Mock Examination M kE i ti

: CAT Paper T1 P

Recording Financial Transactions

Session Set by : June 2011 : Ms Edith Quek

Your Lecturer Mr Wilson Aw Ms Edith Quek Your Mailing Address : ______________________________________ ______________________________________ Your Contact Number : ______________________________________

I wish to have my script marked by my lecturer and collect the marked script at the SAA-GE Reception Counter have the marked script returned to me by mail (Please submit your script latest by 6th May 2011 for marking)

SAA GLOBAL EDUCATION CENTRE PTE LTD

Company Registration No. 201001206N 20 Aljunied Road, #01-04, CPA House, Singapore 389805 Tel: (65) 6744 9700 Fax: (65) 6744 9796 Website: www.saa.org.sg Email: acca@saa.org.sg

CAT T1 Recording Financial Transactions Mock Test (CBE)

1. A business has the following assets and liabilities. What is the owners equity? Motor Van Receivables Bank Overdraft Payables Cash a) b) c) d) $52,500 $56,500 $61,500 $58,500 $50,000 $ 7,000 $ 3,000 $ 2,000 $ 500

2. The following is a summary of the petty cash transactions for a week: Income Expenditure Opening balance $400 Stationery $50 Photocopy fees $20 Transport $210 Sundry Expenses $30 The company used a imprest system for maintaining its petty cash. What is the amount to be reimbursed by the petty cashier at the end of the week/ a) b) c) d) $290 $270 $110 $130

3. A petty cash imprest is $300. In the audit process, it was revealed that there was cash in hand $120. In addition valid vouchers to the value of $140 were produced by the cashier. How much cash is missing? a. b. c. d. $180 $ 40 $160 $280

4. Which of the following is a current payables? a) Opening inventory b) Petty Cash c) Bank Loan d) Bank Overdraft
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5. Which of the following statements concerning a debit entry is correct/ a) b) c) d) Debit entries record increases in liabilities Debit entries record increases in sales Debit entries record increases in profit Debit entries record increases in expenses

6. Which of the following is an example of a revenue expenditure? a) b) c) d) A new motor van Freight charges for the purchase of a new equipment for the business Installation cost of the new equipment for the business Insurance for goods sent to overseas customers ( )

7. Which prime entry record is sales returns recorded? a) b) c) d) Sales Day Book General Journal Cash Book Sales Returns Day Book

8. Which of the following statements concerning direct debit payments is correct? a) b) c) d) They appear on the Bank Statement and to be debited in the Cash Book They are initiated by the receiver They are initiated by the paying company The payment amount is the same every month ( )

9. A cash purchase is made costing $587.50, inclusive of sales tax at 17.5%. Which of the following entries is correct? a) b) c) d) Dr Purchases Dr Cash Dr Purchases Dr Cash Dr Sales Tax Cr Purchases Cr Sales Tax Dr Sales Tax Cr Cash Cr Sales Tax Cr Cash Cr Purchases

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10. Linda sells goods $14,900 and buys goods for $12,390. Both transactions include VAT at 17.5% in the prices given. Calculate how much does Linda has to pay the tax authorities in respect of these two transactions? a) $2,219.15 b) $1,845.32 c) $ 373.83 d) $ 439.25 ( ) 11. April is registered for VAT at 17.5% and purchases flowers from a farm for resale. The list price of June 2010s purchases is $3,000. She receives 10% trade discount and a further 2% cash discount for paying her debts within 2 weeks. How much is VAT for June 2010s purchases? a. $463.05 b. $472.50 c. $525.00 d. $514.50 ( ) 12. A sale is made for $560 net of VAT 17.5%. What is the entry to the sales account? a) b) c) d) Dr $560 Dr $462 Cr $560 Cr $462 ( 13. An error of principle is one where a) A wrong amount has been recorded in both debit and credit accounts b) A transaction has been totally omitted from the books c) One side of the transaction has been recorded in the wrong account, and that account is of the same class to the correct account d) One side of the transaction has been recorded in the wrong account, and that account is of the different class to the correct account ( ) 14. Which of the following errors would be a possible reason for a trial balance failing to agree? a) A cash sales of $2,500 was not recorded b) Payment of rent of $5,000 being recorded as debit : Bank $5,000, credit : Cash $5,000 c) Purchase of Motor Van $60,000 on credit from Lim Motors for business use being recorded as debit : Motor Expenses $60,000, credit : Lim Motors $60,000 d) Credit Sales $6,900 being recorded in Sales A/C of $6,900 only ( )
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15. A suspense account shows a debit balance of $4,100. This could be due to: a) b) c) d) Recording a credit sale of $2,050 twice on the Sales account Recording a credit sale of $4,100 twice on the Sales account Recording a cash purchases of $4,100 twice on the Cash account Omitting a credit purchase of $4,100 from the payable ledger book ( )

16. What is a trade discount? It is : a. b. c. d. A reduction in the amount of an invoice which a customer will pay A reduction in the amount due to a special promotion A reduction in the price due to customers paying cash A reduction in invoice price in order to encourage customers to buy in bulk ( 17. When is a remittance advice sent? a) b) c) d) When goods are delivered When payment is made When confirming an order When customers return goods )

18. Which of the following will not appear in a bank reconciliation statement? a) b) c) d) Uncredited deposits Unpresented cheques Cash book errors Bank errors

19. The cash book of Lim Co showed a balance in hand of $500. The bank statement showed a credit balance of $2,000. Cheques paid in but not yet credited to the bank statement were $500. The unpresented cheques amount to? a) b) c) d)
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$2,500 $2,000 $1,500 $3,000

20. A debit balance of $2,800 in the bank column in the Cash Book shows that a. b. c. d. There is $2,800 cash in the bank There is $2,800 cash in hand There is $2,800 bank overdraft There is an unpresented cheque of $2,800 ( 21. Which of the following items will appear in the firms Cash Book? I. II. III. IV. V. a) b) c) d) Credit Notes Sales Invoices Bank Charges Cash Sales Irrecoverable debts written off I,II & iii III & IV II, III & V All of the above )

22. Which entries below correctly records discount allowed? a) b) c) d) Dr Discount Allowed Dr Discount Allowed Dr Discount Allowed Dr Discount Allowed Cr Receivables Control Cr Payables Control Cr Cash A/C Cr Bank A/C

23. The year end balance on Johns receivables control balance is $56,908. What does this mean? a) b) c) d) John owes suppliers $56,908 Suppliers owe John $56,908 John has received goods from supplier valued at $56,908 on credit Customers owe John $56,908 ( )

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24. Mays salary is $24,000 per annum. In April 2010, she pays $129 tax and $150 employees national insurance, $25 was also deducted for donation to Childrens society. Employers national insurance contribution is $160. How much does May take home in April 2010? a) b) c) d) $1,561 $1,696 $1,536 $1,856

25. The following is the year-end payroll information for ZXT Company. Gross Salaries and Wages $156,789 PAYE and all other deductions $108,122 Employer NIC $ 12,000 Employee NIC $ 9,000 Employees Pension Fund $ 4,900 Employers Pension Fund $ 8,900 What is the total payroll cost for the year for ZXT Company? a) b) c) d) $264,911 $170,689 $177,689 $299,711 ( )

26. Motor Van expenses of $5,600 has been posted to the non current asset account. This will result in one of the following: a) b) c) d) Profit is overstated $5,600 and non current asset understated by $5,600 Profit is understated $5,600 and non current asset understated by $5,600 Profit is understated $5,600 and non current asset overstated by $5,600 Profit is overstated $5,600 and non current asset overstated by $5,600 ( )

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27. Lily purchases some goods at list price of $27,000 on which she receives 10% trade discount. Her supplier offers 5% discount for payment within 7 days. Lily pays one-third of the invoiced amount within 7 days and the balance 2 weeks later. What is the total amount of money that she will pay for this order. a) b) c) d) $23,490 $25,650 $23,085 $23,895 ( )

28. Which of the following would NOT help a business to reduce its irrecoverable debts? a) b) c) d) Better credit checks on customers Higher cash discounts Improved credit control Bigger trade discounts

29. These are the balances of Winnie on 31 December 2010: Sales Purchases Inventory Cash Bank Overdraft Building Capital Payables Receivables $50,900 $18,000 $ 400 $1,500 $2,300 $150,000 $100,000 $? $3,000

If the trial balance balances, what is the missing figure for payables? a) b) c) d) $13,700 $19,700 $18,900 $19,300 ( )

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30. Which of the following will result in a decrease in profit of a company? a) b) c) d) Purchase a Motor Van Repayment of Mortgage Loan Paid a creditor Paid salary to Sales Executive

31. The book-keeper made two errors in recording. The Sales Returns Day Book was undercast by $160 A credit sale $690 was wrongly entered as $960 in the invoice At the close of the period, 31 December 2010, the balances from the Sales Ledger totaled $12,000. What would be the balance on the Receivables Control on 31 December 2010 as a result of the above two errors? a) b) c) d) $11,620 $11,310 $11,570 $11,470 ( )

32. Which error below will affect the Purchases Ledger as well as the Payables Control? a) The Purchases Day Book was overcast b) A return of goods to the supplier was not posted to a suppliers account c) Discount received of $100 was recorded as $109 in the suppliers account d) An invoice was misplaced and completely omitted from the books ( )

33. Which of the following is the primary purpose of Controls accounts? a. b. c. d. To provide information for preparation of the Trial Balance To calculate sales and purchases To calculate total debtors and total creditors To control errors in the books

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34. Edward is a Sales Executive whose monthly basic salary is $3,000. He is entitled to 2% commission of the total value of sales made. In addition if his total sales exceed $150,000 for the month, he will get another 1% of the total sales. What is his salary for the month of December 2011 if his total sales is $183,000. a) b) c) d) $3,000 $6,990 $8,490 $6,330 ( )

35. Martha is paid $5.80 hourly and works from Mondays to Fridays, inclusive of 8 hours daily. If she works on Saturdays, she is paid 1.5 times and on Sundays she is paid double time. What is Marthas weekly gross pay for the week below? Monday to Friday 8 hours daily Saturday 3 hours Sunday 3 hours a. b. c. d. $292.90 $107.30 $301.60 $284.20 ( )

36. Tanias receivable ledger showed a balance of $3,190 at the start of the week. During the week Tania sold $5,870 worth of goods on credit. She also received a total of $3,800 from customers. What is the closing balance on Tanias receivable ledger? a) b) c) d) $12,860 $ 5,260 $ 1,120 $ 6,480 ( 37. Which of the following is a capital expenditure? a. b. c. d. Purchase of goods for resale Payment for motor expenses Cost of decoration for Christmas Purchase of equipment )

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38. Lina purchased an office space and paid the following: Office space Legal Fees Annual Maintenance Fees $100,000 $ 1,000 $ 3,600

How much of the above is capital expenditure? a) $104,600 b) $101,000 c) $103,600 d) $100,000

39. Discount allowed of $300 have been debited to Discount Received. How will this affect the trial balance? a. b. c. d. Debit side of Trial Balance is overstated by $300 Debit side of Trial Balance is overstated by $600 No effect on Trial Balance Credit side of the Trial Balance is understated by $600 ( 40. Which of these will appear as debit balance in the accounts? I. II. III. IV. V. a. b. c. d. Purchases Sales Insurance Expenses Capital Drawings I, II & III I, III & V II & IV II, IV & V )

41. Jolene purchased some office furniture for business use on credit from Wong Co. In which books of prime entry would she record this transaction? a) b) c) d) Purchases Day Book Cash Book General Journal Non Current Assets Register

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42. In Michaels receivables ledger, Wanti has a credit balance. How could this have arisen? a) b) c) d) Wanti has bought goods from Michael Wanti has returned goods to Michael Wanti has returned goods to Michael after settling all outstanding invoices Wanti has sold goods to Michael ( )

43. Peter commenced his business with $50,000. During the 1st month, he purchased a motor van $30,000, paying a deposit of $5,000 and the rest to be paid by instalment. In addition, he also purchased goods $6,000 for resale and paid cash for them. What is his capital at the end of the month? a. b. c. d. $75,000 $55,000 $50,000 $30,000

44. Winnie was unable to trace two credit customers who owed her $5,000 and $6,000. Therefore she has decided to write off these two debts. What journal entry would you need to prepare? a. b. c. d. Dr Cash Dr Irrecoverable Debts Dr Irrecoverable Debts Dr Irrecoverable Debts Cr Receivables Control Cr Receivables Control Cr Payable Control Cr Sales Day Book ( )

45. What is the primary objective of separation of duties in an accounting department? a) b) c) d) To provide a lesser workload for staff To provide on the job training for staff To prevent fraudulent acts To better evaluate staff performance ( )

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The following information relates to Q 46 to 47 Disneys Trial Balance as at 31 December 2010 Debit $4,000 $200 $500 $12000 $290 $ 50 $8052 __________________ $16,750 $16,750 ================== Credit $7,908

Purchases and Sales Mark Twain Bruce Lee Leroy Tan Office Equipment Bank Cash Capital

$500

46. With reference to the Trial Balance above, which of the following statements is NOT true? a. b. c. d. Purchase is $4,000 Mark Twain is Disneys customer Bank overdraft of $290 is a liability to the business Leroy Tan is Disneys customer ( )

47. With reference to the Trial Balance above, what is the total assets of Disney? a) b) c) d) $16,750 $ 8,052 $12,750 $12,000 ( 48. The Sales Day Book is mainly for the recording of a) b) c) d) Sales of goods Sales of goods on credit Sales of Assets All types of sales of the business ( ) )

49. Which of the following entry is NOT to be recorded in the General Journal? a) b) c) d) The purchase of non current assets on credit The correction of errors which had occurred in the ledger The owner brings in his own private car for business use The bank transferred a bank loan to the business account (
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50. Which of the following transactions are NOT represented by the entries below? Debit I. II. III. IV. a. b. c. d. Tan & Co Credit Cash Payment of cash to Tan & Co Purchase of goods from Tan & Co for cash Sale of goods to Tan & Co for cash Receipt of cash from Tan & Co III & IV II,III & IV I, II & III I, II & IV

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