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ZIMSEC O Level · 4051/1 · N2021

Principles of Accounting Paper 1 November 2021

Questions
40
Syllabus code
4051/1

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Questions
40
Pass mark
24
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Answer every question in the printed order, get marked at the end, then see the answers.

The questions

Question 1

Accounting concepts
Identify the correct accounting equation.
  1. AAssets + Capital = Liabilities
  2. BAssets + Liabilities = Capital
  3. CCapital - Liabilities = Assets
  4. DLiabilities + Capital = Assets

Question 2

Accounting concepts
Which of the following is part of the accounting cycle?
  1. ABank reconciliation statement
  2. BControl Account
  3. CSuspense Account
  4. DTrial Balance

Question 3

Computers in accounting
Which of the following is a computer output device?
  1. ACentral Processing Unit
  2. BKeyboard
  3. CMouse
  4. DVisual Display Unit

Question 4

Manufacturing accounts
A manufacturer provided the following information:
$
Lubricant oils 500
Depreciation of delivery van 1 500
Depreciation of plant 2 000
Repairs to plant 9 000
Patent fees 1 200
The total indirect costs were
  1. A$11 000.
  2. B$11 500.
  3. C$12 700.
  4. D$14 200.

Question 5

Source documents
The following are source documents and subsidiary books.
Which set is correct?
  1. AInvoice and Cash book
  2. BInvoice and Returns inwards journal
  3. CVoucher and Petty cash book
  4. DVoucher and Sales journal

Question 6

Partnerships
The following information was taken from the partnership books of Chiedza and Sipho.
$
Net profit for the year 75 200
Drawings: Chiedza 5 000
Sipho 5 700
Interest on capital: Chiedza 2 500
Sipho 1 000
The balance of profit to be shared was
  1. A$61 000.
  2. B$71 700.
  3. C$78 700.
  4. D$82 400.

Question 7

Books of original entry
Entries for adjustment purposes are recorded in which subsidiary book?
  1. ACash Book
  2. BGeneral Journal
  3. CPurchases Journal
  4. DSales day book

Question 8

Division of the ledger
A trade payables ledger of a business contains
  1. Acreditors accounts.
  2. Bdebtors accounts.
  3. Cpurchases accounts.
  4. Dsales accounts.

Question 9

Correction of errors
A transaction was recorded in the correct accounts but on wrong sides.
This is an error of
  1. Acommission.
  2. Bcomplete reversal of entries.
  3. Comission.
  4. Doriginal entry.

Question 10

Limited companies
AXY Limited had the following balances.
$
Net profit for the year after debenture interest 3 000
Transfer to general reserves 500
Dividend paid: ordinary shares 300
preference shares 600
Debenture interest 400
What was the retained profit transferred to the Statement of Financial position?
  1. A$1 200
  2. B$1 600
  3. C$1 800
  4. D$2 200

Question 11

Accounting concepts
Which accounting concept is applied when recording non-current assets?
  1. Aconsistency
  2. Bhistorical cost
  3. Cmatching
  4. Dprudence

Question 12

Final accounts
Cost of goods sold is calculated as follows:
  1. Aopening stock + purchases - closing stock
  2. Bopening stock - purchases - closing stock
  3. Cpurchases + returns inwards - closing stock
  4. Dpurchases + closing stock - returns outwards

Question 13

Depreciation
Depreciation is
  1. Athe amount spent replacing a non-current asset.
  2. Bthe amount spent buying a non-current asset.
  3. Cthe part of the cost of a non-current asset consumed during its period of use.
  4. Dthe scrap value of a non-current asset.

Question 14

Discounts
A supplier allows a 10% trade discount and a 5% cash discount to traders. A trader bought goods worth $2 000.
How much is she going to pay if she makes a prompt payment?
  1. A$1 700
  2. B$1 710
  3. C$1 800
  4. D$1 900

Question 15

Capital and revenue expenditure
What is capital expenditure?
  1. AAdditional capital brought to the business by the proprietor.
  2. BMoney received from the sale of non-current assets.
  3. CMoney spent on buying non-current assets.
  4. DMoney spent on the day-to-day running of a business.

Question 16

Control accounts
The source of information for contra items in both the debtors' and creditors' control accounts is the
  1. AGeneral journal.
  2. BSales journal.
  3. CTrade payables ledger.
  4. DTrade receivables ledger.

Question 17

Bad debts and provisions
The following information was provided by a trader at the end of a financial period.
$
Trade receivables 1 000
Provision for bad and doubtful debts 200
Provision for discount allowed 100
The net trade receivables were
  1. A$ 700.
  2. B$ 800.
  3. C$1 100.
  4. D$1 300.

Question 18

Bank reconciliation
Which item is entered on the credit side of an updated Cashbook?
  1. ACredit transfer
  2. BDividends received
  3. CInterest received
  4. DStanding order

Question 19

Ratio analysis
Which transaction increases working capital?
  1. ABuying stock by cheque.
  2. BCash drawings.
  3. CReceiving cash from debtors.
  4. DSelling a motor vehicle for cash.

Question 20

Control accounts
A trader provided the following information:
2017 $
October 1 Total trade receivables 4 300
October 31 Cheques received from debtors 3 100
Bad debts written off 600
Credit sales 18 500
Trade receivables on 31 October 2017 were
  1. A$10 500.
  2. B$17 900.
  3. C$19 100.
  4. D$20 300.

Question 21

Clubs and societies
In a Not for profit making organisation, profit made from trading activities is
  1. Acredited to the Income and expenditure account.
  2. Bcredited to the Receipts and payments account.
  3. Cdebited to the Income and expenditure account.
  4. Ddebited to the Receipts and payments account.

Question 22

Clubs and societies
In Not for profit making organisations, extensions to clubhouse will be shown under
  1. Aexpenditure in the Income and expenditure account.
  2. Bincome in the Income and expenditure account.
  3. Cnon-current assets in the Statement of financial position.
  4. Dnon-current liabilities in the Statement of financial position.

Question 23

Bank reconciliation
On 30 June 2016 a Cash Book had a debit balance of $4 600. The following information was available:
$
Unpresented cheques 2 700
Deposits not yet cleared 1 000
What was the balance as per bank statement?
  1. A$2 900 credit
  2. B$2 900 debit
  3. C$6 300 credit
  4. D$6 300 debit

Question 24

Manufacturing accounts
Which inventory is part of cost of sales in a manufacturing business?
  1. AClosing inventory of raw materials.
  2. BClosing inventory of work in progress.
  3. COpening inventory of finished goods.
  4. DOpening inventory of raw materials.

Question 25

Partnerships
Which items are debited to a partner's current account?
  1. ADrawings and interest on drawings.
  2. BInterest on drawings and share of profits.
  3. CPartner's salary and drawings.
  4. DShare of losses and interest on capital.

Question 26

Ratio analysis
Sihle, a trader, provided the following information:
$
Net profit 1 000
Turnover 5 000
Gross profit 4 000
Expenses 3 000
Cost of sales 2 000
What was the net profit percentage?
  1. A20%
  2. B25%
  3. C33 1/3%
  4. D50%

Question 27

Limited companies
Shareholders differ from debenture holders in that
  1. Athey are creditors of the company.
  2. Bthey are first to be paid.
  3. Cthey earn a fixed rate of interest.
  4. Dthey earn dividends.

Question 28

Accounting concepts
Which set of items contains business ethics?
  1. ADouble entry and professionalism.
  2. BHistorical cost and confidentiality.
  3. CIntegrity and competence.
  4. DIntegrity and matching.

Question 29

Incomplete records
A trader had the following assets and liabilities on 1 August 2017.
$
Inventory 20 200
Trade receivables 16 400
Trade payables 8 200
Insurance prepaid 400
Salaries due 1 200
Premises 42 000
What is the capital figure for the business?
  1. A$53 200
  2. B$69 600
  3. C$71 200
  4. D$72 000

Question 30

Limited companies
The total amount of share capital requested by a company from its shareholders is called
  1. Aauthorised share capital.
  2. Bcalled up share capital.
  3. Cissued share capital.
  4. Dpaid up share capital.

Question 31

Bad debts and provisions
A decrease in provision for discount allowed is
  1. Acredited to Discount allowed account.
  2. Bcredited to Profit and loss account.
  3. Cdebited to Discount allowed account.
  4. Ddebited to Profit and loss account.

Question 32

Ledger accounts
Which of the following items has a credit entry in a Trial Balance?
  1. ABank overdraft
  2. BDiscount allowed
  3. CMachinery
  4. DStationery

Question 33

Clubs and societies
A club provided the following assets and liabilities.
$
Inventory 1 400
Subscriptions in arrears 900
Subscriptions in advance 700
Sports equipment 2 600
Stock of stationery 100
Creditors for refreshments 300
The accumulated fund was
  1. A$3 600.
  2. B$4 000.
  3. C$5 300.
  4. D$5 400.

Question 34

Final accounts
Which of the following items is part of cost of sales?
  1. Aclosing inventory
  2. Bopening inventory
  3. Creturns inwards
  4. Dreturns outwards

Question 35

Ledger accounts
What is the closing entry for an expense account at the end of a financial period?
  1. ADebit Cash account; Credit Expense account
  2. BDebit Expense account; Credit Cash account
  3. CDebit Expense account; Credit Income statement
  4. DDebit Income statement; Credit Expense account

Question 36

Departmental accounts
The following information was provided for a departmental store.
$
Purchases: Department A 150 000
Department B 250 000
Carriage inwards 50 000
Carriage inwards is apportioned between the departments on the basis of purchases.
Carriage inwards debited to department A's Trading account was
  1. A$18 750.
  2. B$25 000.
  3. C$30 000.
  4. D$31 250.

Question 37

Manufacturing accounts
The following inventories were taken from the books of a manufacturing company at the beginning of the financial period.
Raw materials
Work in progress
Finished goods
Which inventories are part of cost of production?
  1. ARaw materials and finished goods.
  2. BRaw materials and work in progress.
  3. CRaw materials, work in progress and finished goods.
  4. DWork in progress and finished goods.

Question 38

Manufacturing accounts
The following information was obtained from a manufacturing business.
$
Manufacturing wages 40 000
Hire of special plant 6 500
Factory supervisor's salary 4 000
Royalties 8 000
Factory power 1 000
The total direct costs were
  1. A$48 000.
  2. B$54 500.
  3. C$58 500.
  4. D$59 500.

Question 39

Capital and revenue expenditure
A purchase of motor vehicles was debited to Motor expenses account.
What was the effect of this error?
Net profit / Motor vehicles
  1. Aovercast; overcast
  2. Bovercast; undercast
  3. Cundercast; overcast
  4. Dundercast; undercast

Question 40

Bad debts and provisions
The following account appeared in the General ledger of a trader.
Provision for bad and doubtful debts account
Dr 2017: December 31 Income statement 300; 31 Balance c/d 900; total 1 200
Cr 2017: January 1 Balance b/d 1 200; total 1 200
What is meant by the debit entry of $300 on 31 December 2017?
  1. ABad debts written off at the end of the year.
  2. BCreation of a Bad and doubtful debts account.
  3. CDecrease in provision for bad and doubtful debts.
  4. DIncrease in provision for bad and doubtful debts.

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