PAPER 1 Multiple Choice
MAY/JUNE SESSION 2002
Additional materials: Multiple Choice answer sheet Soft clean eraser Soft pencil (type B or HB is recommended)
INSTRUCTIONS TO CANDIDATES Do not open this booklet until you are told to do so. Write your name, Centre number and candidate number on the answer sheet in the spaces provided unless this has already been done for you. There are thirty questions in this paper. Answer all questions. For each question, there are four possible answers, A, B, C and D. Choose the one you consider correct and record your choice in soft pencil on the separate answer sheet. Read very carefully the instructions on the answer sheet. INFORMATION FOR CANDIDATES Each correct answer will score one mark. A mark will not be deducted for a wrong answer. Any rough working should be done in this booklet. Calculators may be used.
This question paper consists of 10 printed pages and 2 blank pages. SP (SLC/JG) S23703/1 © CIE 2002
2 1 What is the accounting equation for capital employed? A B C D current assets – current liabilities fixed assets + current assets – current liabilities fixed assets + current assets + current liabilities net assets – current liabilities
When preparing a sole trader’s annual accounts, no adjustments were made for closing amounts prepaid. What is the effect of these omissions? A B C D net profit overstated net profit understated current assets overstated creditors understated creditors understated owner’s capital overstated
current assets understated owner’s capital understated
Which item is revenue expenditure? A B C D cost of painting new office premises during construction cost of repairs to factory plant and machinery legal fees for the purchase of new factory premises wages of a company’s own workmen for building an office extension
In the cash book of a company the bank account showed a credit balance of $5000. There were unpresented cheques amounting to $1500. The bank statement showed bank charges of $700 not in the cash book. What is the balance on the bank statement? A $3300 debit B $4200 debit C $4200 credit D $5800 credit
A business increases its provision for doubtful debts by $1600. What will be the effect of this adjustment on the final accounts? net profit A B C D decrease by decrease by increase by increase by $1600 $1600 $1600 $1600 net debtors decrease by increase by decrease by increase by $1600 $1600 $1600 $1600
3 6 What will always be classified in a Balance Sheet as a current liability? A B C D debentures preference shares prepaid expense proposed dividend
There is great uncertainty about the continuance of a business. This has caused the proprietor to make a large reduction in the valuation of the year-end stock. Which accounting concept does this illustrate? A B C D going concern matching materiality substance over form
The table shows information from the books of a business at 30 April 2002. invoiced Credit sales invoiced during financial year Goods sent to customers on 28 April 2002 and invoiced 4 May 2002 Goods sent to customers during April 2002 on sale or return basis but not sold by 30 April 2002 $ 79 000 6 100 8 300
What is the amount to be credited to the Trading Account as sales for the year ended 30 April 2002? A $76 800 B $85 100 C $85 300 D $93 400
4 9 The balance on a Sales Ledger Control account is $40 000. The following items are then discovered: $ Total of sales day book understated Discounts allowed not entered in Sales Ledger Control account Bad debts written off not recorded in Sales Ledger Control account Provision for bad debts What is the total of the balances in the sales ledger? A $37 900 B $38 600 C $38 900 D $41 100 500 1 200 400 2...