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

A limited liability company's gross profit for the year ended 31 December 2014 was $260 000. The company's expenses were: directors' fees $80 000; administration expenses $20 000; debenture interest
What do limited companies calculate their ordinary share dividend as being a percentage of?A. Nominal value of authorised capitalB. Nominal value of issued capitalC. Total assetsD. Total reserves.
Preparing partners' accounts, including the calculation of interest on drawings Ryan. Sonya and Tara are in partnership. The partners made an agreement that profits and losses should be shared as
George prepared a trial balance at the end of his business’s financial year on 31 March 2015. However, the totals of the trial balance failed to agree and a suspense account was opened for the
The following statement of financial position was prepared for the business owned by Jack Hall at the end of its financial year. The business had credit sales of $224,000 and credit purchases of
Who appoints the auditors of a company?A. The directorsB. The employeesC. The registrar of companiesD. The shareholders
Roses in Bloom Ltd issued $200,000 6 percent debentures on 1 January 2014. Interest was paid for the year on 31 December 2014. Prepare the journal entries to record the issue of the debenture and the
Which ledger account is to be used on the dissolution of a partnership?A. Disposal accountB. Dissolution accountC. Realisation accountD. Revaluation account.
Sole traders agreeing to form a partnership Rajiv and Sharla are sole traders. They have agreed to form a partnership that will start trading on 1 May 2014.The statements of financial position of
Raj owns a business called Gold Medal Sports Supplies which was opened on 1 January 2013. Raj does not keep proper books of account.The following information is available about the year ended 31
The following statement of financial position was prepared for the business owned by Roy Coulins at the end at its financial year. The business had credit sales of $72,000 and credit purchases of
Which of the following is shown in the income statement of a limited company?A. Asset replacement reserveB. Auditors' feesC. Dividends paidD. Share premium
S. Green Ltd has authorised share capital of 100 000 ordinary shares of $1 each.The company decided to issue 50 000 ordinary shares at $1.50 each. These shares were fully subscribed and paid up.
A partnership has been dissolved and 315 000 is left in the bank.How should this be distributed between the partners?A. According to the last agreed balances on their capital accountsB. According to
Jackie and Kern entered into partnership on 1 April 2014. The partners agreed that:• Interest should be allowed on fixed capitals at 10 percent per annum• Jackie should receive a salary of $60
On 1 February 2014 the directors of the company made a rights issue of shares which was fully subscribed. The issue was of three shares for every eight shares in issue at this date at a price of
Georgina's income statement was as follows. Revenue for the year ended 31 May 2014 totalled $800,000.Calculate the following ratios: a. Profit margin b. Wages as a percentage of
Income statement Which of the following will not be part of the income statement of a limited company?A. Debenture interestB. Ordinary share dividendC. Preference share dividendD. Taxation
Fox Ltd has also authorized share capital of 500 000 preference shares of $0.20 each.The company decided to issue all of the preference shares at $0.45 each, as well as 8 percent debentures to the
Jane and John are in partnership, sharing profits and losses in the ratio 5:3, respectively.They decided to dissolve the partnership on 31 December 2014.Additional information:• At dissolution the
Sharing profit and losses when there is a residual loss Yvonne and Zara are in partnership, sharing profits and losses in the ratio 2:1. Their partnership agreement also states that:• Partners
What is the non-current assets turnover ratio?A. 1.96B. 2.62C. 2.81D. 3.75 $ Non-current assets at cost 84 000 Non-current assets at net book value 63 000 Profit for year 22 400 Revenue for year 165
Misha's income statement was as follows. His business's revenue for the year ended 31 August 2014 was $320,000. Calculate the following ratios: a. Profit margin b. Office expenses
Equity section Which of the following will not appear in the equity section of a limited company statement of financial position?A. 5 percent debentureB. General reserveC. Retained earningsD. Share
Fox Ltd, a limited company, has authorised share capital of 200,000 ordinary shares of $1 each. The company decided to issue 100,000 ordinary shares at $1.30.These shares were fully subscribed and
The statement of financial position for Sara and Tracey at 30 November 2014 was as follows.Sara and Tracey share profits and losses equally. They have agreed to dissolve the partnership as Sara has
Calculating profits shares when there is a partnership salary Cindy, David and Fitz are in partnership, sharing profits and losses in the ratio 3:3:2. Fitz is entitled to a partnership salary of
Ona and Mazrita are in partnership, sharing profits in the ratio 2:1, respectively. They decide to dissolve the partnership on 31 March 2015 due to repeated disagreements about the running of the
The following extract from the income statement was prepared for the business owned by Ismail Cook.Calculate the following ratios: a. Gross profit margin b. Mark-up c. Rate of
A limited company has authorised share capital of:• 500,000 ordinary shares of $0.50 each• 200,000 5 percent preference shares of $1 each.The company had actually issued 80 percent of its
What was the total depreciation of the equipment at the time of the sale?A. $6250C. $7450B. $6850D. $7800
Dividend payment CD plc has an authorised share capital of 500,000 ordinary shares of $0.25 each; 80,000 shares have been issued. The directors declare a dividend of 4 percent. What is the total
Robin, Sharia and Tom are in partnership, sharing profits and losses in the ratio 3:2:1, respectively. The partners have agreed that each partner should be entitled to interest on capital at 8
What was the total of trade payables at 31 January 2015?A. $6600B. $7700C. $8800D. $10100 Trade payables at 1 January 2015 7 300 Cash purchases 3 500 Credit purchases 38 600 Contra with sales
Tapiwa and Rufaro are in partnership, sharing profits in the ratio 4:1, respectively. They have decided to dissolve the partnership. Tapiwa believes that any closing balance in the bank account,
The following extract from the income statement was prepared for the business owned by Jenni Fares. The following extract from the income statement was prepared for the business owned by Jenni
A limited company has issued share capital of:• 300,000 ordinary shares of $2 each• 200,000 6 percent preference shares of $1 each.During the financial year ended 31 December 2014, a dividend of
AB plc has an authorised share capital of 50,000 ordinary shares of $0.50 each. The issued share capital is $100,000. The directors declare a dividend of $0.15 per ordinary share. What is the total
Jennifer, Kim and Lewis are planning to enter into partnership. They have not yet decided what profit/loss-sharing ratio they should adopt. They have considered the following possibilities:a. Equal
Rahul purchased machinery on 1 January 2011 for $64,000. He estimated that it would have a useful economic life of five years and that the residual value at me end of mat time would be $34,000. Rahul
Simon is preparing his financial statements for the year ended 31 December 2014. The trade receivables total $84 350 and he wishes to make a provision for doubtful debts of 3 percent.RequiredDetail
The statement of affairs To what is a statement of affairs similar?A. A bank reconciliation statementB. A bank statementC. A cash bookD. A statement of financial position
A retailer has never kept books of account, but has asked you to tell her how much her business is worth. In order to give her the information, what should you provide?A. A cash bookB. A statement of
The following table shows details about some businesses' total assets, capital and total liabilities. For each business calculate the missing figure, making use of the accounting equation. Total
For each of the following items of expenditure, state whether they are capital expenditure or revenue expenditure.a. Repairs to plant and machinery.b. Legal fees on the purchase of new premises.c.
Errors not affecting profit Which one of the following errors will not affect the profit for the year?A. An accrual for light and heat was omitted.B. An invoice for a new motor van was incorrectly
Prepare a bank reconciliation statement from the following information, clearly identifying the balance as per the cash book. Credit balance as per bank statement 259.03 Unpresented cheques
State two types of error that would be identified by preparing a sales ledger control account.
David has extracted the following balances from his books of account at 31 December 2014.Inventory at 31 December 2014 was valued at $54,350.RequiredPrepare an income statement for David for the year
State and explain three errors that will be revealed by the trial balance.
Update the cash book and prepare a bank reconciliation statement The cash book of Nafisah shows a debit balance of $3849.30 at 6 January 2015. The balance shown on the bank statement at the same date
Prepare a purchases ledger control account from the following information for January 2015.. Purchases ledger balances (credit) at 1 January 2015 33 549 Total of purchases journal for January 2015 52
Majid has extracted the following balances from his books of account at 30 November 2014.Inventory at 30 November 2014 was valued at $39,240.RequiredPrepare an income statement for Majid for the year
Adele has extracted the following balances from her books of account at 31 December 2014.Additional information:• Inventory at 31 December 2014 was valued at $43,450.• Advertising costs of $580
Calculating the business profit The following information is available for a retailerDrawings for the year amounted to $20,000. The retailer paid $70,000 into his business's bank account during the
Double entry Jack owns a business selling computers. The following transactions took place during the first week of September.RequiredState the ledger accounts to be debited and credited to record
On 1 August Selma sold goods to Riaz. Riaz returned some of these goods a week later. In which order will Selma issue documents to Riaz during April?A. Credit note, invoice, statement of accountB.
A business purchased new plant and machinery for $38,000. The cost was settled by the payment of $34,000 by cheque and the part exchange of two items of plant and machinery for the balance. The two
State and explain three errors that will not be revealed by the trial balance.
Sadiq has received the following bank statement for his business account.Sadiq’a cash book entries as at 6 January were as follows.RequiredComplete Saqid’s cash book below and prepare a bank
Dean has prepared the following sales ledger control account for December 2014.The following errors and omissions have been found:a. Irrecoverable debts of $882 had been written off customers' ledger
The owner of a business purchased a new delivery vehicle for business use. A cash deposit of 10 percent was paid at the time of purchase; the balance is to be paid in four months' time. Which books
Make a copy of the following accounts.Balance each account as appropriate. Dr Equipment Cr Jan Balance 3 240 Jan 11 Bank 1050 15 Bank 4 360 Dr Trade payable: UVY Ltd Cr Jan 1 Balance 4 150 16
For each of the following items of expenditure, state whether they are capital expenditure or revenue expenditure.a. Motor vehicle repairs.b. Extension to business premises.c. Redecorating the office
Bernard purchased a new motor van on 1 April 2011 for $32,000. Motor vans are depreciated at 25 percent per annum using the reducing-balance method of depreciation. The motor van was sold on 31 March
Errors affecting profit Which one of the following errors will affect the profit for the year? A. A cheque received from a credit customer had been completely omitted from the books.B. An
Prepare a bank reconciliation statement from the following information, clearly identifying the balance as per the cash book. Debit balance as per bank statement 916.05 Unpresented cheques
Prepare a sales ledger control account from the following information for January 2015. Sales ledger balances (debit) at 1 January 2015 42 356 Total of sales journal for January 2015 68 902 Total of
Kumar has extracted the following balances from his books of account at 31 January 2015.Inventory at 31 January 2015 was valued at $32,650.RequiredPrepare an income statement for Kumar for the year
Daniel has extracted the following trial balance from the books of account at 31 March 2015.Additional information:• Provide for depreciation for the year on motor vehicles at 25 percent per annum
Milquel was able to produce the following information concerning his business.What was the business's profit for the year?A. $36,000B. $70,000C. $104,000D. $236,000 Capital 1 January 2014 100 000
Hakim is in business selling furniture. The folowing transactions took place during the first week of May.Detail the double entry for each of these transactions. Date Details $ 1 May Purchased
The following totals were shown in the discount columns of a business's cash book.What entries should be made in the general ledger?A. Debit discounts allowed $450 Credit
George has had new machinery installed in his factory. The total expenditure was as follows.RequiredCalculate the total capital expenditure and total revenue expenditure for the new machinery. 24
Lee purchased a new motor vehicle for $25,000. The cost of the vehicle was settled by the payment of $21,000 by cheque and the part exchange of his old motor vehicle for the balance. The old motor
Bobby is in business as a market stallholder. He has not kept full accounting records. His statement of affairs at 1 April 2014 showed his capital was $86 000; his statement of affairs at 31 March
Mary-Anne owns a shop that sells jewellery. She does not know how to keep full accounting records. but is able to provide the folowing information for the year ended 31 December 2014.Calculate the
Harry has extracted a trial balance from his books of account at 30 April 2014. The totals do not agree. He has posted the difference to a suspense account. Harry has found the following errors:a.
Preparing simple ledger accounts Kisha's business opened on 1 November 2014. The business had the following assets and liabilities at that date.Requireda. Calculate Kisha's capital on 1 November 2014
Adam is responsible for keeping a petty cash book for his employer. The monthly imprest is $200. During January the following petty cash payments were made: travel expenses $82; postage $45; office
Yasmin has extracted the following balances from her books of account at 30 November 2014.RequiredPrepare Yasmin trial balance 30 November 2014. $ Cash at bank 21 536 Capital account 29 493 Drawings
The following information has been extracted from the books of Smith Ltd for the month of February 2015.RequiredPrepare a sales ledger control account and a purchases ledger control account at 28
Aziza's business opened on 1 January 2015. The business had the following assets and liabilities at that date.Requireda. Calculate Aziza's capital on 1 January 2015 using the accounting equation.The
A retailer purchased $2000 of goods from a supplier on the following terms: 25 per cent trade discount, 10 per cent cash discount if the invoice is paid within 30 days. The retailer paid the invoice
Jane runs a business selling ladies clothes. She has extracted the following balances from her books of account at 31 January 2014.RequiredPrepare Jane’s trial balance at 31 January 2014. Bank
Faye is a florist. The following information is available for the year ended 30 November 2014.Prepare the trading section of an income statement for the year ended 30 November 2014. $ Inventory at 1
Becky owns a shoe shop. During May 2014 she received the following purchase invoices.Prepare the following accounting records to record these transactions:• Purchases journal• Trade payable
Prepare a trial balance Salim runs a business selling books. He has extracted a trial balance at 30 April 2014 but has not yet included the following balances.RequiredComplete the trial balance
Alvin runs a music store but does not keep a kill set of accounting records. He marks up his goods by 50 percent All 4Ales are on a credit basis and all takings are banked at the end of the day.
Stephen owns a shop selling the latest music technology. During August 2014 he issued the following sales invoices to customers.Prepare the following accounting records to record these
Steve runs a business selling beds. He has extracted a trial balance at 31 March 2014 but has not yet included the following balancesRequiredComplete the trial balance below. Enter any difference as
Seeta runs a food store but does not keep a full set of accounting records. Her gross profit margin is 20 percent. All takings are banked at the end of the day. Seeta believes that some cash was
James and Alvo Ltd are wholesalers of bicycles. The company buys goods from a number of bicycle manufacturers. Manufacturers offer trade discounts for large orders. During October 2014 the
K.D. Green has a shop selling carpets. He has been so busy that he has not had time to keep proper financial records, but he is able to provide the following information for the year ended 30 June
Kerron owns a shop supplying fishing tackle. During March 2014 he returned goods to suppliers that had previously been purchased on credit. Prepare the following accounting records to record
Cherie has extracted a trial balance from her books of account at 31 March 2014. The trial balance totals do not agree and the difference has been posted to a suspense account. Cherie has found the
Maurice has two gilt shops. He does not keep full accounting records but is able to provide the following information for the year ended 31 March 2015.The list of balances at 1 April 2014 and 31
Recording returns inwards Mikhail is the owner of a business supplying car accessories to local garages and car dealers. During June 2014 credit customers returned goods that had been sold to them on
Talpur has prepared a draft income statement for his business for the year ended 31 January 2015 that shows a profit for the year of $42,910. He then discovers the following errors:a. The sales
A sole trader did not keep proper books of account. The following information is available about 2014.What were the business's purchases for 2014?A. $166,000B. $205,000C. $214,000D. $223,000 Payments

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