Principles of Accounting Paper 2 June 2023

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1. A$250
2. B$750
3. C$1 000
4. D$1 750

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1. Aadditional capital introduced by the partner during the previous period.
2. Ba partner who had overdrawn against their share of profit in the previous period.
3. Ca loan the partner had made to the business, to be repaid with interest at a later date.
4. Dprofit the partner had not yet been credited with.

1. ANet profit percentage
2. BMark up
3. CRate of stock turnover
4. DMargin

1. AMark up
2. BReturn on capital employed
3. CGross Margin Return on Investment
4. DMargin

1. AMark up
2. BMargin
3. CReturn on capital employed
4. DNet profit percentage

1. AGross Margin Return on Investment (GMROI)
2. BMark up
3. CAcid test ratio
4. DRate of stock turnover, showing how many times inventory is sold and replaced in a year

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1. APurchases ledger
2. BNominal ledger, where expense and revenue accounts such as rent and sales are kept
3. CSales ledger
4. DCash book

1. ABad debt recovered
2. BDiscount received
3. CDiscount allowed
4. DTrade discount

1. ATo clear old or damaged stock.
2. BTo encourage larger bulk orders.
3. CTo write off an amount as a bad debt.
4. DTo encourage prompt payment.

1. AEquity
2. BCurrent assets
3. CCurrent liabilities
4. DNon-current liabilities

1. Aa loan A. Mutasa made to G. Green.
2. Ba cash sale G. Green made to A. Mutasa.
3. Cgoods G. Green returned to A. Mutasa after finding them faulty, reducing the amount owed.
4. Dthe amount G. Green owed A. Mutasa, brought forward from the previous period.

1. Aan entry in A. Mutasa's account only, with no other account affected.
2. Ba credit entry to Sales in A. Mutasa's account.
3. Ca credit entry to Purchases in A. Mutasa's account.
4. Da debit entry, since G. Green is paying A. Mutasa.

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1. ADebit C. Chauke $180, Credit Sales $180.
2. BDebit C. Chauke $108, Credit Sales $108.
3. CDebit C. Chauke $72, Credit Sales $72.
4. DDebit Sales $72, Credit C. Chauke$72.

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1. ADebit Cash $210, Credit Bank $210.
2. BDebit Bank $210, Credit Cash $210.
3. CDebit Bank $420, Credit Cash $420.
4. DDebit Cash $420, Credit Bank $420.

1. ADebit Accrued expenses $80, Credit Cash $80.
2. BDebit Philips Insurance $80, Credit Insurance $80.
3. CDebit Insurance $80, Credit Bank $80, treating the invoice as if it had already been paid in cash.
4. DDebit Insurance $80, Credit Philips Insurance (accrued expenses) $80.

1. ADebit Sales $2 000, Credit Office equipment disposal $2 000.
2. BDebit Office equipment disposal $2 000, Credit Sales $2 000.
3. CDebit Sales $2 000, Credit Office equipment $2 000, then reverse both.
4. DNo correcting entry is needed, since both are $2 000.

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1. AThe equipment sale of $2 000 recorded in the Sales account, overstating this year's trading sales.
2. BCash deposited of $210 debited to Cash and credited to Bank in error.
3. CThe sale of goods to C. Chauke understated by $72.
4. DThe unrecorded Philips Insurance invoice of $80.

1. Adecreasing it: inventory, a current asset, falls with no offsetting current item.
2. Bhaving no effect, since it is only an internal transfer of stock.
3. Cdecreasing it, because a current liability is created to record the drawings taken, which is not how drawings are actually recorded.
4. Dincreasing it, since drawings reduce a long-term liability.

1. Ahaving no effect: a current asset (bank) and a current liability (payables) fall by the same amount.
2. Bhaving no effect, since payables are not a current item.
3. Cincreasing it, since a liability is settled and disappears from the statement of financial position entirely.
4. Ddecreasing it, since cash is permanently lost to the business.

1. Aincreasing it, since the business now owns more valuable assets than it did before the purchase.
2. Bhaving no effect, since both sides of the entry are assets.
3. Cdecreasing it, because a current liability is created.
4. Ddecreasing it: a current asset (bank) falls while a non-current asset rises.

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1. Asubtracted, since the bank has already cleared it.
2. Badded, since the bank has not yet paid it out.
3. Csubtracted, since the cheque has already left the business.
4. Dignored, since it never affects the reconciliation.

1. Asubtracted, since the bank has not yet added it to the account.
2. Bignored, since the bank already knows about it.
3. Cadded, since the cash book has understated the deposit amount that was banked before month end.
4. Dadded, since it increases the amount held.

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1. Athe Statement of Financial Position, as a liability.
2. Bthe Capital account, directly reducing it.
3. Cthe Income Statement, as an expense.
4. Dthe Provision for Depreciation account.