a) The double-entry ledger is conveniently divided so that accounts with similar

characteristics are placed together. Identify each of the recognised ledger

divisions and describe, with an example, the account types that each division

contains. (4 marks)

b) ABC Dealing is a business owned and run by Alan B Crick. Whilst the following

events took place in the first few days of this month, ledger accounts have not

yet been written up and that will become your task here.

01-Jun The business bank account is in funds by 1,500 and there is

2,000 cash in the business's office safe. Open accounts as

relevant and simply show these as existing balances brought

forward.

01-Jun Bought new inventory on credit from N Joshi and received an

invoice for 1,800 inclusive of VAT.

01-Jun Sold goods to Joan's Phones on credit and sent an invoice for

3,500 plus VAT.

01-Jun Alan B Crick puts 2,500 into the business bank account and

puts 2,500 into the office safe. This is all new money to his

business.

02-Jun Purchased goods for resale in cash from MTC Wholesale and

their cash invoice/receipt was 2,000 goods, plus VAT.

03-Jun Sold more goods for 2,700 including VAT and all customers

paid by cheque.

05-Jun Goods returned by Joan's Phones and ABC issued a credit note

for 250 plus VAT.

06-Jun Alan purchased a second-hand van solely for use within ABC

Dealing from D Trotter in cash for 1,200 including VAT.

TASK for part b)

Opening ledger accounts as necessary and following recognised bookkeeping

and accounting principles, correctly record each of the transactions stated

above. (12 marks)

c) Explain the principles and characteristics of Value Added Tax from a business

accounting perspective. (4 marks)

Total 20 marks

Question aims

To test candidates' ability to:

? Explain the construction of the accounting ledger

? Apply the rules of double-entry bookkeeping

? Record transactions relating to cash and credit sales, cash and credit purchases,

owner's capital, purchase of non-current assets, and value added tax

? Overview VAT from an accounting principles perspective

3. a) Describe the role and purpose of an internal auditor for a business. (4 marks)

b) Neha has drafted the ledger accounts and financial statements at year end for

her promotions and marketing business and is pleased that Gross Profit is

74,500 and Net Profit is 14,500. However, on checking the details more

closely, she identifies the following:

A. Rent from a client of 3,500 for the short-term use of an unwanted

outbuilding for storage has been credited to the Land and Buildings

account.

B. The cost of a colour photocopier for the business, 13,500 including

installation costs, has been debited to the Purchases account.

C. A bill for 650 for repairing some office equipment has been debited to

the Vehicle Expenses account.

D. The price of a motor vehicle for business use, namely 7,500, has been

debited to the Vehicle Expenses account.

E. Carriage in of 80 has been entered to the Postage and Delivery account.

F. 18,000 from the sale of the outbuilding has been credited to the Sales

Revenue account.

TASK for part b)

i) Briefly explain the accounting concern in each of the six situations A to F

given above. (6 marks)

ii) Ignoring depreciation and other adjustments, and starting with Neha's

draft gross and net profit figures, briefly show the effect upon profit of

correcting each issue and then give the revised Gross Profit and Net Profit

figures after amendments have been made. (6 marks)

c) Explain the significance of a 'true and fair view' in relation to the accounts and

financial statements of a company or other incorporated business. (4 marks)

Total 20 marks

Question aims

To test candidates' ability to:

? Explain the usefulness of auditors and audit reports to companies

? Apply the rules of double-entry bookkeeping and accounting concepts in the

calculation of different levels of profit in an organisation

Suggested grounds for response include:

a) The role and purpose of an internal auditor for a business includes:

? An internal auditor's role is to scrutinise the company's internal accounting

control systems. As internal auditors usually work for the business/company

in question and are therefore answerable to its management, their brief can

often change as it is not stipulated in law.

3. Differentiate between financial and management accounting reporting in term of: i. Users Type of information data in. Decision-making Iv. Objective 7. Briefly discuss the meaning of the following accounting concepts: (8 marks) i. Going Concern i. Business Entity s. What do you understand by an accounting period? 9. Contrast between assets and liabilities. 10. Briefly discuss any TWO (2) accounting concepts.Q C. The following mal balance has been extracted from the books and records of N-Duds Pic, oft 31 December 2020 Part ong Equipment abcast 525 000 75,000 Using International Accounting Standards (IAS) produce the following financial statements Accumulated depreciation on buck bit 27:000 Computer at come 171000 (a) The statement of profit or loss for the year ended 31 December 2020 Accumulated depreciation on computers .but 85:500 Tide Repenables Payables 78 300 132 960 (b) The statement of changes in equity for the year ended 31 December 2020 General expenses 118:350 (c) The statement of financial position as at 31 December 2020. inventory at 1 January 2020 130.500 Cashi and cash equivalents 171 315 Note Show all your workings as notes to the accounts. Retained earnings at + January 2020 70.275 Purchases of infinior 735.975 Wages 198.765 Part two Revenue 1,418,715 Explain the differences between financial and management accounting from five Ordinary shares al 20 50 each 450,000 perspectives. Long term borrowings 215.650 Electricity 141.000 Transportation exporises 84.795 Additional Information The directors estimate the porporation tax to be E19.500 Inventory at 31 December 2020 was valued at E166,500. Depreciation is to be provided on a 10% reducing balance basis for the year for Truck and 20%% on cust (straight line basis) for computers 300,000 shares were issued on 1 July 2020 at a price of 1 10 per share, This transaction has not been recorded. The directors proposed and agreed a dividend of 5 pence per share which will be paid out after the year end to all shareholders registered at 31 December 2020(3 marks) Question 1 (b): Sita Ltd makes and sells a specific type of component. Last year, the company produced and sold 5,000 of them. Costs data for producing and selling these 5,000 units are provided in the table below: Costs Direct materials 32.500 Direct labour 26.250 Production overheads 21.400 Selling and Distribution costs 13,375 Administration costs 7,200 Total costs 100.725 Required: i. What was the total prime costs and total conversion costs for 5,000 units of the component last year? (4 marks) ii. If Sita Lid made a loss of $12,725 last year but wanted to make a profit of $6,275, by what amount should the company have increased its average selling price per unit for all units produced and sold? (4 marks) iii. Explain the difference between Financial and Management accounting. (2 marks) (Total: 25 marks)1. Besta Corporation has total current assets of RM800,000; total current liabilities of RM450,000; and long-term assets of RM300,000. How much is the firm's Total Liabilities & Equity? A. RM190,000 B. RM650,000 c. RM950,000 D. RM1,100,000 2. Bilal Holdings has total current assets of RM800,000; total current liabilities of RM450,000; long-term assets of RM300,000; and long-term debt of RM200,000. How much is the firm's total equity? A. RM150,000 B. RM450,000 c. RM750,000 D. RM1,150,000