Poa Mock Paper 1

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  • Topic: 2007, 1920, 1971
  • Pages : 5 (755 words )
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  • Published : October 5, 2012
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Question 1
A trader decided to open a Provision for Doubtful Debts Account in 2007. Provision was to be provided at 5% of debtors outstanding at each year end. $ $
Debtors balance at 31 Dec200810 900
Debtors balance at 31 Dec200910 500
Debtors balance at 31 Dec201010 000
The following information has to be taken into account when preparing the provision for doubtful account.
1The provision account has a balance of $600 on 1 January 2008. 2 A cheque of $200 received for a debt written off in year 2007 has not been taken into account and bad debt of $500 has to be written off in 2008. 3 A debtor account has been overdue and an interest of $80 has to be charged into his account in 2009. 4 A debit note of $60 issued for an invoice undercharged has been wrongly recorded as credit note received in the books in 2010. REQUIRED

(a) Provision for Doubtful Debts Account for the three accounting years 2008, 2009 and 2010. [ 8 marks] Provision for Doubtful Debts
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(b) State the account to be debited and the account to be credited for the following transactions. [2 marks] | Transaction| Account to be|
| | Debited| Credited|
1| Debit note issued for invoice undercharged.| | |
2| Correction for debit note issued but wrongly recorded as credit note received in the books.| | |

[Total: 10]
Question 2
The following is the cash book summary (bank columns only) for Bass for the month of Jul 2011. | | $| | Cheque No.| $|
Jul 1| Balance| 6500| Jul 3 Drawings| 10224| 108|
5| Cash| 200| 11 Jenny| 10225| 526|
10| Blake| 412| 16 Motor Vehicle| 10226| 3400|
14| Lively| 180| 21 Humpfrey| 10227| 2802|
30| Waldorf| 520| 23 Chuck| 10228| 500|
| | | 29 Wages| 10229| 1888|
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The bank statement received for July is summarised as follows:

2011| Details| Payments| Receipts| Balance|
Jul| | $| $| $|
1| Balance brought forward| | | 6580|
1| Error corrected- contra 30 June| 80| | 6500|
5| Cheque no. 10224| 108| | 6392|
5| Cash| | 200| 6592|
9| Credit transfer - Dan| | 520| 7132|
11| Blake| | 412| 7 544|
12| Unpaid cheque - Blake| 412| | 7132|
15| Cheque no. 10225| 526| | 6606|
16| Lively| | 180| 6786|
20| Standing order - Fire Insurance| 300| | 6486|
21| Cheque no. 10226| 3400| | 3086|
29| Cheque no. 10227| 2800| | 286|
31| Bank charges| 80| | 206|
Note:|
A cheque of $2 800 paid to Humpfrey was wrongly credited in the cash book as $2802| |

REQUIRED
(a) State which accounting concept Bass was following when he recorded the entry in the cash book on 3 July for drawings.

(b) Bring the cash book up to date, starting with the balance on 31 July 2011. | | | | | |
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c ) Prepare a statement, appropriately headed, which reconciles the balance between the amended cash book and the bank statement balance at 31 July 2011

Question 3

The following are the transactions related to Joel.
1 Joel issued a cheque of $3 000 for the purchase of a laptop for office use, 2 Joel issued a personal cheque of $2 500 for the payment of business insurance premium for the year. 3 Bought goods $5 000 less 2% trade discount from Shannon on credit.

4 Defective goods of...
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