May/June 2023 (PAPER-12)

What is the main function of book-keeping?

• communicating information

• interpreting information

• recording information

• summarising information

Which components of a statement of financial position do descriptions 1, 2 and 3 relate to?

1 finance and other resources that have been provided by the owner

2 money owed for goods supplied, unpaid expenses and loans made to the business

3 property owned by the business, amounts owed by customers, unsold goods and

money in the bank

• assets capital liabilities

• assets liabilities capital

• capital assets liabilities

• capital liabilities assets

A cheque received from Kate, a credit customer, was dishonoured.

How was this dishonoured cheque recorded?

• bank debited Kate credited

• Kate debited bank credited

• Kate debited sales credited

• sales debited Kate credited

What does the sales ledger of a business contain?

• accounts of trade payables

• accounts of trade receivables

• sales account

• sales ledger control account

Which action is an example of double entry book-keeping?

• making a journal entry to record the correction of an error made in the ledger

• making entries in the sales journal and the sales ledger to record goods sold on credit

• recording a cheque paid to a trade payable in the cash book and purchases ledger

• recording the purchase of goods on credit in the purchases journal and purchases account

What is true about cash discounts received?

• A

• B

• C

• D

Tahir prepared a trial balance. He entered both the balance on the discount allowed account, $900, and the bank overdraft, $750, in the wrong column.

Which total of the trial balance was higher and what was the amount of the difference between the debit total and the credit total?

• credit column 300

• credit column 1650

• debit column 150

• debit column 3300

Goods sold on credit to J Sharp were debited in error to the account of T Sharpe.

Which type of error has been made?

• commission

• complete reversal

• original entry

• principle

Khalid made entries in a suspense account to correct two errors found in his ledger accounts. Once the errors were corrected, the suspense account was closed.

error 1 $700 sales had been omitted from the sales account.

error 2 The purchases journal had been overcast by $550.

Which entry was made in the suspense account to balance the trial balance?

• credit $150

• credit $1250

• debit $150

• debit $1250

Maya depreciates her motor vehicle at 25% per annum using the straight-line method.

The motor vehicle cost $15 000.

The depreciation for the current financial year was incorrectly calculated at 15% per annum.

How will correcting the error affect the profit for the year?

• decrease $1500

• decrease $2250

• increase $1500

• increase $2250