Font size
WorksheetsAccounting IGCSE YEAR 11 _REVISION_1_Ms.Zania_2024
Total questions: 100
Worksheet time: 2hrs 17mins
Jane bought a non-current asset for $5,000 and depreciated it at 10% per annum on the straight line basis. At the end of year 2 he sold it for $4,100. What was the profit or loss on disposal?
$50 loss
$50 profit
$100 loss
$100 profit
Jane bought a non-current asset for $5,000 and depreciated it at 10% per annum on the straight line basis. At the end of year 2 he sold it for $4,100. What was the profit or loss on disposal?
$50 loss
$50 profit
$100 loss
$100 profit
Zen bought a machine for $10,000 and depreciated it at the rate of 30% per annum on the reducing (diminishing) balance basis. What was the net book value at the end of year 2?
$4,000
$6,000
$4,900
$5,100
Why does a business provide for depreciation of its non-current asset?
To set aside a specific fund for the future repair of the non-current asset
To charge the cost of the non-current asset against the profit in the year it is purchased
To show the net book value of the non-current asset in the statement of financial position
To spread the cost of the non-current asset over its useful life
Which of the following assets best be depreciated using the revaluation method?
Building
Machinery
Loose tools
Motor vehicle
Pick the causes for the provision of depreciation of non-current asset
Physical deterioration
Economic reasons
Matching and prudence
Depletion of natural resources
Social factors
Explain the straight line method of depreciation
The depreciation is calculated on the net cost price and the same amount is written off each year
The same percentage is written off each year but it is calculated on the net book value of the asset
Explain the reducing (diminishing) balance method of depreciation
The depreciation is calculated on the net cost price and the same amount is written off each year
The same percentage is written off each year but it is calculated on the net book value of the asset
A restaurant records its equipment at valuation. How does it calculate its depreciation?
Value at start of year + equipment purchased + value at end of year
Value at start of year + equipment purchased – value at end of year
Value at start of year – equipment purchased – value at end of year
Value at start of year – equipment purchased + value at end of year
What is the financial statement in which the accumulated provision for depreciation appears? State in which section it appears.
Income statement; Cost of sales
Statement of financial position; Current assets
Income statement; Expenses
Statement of financial position; Non-current assets
A car was bought for $6,000 on 1 January 2018. It was sold on 6 October 2020 at a profit of $450. The car was depreciated at 10% using the reducing balance method on assets in use at the end of the year. Calculate the price at which the car was sold.
(a)
Choose which statements represent the fact that providing depreciation is an application of the accounting principle of accruals (matching)
The cost of a non-current asset and the revenues arising from its use are matched in an accounting period
Depreciation is one of the expenses of running a business
The cost of a non-current asset is spread over its useful life
Whichever method of calculation is used the result is shown in a provision for depreciation account
Choose the accounting principles used in the provision for depreciation
Matching: Depreciation is charged as an expense in the income statement based on an estimate of how much of the overall economic usefulness of the noncurrent asset has been used up in that year
Realisation: Revenues can only be recognised when it is earned
Prudence: To record non-current assets at a more realistic value than the historic cost
Business entity: The affairs of a business are treated as being separate from the non-business activities of its owner
What are assets?
Items that are bought for long-term use by a business
Items that are expected to be turned into cash in the near future
Items that are owned by or owed by a business
Items that are owned by or owed to a business
Amit depreciates his buildings at the rate of 2% per annum using the straight line method. He bought land for $200,000. It cost $120,000 to build a warehouse on it. After five years he sold the warehouse for $299,000. What was the profit or loss on disposal?
$9,000 loss
$9,000 profit
$11,000 loss
$11,000 profit
Which group contains only trading businesses?
Driving school, motor insurance agency, vehicle repair business
Driving school, motor insurance agency, petrol station
Motor parts shop, vehicle repair business, car dealership
Motor parts shop, petrol station, car dealership
Which accounting objective is being applied when financial information affects business decisions?
Comparability
Relevance
Reliability
Understandability
A wages account will be found in the
private ledger
nominal ledger
cash book
petty cash book
Which of the following pairs of accounts usually have credit balances b/d?
capital and expenses
assets and expenses
income and assets
liabilities and income
Where should trade discount be shown?
the cash book
personal accounts in the ledger
a discounts account
an invoice
What is the purpose of preparing a trial balance?
to check the arithmetical accuracy of the book-keeping
to find the net profit or net loss
to check that all transactions have been included in the accounts books
to prove that there are no book-keeping errors
What does a debit balance b/d on the insurance account indicate?
A liability and a prepayment
A liability and an accrual
An asset and an accrual
An asset and a prepayment
A machine costing 5000 is depreciated at 20% per annum by the straight line method. It is sold after three years for 2500. Which one of the following is true?
The firm has made a 500 loss
The firm has made a 500 profit
The firm has made a 2500 loss
The firm has a made a 2500 profit
Ignoring work in progress, which of the following statements correctly defines factor cost of production?
Raw materials purchased plus indirect costs
Prime cost plus factory overhead
Prime cost minus factory overhead
Prime cost plus direct costs
A business sells goods for cash. What are the entries in the books of the seller?
Debit Credit cash sales
Debit Credit cash debtor
Debit Credit sales cash
Debit Credit debtor cash
Which item would be recorded on the debit side of a sales ledger control account?
bad debts
credit sales
payments from debtors
sales returns
Which transaction would not be entered in a business’s cash book?
purchase of goods from T Patel, paying by cheque
purchase of goods by a customer, paying in cash
purchase of goods from J Walsh on credit
purchase of a new machine, paying by cheque
A business instructs its bank to make a regular payment of a fixed amount to a supplier. What is this known as?
cheque
credit transfer
direct debit
standing order
A trader always uses the diminishing balance method of depreciation for machinery. Which accounting concept is being applied?
accrual
consistency
dual aspect
going concern
The following information was provided for the year ended 31 December 2016.
Sales £80 000
Cost of sales £40 375
Stock 1 January 20165 £ 5 300
Stock 31 December 2016 £4 200
What was the rate of Gross profit?
39625
76265
85043
16847
Which of the following is a liability?
Accrued expenses
cash in hand
trade receivable
prepaid expenses
Where should trade discount be shown?
the cash book
personal accounts in the ledger
a discounts account
an invoice
What is the purpose of preparing a trial balance?
to check the arithmetical accuracy of the book-keeping
to find the net profit or net loss
to check that all transactions have been included in the accounts books
to prove that there are no book-keeping errors
What does a debit balance b/d on the insurance account indicate?
A liability and a prepayment
A liability and an accrual
An asset and an accrual
An asset and a prepayment
A machine costing 5000 is depreciated at 20% per annum by the straight line method. It is sold after three years for 2500. Which one of the following is true?
The firm has made a 500 loss
The firm has made a 500 profit
The firm has made a 2500 loss
The firm has a made a 2500 profit
Which transaction would not be entered in a business’s cash book?
purchase of goods from T Patel, paying by cheque
purchase of goods by a customer, paying in cash
purchase of goods from J Walsh on credit
purchase of a new machine, paying by cheque
A trader always uses the diminishing balance method of depreciation for machinery. Which accounting concept is being applied?
accrual
consistency
dual aspect
going concern
Narinder made a short-term loan to Seema. Narinder’s draft statement of financial position showed this loan as a current liability.
What was the effect of this error?
current assets understated
current liabilities understated
non-current liabilities overstated
owner’s capital overstated
On 1 February 2017 Katya’s fixtures and fittings had a net book value of $12 950.
She purchased fixtures, $2250, during the year.
Depreciation for the year ended 31 January 2018 was $4900.
What was the net book value of fixtures and fittings on 31 January 2018?
$5800
$7150
$10 300
$15 600
What is the fundamental concept behind the Double Entry System?
Every transaction affects three accounts
The Double Entry System does not involve debiting or crediting accounts
Every transaction affects at least two accounts, with one account debited and another credited.
Only one account is affected in each transaction
Explain the concept of Depreciation in accounting.
Depreciation is the increase in value of an asset over time.
Depreciation is the process of writing off all asset costs immediately.
Depreciation is only applicable to intangible assets.
Depreciation in accounting is the allocation of the cost of a tangible asset over its useful life.
List three accounting principles that guide the preparation of financial statements.
Accrual principle, Going concern principle, Matching principle
Cash basis principle
Consistency principle
Materiality principle
What are the IGCSE Accounting Standards and why are they important?
IGCSE Accounting Standards are guidelines for cooking recipes.
IGCSE Accounting Standards are rules for playing musical instruments.
IGCSE Accounting Standards are regulations for gardening techniques.
IGCSE Accounting Standards are rules and guidelines for recording and reporting financial transactions, ensuring consistency and comparability.
In the Double Entry System, what does a debit entry represent?
Increase in assets or decrease in liabilities or equity
Represents revenue or income
Decrease in assets or increase in liabilities or equity
No impact on assets, liabilities, or equity
How is straight-line depreciation calculated?
Depreciation Expense = Salvage Value / Useful Life
Depreciation Expense = (Initial Cost - Salvage Value) / Useful Life
Depreciation Expense = Initial Cost * Useful Life
Depreciation Expense = Initial Cost / Useful Life
Why is the Matching Principle important in accounting?
To ensure expenses are recognized in the same period as related revenues.
To delay the recognition of expenses
To increase tax liabilities
To confuse financial statements
What is the purpose of the accrual concept in accounting?
To match revenues and expenses to the period in which they are incurred.
To track the number of employees in a business
To determine the market value of a product
To calculate the total assets of a company
How does the historical cost principle impact the valuation of assets?
Assets are recorded at their market value
Assets are initially recorded at their original cost when acquired.
Assets are recorded at their book value
Assets are recorded at their liquidation value
Discuss the relevance of the Materiality Principle in accounting standards.
The Materiality Principle focuses on including all information, regardless of significance, in financial statements.
The Materiality Principle ensures that only significant information is included in financial statements to avoid clutter and focus on what truly impacts decision-making.
Materiality Principle is only applicable to non-financial industries.
Materiality Principle is a recent addition to accounting standards and not widely recognized.
What is the significance of the Going Concern Principle in financial reporting?
The Going Concern Principle ensures that all financial transactions are recorded accurately.
The Going Concern Principle is significant as it guides the preparation of financial statements based on the assumption that the entity will continue to operate.
The Going Concern Principle focuses on maximizing short-term profits.
The Going Concern Principle dictates that financial statements should only be prepared once a year.
How do accounting standards ensure consistency and comparability in financial reporting?
By providing a common framework and rules for financial reporting.
By frequently changing the rules and guidelines for financial reporting.
By allowing companies to report financial information in any format they choose.
By excluding certain industries from following the standards.
Which task would an accountant perform
drawing up a trial balance
entering transactions in ledger
preparing financial statements
writing up the cashbook
Amina returned goods to Nadia. Which document did Amina issue ?
credit note
debit note
invoice
statement of account
$3680
$4600
$8280
$9200
$ 30000
$ 81000
$ 151000
$ 185000
Which is an intangible asset ?
goodwill
inventory
office fixture
trade receivables
$37190
$41430
$42870
$47110
name the ledger in which the following account would appear - Nyack (credit customer account )
nominal ledger
sales ledger
purchase ledger
sales returns ledger
name the ledger in which the following account would appear - Purchases account
trade payables ledger
trade recievables ledger
nominal ledger
purchases returns ledger
name the ledger in which the following account would appear - discount received account
nominal ledger
sales ledger
purchases ledger
purchase returns ledger
name the ledger in which the following account would appear - Tebago (credit supplier)account
sales ledger
purchases ledger
nominal ledger
purchase returns ledger
TP Ltd manufactures toys. How will you classify the following manufacturing cost - purchase of plastic toy parts
direct material
direct labour
factory overhead
TP Ltd manufactures toys. How will you classify the following manufacturing cost -rent of factory
direct material
direct labor
factory overhead
TP Ltd manufactures toys. How will you classify the following manufacturing cost -wages of machine operator
direct material
direct labor
factory overheads
TP Ltd manufactures toys. How will you classify the following manufacturing cost -purchase of packaging
direct material
direct labor
factory overheads
TP Ltd manufactures toys. How will you classify the following manufacturing cost -wages of supervisor
direct material
direct labor
factory overheads
the employees of a business are highly skilled but this is not recorded in the financial statements of the business. Which accounting principal is being applied ?
going concern
money measurement
prudence
realisation
$12000 loss
$12000 profit
$26000 loss
$26000 profit
how is cost of production calculated
direct materials+direct labour+direct expense
direct materials+direct labour+direct expense +factory overheads
direct materials+direct labour+direct expense +factory overheads + decrease in work in progress
direct materials+direct labour+direct expense +factory overheads -decrease in work in progress
Lisa returned goods previously purchased from Tara. How did Tara record this ?
Lisa debit - purchase returns credit
Lisa debit - sales returns credit
purchase returns debit - lisa credit
sales returns debit - lisa credit
loss of $1100
loss of $4700
profit $1780
profit $2500
financial information should be free from errors and bias. To which accounting objective does this refer to ?
comparability
relevance
reliability
understandability
1,2 and 3
2 and 3 only
2 only
4 only
$105440
$105920
$105960
$111240
on 1 february , Ahmad purchased goods on credit from Zaffar. he returned these goods on 8th feb.
How did Zaffar record the transaction of 8 feb
ahmad debit --- purchase returns credit
ahmad debit -- sales return credit
purchase returns debit -- ahmad credit
sales returns debit -- ahmad credit
credit $80
credit $260
debit $80
debit $260
Which items are included in an income and expenditure account prepared for a sports club?
1 cost of new furniture purchased during the year for the clubhouse
2 depreciation on furniture and sports equipment
3 rates for the clubhouse paid in advance for the next financial year
4 subscriptions that remain unpaid by club members at the end of the financial year
What is the main function of book-keeping?
communicating information
interpreting information
recording information
summarising information
Melody is a music club. The club holds a music concert once every year. Prizes are awarded to musicians selected by a judge. What was the profit from the concert?
A $950
B $1050
C $1450
D $2100
What does the sales ledger of a business contain?
accounts of trade payables
accounts of trade receivables
sales account
sales ledger control account
What is meant by the term equity?
A dividend paid to ordinary shareholders
B funds raised through borrowing
C interest paid to debenture holders
D total funds provided by shareholders
What does the statement of financial position of a business show?
A assets and liabilities at a certain date
B calculation of the annual profit or loss
C changes in equity during the financial year
D income and expenditure for the financial year
Which entries would Razia make on 2 October?
A bank - Debit
debts recovered - Credit
B bank - Debit
irrecoverable debts - Credit
C debts recovered - Debit
bank - Credit
D irrecoverable debts - Debit
bank - Credit
A cheque received from Kate, a credit customer, was dishonored. How was this dishonoured cheque recorded?
bank - Debit
Kate - Credit
Kate - Debit
bank - Credit
Kate - Debit
sales - Credit
sales - Debit
Kate - Credit
Which group contains only service businesses?
A book shop, language school, newsagent
B jewellery repairer, taxi firm, food store
C language school, taxi firm, jewellery repairer
D taxi firm, newsagent, food store
Which item is added to the profit for the year in a partnership appropriation account?
A interest on capital
B interest on drawings
C partners’ drawings
D partners’ salaries
What was the total value of Asha’s inventory?
A $1300
B $1400
C $1450
D $1550
How much did the trader include for insurance in her income statement for the year ended 31 March 2023?
A $1680
B $1740
C $1920
D $2160
Which components of a statement of financial position do descriptions 1, 2 and 3 relate to?
assets
capital
liabilities
assets
liabilities
capital
capital
assets
liabilities
capital
liabilities
assets
During the financial year, AB Limited paid debenture interest of $1400 relating to that financial year. At the end of the year, debenture interest of $700 was accrued. How was debenture interest shown in the financial statements for the year?
A 1400 no entry
B 2100 no entry
C no entry 1400
D no entry 2100
In which book of prime (original) entry is the sale of a fixed asset on credit recorded?
Cash book
Debit note
Sales journal
General journal
Sam uses the imprest system of petty cash. The imprest amount is $300, which is restored at the end of each month.
The following takes place in March.
Receipts
20 Stamps sold to employees $10
Payments.
March 8 Postage stamps $50
10 Refreshments $62
11 Flowers $20
15 Stationery $17
27 Sam’s travelling expenses $135
How much will the petty cashier receive from the cashier on 1 April?
$274
$284
$294
$300
Sara’s sales journal includes the following entry.
April 1 Ali $350
To which accounts will this item be posted in Sara’s ledger?
account debited : Ali
account credited : cash
account debited : Ali
account credited : sales
account debited : cash
account credited : Ali
account debited : sales
account credited : Ali
The total of David’s purchases journal and purchase returns journal for April showed the following.
purchases journal $10 000
purchase returns journal $900
How are these posted to David’s ledger?
purchases account : credit $10 000
purchase returns account : debit 900
purchases account : debit 10 000
purchase returns account : credit $900
purchases account : debit 10 900
purchase returns account : –
purchases account : –
purchase returns account : credit 9100
Where are suppliers’ accounts found in a trader’s accounting records?
Purchases journal
Purchases ledger
Sales journal
Sales ledger
Purchase of a new computer has been posted to the repairs account in error.
What type of error is this?
Commission
Complete reversal
Original entry
Principle
Which is an error of omission?
No entry has been made for the purchase of stationery by cheque.
Purchase of stationery has been entered only in the cash book.
Purchase of stationery has been entered only in the stationery account.
The stationery account has been missed out of the trial balance.
When is a suspense account opened?
when a Balance Sheet fails to balance
when a trial balance fails to balance
when an error of omission is corrected
when an error of principle is corrected
Rent received, $100, has been debited to rent paid account and credited to cash account.
What is the correcting journal entry?
account debited : cash 100
account credited : rent received 100
account debited : cash 200
account credited : rent paid 100 , rent received 100
account debited : rent received 100, rent paid 100
account credited : cash 200
account debited : rent paid 100
account credited : rent received 100
A business receives a bank statement and updates its cash book.
Which item will increase the bank balance in the cash book?
Bank charges
Credit transfers received
Interest charges
Standing orders paid
