Saraswati Vidya Niketan

Vyasa Purnima End of Term Examinations

Principles of Accounts – Sir Eddie
Name: ____________________________ Date: 23rd July, 2019

Class: Form 4 ____ Time: 3 hours

Good Luck J

Paper 1

1. The term ‘Accounting’ refers to the 5. If the following lists of assets found on the
(a) use of information in making business Balance Sheet of a retail trader were to be
decisions arranged in order of liquidity, the sequence
(b) use of special ways of recording business would be
information (a) Motor van, Building, Bank, Fixtures, Cash,
(c) recording, analyzing and interpreting of Debtors
business information (b) Cash, Fixtures, Debtors, Bank, Building,
(d) journalizing, posting and balancing of Motor van
accounts in special books (c) Cash, Bank, Fixtures, Debtors, Motor van,
Building
2. How would you classify land and building in a (d) Cash, Bank. Debtors, Motor van, Fixtures,
Balance Sheet? Building
(a) Fixed Assets
(b) Current Assets 6. When a proprietor withdraws cash or other
(c) Current Liabilities assets from a business, what effect does it have
(d) Long-Term Liabilities on drawings or capital?
(a) Capital is decreased.
3. Which group of assets below is recorded in the (b) Capital is increased.
‘Order of Liquidity’? (c) Drawings are decreased.
(a) Cash, Plant and Machinery, Stock (d) Neither the drawings nor capital is affected.
(b) Cash, Stock, Buildings and Lands
(c) Vehicles, Cash, Buildings and Lands 7. When money is taken from cash and paid into a
(d) Furniture, Vehicles, Office Supplies bank account, the recording is referred to as
(a) the imprest
4. The summarized position of Foster and Scott (b) a contra entry
Limited at 6 March 2015 was: (c) cash takings
$ (d) personal drawings
Current Liabilities 60 000
Current Assets 100 000 8. An increase in drawings will result in
Fixed Assets 200 000 (a) an increase in long-term liabilities
Long Term Liabilities 150 000
(b) a decrease in capital
What was the capital of Foster and Scott
(c) a decrease in current liabilities
Limited at 6 March 2015?
(d) an increase in capital
(a) $ 40 000
(b) $ 90 000
(c) $150 000
(d) $190 000

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9. During the year, a company bought stationery Item 15 refers to the following information which
for $220 and used $120 worth of it. What is the was extracted from the Cash Book of Dandy Dare.
expenditure for stationery that would be posted
to the Profit & Loss Account?   $
(a) $100 Balance per Cash Book 560
(b) $120 Total unpresented cheques 120
(c) $220 Lodgement not entered on  
(d) $340 Bank Statement 150

10. A trader started with capital of $20 000 in the 15. What is the balance per Bank Statement?
bank. If $12 000 of it was used to purchase (a) $120
building and plant, the balance of $8 000 would (b) $150
be (c) $340
(a) drawings (d) $530
(b) total assets
(c) working capital 16. In a partnership, which of the following
(d) current liabilities transactions is compulsory?
(a) Paying of salaries
11. The formula for working capital is (b) Interest on capital
(a) total assets less total liabilities (c) Interest on drawings
(b) fixed assets less current assets (d) Sharing of profits or losses
(c) fixed assets less current liabilities
(d) current assets less current liabilities 17. Which of the following items can be used to
adjust the Cash Book balance before preparing a
12. What is the gross profit? Bank Reconciliation Statement?
(a) $100 (a) Direct transfers and bank lodgements
(b) $300 (b) Direct transfers and dishonoured cheques
(c) $500 (c) Bank lodgements and unpresented cheques
(d) $800 (d) Dishonoured cheques and unpresented
cheques
13. When a Trial Balance fails to agree, the
difference is entered in the 18. Mr. Jones’ business began the month with an
(a) Control Account overdraft of $1 200. During the month, total
(b) Suspense Account deposits were $2 000 and total payments were
(c) Reserve Account $600. What was the Cash Book Balance at the
(d) Provision Account end of the month?
(a) Debit balance of $200
14. How does an increase in bad debt affect a sole (b) Credit balance of $200
trader’s financial statements? (c) Credit balance of $600
(a) Decrease in the gross profit (d) Debit balance of $1 400
(b) Increase the gross profit
(c) Decrease the net profit
(d) Increase the net profit

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 Item 19 refers to the following (c) $21 000
information. (d) $24 000

  $ 20. P. Hawk has a manufacturing business. The cost

Prime cost 10 000 of his raw materials was $1 900. Rates and rent
Overheads 16 000 totalled $2 000, and factory wages amounted to
Work in progress 1 January 3 000 $2 500.
Work in progress 31 December 5 000
The number of units produced was 640. What
was the cost of ONE unit?
19. What is the year’s cost of production of finished
goods? (a) $ 4
(a) $14 000 (b) $ 6
(b) $18 000 (c) $10
(d) $13

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Paper 2: Complete ALL questions on answer sheets provided.

1) (a) Draw a journal and enter the following transactions.

June
1 Received a loan of $2500 by cheque
5 Purchased goods on credit from Samlall, $1000
10 Cash sales $3600
20 Withdrew $200 from bank for private use
24 Paid salaries by cheque, $300

(b) The totals of a trial balance showed:

Debit $3400
Credit $3600

The following errors were discovered

i. A purchase of goods for $400 was entered in error with $40
ii. Sales A/c was overcast by $280
iii. Discounts received of $350 were entered on the wrong side of discounts account
iv. A payment of $600 for salaries was recorded incorrectly in salaries account with $680
v. Goods sold to Mark Anthony for $300 were only entered in the sales A/c
(a) Use the journal entries to correct the errors
(b) Prepare the suspense account showing clearly:
(i) The original error
(ii) The undiscovered error

2) (a) Prepare the double column ash book of Rohan Sharma

May
1: Balances in hand: Cash $1600, Bank $2400
5: Paid J. Persaud $200 by cheque
8: Received a loan of $1700 by cheque
12: Cash sales $500
20: Paid into bank $300 cash
25: Paid for salaries by cheque, $250
27: Paid insurance by cash, $70
30: Withdrew $400 cash from bank for office use

(b) The bank statement of Rohan Sharma received at the end of May 2019, showed a balance at bank of $3740
The following errors were discovered:
1. Standing order for insurance, $400 was not in the cash book
2. Dividends collected by the bank for $560 were omitted from the cash book
3. Bank changes amounting to $140 were left out from the cash book
4. Unpresented cheques totaled $840

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 5. Deposits in transit totaled $470
6. A cheque for $200 was returned by the bank, stamped ‘Refer to drawer’

Required: (a) Prepare an adjusted cash book

(b) Prepare a bank reconciliation statement

3) Hand and foot are partners sharing profits and losses in the ratio:
Hand $3000, Foot $2000
Net profit for the year 2018 was $14,800
Their agreement was as follows:
i. Salaries entitlement: Hand $580
Foot $360
ii. Interest allowed on their capital at 5% per annum
iii. Interest changed on drawing the at 10% per annum
iv. Drawings during the year: Hand $1600
Foot $1200
i. Prepare the appropriation A/c of the partnership
ii. Draw up the current A/c of Hand and Foot.

4) Below is the trial balance drawn up by Victor Hugo for the year ended December 31, 2018

Inventory, 1 Jan,2018 2,800Dr . Cr.

Purchases and sales 17,200 27800
Rent 600
Electricity 400
Salaries 1,200
Insurance 500
Bad debts 200
Vehicles at cost 14,000
Furniture at cost 5,800
Debtors and creditors 3,200 2,400
Bank overdraft 700
Cash in hand 5000
Drawings 1200
Capital 21,200
52,100 52,100

Notes on 31 December, 2018

1. Electricity bill unpaid - $420
2. Insurance paid in advance $75
3. Depreciate vehicles by $200 and furniture by $100
Required – (a) An income statement for the year ended December 31, 2018
(b) A statement of financial position as at December 31, 2018

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