Questions and Answers of Cambridge International AS And A Level Accounting

Identify one example of a cost unit.
What does the abbreviation OAR stand for?
Explain what is meant by the term 'reciprocal service departments'.
Identify two methods of calculating an overhead absorption rate other than by using a direct labour hour method.
Budgeted overheads are $23600; actual overheads are $24000; and actual activity is equal to budgeted activity. Does this result in an over or under absorption of overheads?
Budgeted overheads are equal to actual overheads and actual activity is 23000 units of production compared to budgeted activity of 25 000 units. Does this result in an over or under absorption of
What is meant by the term 'marginal'?
Total cost = $3 500. After producing one more unit of production, total cost rises to $3510. What is the marginal cost?
Contribution is the amount that a single unit of a product can be sold for. True/False?
Fixed costs + Profit = ?
Give an example of a direct cost for a car manufacturer.
Define 'indirect costs'.
Give an example of an indirect cost for a manufacturer of sports shoes.
Why might a manufacturing business transfer goods to an income statement at a price exceeding total production cost?
Why is there a need to make provision for unrealised profit?
Name the two types of gross profit usually earned in a manufacturing business.
What is the name given to the summarised cash book of a club?
From which type of inventory is the provision for unrealised profit deducted in a statement of financial position of a manufacturing business?
Name two additional activities that might be organised by a club.
Why would a club organise additional activities?
Give one advantage that a club will obtain by running a life membership scheme.
Give one disadvantage of running a life membership scheme.
How would entrance fees be treated in the financial statements accounts of a club?
What is the name of the capital account of a club?
Subscriptions in arrears is a current asset. True/False?
Subscriptions paid in advance is a current asset. True/False?
Equipment at valuation at the beginning of a year $3400; equipment at valuation at the end of a year $2700. There have been no additions or disposals during the year. What has caused the $700
What is the difference between statutory accounts and the annual report and accounts?
Private limited companies do not have to file their statutory accounts with the Registrar of Companies. True/False?
Directors own a company. True/False?
Shareholders own a company. True/False?
Directors run a company for the shareholders. True/False?
Auditors run a company for the tax authorities. True/False?
A shareholder could be a director of a limited company. True/False?
Name two public limited companies.
Name the components of a complete set of financial statements.
Explain why the published income statement of a limited company does not have to give all the details of every expense incurred during the accounting period.
Identify three items that must be disclosed in an income statement for a limited company.
All businesses must prepare a statement of cash flows. True/False?
Statements of cash flows calculate the profits earned by a business. True/False?
State two reasons why a business might prepare a statement of cash flows.
Explain why depreciation is added to profit from operations when calculating cash flows.
Explain how a profit on the disposal of a non-current asset is treated in a statement of cash flows.
Explain how a loss on the disposal of a non-current asset is treated in a statement of cash flows.
Land and buildings have been revalued from $120000 to $250 000. Under which heading would this transaction be shown in a statement of cash flows?
Proposed final ordinary dividend $31 000; interim dividend paid $12000. Under which heading should dividends be shown in a statement of cash flows? How much should be shown in this case?
A company that makes losses does not have to produce a statement of cash flows until it becomes profitable. True/False?
At the start of a year a company has cash resources totalling $67 000. It has debentures of $360 000. At the end of the year, cash resources amount to $80000 after repurchasing $50 000 of the
Why is there a need for international accounting standards?
What does IAS 7 deal with?
Which standard deals with depreciation of non-current assets?
What does IAS 2 deal with?
Which standard deals with the treatment of research and development costs?
Which standard deals with intangible non-current assets?
Which standard says that financial statements should be understandable?
Which objective in the preparation of financial statements is missing: relevance; comparability; understandability?
What is the overriding principle in the valuation of inventories?
What are the six components of a complete set of financial statements?
Identify two social issues affecting staff that a manager might consider.
Social responsibility issues do not apply to sole traders who do not employ any workers. True/False?
Multinational organisations do not need to take social costs into consideration since they are extremely powerful. Do you agree?
'Profits are more important than members of staff.' Outline a case to refute such a statement.
Auditor is another term used to describe a director. True/False?
Auditors appoint directors. True/False?
What is meant by the term 'emoluments'?
Identify two items that the auditor must verify.
In what circumstances might an auditor qualify his opinion?
Explain the term 'synergy'.
Explain the difference between vertical and horizontal integration.
Explain why a business might wish to acquire another business.
Identify and explain two types of economies of scale.
A manufacturer of television sets starts production of microwave cookers. This is an example of diversification. True/False?
Explain why two sole traders might combine their businesses and form a limited company.
When two sole traders form a limited company they would retain the principle of unlimited liability. True/False?
Import duties are always paid by the consignor. True/False?
A business can only make one consignment in any one financial year. True/ False?
Explain the difference between a consignor and a consignee.
Explain the difference between an agent and a consignee.
Explain how the value of inventory at the end of an accounting period is calculated.
A quantity of 500 electrical generators are shipped to an overseas agent. The agent sells 400. Import duties amount to $1500. Calculate the import duty that relates to the remaining inventory.
Explain the term 'del credere commission'.
Joint ventures can only be entered into by joint stock companies. True/False?
How many parties can be involved in a joint venture?
Explain the difference between a joint venture and a partnership.
A joint venture can only be entered into by people living in different countries. True/False?
Explain two disadvantages of using a computerised accounting system to record financial transactions.
Explain two advantages of using a computerised accounting package to prepare a production budget.
Outline advantages to members of staff who will be required to use a computerised accounting system.
A spreadsheet can only be used in very large businesses. True/False?
Explain what is meant by the term 'what if'.
Explain how a middle manager might use a spreadsheet.
How is the working capital cycle calculated?
Gearing shows how much long-term finance a limited company needs. True/ False?
ABC method of apportioning overheads stands for 'A Better Cost method' of apportioning overheads. True/False?
Cost drivers and cost pools are different descriptions for the same activity. True/False?
Cost of ordering materials $400; number of purchase orders 200. Calculate the cost driver rate per order.
Explain two reasons why a manager might prepare a cash budget.
Explain how there can be a negative cash balance shown in a cash budget at the end of a month.
A cash budget is another name for an income statement. True/False?
'There is no need to prepare a cash budget if my business is profitable," a businessman was heard to say. Do you agree? Explain your reply to his statement.

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