Qualifications: Level 2 Award in Manual Bookkeeping QCF (Accreditation number: 500/9259/5) IAB ID 210

Transcription

1 Exam ID 208 QUESTION PAPER Qualifications: Level 2 Award in Manual Bookkeeping QCF (Accreditation number: 500/9259/5) IAB ID 210 Level 2 Certificate in Bookkeeping QCF (Accreditation number: 500/9053/7) IAB ID 200 Level 2 Certificate in Applied Bookkeeping QCF (Accreditation number: 500/9262/5) IAB ID 230 Examination: Units: Maintaining the Journal T/600/8772 Maintaining Control Accounts K/600/8770 Processing Ledger Transactions and Extracting a Trial Balance F/600/8760 January 2012 Time Allowed: 2 hours and 30 minutes International Association of Book-keepers Suite 30, 40 Churchill Square, Kings Hill, West Malling, Kent, ME19 4YU Tel: Fax: educationl@iab.org.uk

2 INTERNATIONAL ASSOCIATION OF BOOKKEEPERS LEVEL 2 BOOKKEEPING (QCF) General Information and Instructions This question paper contains three questions. You must answer all three questions You must enter your Unique Learner Number, Candidate Number and Name of Examination Centre in the boxes provided on the front cover of your Answer Booklet. Time allowed: 2 hours and 30 minutes All answers are to be written in ink. Cross out errors neatly, or use correcting fluid in moderation. The use of silent non-programmable calculators is permitted. Blank pages are provided in your Answer Booklet for notes/workings (see pages 17 and 18) NOTE this Question Paper and the Answer Booklet have information and data printed on both sides of the pages contained within the booklets. 208 Exam L2 Bookkeeping QCF Jan 2012 QP Page 1

3 Maintaining the Journal Question One Question One is in four parts (Parts A, B, C and D) Question One (Part A) Use the Journal to Write Off a Bad Debt You are presented on page 1 and 2 of the Answer Booklet with the Sales Ledger Control Account, Bad Debts Account and VAT Control Account in the General Ledger of Mechanical Motors, a small family run garage. The bookkeeper of the business maintains double entry records for the business which is registered for VAT. On 31 January 201Y, the Sales Ledger Control Account had a closing balance of 58,695. This balance includes an invoice for 13,260 which was sent to Kent Car Parts several months ago. The owner of Mechanical Motors has just found out that Kent Car Parts has just gone into liquidation. The goods sold to Kent Car Parts were inclusive of VAT at the standard rate of 20%. VAT bad debt relief is to be claimed when writing off the balance. REQUIRED: You are required to complete the following tasks: Task A Prepare a Journal entry to write off the bad debt and claim the VAT bad debt relief. Provide a suitable narrative. (2.5 marks) Task B Post the entry from the Journal prepared in Task A above to the Sales Ledger Control Account, Bad Debts Account and VAT Control Account in the General Ledger of Mechanical Motors. You should also make a posting to Kent Car Parts in the Sales Ledger. You are not required to balance off the ledger accounts having made the postings from the Journal. (2 marks) Note: The following proformas are provided for your use in completing the above tasks: Journal (see page 1 of your Answer Booklet) General Ledger (extract) Sales Ledger Control Account, Bad Debts Account and VAT Control Account (see pages 1 and 2 of your Answer Booklet) Sales Ledger (extract) Kent Car Parts (See page 2 of your Answer Booklet) 208 Exam L2 Bookkeeping QCF Jan 2012 QP Page 2

4 Question One (Part B) Use the Journal to Account for Wages and Salaries All employees of Castle Confectionery are paid weekly. They are paid on the last Friday of each week via the BACS direct credit system. The following accounts are kept in the ledger of Castle Confectionery for the purpose of accounting for wages and salaries Wages and Salaries Control Account PAYE / NIC Creditor Account Wages, Salaries and Contributions (Expense) Account REQUIRED: You are required to complete the following task: Task A Complete the following Journal entries provided on page 3 of the Answer Booklet and account for wages salaries and employment costs on 27 January (week 43) of the current tax year (201Y/201Z). You will need to use the payroll analysis sheet provided on page 4 of this question paper: Payment of net pay from the business Bank Account Employee PAYE income tax deductions Employee NIC deductions Employer NIC deductions Transfer of total employment costs for 27 January 201Y (week 43) from the Wages and Salaries Control Account to the Wages, Salaries and Contributions (Expense) Account. (5 marks) Note: The following proforma is provided for your use in completing the above tasks: Journal (see page 3 of your Answer Booklet) 208 Exam L2 Bookkeeping QCF Jan 2012 QP Page 3

5 Month Ending: 31 January 201Y (week 43) Works No Employee Name C Derby S Cotterill A Booth K Hardy T Comer Basic Pay ,250 Castle Confectionery Payroll Analysis Sheet Earnings Overtime Bonus Total Gross Pay , PAYE (Income tax) Employee Deductions National Insurance Total Deductions Net Pay Employer s National Insurance Castle Confectionery Payroll Analysis Sheet 208 Exam L2 Bookkeeping QCF Jan 2012 QP Page 4

6 Question One (Part C) Use the Journal to Open Double Entry Books of Account To date the bookkeeper of Brookfield Bikes has kept their books on a single entry basis. However, the owner Bryan Brookfield has decided to start using a double entry system from 1st January 201Y which coincides with the start of the new financial year of the business. The following information is available as at 1 January 201Y: Bank Overdraft 1,850 Bank Loan 10,580 Fixtures and Fittings 6,253 Vehicles 2,590 Sales Ledger Control (total trade debtors) 5,845 Purchase Ledger Control (total trade creditors) 2,475 Cash 150 Stock 6,780 REQUIRED: You are required to complete the following task: Task A Complete the Journal entry provided on page 4 of the Answer Booklet from which double entry books can be opened. You will need to calculate and insert as a balance the capital claim of the owner of the business. (7 marks) Note: The following proforma is provided for your use in completing the above task: Journal (see page 4 of your Answer Booklet) 208 Exam L2 Bookkeeping QCF Jan 2012 QP Page 5

7 Question One (Part D) Use the Journal to Correct Errors. Eliminate a Suspense Account Balance and Redraft a Trial balance The following Trial Balance was extracted from the double entry books of Calverton Ceramics as at the month end 31 Jan 201Y. On listing the ledger account balances the bookkeeper of Calverton Ceramics found that debit balances did not agree with credit balances. The amount necessary to make the Trial Balance totals agree was added to the Trial Balance as a Suspense Account balance: Calverton Ceramics Trial Balance as at 31 Jan 201Y Ledger Account DR CR Bank Charges 50 Bank Overdraft 2,500 Bank Loan 5,000 Capital 10,000 Cash 200 Drawings 1,000 Fixtures & Fittings 2,500 Heat & Light 328 Motor Vehicles 8,000 Purchases 6,107 Purchase Ledger Control 3,330 Purchase Returns 900 Rent 1,201 Sales 9,894 Sales Ledger Control 12,680 Sales Returns 1,810 Telephone 850 VAT 1,701 Vehicle Expenses 1,316 Suspense (difference in books) 2,717 Totals 36,042 36,042 An investigation into the reason for the difference between the debit balances and credit balances as at 31 January 201Y revealed the following bookkeeping errors: 1. A table (fixtures and fittings) purchased for use in the meeting room at a cost of 594 (including VAT at 20%) was incorrectly posted in the books as follows: Debit Purchases Account 495 Debit VAT Account 99 Credit Bank Account Exam L2 Bookkeeping QCF Jan 2012 QP Page 6

8 2. In balancing off the Purchase Returns Account the bookkeeper made an arithmetic error, as a result the balance on the account was understated by A cheque received for 1,584 in respect of cash sales (inclusive of VAT at 20%) was incorrectly posted in the books of account as follows: Debit Bank Account 1,584 Debit Sales Account 1,320 Credit VAT Account Cash drawings of 596 were correctly credited to the Cash Account but debited to the Drawings Account as 569. REQUIRED: You are required to complete the following tasks: Task A Prepare the Journal entries required to correct the bookkeeping errors listed above. Your Journal entries should be dated 31 January 201Y and include a suitable narrative. (8.5 marks) Task B Enter the difference in books balance as at 31 January 201Y into the Suspense Account provided in the Answer Booklet. (1 mark) Task C Post the Journal entries prepared to correct errors in Task A above to the following accounts which are provided in the Answer Booklet. Date your postings 31 January 201Y: Suspense Account Drawings Account Purchases Account Purchase Returns Account Sales Account Fixtures & Fittings Account Note The Drawings Account, Purchases Account, Purchase Returns Account, Sales Ledger Control Account, Sales Account and Fixtures & Fittings Account, show the balances (as listed on the Trial Balance before the correction of any errors) brought forward (b/f) as at 31 Jan 201Y (4 marks) 208 Exam L2 Bookkeeping QCF Jan 2012 QP Page 7

9 Task D Show the elimination of the Suspense Account Balance as at 31 Jan 201Y by closing off the account. Balance off the following accounts as at 31 January 201Y bringing down the corrected account balances as at that date - Drawings Account, Purchases Account, Purchase Returns Account, Sales Account and Fixtures & Fittings Account. (4 marks) Task E Redraft the Trial Balance of Calverton Ceramics as at 31 Jan 201Y which is provided in the Answer Booklet. The redrafted Trial Balance should show the account balances having corrected the bookkeeping errors as per Task A above. Balances on ledger accounts, other than those on the Drawings Account, Purchases Account, Purchase Returns Account, Sales Account and Fixtures & Fittings Account have already been entered on the Trial Balance for you. (6 marks) Note: The following proformas are provided for your use in completing the above tasks: General Leger (extract) Suspense Account, Drawings Account, Purchases Account, Purchase Returns Account, Sales Account and Fixtures & Fittings Account (see pages 6 and 7 of your Answer Booklet) Journal (see page 5 of your Answer Booklet) Trial Balance (see page 8 of your Answer Booklet) 208 Exam L2 Bookkeeping QCF Jan 2012 QP Page 8

10 Maintaining Control Accounts Question Two Today s date 31 January 201Y and you work for Walton Wood Suppliers. This business is registered for VAT. The business maintains a double entry bookkeeping system. The personal accounts of customers and suppliers are kept as memorandum accounts in the subsidiary Sales Ledger and Purchase Ledger respectively. A Sales Ledger Control Account and Purchase Ledger Control Account are kept in the General Ledger as part of the double entry bookkeeping system. At the end of each month the balances from the two control accounts are reconciled with the balances on the personal accounts of customers and suppliers from the Sales Ledger and Purchase Ledger. A VAT Control Account is also kept in the General Ledger. Transactions are posted to the Control Account from totals extracted from the books of Prime Entry. The books of Prime Entry consist of four Day Books, the Cash Book and the Journal. Your colleague at Walton Wood Suppliers says he has already made all postings for the month of January 201Y to the customer and supplier personal accounts in the subsidiary Sales ledger and Purchase Ledger. The accounts have been balanced off as at 31 January 201Y. He has provided you with the following list of personal account balances as at 31 January 201Y: Walton Wood Suppliers Schedule of Debtors (Complete) 31 January 201Y Amderside 958 Calverton Construction 2,154 Darley Dale Timber Yard 1,457 Matlock Manufacturing 680 Tim s Timber Yard 350 Walton Wood Suppliers Schedule of Creditors (Complete) 31 January 201Y A J Booth 560 B Darlington Ltd 90 Farnborough Firewood 125 M Evans Ltd 354 South Firewood Supplies Exam L2 Bookkeeping QCF Jan 2012 QP Page 9

11 Provided below are details of the balances on the Sales Ledger Control Account, Purchase Ledger Control Account and VAT Control Account from the General Ledger of Walton Wood Suppliers as at 1 January 201Y. These balances appear within the ledger accounts as balances brought down in the General Ledger provided (see page 11 of the Answer Booklet) Walton Wood Suppliers Control Account Balances Brought Down as at 1 January 201Y Control Account Sales Ledger Control Account 4,741 Purchase Ledger Control Account 1,987 VAT Control Account (CR) 750 The following totals are extracted from the Day Books of Walton Wood Suppliers as at the month end 31 January 201Y: Walton Wood Suppliers Totals Extracted from the Day Books as at 31 January 201Y Sales Day Book - Sales on credit 8,460 Purchase Day Book - Purchases on credit 3,390 Sales Returns Day Book - Sales returns 960 Purchase Returns Day Book - Purchase returns 840 The Cash Book of Walton Wood Suppliers was balanced off as at 31 January 201Y and totals of amounts received from credit customers and paid to credit suppliers, together with cash discounts allowed and received in January 201Y, have already been posted into the Sales Ledger Control Account and Purchase Ledger Control Account in the General Ledger. The totals of VAT on cash sales and cash purchases in January 201Y have also already been posted as at 31 January 201Y from the Cash Book to the VAT Control Account in the General Ledger. You can assume that all goods sold and purchased on credit were inclusive of VAT as the standard rate. REQUIRED: You are required to complete the following tasks: Task A Make postings of totals from the Day Books above, as at 31 January 201Y, to the Sales Ledger Control Account, Purchase Ledger Control Account and VAT Control Account in the General Ledger provided. Please note that the Sales and Sales Returns Day book and Purchase and Purchase Returns Day book figures provided above are all inclusive of VAT at the standard rate of 20% and you are required to calculate the correct amount to enter into the VAT control account. (8 marks) 208 Exam L2 Bookkeeping QCF Jan 2012 QP Page 10

12 Task B Balance off each of the three Control Accounts in the General Ledger, as at 31 January 201Y, bringing down the account balances as at that date. (4 marks) Task C Prepare a reconciliation of the balances from the Sales Ledger Control Account and Purchase Ledger Control Account as at 31 January 201Y, with the balances from the personal accounts of customers and suppliers from the subsidiary Sales Ledger and Purchase Ledger as at that date. (4 marks) Note: The following proformas are provided for your use in completing the above tasks: Sales Ledger and Purchase Ledger Control Accounts (see page 9 of your Answer Booklet) Value Added Tax (VAT) Control Account (see page 9 of your Answer Booklet) Forms for the reconciliation of the personal account balances to the control account balances (see page 10 of your Answer Booklet) 208 Exam L2 Bookkeeping QCF Jan 2012 QP Page 11

13 Processing Ledger Transactions and Extracting a Trial Balance Question Three You work for Johnson Aquatics and the business is registered for VAT. Books of account are kept on a double entry basis. A General Ledger and Cash Book are maintained as part of the double entry bookkeeping system. The personal accounts of trade debtors and trade creditors are kept in the subsidiary Sales Ledger and subsidiary Purchase Ledger respectively. The personal accounts of trade debtors and trade creditors are kept only as memorandum accounts and are therefore outside the double entry system. Sales Ledger and Purchase Ledger Control Accounts are kept within the General ledger. Invoices and credit notes issued and received are listed in the appropriate Day Books. At the end of each week of trading the Day Books are totalled and postings are made into the bookkeeping system. You are provided with an extract of the Day Book totals. The Cash Book is kept in analysed format and separate pages are kept for the purpose of recording and analysing receipts and payments. At the end of each week the Cash Account and Bank Account columns of the Cash Book are balanced off and all other analysis columns are totalled. Postings of totals from the analysis columns are then made into the books of account. The Petty Cash Book is kept in analysed format. At the end of each week the Petty Cash Book is balanced off and all analysis columns are totalled. Postings of totals from the analysis columns are then made into the books of account. You are also presented with the General Ledger accounts on pages 13 to 18 of your answer booklet. You are provided below with extracts from the Day Books of Johnson Aquatics for the week ended 31 January 201Y. Walton Wood Suppliers Totals Extracted from the Day Books as at 31 January 201Y Total VAT Net Sales Day Book - Sales on credit 18,000 3,000 15,000 Purchase Day Book - Purchases on credit 6,600 1,100 5,500 Sales Returns Day Book - Sales returns 2, ,850 Purchase Returns Day Book - Purchase returns You are also provided with the receipts and payments pages of the analysed Cash Book of Johnson Aquatics for the week ended 31 January 201Y (see pages 15 and 16 of this Question Booklet). The Cash Book has been balanced off. 208 Exam L2 Bookkeeping QCF Jan 2012 QP Page 12

14 You are also provided with the petty cash book (see page 17 of this Question Booklet) which has also been balanced off. General Ledger Account balances as at 24 January 201Y GENERAL LEDGER Balance b/down 24 Jan 201Y Bank Deposit 15,000 Capital 35,150 Carriage Inwards 3,788 Drawings 3,005 Gas & Electricity 562 Miscellaneous Expenses 1,950 Petty Cash 150 Postage & Stationery 401 Purchases 8,029 Purchase Ledger Control 5,699 Purchases Returns 670 Rent 2,000 Sales 27,765 Sales Ledger Control 15,900 Sales Returns 980 Stock 7,580 Telephone 293 VAT (Credit balance) 4,080 Vehicles 7,098 Wages 2, Exam L2 Bookkeeping QCF Jan 2012 QP Page 13

15 REQUIRED: You are required to complete the following tasks: Task A Post the General Ledger Account balances on page of 13 of this question paper to the ledger accounts provided in your answer booklet (pages 11 to 15) Task B Post the totals extracted from the Day Books provided on page 12 of this question paper to the following accounts in the General Ledger Sales Ledger Control Account, Sales Account, Sales Returns Account, VAT Control Account, Purchase Account, Purchase Returns Account and Purchase Ledger Control Account. (3 marks) Task C - Make postings of totals, as at 31 January 201Y, from the analysed Cash Book receipts page into the following accounts in the General Ledger Sales Ledger Control Account, VAT Control Account, Sales Account and Capital Account. (4 marks) Task D Make postings of totals, as at 31 January 201Y, from the analysed Cash Book payments page to the following accounts in the General Ledger Purchase Ledger Control Account, VAT Control Account, Wages Account, Purchases Account, Miscellaneous Expenses Account, Rent Account and Telephone Account. (6 marks) Task E Make postings of totals, as at 31 January 201Y, from the Petty Cash Book to the following accounts in the General Ledger VAT Control Account, Postage & Stationery Account and Miscellaneous Expenses Account. Task F Balance off all the accounts within the General Ledger as at 31 January 201Y bringing down the account balances as at that date. (7 marks) Task G Prepare the Trial Balance provided on page 16 of the Answer Booklet thereby proving the arithmetic accuracy of the double entry records as at 31 January 201Y. To prepare the Trial Balance you will need to list the closing balances brought down on each of the accounts in the General Ledger, you will also need to list the closing Cash Account, Bank Account and Petty Cash Account balances per the analysed Cash Book and the Petty Cash Book. (11 marks) Note: The following proformas are provided for your use in completing the above tasks: General Ledger Accounts (see pages 11 to 15 of your Answer Booklet) Trial Balance (see page 16 of your Answer Booklet) 208 Exam L2 Bookkeeping QCF Jan 2012 QP Page 14

16 Page 15 Walton Wood Suppliers Cash Book - Receipts 201Y Details Cash Bank Debtors VAT Sales Capital Contra Balances SL Control 24 Jan Balance B/f 100 3,548 3, Jan Capital 5,000 5, Jan Cash Sales 1, , Jan Cash to bank 1,000 1, Jan New Vale Pet Shop ,390 10, ,075 5,000 1,000 3, Jan Balance b/d 42 2,966 3, Exam L2 Bookkeeping QCF Jan 2012 QP Page 15

17 Page 16 Walton Wood Suppliers - Cash Book Payments Creditors 201Y Details Cash Bank PL Control VAT Purchases Wages Misc Expense Rent Telephone Contra Balances 24 Jan Severn Stock Ltd Jan Purchases Jan Wages 2,750 2, Jan Rent Jan Telephone UK Jan Cash to Bank 1,000 1, Jan Vehicle Tax Jan Wages Jan Northern Manufacturers 2,490 2, Jan Purchases Jan Balance c/d 42 2,966 3,008 1,390 10,533 3, , ,000 3, Exam L2 Bookkeeping QCF Jan 2012 QP Page 16

18 Page 17 Carlton Cotton Petty Cash Book Receipts Date 201Y Details Voucher No Jan Balance b/f Total Payment Expenditure Analysis VAT Postage & Stationery Misc Expenses 24 Jan Ornaments for reception Jan Parcel Jan Stamps Jan Paper Jan Envelopes Jan Stamps Jan Balance c/d Totals Jan Balance b/d 208 Exam L2 Bookkeeping QCF Jan 2012 QP Page 17