G.C.E. (Advanced level) support seminar Accounting I. learnium.org

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1 G.C.E. (Advanced level) support seminar 2012 Accounting I Time: 3 Hours Prepared by : Under the direction of Ministry of Education Instructions :- 1. Answer all questions in Part 1 on the question paper itself 1. In which of the following statement is true inrelation to GRN (1) Document assured that goods are issued to suppliers (2) Document which delegated authority from production department to store (3) Document assured that goods received from suppliers (4) Doument which used to delegate power (5) Document assured that payment is made 02' Basil s traders asset 30th April 2012 Total Assests Rs Total liabilities Rs During the month of May 2012 following transactions took place - Credit sales Rs ( Has been invoiced addind 331/3 Margin on cost) - Invoice value of return goods Rs ( Has been invoiced reciving 20% profit margin on sales price) - Owners goods drawings on cost Rs What is the capital of the business asstd 31 st May 2012 after considering above tranaction? (1) Rs (2) Rs (3) Rs (4) Rs (5) Rs Kasun receives 5% trade discount from marked value of goods and 10% of cash discount when payment is made within the month. Following information is related to April Date Marked value of goods Csah payment Total payable after deduction of discount 2012'04' Total payable after deducting discount What is the net effect that can be made on purchase account and discount received account

2 Purchase account Discount received account (1) Dr Cr (2) Dr Cr (3) Dr Cr (4) Dr Cr (5) Dr Cr 04' New lanka furniture Ltd Bought Rs worth furniture for office use and worth furniture for sales on credit from alokka Ltd. Sold furniture on credit for What are the prime entry books which are required to record above trancaction respectively. 1. General journal, Sales day book (2) General journal, purchase day book, sales day book (3) Purchase day book, General journal sales day book (4) General journal, purchase day book, Debtors Account (5) purchase journal and sales journal 05. A. Recording assets on its book value does not agree with historical cost concept. B. Leaving personal insurance expenses from income statement of business is agreed with the entity concept. C. Making provision for doubt full debt is not agreed to prudent concept. Out of the above stament/ s in which statement /s is / are correct (1) A and B only. (2) B and C only (3) B only (4) A, B, C all (5) C only 06. Calculated profit on cash basis for the ending 31st March 2011of nandun business was Rs Cosidering following methods 1. Paid salaries in cash for March 2011 was 92, % and 12% employees and employers EPF contribution has not been paid. 3. Out of investment income Rs.8000, Rs.2000 only received in cash 4. Accrued income for the year is Paid advertising expenses Rs should be relevant for the year ending 30th June The prfit or loss calculated on accrual basis for the year ending 31st march (1) Rs ,Profit (2) Rs , Loss (3) Rs ,Profit' (4) Rs , Profit (5) Rs , Profit

3 07. A machine was obtained on lease basis Rs has been recorded as an asset in the balance sheet In which accounting concept is directly related to the accounting processs. (1) Historical cost concept 6. Substance over form 7. Substance over form and going concern 8. Going concern and reliability 9. prudence 08' on 20 th of May 2011 stock of Nethum Ltd was destroyed. Following information extaracetccv from books to Purchases to sale 1,200,000 As at stock was120, Comapany prices goods adding 33 1/3 profit margin on cost 2. Insurnce company agreed to recover 60% Stock valued for Rs has not been received to the stores which already has been dispatched by ther suppliers. What is the value of stock destoryeed. (1) Rs (2) Rs (3) Rs (4) Rs (5) Rs Cost of an asset was Rs.500,000 and scrap value Rs purchased on , it was depreciated 20% per annum on reducing balance mehod in first two years and was transfered to the straight line method for the next four years. What is the depreciable value as at 1st Jauary 2011 and annual depreciation for the year endinfg 31st December Depreciable value (Rs.) Annual Derpreciation (Rs.) ^1& ^2& ^3& ^4& ^5& Paid building rent for the year ending 31st march 2012 is Rs up to 31st December 2011 monthly rent was Rs.200 and from 1st January 2012 monthly rent was increased by Rs.500. For the year ending 31 march 2012 the values are to be indicated in income statement and balance sheet. (1) Rs and (2) Rs and (3) Rs and (4) Rs and (5) Rs and

4 11. As a 31st march 2012, inventory cost of a business was Rs.50000, Rs valued cost which was included in closing stock has been sold on 1st April 2012 for Rs What is the correct accounting application to be done in the financial statement for the year ending 31st march Identified value as an expenditure in calculating profit Identified value as closing stock (1) Nil (2) (3) (4) (5) ' A company issued 10/=, shares at once collecting cash with application. If employees applied for shares the values of the shares issued them will be deducted from their salaries. 150,000 applications were received and for shares have been applied by the employee.if Shares were allocated as a proportion what would be the rejected application money. (1) Rs (2) Rs (3) Rs (4) Rs (5) Following details related to Gold star sport club. 1. Number of members Annual membership fee Rs As at 1st April 2011 subscription in arrears Rs As at 31st March 2012 subscription received advance Rs Received subscription For 2010 and 2011 Rs and 2012 Rs As at 1st April 2012 decided to write off for life members subscription against to this Calculate the arrears in subscription as as at 31 st march 2012.which should be shown in the Gold and star sports balance sheet. (1) Rs. 500 (2) Rs. 900 (3) Rs (4) Rs.1300 (5) Rs Asitha and thusitha are in the partnership sharing profit and loss equally for the year ending 31st march 2012 following errors were discovered after appropriating profit and losses. Goods drawing Rs.3000 has not been recorded. Paid Rs.2000 water bill of the business by thusitha from his personal money has been recorded in books as Rs.200 After correcting above errors how it would be effected to the equities of partners.

5 Asitha Thusitha ^1& increased by Rs. 600 increased by Rs. 600 ^2& decreased by Rs Increased by Rs ^3& decreased by Rs decreased by Rs ^4& decreased by Rs Increased by Rs ^5& decreased by Rs Increased by Rs Dinuka and Rashmi were in the partnership on1st April 2012, Viharai Joined as a new partner. New profit and loss sharing ratio is 2 :1 :1. There were no previous goodwill recording. On new admission of vihari good will had been recorded as follows. Good will Capital Account Dinuka Rashmi vihari Dinuka Rashmis vihari Goodwill What would be the goodwill as at 1st April 2012 and old profit and loss ratio. Goodwill P/L ratio ^1& Rs : 1 ^2& Rs : 2 ^3& Rs : 3 ^4& Rs : 1 ^5& Rs : 3 Use following information to unswer the questions 16 & Current account prepared for the year ending 31st march 2012 of a partnership was as follows. A B C Current Account Rs. 000 A B C B/F Drawings B/F Interest on capital Profit shares Building Rent Loan interest B/C/D Before appropriation of profit Rs has been transferred to general reserve. 16. What is the profit amount that can be received by A for the year ending 31st march 2012? ^1& Rs ^2& Rs ^3& Rs (4) Rs (5) Rs

6 17. How much is the allocated profit for B for the year ending 31 st march ^1& Rs (2) Rs (3) Rs (4) Rs (5) Rs ' When liability is compared with the provision, the amount and timing of provision ^1& is uncertain. (2) Cannot be measured reliabily (3) Cannot be estimated certainly (4) Have a present obligation (5) Have no quantitative value 19' Sales day book entry can be described more meaningfully 1. As a list of sales 2. As a list of credit sales 3. As a gathering of customers account 4. As a part of double entry system 5. As a list of total sales 20' According to structural frame work of financial statement to makesure reliability of financial information (1) Should be presented only quantitative items in financial staement (2) Should be relevant to process of economic decision making (3) Should be forwarded within a short time of period (4) Should be presented as an audited report. (5) Should be presented in accrual basis 21' Nelumnka PLC provides following details 1. Ordinary share capital issued at 50/=, 1 million 2. 10% 25/= issued reference their capital is 1million 3. Paid interim dividends ( net) Ordinary shares Rs Reference share Rs Dividend tax is 10 % Rs has been proposed as a divdends of ordinary share What is the amount of dividend which should be shown in the statement of changes in equities? Ordinary share Reference share

7 1. (1) Rs RS (2) Rs Rs (3) Rs Rs (4) Rs Rs (5) 0 - Rs Following information has been extracted from statement of changes in equity of Eranga PLC Results Balance Rs.(000) Bonus share issues Rs.(000) Balance Rs.(000) General Reserve Retained earnings During the year has not paid dividend and not made a provsion 100/= 3000 ordinary shares has been issued utilizing reserves. For the year ending 31st March 2012 profit of the company would be 2. (1) Rs (2) Rs (3) Rs (4) Rs (5) Rs ' Nipuna PLC has been estimated income tax liability for the year2011/ 2012 as Rs At 01st of april was During the year was paid for income tax. Rs included in that amount which was paid for the 2010/2011 That was the agreed amount of the year. If profit before the tax of the company was , profit for the year and accrued income tax would, (1) Rs' Rs' (2) Rs and Rs' (3) Rs' and Rs' (4) Rs and Rs' (5) Rs' and Rs' If there is an impairement loss and if it would not be able to recover from future cash flows the loss should be deducted from asset value. Except to that (1) Should be identified as a loss (2) Should be identify an intangible asset (3) Asset should be removed from books (4) Depreciation should be stopped (5) Asset should be revalued 25' Following information related to letters of the business

8 Rs'' balance balance Receved cash during the year Allowed discount 6 00 Letters turnover ratio is? (1) (1) (2) (3) (4) 8.0 (5) Following information is related to tiny limited employees salaries. Basic salary Rs Allowances Rs EPF-employee 10 % EPF -employer 15 % Deductions Housing loan Rs Insurance premaium Rs Festival advance Rs What is the total salary expenditure of the months?. 10. (1) Rs (2) Rs (3) Rs (4) Rs (5) Rs A B C Total cost y Unit cost y Total cost y 1. x Activity level 1. x Activity level 1. x Activity level In which graphs is describe variable cost? 2. (1) A only 3. (2) A & B only 4. (3) B only 5. (4) B and C only 6. (5) C only

9 28. Relating to a certain job following standards are given. 1. Allowed time to complete the job 20 hours (Maximum is 20 hours) 2. Rate for hour Rs.100 X and Y have taken following time durations to complete the job. X is 18 Y is 24 Rs.200 is paid for each saved hour as an allowance. Total basic salary is the business is(for a job) 3. (1) (2) (3) (4) (5) Following information has been extracted from the balance sheet. Plant Rs' Accumulated depreciation Assests are depreciated 10% per annum on cost. Scrape value of plant is Calculate time period of the asts being used to? 8. (1) 2 year and 6 months 9. (2) 3 yers 10. (3) 4 yers 11. (4) 7 yers (5) 10 yers 30. What would be the better statement to describe the pay back period? (1) Considers all future cash closed (2) Considers descounted value of future chashclouse (3) Pays high attention about the liqudity and benifits if investments (4) considers all future profits. (5) Do not consider the time of money but considers the liquidity of assets 31. Bandula comments the business on fit for the year Rs /2012 Rs Additional capital /2012 Rs Bandula s drawers Rs Total assets as at march Rs Rs Total liabilities Rs If there were no openning liabilities of the business how much is the openning capital as at 01st of April 2011

10 Two transactions have been recorded in an accounting equation as follows. Transasction + Income - Expenses + Liabilities Asets no = = Propose a suitable transaction that could happen and write a double entry to record it Roshann s limited petty cash impressed for a month is rs Pety cash trans action for a four months were as follows. B/B/F forwarded Cash received Value of pettycash voutures First month Second Third month Forth month month A 200 D C B Calculate relecvent values to A,B, C and D 1. A Rs' B Rs' C Rs' D Rs' Fill in the blanks with suitanble accounting terms Historical cost/ Relibility/ Prudance / Matching concept / Consistancy / Accounting Policies / Accrual Concept 1. Recording property, plant and equipment on its revalued values is a neglection of Without recording expected future profits, Identifying only future expected losers is relevent to Changing depreation policy to reducing balance methods from straight line method, would be resulted to violate Prepaid expensus and receivable income will be identify that an asset according to... concept.

11 35. RS Mobile traders closing inventory items are as follows. Phone Type Number of units Cost of Unit Net present values NOKIA SAMSUN FORME MICRO According to account standard calculate two types of values which can be recorded to financial statement A business bought a machine on 01 of april 2011 for Rs having Rs. 10 and Rs scrap value and 10 year lifetime. On 01st of April 2011 Rs was aded to the machine to improve the capacity of the machine. The lifetime of special section would be 5years. Calculate carrying amount of the assets as at 31st of march a business has sent a stock on 1st of february 2011 on sales or terurn basis. Unter the condition of selliing goods within a three months. It was invoised for rs by 31st of march 2012 debtor noticed that 40% of stock has been sold.this business keeps % a profit on cost. After adjestment of above informttion what would be the following items in the balance sheet as at 31st of march 'Debtors... 2' Closing Stock Dhanuka Vijitha and Piyal were in a partnertship sharing profit and loss in the ratio of 3:2:1. On 31 of march 2012 Piyal retired from the partnertship. Before adjustment of retirement as at 31of march 2012, Piyal had a capital account balance and Rs current account debit balance account. On retirement of piyal he taken over some furniture valued as follows. cost Rs Accumulated depreciation Rs Of furniture was Rs how much is Piyal s remaining equity to be paid to him Overhed cost of a maintainnence department of a production is It will be destributed based on lables. Details of the production division is as follows. Production Divisionq Estimated laboure hour Actual laboure hour Division Division Calculate the overhead which will be appordioned to division 1 from overheads of maintainance departments Write 2 criterias which should be completed to identify assets in financial statements SW Plc limited Director boards intends to capitalize its reserves. Write two advantages that can be received by company and shareholders by conversion of reserves to capital seperately Defined current assets according to relevant standards.

12 A company provides following information Sales Rs Average stock Rs Stock turn over ratio 4 times Operating expensus Rs Income tax Rs Calculate 1. Gross profit ratio Net Profit ratio A production company provides following information relating to a product. Reorder level Kg Reorder quantity Kg Maximum Reorder period 4 weeks Minimum Reorder period 2 weeks Weekly production can be vary from 300 units to 500units. Calculate 1. Minimum stock level Complete the table with the required sections Document Issued division Directed division Material requisition note Purchase order Purchase requisition note Mention four document that can be used to calculate employees active times

13 47. Write 3 reasons that can affect to make a difference between profit from cash flows ATLAST company produces a special type of carbon pen. Variable cost of a pen is Rs.12. Fixed cost is Rs If monthly salesin unit is To retain margin of safety level at 2500 units, calculate the price of a unit to be sold. 49. An Engineering company intends to purchase a new machine. Purchase cost of the machine is and transportation and installation cost is Existing machines book value of and Market value is and it s selling expenses is Rs What is the expected initial investment cost of the project An old boy union of a school intends to incur following expenses relating to a celebration. Food cost of a member 200 Soft Drink cost of a member 50 Decoration cost Sound arrangments and Hall charges Television advertistments Price of a ticket 500 Calculate the number of tickets to be sold to organize the event without profit or loss..

G.C.E. (A.L.) Support Seminar- 2014

G.C.E. (A.L.) Support Seminar- 2014 Accounting I Two hours Instructions ( Answer all the questions. Select the correct answers for questions No. 1-30 and write its number on the dotted line given. Write