1 st Term Examination November, 2017 BUSINESS & ACCOUNTS

Transcription

1 c Grade 10 Angel International School - Manipay 1 st Term Examination November, 2017 BUSINESS & ACCOUNTS Duration: 03 hours PART-1 Answer the questions no.1 to 5 paying attention to the following case. Index No:- Dilini, a diploma holder of sewing children s clothes started a business to sew and sell children s clothes as Dilutex with Dilan, a designer, employing capital equally and purchasing a building close to a preschool. 1. What is the basic need satisfied by the business of DiluTex in this case? 1. Food 3. Housing 2. Clothing 4. Security 2. An opportunity of the business of DiluTex in the above case is 1. The business situated close by a preschool. 2. Dilini being a diploma holder of sewing children s clothes. 3. Getting Dilan tojointhe business. 4. Employing capital equally by Dilini and Dilan. 3. To what type of business organization does the business of Dilutex in this case belong? 1. Sole proprietorship 3. Incorporated companies 2. Partnership 4. Associations 4. What is the factorof production that the building purchased by the business of Dilutex belongs to? 1. Land 3. Capital 2. Labour 4. Entrepreneurship 5. Select the correct statement about the business of Dilutex in this case. 1. This is a business that produce goods. 2. This is a business that produce services. 3. Registration the name of this business is not compulsory. 4. This business has a legal entity. 6. Businesses started as a result of 1. Barter system 2. Usage of money 3. Transportation 4. Industrial revolution 7. All employees completing successfully the workshop conducted by the business to enhance the skills of its employees is 1. A strength to the business 2. A weakness to the business 8. Products are basically classified as 1. Primary and secondary 2. Agricultural and industrial 9. Who is not a mediator in the distribution process? 1. Consumer 2. Wholesaler 3. An opportunity to the business 4. A threat to the business 3. Direct and indirect 4. Goods and services 3. Retailer 4. Agent 10. The savings of a country depend on the interest rate given by the banks for deposits. What is the business environmental factor that can be deducted from the above statement? 1. Social and cultural environment 3. Economic environment 2. Demographic environment 4. Political environment 1 P a g e

2 11. Saman intends to produce a special type of shoes. What he should do first,is 1. Purchasing a business place 3. Recruiting and training employees 2. Obtaining a loan from a bank 4. Preparing a business plan 12. A characteristic that can be seen in limited companies but not in sole proprietorships and partnerships is 1. Being an aim 3. Having legal personality 2. Engaging in economic activity 4. Being an existence 13. Select the correct statement about business registration from the following 1. Registration is compulsory for all business organizations doing business in Sri Lanka 2. A limited company becomes a listed company by incorporating 3. All businesses receive the legal entity by registration. 4. A limited company receives a legal entity by incorporating 14. Retailers assist wholesalers by 1. Givingadvice on the use of goods. 2. Offeringinformation on new goods available. 3. Payingin advance. 4. Providingdetails of goods demanded. 15. While the 1..of the business are interested in the safety of the investment, the 2.are interested in obtaining a reasonable salary. Select the answer that shows the suitable terms to 1 and 2 in above statement in correct order. 1. Competitors, employees 2. Owners, suppliers 3. Employees, owners 4. Owners,employees 16. Following are a few events occurred in the business environment. Declaring a day to celebrate disabled soldiers. Increasing the bank interest rate Increasing the price levels of consumer goods The answer that indicate only the economic environmental factors out of the above events is, 1. A and B 3. B and C 2. A and C 4. A, B and C. 17. Kapila who is a current account holder of people s bank has issued a cheque to sapumel who is a current account holder of bank of Ceylon. Select the answer which shows the drawer and payee of the cheque in this case in correct order. 1. Kapila, People s bank 2. Sapumel, Kapila 3. Bank of Ceylon, Sapumel 4. Kapila, Sapumel 18. Following are a few occasions in which a trade took place. Purchasing 200kg of rice by Sunil for giving a free food stall Selling bakery products to canteen by Danapala who is bakery owner Selling 5000 bricks producer to sujatha who is building her own house Out of the above trades, those belongs to retail trade are. 1. A and B 3. B and C 2. A and C 4. A,B and C 19. which are Assets 1. Creditor, Loan 3. Debtors, Stocks 2. Bank loan, Accrued expenses 4. Debentures, payables 20. Goods purchased for Rs 5,000 was sold on credit for Rs 5,000 The result of the above transaction can be correctly described as 1. Decreasing assets- increasing income 2. Decreasing assets- increasing assets 3. Decreasing assets- increasing equity 4. Decreasing assets- increasing expenses 21. In the business plan, the bank loan expected to be obtained by Mohan is included in 1. Marketing plan 2. Operational plan 3. Financial plan 4. Human resource plan 2 P a g e

3 22. Select the correct calculation that shows the total production cost. 1. Direct material + direct labour cost 2. Indirect material cost + primary cost 3. Primary cost + production overhead cost 4. Direct material cost + production overhead cost 23. A trader withdraws money from his business bank account for personal expenses. Which entries record this in his books? Debit Account Credit Account 1. Bank Capital 2. Bank Drawing 3. Capital Bank 4. Drawings Bank 24. Which of the following statement is not correct? 1. Assets = Liabilities + Capital 2. Capital = Assets Liabilities 3. C. Capital Liabilities = Assets 4. Liabilities = Assets Capital 25. When a businessman introduces capital into his business, the transaction is debited in the Cash Book and credited to his Capital account. Of which accounting principle is this an example? 1. A business entity 2. B going concern 3. C matching 4. D prudence 26. What is the Prime entry book needed to record the Purchase Invoice as the Source document 1. Return outward book 2. Sales Book 3. Purchase Day book 4. Return inward book 27. Padma started a business on 1 April 2011 with $ of her own money. On 31 March 2012 her assets and liabilities were: $ machinery at net book value other assets long-term loan from bank A $ B $ What was Padma s capital on 31 March 2012? 3. C $ D $ What is a trial balance? 1. A a list of balances on a business s books on a certain date 2. B a list of the assets, liabilities and capital of a business on a certain date 3. C a summary of all a business s transactions for the year 4. D a summary of the financial position of a business at the year end 29. A trader decided that office equipment costing less than $100 would not be regarded as a non-current asset. Which accounting principle is being applied? 1. A accounting entity 2. B materiality 3. C money measurement 4. D prudence 3 P a g e

4 30. Which appear on the debit side of a trial balance? 1. 1 assets 2. 2 capital 1. A 1 and 3 2. B 1 and expenses 4. 4 revenue 3. C 2 and 3 4. D 2 and Which is both a book of prime entry and a ledger account? 1. cash book 3. sales journal 2. general ledger 4. sales ledger control account 32. business buys stock on credit for $500. It is allowed trade discount of 10 % and cash discount of 4 %. Which amount will be entered in the purchases account? 1. A $ C $ B $ D $ A business keeps a three column cash book. How is the total of the discount column on the debit side posted? 1. A credit discount allowed account 3. C debit discount allowed account 2. B credit discount received 4. D debit account 5. discount received account 34. What is the column in cash book, where payment of standing order is posted? 1. Debit side bank column 3. Credit side- bank column 2. B. Debit side -cash column 4. D. Credit side - cash column 35. Petty cashier of a business had spent Rs 650 at the end of a certain month and amount of Rs 350 was in hand. Rs 650 was reimbursed for the following month. The monthly petty cash imprest of this business is 1. Rs Rs Rs 1, Rs 1, The credit balance of the bank statement of Sandun s business for the month of March 2013 was Rs. 9,000 and the debit balance of the bank column of the cash book was Rs 10,500. The reason for this difference may be 1. Direct dividend received to the bank for the business 2. Cheque issued but not presented to the bank 3. Debtors remittance received to the bank 4. Cheque deposited but not realised 37. Following are several statements about the general journal A General journal is a prime entry book B General journal records only the opening entries C The source document used to record the transactions in General journal is the journal voucher D The error correction entries in accounting are recorded in General Journal 1. A and C only 2. A and D only 3. A, C and D only 4. B, C and D only 38. A trading business has paid its expense of building repair Rs 150,000 in cash. This expense of the business is 1. A revenue expense 3. An accrued expense 2. A capital expense 4. A financial expense 4 P a g e

5 Using the following information answer question No.37 to 40. A few balances extracted from the trail balance of Tharaka s trade business as at are given below. Opening stock as at Purchases Sales %bank loan Return inwards 5000 Returns outwards 2000 Land at cost Discount received 2100 Investment income 3500 Electricity 8000 Building rent Advertising 3600 Additional information: 1) Stock at cost as at Rs The gross profit of this business in the year ended is 1. Rs Rs Rs Rs The net profit of this business for the year ended is 1. Rs Rs Rs Rs Part-II 1. Using the following case, answer the following questions. Amal who is a graduate from the institute of indigenous medicine of University of Colombo and his sister Rosi,started a business by employing Rs each on as AmalrosihelaOsu to sell herbal porridge (Kola kanda) and medicinal drinks in a rented building beside a government Ayurveda Hospital. On the same day,utensils to the amount of Rs were purchased on credit. In the Ayurveda hospital, while clinics are held every day in the week, doctors impart knowledge to the patients about the value of the medicinal drinks also. Following transactions occurred during the month of the January Purchases on cash- Medicinal leaves Payments for other materials Paid monthly electricity charges 3000 Paid monthly building rent 5000 Paid monthly wages to helper P a g e

6 On a bank loan of Rs at 5% interest per annum was obtained from the Sanasa development bank for further expansion of the business. The effective life time of the utensils is two years. No stock remained as at i. Write a. A private sector business organisation b. A public sector business organisation Mentioned in the above case ii. iii. iv. Write two advantages and two disadvantages of the type of the business organisation which AmalrosihelaOsu belongs to. Since AmalrosihelaOsu is conducted by Amal and Rosi, the registration of the business name is not compulsory. c. Do you agree with this statement? d. State reasons for your answer State a strength and an opportunity in AmalrosihelaOsu business. v. Indicate the production process of herbal porridge (kola kenda) of this business under each heading: inputs, process and outputs. vi. a. Name two prime entry books that should be prepared by this business. b. What is the amount of total asset of this business as at vii. Write the double entry to record the bank loan obtained on viii. ix. a. What is the amount of capital as at ? b. What is the amount of total liabilities as at ? The cash balance of this business as at is Rs if all sales of the business occurred in cash, calculate the amount of sales for the month of January Part-A (Answer two Questions only) 1) i. What is a human want? ii. Write two examples for human needs and wants? iii. State whether the following statements are true or false. a. The person who purchases goods and services for final consumption is the consumer. b. According to the objective, businesses are classified mainly as public sector businesses and private sector businesses. c. Owners of a businesses are an internal environmental factor, while customers are an external environmental factor. d. Human needs are different, while wants are limited. iv. Suranga sells beautiful seashells designs to tourists that are prepared by using collected seashells from seashore. Glue and different paints with the support of a helper. v. Write two factors of production the businessmentioned in this case. vi. Write an example from the case for each factor of production you wrote in the above. 6 P a g e

7 2) i. The development of the businesses upto the present condition has come through different stages. State these stages in sequence. ii. State four payment instruments that can be used to settle transaction today. iii. Name four macro (external) environmental forces and write one factor each that can be included in each force. iv. Different type of the business organisations can be seen such as sole tradership, partnership, companies etc. but there are common characteristics to those. Write four such common characteristics. v. Name the major parts which should be included in a business plan and provide a short description about one of them 3) i. What is the trade? ii. Differentiate retailtrade and wholesale trade. iii. Write two support services which provide assistance to a business. iv. Give two terms that can be written between general crossing and special crossing. v. Write two advantages of each debit card and credit card. Part-B (Answer two Questions only) 1. A) Some transactions that occurred during the first week of the business started by Nihal on are given bellow. a. Investing Rs 100,000 as capital by Nihal b. Obtaining a bank loan of Rs 25,000 c. Purchasing a stock of goods on credit from SupunRs. 10,000 d. Paying a rent of Rs 3,000 in cash e. Paying to SupunRs 5,000 Required: Indicate as increased or decreased the influence of the above transaction on assets, liabilities and equity in accounting equation. To provide the answer, use a format like the one given below. The first transaction has been done for you. Assets = Liabilities + Owner s Equity a.eg: Increased Increased b. c. d. e ( 4 marks) B) The debit balance of the bank column in the cash book of Safya s business on was Rs 15,500. But the balance of the bank statement received for the month of March 2016 did not match with the balance of the cash book. Later, following were revealed as the reason for this difference. 1. Cheque deposited in March but not realised during the month was Rs 4, Bank charges that were not recorded in the cash book was Rs Cheque issued in March but not presented to the bank for encashment were Rs 3, Remittances directly received to the bank but not recorded in the cash book were Rs 6,000 Required 1. Adjust the bank balance of the cash book as at Prepare the bank reconciliation statement as at (6 Marks ) 2. A. Name the prime entrybooks/journals used for entering the following transactions. I. Credit purchases from lathika traders for resale Rs II. Sales in cash Rs III. Returns inwards from goods sold to amith Rs.4000 IV. Sales on credit of office equipment used by the business Rs.4000 (4 Marks) 7 P a g e

8 B. I. State two reasons as to why a business uses a petty cash book with analytical columns. (2 Marks) II. As at 30 th November,2016 the total amounts of analytical columns in the petty cash book of Passan Enterprise are as follows. Travelling Rs.350 Stationery Rs. 150 Postal expenses Rs. 250 Miscellaneous expenses Rs. 400 The balance of the petty cash book as at 30 November, 2016 is Rs Calculate: a. Petty cash imprest for the month b. The amount needed to reimburse the petty cash imprest for December,2016. (04 Mark) 3. The accounting period of bialy s business ends on The trial balance as at is given below. Account name Debit Credit Capital Trade debtors Trade creditor Stocks as at Purchases Carriage inwards Sales commission 9000 Insurance expense Rent income Discount received 6000 Sales Discount given 3000 Machinery and equipment Buildings Bank loan Interest expenses Bank overdraft Cash in hand Bad debts 7000 Salaries administration Bank charges Assume that the entire stock has been sold out. Prepare: a. The profit or loss statement for the year ended 31 st December b. The statement of financial position as at 31 st December 2016.******** 8 P a g e