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COURSE TEST 1
QUESTION PAPER
CC210 C2 CT (1)
The net assets of Walter's business decreased by $11,025 over the year to 31 October 20X8. During that
year he had paid in additional capital of $14,000, drawn $875 in cash each month and, on one occasion,
taken goods costing $2,625 for his own use.
The
made by the business for the year ended 31 October 20X8 was profit/loss
$
2
The following are all current assets; trade receivables, inventories, prepaid expenses and bank deposit
account.
If they are placed in order of decreasing liquidity, their order will be:
Which of the following best explains the imprest system of petty cash control?
A
the petty cash total must never fall below the imprest amount
A business has net assets of $286,400 on 31 January 2009 and had net assets of $266,800 on 31
January 2008. During the year the proprietor of the business
(1)
took goods for his own use which cost $10,000 and had a market value of $14,000
(2)
(3)
Cash
Prepayments
Land
Receivables
If the trial balance does not balance an error must have been made
the assets of the business and the claims against those assets
True or false?
A van for sale on a motor dealer's forecourt is shown as a non-current asset in the motor dealer's balance
sheet.
True
False
10
was
Profit/loss
2
3
4
5
6
7
8
9
10
Date: ..........................................................................
CIMA
CERTIFICATE IN BUSINESS ACCOUNTING
PAPER C2
FUNDAMENTALS OF FINANCIAL ACCOUNTING
COURSE TEST 1
SOLUTIONS
CC210 C2 CT (1)
$9,600
False
10
WORKINGS
1
$11,900 loss
Change in net assets
-11,025
-11,025
-11,900
=
=
=
286,400 - 266,800
19,600
19,600 10,000
Profit
=
=
=
=
ie a loss of 11,900
2
$9,600
10
The balance sheet contains assets at historic cost (e.g. non current assets) and assets at less
than market value (e.g. inventory) together with all known liabilities at a certain date. It will not
reflect, therefore, the real worth of the business or what it would realise on sale. The going
concern concept implies that, unless explicitly stated to the contrary, the business will continue for
the foreseeable future. No account need be taken, therefore, of a sale in liquidation.
TEST 1