Soft clean eraser Soft pencil (type B or HB is recommended)

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1 * * ambridge International Examinations ambridge Ordinary Level PRINIPLES OF OUNTS 7110/12 Paper 1 Multiple hoice May/June 2018 dditional Materials: Multiple hoice nswer Sheet Soft clean eraser Soft pencil (type or H is recommended) 1 hour RE THESE INSTRUTIONS FIRST Write in soft pencil. o not use staples, paper clips, glue or correction fluid. Write your name, entre number and candidate number on the nswer Sheet in the spaces provided unless this has been done for you. O NOT WRITE IN NY ROES. There are thirty questions on this paper. nswer all questions. For each question there are four possible answers,, and. hoose the one you consider correct and record your choice in soft pencil on the separate nswer Sheet. Read the instructions on the nswer Sheet very carefully. Each correct answer will score one mark. mark will not be deducted for a wrong answer. ny rough working should be done in this booklet. alculators may be used. This document consists of 10 printed pages and 2 blank pages. I18 06_7110_12/2RP ULES 2018 [Turn over

2 1 Which statement about a computerised accounting system is correct? 2 The general ledger does not include non-current asset accounts. The always shows a profit. The statement of financial position does not include non-current assets. The trial balance always balances. 2 Which group contains only liabilities? bank loan, trade payables, prepaid rent bank overdraft, trade payables, unpaid wages trade payables, cash at bank, unpaid rates trade payables, inventory, unpaid wages 3 What is the accounting equation? assets liabilities = capital assets + liabilities = capital liabilities assets = capital liabilities capital = assets 4 Omar returned faulty goods to Yasmin, the supplier. Which document did Omar send to Yasmin? credit note debit note invoice statement of account ULES /12/M/J/18

3 3 5 Jacob settled the account of hmed, a credit supplier. He made the following entries on the credit side of his cash book. discount cash bank hmed Which entries did Jacob make on the debit side of hmed s account? ank 195 ank 200 ank iscount allowed ank iscount received What may a credit balance on a ledger account represent? accrued income asset expense prepaid income 7 The following partly-completed account appeared in Edward s sales ledger. nn account 2018 debit credit balance pril 4 sales sales returns 500 On 29 pril, nn paid by cheque and was given a cash discount of 200. Which statement is correct on 30 pril? nn owed Edward nn owed Edward Edward owed nn Edward owed nn ULES /12/M/J/18 [Turn over

4 8 The totals of a trial balance did not agree. The total of the debit column was It was found that the purchases journal had been overcast by 195 and goods bought from supplier X for 85 had been incorrectly credited to Y. What was the total of the credit column of the trial balance? Leo is unable to pay the debt he owes to Sam. Which entry did Sam make to write off this bad debt? debit credit bad debts account bad debts account Leo account Leo account Leo account 10 Rashid maintains a provision for doubtful debts of 5% of the trade receivables at the end of each year. Trade receivables owed on 31 March Trade receivables owed on 31 March Which journal entry should Rashid make on 31 March 2018? debit credit provision for doubtful debts provision for doubtful debts provision for doubtful debts provision for doubtful debts ULES /12/M/J/18

5 5 11 What are examples of revenue receipts? 1 a cheque received from the sale of a non-current asset at book value 2 a profit made on the sale of a non-current asset 3 a loan from a bank that is repayable in discounts received from credit suppliers for prompt payment 1 and 3 1 and 4 2 and 3 2 and 4 12 Jon paid for machinery on 1 January He depreciated this asset using the diminishing (reducing) balance method at 5% per annum. What was the balance on the provision for depreciation account on 1 January 2018? 1755 credit 1755 debit 1800 credit 1800 debit 13 motor vehicle cost It was sold for t the date of disposal the motor vehicle had been depreciated by Which journal entry records the closing of the disposal account? debit credit disposal account disposal account disposal account disposal account ULES /12/M/J/18 [Turn over

6 14 business provided the following information. 6 sales ledger control account balance on 1 March debit credit sales cash sales receipts from credit customers discounts allowed discounts received returns inwards returns outwards What was the sales ledger control account balance on 31 March? James was late paying an invoice issued by Henry. Henry charged James interest on the overdue amount. Which entry would be made in Henry s control accounts? credit purchases ledger control account credit sales ledger control account debit purchases ledger control account debit sales ledger control account 16 ennis runs a business with two departments, one selling carpets and one selling furniture. Total sales were of which 60% related to the carpet department. The total gross profit was of which 60% related to the furniture department. What was the cost of sales of the carpet department? ULES /12/M/J/18

7 7 17 Which is an intangible asset? buildings goodwill inventory trade receivables 18 business has no non-current liabilities. What is added to the non-current assets in order to calculate the capital employed? current assets current liabilities owner s capital working capital 19 lan s inventory consisted of the following. quantity goods cost per unit selling price per unit 100 large t-shirts small t-shirts 5 3 What was the value of the inventory? Which item is credited in a partnership appropriation account? interest on capital interest on drawings partners drawings partners salaries ULES /12/M/J/18 [Turn over

8 8 21 Y and Z formed a partnership and agreed to share profits equally. Y deposited into the business bank account. Z introduced a motor vehicle worth and goodwill of. How should these transactions be recorded in the books of the partnership? accounts to be debited accounts to be credited bank goodwill motor vehicle capital Y capital Z bank goodwill motor vehicle capital Y capital Z capital Y capital Z bank goodwill motor vehicle capital Y capital Z bank goodwill motor vehicle 22 business provided the following information. revenue gross profit What was the percentage mark-up? 20% 25% 75% 80% 23 trader does not keep a full set of accounting records. How can he calculate credit sales? cheques received from customers + owed by customers at start of year + owed by customers at end of year cheques received from customers + owed by customers at start of year owed by customers at end of year cheques received from customers owed by customers at start of year + owed by customers at end of year cheques received from customers owed by customers at start of year owed by customers at end of year ULES /12/M/J/18

9 24 Which item would be entered in a statement of changes in equity? 9 debenture interest accrued debenture interest paid ordinary dividend paid for current year ordinary dividend proposed for current year 25 On 1 January NH Limited was formed with the issue of ordinary shares of 0.50 each. uring the first year it made a profit of dividend of 0.02 per share was paid and was transferred to general reserve. What was the total of reserves on 31 ecember? Which type of labour would be classified as direct? 1 factory managers 2 factory office staff 3 factory production workers 1, 2 and 3 1 and 3 only 2 only 3 only 27 manufacturing business provided the following information. prime cost factory overheads cost of goods produced office and selling expenses opening work-in-progress What was the value of the closing work-in-progress? ULES /12/M/J/18 [Turn over

10 10 28 Which document is used to inform employees of their social security / national insurance contributions? clock card payroll register payslip time sheet 29 business provided the following information % 2017 % gross profit / sales net profit / sales 8 10 What may have caused the change in the net profit/sales ratio? expenses have decreased expenses have increased the percentage of expenses to sales has decreased the percentage of expenses to sales has increased 30 trader spreads the cost of a machine over the years which benefit from the use of that machine. Which accounting principle is being applied? accounting year dual aspect matching / accruals materiality ULES /12/M/J/18

11 11 LNK PGE ULES /12/M/J/18

12 12 LNK PGE Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every reasonable effort has been made by the publisher (ULES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the publisher will be pleased to make amends at the earliest possible opportunity. To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the ambridge International Examinations opyright cknowledgements ooklet. This is produced for each series of examinations and is freely available to download at after the live examination series. ambridge International Examinations is part of the ambridge ssessment Group. ambridge ssessment is the brand name of University of ambridge Local Examinations Syndicate (ULES), which is itself a department of the University of ambridge. ULES /12/M/J/18

Soft clean eraser Soft pencil (type B or HB is recommended)

Soft clean eraser Soft pencil (type B or HB is recommended) *8196944247* ambridge International Examinations ambridge Ordinary Level PRINIPLES OF OUNTS 7110/11 Paper 1 Multiple hoice May/June 2017 dditional Materials: Multiple hoice nswer Sheet Soft clean eraser