debited to?A. The appropriation accountB. The bank accountC. The partners' current accountsD. The partners' drawings accounts
A company produces the following information concerning inventory turnover. If the Year 2 average inventory is double Year 1's and the cost of goods sold is increased to $960,000, what will the
In the books of a partnership, what should the ledger entries for interest on drawings be?A. Debit: appropriation account Credit: partners' current accountsB. Debit: partners' current accounts
Which actions would increase the liquid (acid test) ratio of a business in the short term? i. Trade receivables paying Their debts ii. Paying trade payables iii. Selling a number of
What should a partnership appropriation account include?A. Shares of residual loss, partnership salaries, drawings, interest on partners' loansB. Shares of residual loss, partnership salaries,
A firm has calculated the following accounting ratios for the year ended 30 June. What could explain the changes in the percentages? A. A fall in interest payments was equal to an increase
The following trial balance has been extracted from the books of account of Ionians plc at 30 April 2014.Additional information: • Inventory at 30 April 2014 was valued at $148 000. •
A company has an issued sham capital of 100 000 ordinary shares of $1 each. On 1 June, the company makes a bonus issue of one ordinary share for every four shares held. On 1 September, the company
Calculating the closing balance in a current account Xavier and Yvonne are partners in a business. Xavier's current account has been prepared by an inexperienced bookkeeper.Assuming that Xavier's
A company has the following information in its statement of financial position.What is the liquid (acid test) ratio? A. 0.54:1 B. 0.88:1 C. 0.93:1 D. 1.85:1 $000 Trade receivables
The following trial balance has been extracted from the books of account of Robins plc at 31 March 2015.Additional information: • Inventory at 31 March 2015 was valued at $125 000. •
Which one of the following reserves is a revenue reserve?A. Capital redemption reserveB. General reserveC. Revaluation reserveD. Share premium account.
Profit share Mala and Norris are in partnership, with capitals of $240 000 and $120 000. respectively. The partners are entitled to interest on capitals at 10 per cent per annum and remaining profits
A business turns aver its inventory Pre times a year. Average inventory is $54 003 and revenue is mode at a market of one-third. How much Is the revenue? A. $240,000B. $270,000 C.
Preparing an income statement for a limited company The following is an extract from the trial balance of Airlie plc at 31 March 2015.Additional information:• Inventory at 31 March 2015 was valued
Bonus issue A company has an issued share capital of 500 000 ordinary shares of $1 each. The company makes a bonus issue of one ordinary share for every two shares held. What will the effect be on
Walter and Vera are in partnership. The following trial balance is available at 31 August 2014.Additional information:• Depreciation on furniture and equipment is charged at 10 per cent per annum
Identifying the use of a ratio What does the ratio of current assets/current liablities show? A. Asset usage B. Liquidity C. Profitability D. Return on capital employed.
The following is an extract from the trial balance of Tiger plc at 31 January 2015.Additional Information:• Inventory at 31 January 2015 was valued at $110 000.• Depreciation is to be provided as
Rights issue A company has an issued share capital of 500 000 ordinary shares of $1 each. The company makes a rights issue of one ordinary share for every two shares held at $1.20 per share. What
Ron, Stan and Frank are h partnership, sharing profits and losses equally. Their summarised statement of financial position at 31 March 2014 was:Frank decides to retire on 1 April 2014. At that date
The following ratios have been calculated as a result of analysing the end of year financial statements of Horizon Stores, a business owned by Robin Spencer. The profitability ratios are as
The following balances have been extracted from the books of Bendon Ltd at 31 October 2014.RequiredPrepare the statement of financial position of Bendon Ltd at 31 October 2014. Dr Cr 10% debentures
A limited company has an authorised capital of 400,000 ordinary shares of $0.50 each. The issued capital is $150 000. The directors declare a dividend of $0.10 per share.What will the dividend amount
Marion and Nina are in partnership. Their summarised information at 31 October 2014 is:Currently profits and losses are shared in the ratio 5:4. On 1 November they admit Oliver as a partner. Oliver
Nevin has been looking at his business end-of-year financial statement for each of the years ended 21 December 2013 and 2014. He has worked out the following accounting ratios based on these
The following is an extract from the trial balance of Ramteet Ltd at 31 December 2014 after the preparation of the income statement and statement of changes in equity for the year ended on that
A limited company's records show the following.If the directors declare a 10 percent dividend, what will shareholders receive?A. $50,000B. $70,000C. $100,000D. $220,000 $ Authorised capital 1 000 000
Gaynor, Henry and Irvin are in partnership, sharing profits and losses as follows: Gaynor 20 percent; Henry 40 percent; Irvin 40 percent. The following trial balance was extracted from the business's
Grand Gardening Ltd is a successful garden design company that has been operating for many years. The ratios for Grand Gardening Ltd and the averages for the industry for the year ended 31
The following balances have been extracted from the books of account of Owen Ltd at 31 March 2015.Additional information (figures in $000):• The directors propose to transfer $2000 to a general
To which of the following is the difference credited when a limited company sells shares at more than their nominal value?A. Retained earningsB. The income statementC. The ordinary share capital
Bryan and Stacey are in partnership with fixed capitals of $200 000 and $150 000, respectively. The partners do not have a formal agreement about how to share profits and losses, although salaries
The financial statements for Falls Ltd for the year ended 31 May 2014 were as follows.Additional information:• Dividends paid during the year: $30,000 • Retained earnings ell June 2013:
Equity A limited liability company's statement of financial position includes the following:Authorised share capital ……….. $300,000Issued share capital ……………….. $160,000General
What is a limited company's authorised capital?A. Capital that has been authorised to be put into reservesB. Capital that has been authorised to be spent on non-current assetsC. The number of shares
The following is an extract from Zebrex plc's statement of financial position at 1 April 2014.Additional information: • On 1 June 2014 the directors decided to make a bonus issue of three
Kelly and Leo have been in partnership for a number of years sharing profits and losses in the ratio of their fixed capitals. The following balances appeared in the partnership's books at 31 December
Preparing fluctuating capital accounts Jenny and Keith are in partnership, sharing profits and losses in the ratio 2:3. The partners have agreed not to maintain separate current accounts.On 1 August
The financial statements for Over and Out Ltd for the year ended 31 December 2014 were as follows.Additional information:• Dividends paid during the year: $12,000• Retained earnings at 1 January

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