Accounting Paper 3 November 2021

Answer this when you sit the paper.

1. AReturns inwards
2. BDiscounts allowed
3. CBad debts written off
4. DDiscounts received

1. AA credit sale was posted to the control account twice over in the month.
2. BA customer paid for goods in advance of their delivery.
3. CAn invoice was recorded at less than the amount actually charged to the customer.
4. DA bad debt was written off in the customer's own account only.

1. AThe customer settled his account in full on the last day of the month.
2. BThe customer was invoiced for goods that were delivered to him late in the month.
3. CA contra against the same person's payables account that exceeds what he owes.
4. DA discount allowed to the customer was left out of his account in error.

1. AThe totals come from the books of prime entry via someone other than the ledger clerk, so a hidden theft shows as a difference.
2. BThey are prepared at the end of the year by the auditor, who checks each and every personal account against the original invoices.
3. CThey make every customer's account agree with the control account, so an error can never be posted to a customer.
4. DThey allow bad debts to be written off without the authority of a manager, which speeds up the work of the ledger clerk.

Answer this when you sit the paper.

Answer this when you sit the paper.

Answer this when you sit the paper.

Answer this when you sit the paper.

Answer this when you sit the paper.

Answer this when you sit the paper.

Answer this when you sit the paper.

1. AAs income in the income and expenditure account, alongside subscriptions and entrance fees.
2. BAs a current liability, until the money has actually been spent on the stated purpose.
3. CAs a deduction from the expenditure of the year to which the stated purpose relates.
4. DAs an addition to the accumulated fund, and not as income of the year at all.

Answer this when you sit the paper.

1. AThe receipts and payments account covers only the second half of the year, while the income and expenditure account covers the whole of the club's financial year.
2. BThe receipts and payments account records accruals and prepayments, while the income and expenditure account records only the amounts of cash that were actually paid and received in the year.
3. CThe receipts and payments account is prepared by the treasurer, while the income and expenditure account is prepared for the members by the club's auditor at the year end.
4. DThe receipts and payments account summarises the cash book, capital items included, while the income and expenditure account shows only revenue items of the period.

Answer this when you sit the paper.

Answer this when you sit the paper.

Answer this when you sit the paper.

Answer this when you sit the paper.

1. AIt is added to that partner's capital account and left out of the profit and loss account entirely.
2. BIt is an expense of the business, charged before the profit is appropriated, and credited to that partner.
3. CIt is treated in the same way as interest on capital, so it is deducted after the partner's salary.
4. DIt is an appropriation of profit, shared out between all the partners in the profit sharing ratio.

Answer this when you sit the paper.

Answer this when you sit the paper.

Answer this when you sit the paper.

1. ABecause it replaces the share of profit that a partner who takes no active part in running the business would otherwise get.
2. BBecause it rewards each partner for the amount of money he has tied up in the firm and for how long it has been invested.
3. CBecause the law requires every partnership to pay its partners interest on the capital they have invested in the firm.
4. DBecause it guarantees that each partner receives the same total return whatever the firm's profit for the year turns out to be.

1. ABecause a partner who works in the business, or works more than the others, is paid for that effort before profits are shared.
2. BBecause a partner who has lent money to the firm must be given a return on that loan in some form.
3. CBecause the partner concerned is an employee of the firm and must be paid at least the minimum wage.
4. DBecause it reduces the profit of the firm and so reduces the tax the partnership has to pay.

1. ABecause it makes sure every partner ends the year with exactly the same balance on his current account.
2. BBecause drawings are treated as a loan from the firm, which the partner must eventually repay with interest.
3. CBecause it discourages partners from taking money out early, and charges more to the partner who takes out more.
4. DBecause the interest charged covers the bank charges the firm pays when a partner withdraws cash.

Answer this when you sit the paper.

Answer this when you sit the paper.

1. A$26,400 adverse
2. B$26,400 favourable
3. C$39,600 adverse
4. D$13,200 favourable

1. A$13,200 adverse
2. B$26,400 favourable
3. C$39,600 adverse
4. D$39,600 favourable

1. A$59,400 adverse
2. B$59,400 favourable
3. C$39,600 favourable
4. D$52,800 favourable

1. A$39,600 adverse
2. B$39,600 favourable
3. C$6,600 adverse
4. D$33,000 adverse

1. A$18,000 adverse
2. B$63,000 adverse
3. C$66,000 adverse
4. D$66,000 favourable

1. ALess skilled workers were hired at below the standard rate and took longer to do the work.
2. BOvertime was worked at a premium rate, which raised the hourly cost and cut the hours needed.
3. CThe standard hours per unit were set too high, so the work was always going to be done sooner.
4. DMaterial of a poor quality was bought, which made the labour rate paid fall below standard.

1. AThe standard price was set too low, so more material than usual had to be issued to production.
2. BProduction fell below the budget, which lowered both the price paid and the quantity used.
3. CMaterial of a better quality was bought at a higher price, and it produced less wastage.
4. DThe buyer obtained a bulk discount, which lowered the price paid and also lowered wastage.