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ZIMSEC O Level · 4051/2 · N2022

Principles of Accounting Paper 2 November 2022

Questions
20
Total marks
100
Syllabus code
4051/2

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Questions
20
Pass mark
12
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Answer every question in the printed order, get marked at the end, then see the answers.

The questions

Question 101

[2 marks]Manufacturing and trading accounts of a manufacturing company
A manufacturing company's raw materials inventory on 1 January was $4 800, purchases of raw materials during the year were $17 250, and carriage inwards was $935. Raw materials inventory on 31 December was $2 550. Calculate the cost of raw materials consumed for the year.

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Question 102

[2 marks]Manufacturing and trading accounts of a manufacturing company
A manufacturing company's cost of raw materials consumed for the year was $20 435 and its direct factory wages were $14 500. Calculate the prime cost.

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Question 103

[2 marks]Manufacturing and trading accounts of a manufacturing company
Which of the following costs is part of a manufacturing company's prime cost?
  1. AIndirect factory wages, since they support production without being traceable to a single unit.
  2. BDepreciation on factory machinery, since it is a non-cash factory overhead.
  3. CFactory rent, since it is a fixed overhead charged to the factory.
  4. DDirect factory wages, since they can be traced directly to the units produced.

Question 104

[3 marks]Manufacturing and trading accounts of a manufacturing company
A manufacturing company's factory fuel and power for the year, as recorded in its books, was $19 100. At the year end, unused fuel on hand was valued at $4 100, so this amount must be deducted before the fuel and power cost is charged to the manufacturing account. Calculate the fuel and power expense to charge to the manufacturing account for the year.

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Question 201

[2 marks]Partnership appropriation account and partners' current accounts
A partner's capital balance is $28 000. Under the partnership agreement, interest on capital is allowed at 8% per year. Calculate the interest on capital for the year.

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Question 202

[2 marks]Partnership appropriation account and partners' current accounts
A partner's capital balance is $36 000. Under the partnership agreement, interest on capital is allowed at 8% per year. Calculate the interest on capital for the year.

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Question 203

[3 marks]Partnership appropriation account and partners' current accounts
Two partners share profits in proportion to their capitals, $28 000 and $36 000. After salary and interest on capital have been deducted, the profit available for distribution between them is $20 480. Calculate the share of this profit belonging to the partner whose capital is $28 000.

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Question 204

[2 marks]Partnership appropriation account and partners' current accounts
In a partnership appropriation account, how is interest charged on partners' drawings treated?
  1. AIt is added back to the net profit before the profit is shared between the partners.
  2. BIt is treated as an expense of the business in the income statement.
  3. CIt is deducted from the partners' capital accounts at the end of the year.
  4. DIt is ignored in the appropriation account and charged only in the partners' current accounts.

Question 301

[2 marks]Errors, suspense accounts, capital and revenue expenditure
A trial balance was drawn up and its totals agreed. One of the following errors would NOT have caused the trial balance to disagree in the first place. Which one?
  1. AA furniture account added up incorrectly so that it is overcast by $110.
  2. BBad debts written off but never recorded anywhere in the books at all.
  3. CWages paid by cash recorded in the cash account only, with no debit to the wages account.
  4. DA purchases ledger credit balance left out when the trial balance was drawn up.

Question 302

[3 marks]Errors, suspense accounts, capital and revenue expenditure
A Sales Day Book total was recorded as $7 650 instead of the correct $6 750. This total is posted as one figure to the Sales account, while the individual customer accounts were posted correctly, one invoice at a time, from the original invoices. By how much is the Sales account overstated because of this error?

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Question 303

[2 marks]Errors, suspense accounts, capital and revenue expenditure
A business imports a delivery vehicle from South Africa and pays import duty to clear it through customs. How should the import duty be classified?
  1. ACapital expenditure, since it is part of the cost of bringing the non-current asset into a usable condition.
  2. BRevenue expenditure, since it recurs regularly during the ordinary running of the business.
  3. CAn expense charged directly against gross profit in the trading account, not the income statement.
  4. DA reduction of the owner's capital account, recorded as drawings rather than expenditure.

Question 304

[2 marks]Errors, suspense accounts, capital and revenue expenditure
A business bought a motor vehicle for $5 500 and paid import duty of $4 000 to bring it into use in the country. Both figures are capital expenditure. Calculate the total capital expenditure on acquiring the vehicle from these two figures.

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Question 401

[3 marks]Bank reconciliation statement; accounting business ethics
A cash book showed an overdrawn balance of $2 011. On checking against the bank statement, a debtor's deposit of $3 150 had not yet been recorded in the cash book, and neither had bank charges of $90, interest earned of $85, interest on overdraft of $54, nor a direct debit to the City Council of $30. Starting from the overdrawn balance of $2 011, calculate the updated cash book balance after recording these five items (ignore any other items).

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Question 402

[2 marks]Bank reconciliation statement; accounting business ethics
In a bank reconciliation statement, how should a cheque issued to a supplier but not yet presented to the bank for payment be treated?
  1. AIt is ignored, since it does not affect the reconciliation between the two balances.
  2. BIt is added to the cash book balance to arrive at the balance shown on the bank statement.
  3. CIt is deducted from the cash book balance to arrive at the balance shown on the bank statement.
  4. DIt is recorded a second time in the cash book, since the bank has not yet processed it.

Question 403

[2 marks]Bank reconciliation statement; accounting business ethics
A bank debited a customer's account with $2 100 that should not have been deducted at all, purely because of the bank's own error. Where should this be corrected?
  1. AIn the customer's cash book, since every item on the bank statement must be recorded there.
  2. BIn the customer's Sales account, since it affects the money owed by customers.
  3. CIt is the bank's own error, so no entry is needed in the customer's cash book at all.
  4. DIn the Suspense account, since the trial balance no longer agrees.

Question 404

[1 marks]Bank reconciliation statement; accounting business ethics
State one accounting business ethic, that is, one professional value an accountant is expected to uphold.

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Question 501

[3 marks]Non-current asset disposal (motor vehicles) and sales ledger control account
A motor vehicle costing $15 000 was bought on 30 June 2016. Depreciation is charged at 10% per annum on cost, for each month of ownership. Calculate the depreciation charged on this vehicle for its six months of ownership in 2016 (1 July to 31 December).

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Question 502

[3 marks]Non-current asset disposal (motor vehicles) and sales ledger control account
A motor vehicle costing $15 000 had accumulated depreciation of $2 250 on the date it was sold. It was sold for $14 000. Calculate the profit or loss on disposal, stating whether it is a profit or a loss.

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Question 503

[2 marks]Non-current asset disposal (motor vehicles) and sales ledger control account
In a Sales Ledger Control Account, credit sales made during the period are entered on which side, and from which subsidiary book?
  1. ADebit side, posted from entries made directly in the Cash Book.
  2. BCredit side, posted from the total of the Sales Returns Journal.
  3. CDebit side, posted from the total of the Sales Journal (Sales Day Book).
  4. DCredit side, posted from the total of the Purchases Journal.

Question 504

[1 marks]Non-current asset disposal (motor vehicles) and sales ledger control account
In a Sales Ledger Control Account, what source document is used to record a credit note issued for goods returned by a customer (returns inwards)?

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