SECONDARY SCHOOL - IMRIEĦEL HALF-YEARLY EXAMINATIONS 2017/2018

Transcription

1 SECONDARY SCHOOL - IMRIEĦEL HALF-YEARLY EXAMINATIONS 2017/2018 Track 3 FORM: 4 Accounting Time: 2hrs Name: Class: ANSWER ALL SECTIONS. THE ORDERLY PRESENTATION OF YOUR WORK IS IMPORTANT. CARELESS WORK WOULD BE PENALISED. ILLEGIBLE WORK WOULD BE WRITTEN OFF. SECTION A Answer the following questions in the space provided. 1. What is the purpose a bank reconciliation statement? 2. What are the book-keeping entries for an irrecoverable debt recovered? 3. Name two debit and two credit entries made in the sales ledger control account? Accounting / Form 4 / Half-Yearly Examinations

2 4. Give two reasons why the balance in the cash book (Bank Colum) may not agree with the balance in the bank statement. 5. Explain in brief the accounting concept applied in the calculation of the allowance for irrecoverable debts. 6. What do you understand by set-off in control accounts? 7. Explain the term direct debit as may be found in the bank statement. 8. Explain the reason behind a credit balance brought down at the beginning of a financial period in the sales ledger control account. 9. Explain two reasons for a cheque to become dishonoured. 10. Distinguish between irrecoverable debts and allowance for irrecoverable debts. Accounting / Form 4 / Half-Yearly Examinations

3 SECTION B Question 1 IRRECOVERABLE DEBTS AND ALLOWANCE FOR IRRECOVERABLE DEBTS Brendan Buttiġieġ is a wholesaler and most of his sales are made on credit terms. The following information relates to the first three years that he has been in business Trade Receivables as at 31st December 70,000 80,000 60,000 The allowance for irrecoverable debts was set to be 6% of the trade receivables. During 2015 and 2017, two debtors, one of 5,000 and the other of 2,000 respectively were declared bankrupt. No adjustments have been made to the balance shown above. Required: a) The irrecoverable debts account for 2015, 2016 and 2017 clearly showing the transfer to the income statement each year (if any). (6 marks) Accounting / Form 4 / Half-Yearly Examinations

4 Irrecoverable Debts Account Date Details Date Details b) The allowance for irrecoverable debts account for 2015, 2016 and 2017 clearly showing the transfer to the income statement each year and the balancing off at the end of each of the three years. (11 marks) Allowance for Irrecoverable Debts Account Date Details Date Details c) Fill in the Income Statement (Extract) for the years ending 31st December 2015, 2016 and (5 marks) Accounting / Form 4 / Half-Yearly Examinations

5 Income Statement (Extract) for the year ending 31st December: Gross Profit xxx xxx xxx Add Revenues: Decrease in allowance for irrecoverable debts Less Expenses: Increase in allowance for irrecoverable debts Irrecoverable Debts d) Fill in the Statement of the Financial Position of a Business (Extract) as at 31st December 2015, 2016 and (8 marks) Statement of the Financial Position of a Business (Extract) as at 31st December: Current Assets Closing stock xxx xxx xxx Debtors Less: Allowance for irrecoverable debts Bank xxx xxx xxx Cash xxx xxx xxx Accounting / Form 4 / Half-Yearly Examinations

6 Question 2 Fill in the empty boxes of the underneath table for Valletta Glass Limited. (20 marks) Note: The allowance for irrecoverable debts was first created in 2014 at a rate of 5% on the remaining debtors at the end of the financial year, after any irrecoverable debts have been deducted. The same percentage was maintained in the following years. Details Debtors at 1st January 3,700 8,500 17,200 25,600 Credit sales 30,000 45,000 28,000 36,000 Cash received from debtors 25,000 36,000 19,000 25,000 Irrecoverable debts Debtors at 31st December 8,500 25,600 Allowance for irrecoverable debts at st December Amount of allowance for irrecoverable debts appearing in the year's income statement. 420 Net Debtors appearing in the year s statement of the financial position (i.e: Debtors at the end of the year less allowance for irrecoverable debtors) 8,075 34,105 Accounting / Form 4 / Half-Yearly Examinations

7 SECTION C BANK RECONCILIATION STATEMENTS Kristina Chetcuti s cash book at 31st January 2018 showed an overdraft at bank of 3,250. This did not agree with the balance as shown on the bank statement at the same date. When she checked the bank statement with her cash book, Kristina found the following: i) She had drawn some cheques amounting to 2,650, which were not yet presented for payment. ii) 1,400 had been paid direct to the bank by a debtor, but this was not recorded in the cash book. iii) Kristina paid 2,680 into his bank account but these were not included in the bank statement. iv) A payment by cheque of 600 to a creditor had been entered in the cash book as 60. v) A standing order payment of 135 had not been entered in the cash book. vi) Bank charges of 52 had not been entered in the cash book. Required: a) Update Kristina s cash book at 31st January 2018 starting with the overdraft balance at 31st January 2018 of 3,250. (8 marks) Kristina s Cash Book 2018 Details 2018 Details Accounting / Form 4 / Half-Yearly Examinations

8 b) Prepare a bank reconciliation statement at 31st January (7 marks) Bank Reconciliation Statement as at 31st January 2018: SECTION D CONTROL ACCOUNTS The following information is available for the month of January 2018: Purchases Ledger balances 1st January Dr 8,000 Cr Sales Ledger balances 1st January ,500 Dr 200 Cr Sales on credit 156,000 Purchases on credit 105,000 Receipts from debtors 108,000 Payments to creditors 85,000 Irrecoverable debts written off 950 Discounts received 2,500 Discounts allowed 2,100 Set-Off 4,000 Sales returns 1,400 Purchases returns 1,200 Sales Ledger balance at 31st January Cr Purchases Ledger balance at 31st January Dr Required: i) Prepare a sales ledger control account, to find the the total debtors at the end of January (8 marks) Accounting / Form 4 / Half-Yearly Examinations

9 Sales Ledger Control Account 2018 Details 2018 Details ii) Prepare a purchases ledger control account, to find the the total creditors at the end of January (7 marks) Purchases Ledger Control Account 2018 Details 2018 Details END OF EXAMINATION PAPER FOR TEACHER S USE: Section A (20 marks) B1 (30 marks) B2 (20 marks) C (15 marks) D (15 marks) TOTAL Mark Accounting / Form 4 / Half-Yearly Examinations