Accounting (0452) · Oct/Nov 2009 · Question paper 1

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UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS
International General Certificate of Secondary Education

0452/01

ACCOUNTING
Paper 1 Multiple Choice

October/November 2009
1 hour

Additional Materials:

*4482357045*

Multiple Choice Answer Sheet
Soft clean eraser
Soft pencil (type B or HB is recommended)

READ THESE INSTRUCTIONS FIRST
Write in soft pencil.
Do not use staples, paper clips, highlighters, glue or correction fluid.
Write your name, Centre number and candidate number on the Answer Sheet in the spaces provided
unless this has been done for you.
There are forty questions on 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 the instructions on the Answer Sheet very carefully.
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 document consists of 12 printed pages.
IB09 11_0452_01/2RP
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2

Which group contains only assets?
A

cash at bank, debtors, prepaid rent

B

cash, motor vehicle, bank overdraft

C

creditors, bank loan, machinery

D

debtors, unpaid wages, stock

Amber had the following assets and liabilities.
$
fixtures at cost

5120

bank overdraft

310

amounts owing by customers

2190

amounts owing to suppliers

2570

rent paid in advance

320

wages outstanding

170

What was her capital?
A
3

$4280

B

C

$4580

D

$5200

$5340

A trader provided the following information for the year ended 31 August 2009.
$
sales

80 000

cost of sales

50 000

net profit

14 000

What were the expenses for the year ended 31 August 2009?
A
4

$16 000

B

$30 000

C

$36 000

Which is calculated in a profit and loss account?
A

capital

B

drawings

C

gross profit

D

net profit

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D

$66 000

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John is a trader. His business cash book includes the following payments.
$
rates for the business premises

200

rates for John’s private house

100

wages of employees

25 000

wages of John

3 000

How much will appear under expenses in the profit and loss account?
A
6

$25 200

B

$25 300

C

$28 200

D

$28 300

The skill and knowledge of the workforce is not shown as an asset in the balance sheet of a
business.
Which accounting principle is being applied?

7

A

business entity

B

consistency

C

money measurement

D

prudence

Joe always depreciates his fixed assets using the straight line method.
Which accounting principle is he applying?

8

A

consistency

B

duality

C

going concern

D

realisation

On 1 January 2008 Maria had a stock of stationery valued at $60.
At 31 December 2008 her stock of stationery was valued at $90.
During the year Maria purchased stationery costing $250.
Applying the matching principle, how much should be charged for stationery in the profit and loss
account for the year ended 31 December 2008?
A

$220

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B

$250

C

$280

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D

$310

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Henrick sent Jan an invoice for goods supplied on credit.
In which of Jan’s books of prime (original) entry will the invoice be entered?
A

cash book

B

journal

C

purchases journal

D

sales journal

10 Paul had the following transactions with David, a new customer.
$
March

April

4 goods invoiced to David

350

7 debit note received from David

25

8 credit note issued to David

20

19 cheque received from David

300

28 goods invoiced to David

470

1 cheque received from David

30

Paul sent a statement of account to David on 31 March.
What was shown as the balance due on that date?
A

$470

B

$475

C

$500

D

$525

11 In which book of prime (original) entry is the purchase of a fixed asset on credit recorded?
A

cash book

B

journal

C

purchases journal

D

purchases returns journal

12 Gugu sells goods on credit to Janet.
Gugu offers Janet 25 % trade discount and 2 % cash discount for prompt payment.
Janet purchased goods, list price $1000, on credit from Gugu.
What entry will Janet make in her books of prime (original) entry?
A

purchases journal $735

B

sales journal $735

C

purchases journal $750

D

sales journal $750

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13 An office junior keeps a petty cash book using the imprest system. The monthly imprest amount
is $150.
Petty cash payments during September were:
$
stationery

25

tea and coffee

33

postage

27

How much will be received from the chief cashier on 1 October to restore the imprest amount?
A

$65

B

$85

C

$150

D

$235

14 The following is an extract from Ali’s sales returns journal.
date

name

amount
$

June 7 Hassan

150

15 Mohamed

430

28 Karim

110

30

690

Ali enters this information in the customers’ accounts.
Where will the double entry be made on the 30 June?
A

credit - sales account

B

debit - sales account

C

credit - sales returns account

D

debit - sales returns account

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15 Sarah sublets part of her premises to Ruth.
A cheque for rent has been received from Ruth.
How will Sarah record this in her ledger?
account to be debited

account to be credited

A

bank

rent receivable

B

rent receivable

bank

C

rent receivable

Ruth

D

Ruth

bank

16 What is not a purpose of preparing a trial balance?
A

to aid the preparation of final accounts

B

to check the arithmetical accuracy of the double entry book keeping

C

to help locate arithmetical errors

D

to prove that the double entry has been carried out without errors

17 Which error affects the balancing of a trial balance?
A

a purchase invoice, $2000, completely omitted from the books

B

a sale on credit, $500, entered in the sales journal as $550

C

purchase of a machine, $5000, entered in the purchases account

D

the purchases journal undercast by $1000

18 A business pays rent of $10 000. This was entered correctly in the cash book, but was debited to
the rent account as $1000. A suspense account was opened for the difference.
Which is the correcting entry?
account to be debited

$

account to be credited

$

A

rent

1000

suspense

1000

B

suspense

1000

rent

1000

C

rent

9000

suspense

9000

D

suspense

9000

rent

9000

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19 What is a bank reconciliation statement?
A

a statement presented by a business to the bank listing cheques to be credited by the bank

B

a statement sent by a business to a customer who has purchased goods on credit

C

a statement sent to a customer each month by the bank

D

a statement showing the differences between a business’s cash book balance and the bank
statement balance

20 The bank statement showed a balance of $1650 credit. Dishonoured cheques, $310, and
standing orders, $55, paid by the bank, have not been entered in the cash book.
What was the debit balance on the cash book before it was updated?
A

$1285

B

$1395

C

$1905

D

$2015

21 At the end of her financial year, Sara owes $50 for property tax.
How will the adjustment for this affect Sara’s final accounts?
A

decrease expenses and increase current assets

B

decrease expenses and increase current liabilities

C

increase expenses and increase current assets

D

increase expenses and increase current liabilities

22 Shilpa charges a tenant rent of $7500 a year. The tenant owed $1300 at the beginning of the
year and had prepaid $700 at the end of the year.
How much did Shilpa receive for rent during the year?
A

$5500

B

$6900

C

$8100

D

$9500

23 Nicholas is a baker.
Which item would be a capital receipt?
A

cash received from the sale of bread

B

cheque received from the sale of an oven

C

discount received from a creditor

D

rent received from a tenant in cash

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24 Motor vehicle expenses were debited to the motor vehicles account.
What is the effect of this error?
capital expenditure
overstated
A

understated

revenue expenditure
overstated





B



C

understated







D





25 Farad’s financial year ends on 31 December.
On 31 December 2007 his accounts included:
$
equipment at cost

18 000

provision for depreciation of equipment

7 000

On 1 January 2008 Farad purchased equipment for $12 000.
Equipment is depreciated at 25 % per annum using the straight line method.
What would be the provision for depreciation of equipment on 31 December 2008?
A

$5750

B

$7500

C

$12 750

D

$14 500

26 Which statement describes the reducing balance method of depreciation?
A

The percentage rate changes each year.

B

The percentage rate increases each year.

C

The percentage rate is the same each year.

D

The percentage rate reduces each year.

27 A business values its stock at $35 600.
This includes $2500 for goods which can only be sold for $800.
At which value should stock be recorded in the final accounts?
A

$33 100

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B

$33 900

C

$34 800

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D

$35 600

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28 Which appears in both the profit and loss account and the balance sheet of a sole trader?
A

creditors

B

gross profit

C

net profit

D

sales

29 How is the cost of goods sold calculated?
A

opening stock + purchases + closing stock

B

opening stock + purchases – closing stock

C

opening stock – purchases + closing stock

D

opening stock – purchases – closing stock

30 How is discount received shown in the final accounts of a sole trader?
A

as an expense in the profit and loss account

B

as an expense in the trading account

C

as income in the profit and loss account

D

as income in the trading account

31 At the end of her financial year Melissa had prepaid insurance.
In which section of Melissa’s balance sheet will this appear?
A

current assets

B

current liabilities

C

fixed assets

D

long-term liabilities

32 Which is credited to a partnership profit and loss appropriation account?
A

interest on capital

B

interest on drawings

C

partners’ drawings

D

partners’ salaries

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33 A partnership makes a loss during the financial year.
How is this shown in the accounts?
account to be debited

account to be credited

A

appropriation account

partners’ capital accounts

B

appropriation account

partners’ current accounts

C

partners’ capital accounts

appropriation account

D

partners’ current accounts

appropriation account

34 A trader provides the following information for the year ended 31 December 2008.
$
debtors at 1 January 2008

10 000

cheques received from debtors in 2008

265 000

debtors at 31 December 2008

14 000

What were the credit sales for the year ended 31 December 2008?
A

$261 000

B

$269 000

C

$275 000

D

$289 000

35 Yeung, a sole trader, does not maintain any accounting records.
During the year ended 31 May 2009 he did not introduce any additional capital and did not make
any drawings.
His capital on 31 May 2009 was less than his capital on 1 June 2008.
What does this show?
A

He made a gross loss.

B

He made a gross profit.

C

He made a net loss.

D

He made a net profit.

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36 The following balances have been taken from a trader’s books.
$
stock

20 000

equipment

70 000

trade debtors

60 000

trade creditors

35 000

long-term loan from bank

20 000

cash at bank

5 000

What is the total of the current assets?
A

$80 000

B

$85 000

C

$105 000

D

$155 000

37 Paul had sales of $400 000. His expenses were $100 000 and his net profit was $60 000.
What was the gross profit as a percentage of sales?
A

40 %

B

60 %

C

75 %

D

85 %

38 Which formula is used to calculate the rate of stock-turnover?
A

average stock
cost of goods sold

B

cost of goods sold
average stock

C

opening stock less closing stock
2

D

opening stock plus closing stock
2

39 Which shows how well a business controls its expenses?
A

current ratio

B

percentage of gross profit to sales

C

percentage of net profit to sales

D

rate of stock turnover

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40 A business provided the following information.
year 1

year 2

gross profit as a percentage of sales

25

25

net profit as a percentage of sales

12

8

Which statement is correct if the total annual sales figure is unchanged?
A

cost of sales has fallen

B

cost of sales has increased

C

total expenses have fallen

D

total expenses have increased

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