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ZIMSEC O Level · 4051/2 · N2023

Principles of Accounting Paper 2 November 2023

Questions
53
Total marks
100
Syllabus code
4051/2

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Questions
53
Pass mark
32
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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]Final accounts of a sole trader with provision for discount allowed
P. Maradza's trial balance at 31 May 2020 showed Sales $127 900 and Sales returns $2 400. Calculate the turnover (net sales) for the year.

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Question 102

[2 marks]Final accounts of a sole trader with provision for discount allowed
P. Maradza's turnover for the year ended 31 May 2020 was $125 500. Opening inventory was $26 900, purchases were $81 200 and closing inventory was valued at $27 500. Calculate the gross profit for the year.

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Question 103

[1 marks]Final accounts of a sole trader with provision for discount allowed
P. Maradza's stationery account showed $800 paid during the year, of which $300 was still on hand (unused) at 31 May 2020. Calculate the stationery expense for the year.

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Question 104

[1 marks]Final accounts of a sole trader with provision for discount allowed
P. Maradza's machinery cost $85 000 and is depreciated at 10% per annum on cost. Calculate the depreciation charge on machinery for the year ended 31 May 2020.

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Question 105

[2 marks]Final accounts of a sole trader with provision for discount allowed
P. Maradza's motor vehicles cost $62 000, with accumulated depreciation of $12 000 at 1 June 2019 (net book value $50 000). Depreciation is charged at 20% per annum on the net book value. Calculate the depreciation charge on motor vehicles for the year ended 31 May 2020.

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Question 106

[1 marks]Final accounts of a sole trader with provision for discount allowed
P. Maradza's trade receivables were $18 000 at 31 May 2020 and the provision for discount allowed is to be maintained at 5% of trade receivables, increased from an opening provision of $700. Calculate the increase in the provision for discount allowed to be charged as an expense.

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Question 107

[3 marks]Final accounts of a sole trader with provision for discount allowed
P. Maradza's gross profit for the year ended 31 May 2020 was $44 900. Other income (commission receivable, including $100 owing) was $700. Total expenses for the year (stationery, salaries, rent, interest on loan, the increase in provision for discount allowed and depreciation) were $31 400. Calculate the net profit for the year.

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Question 108

[2 marks]Final accounts of a sole trader with provision for discount allowed
At 31 May 2020, P. Maradza's current assets (inventory, trade receivables net of the provision for discount allowed, commission receivable owing and stationery in hand) totalled $45 000, and current liabilities (trade payables and a bank overdraft) totalled $13 700. Calculate the working capital.

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Question 109

[1 marks]Final accounts of a sole trader with provision for discount allowed
In P. Maradza's trial balance at 31 May 2020, Bank appeared as a credit balance of $300. In the statement of financial position, this $300 is classified as...
  1. Apart of capital.
  2. Ba non-current asset.
  3. Ca current asset.
  4. Da current liability (bank overdraft).

Question 110

[2 marks]Final accounts of a sole trader with provision for discount allowed
L. Makumbe's provision for doubtful debts was $1 120 brought forward, and trade receivables at the close of the year were $24 000, with the provision maintained at 4% of trade receivables. Calculate the new (closing) balance of the provision for doubtful debts.

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Question 111

[1 marks]Final accounts of a sole trader with provision for discount allowed
L. Makumbe's provision for doubtful debts fell from $1 120 to $960 during the year. Calculate the amount transferred to the Income Statement as a result of this decrease.

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Question 201

[2 marks]Sales ledger control account, subsidiary books and source documents
N. Manungo's trade receivables were $15 000 at the start of the year, and credit sales for the year to 31 October 2020 were $230 000. Cheques received from credit customers totalled $160 000 and discounts allowed were $10 000. Bad debts written off were $5 000. Dishonoured cheques were $8 000, cash refunded to credit customers was $7 000 and interest charged on customers' overdue accounts was $3 000. There were also credit balances of $2 000 within the sales ledger. Calculate N. Manungo's closing trade receivables (debit balances) at 31 October 2020.

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Question 202

[1 marks]Sales ledger control account, subsidiary books and source documents
In a Sales Ledger Control Account, dishonoured cheques (cheques received from a credit customer that were later returned unpaid by the bank) are entered on which side?
  1. ANeither side, since dishonoured cheques are ignored in a control account.
  2. BThe debit side, since the customer's debt is reinstated.
  3. CThe credit side, since the cheque was never actually received.
  4. DThe credit side, as a reduction to discounts allowed.

Question 203

[1 marks]Sales ledger control account, subsidiary books and source documents
In a Sales Ledger Control Account, cash refunded to a credit customer is entered on which side?
  1. AThe credit side, since cash leaves the business.
  2. BThe debit side, since it is treated the same as a bad debt written off.
  3. CIt is not entered in the control account at all.
  4. DThe debit side, since it increases what the customer owes.

Question 204

[1 marks]Sales ledger control account, subsidiary books and source documents
Zvavanhu Stores bought furniture for resale on credit from M. Furnitures for $5 000 on 4 June 2018. In which subsidiary book (book of original entry) was this transaction first recorded?

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Question 205

[1 marks]Sales ledger control account, subsidiary books and source documents
Zvavanhu Stores paid $100 out of petty cash for airtime on 18 June 2018. In which subsidiary book was this transaction first recorded?

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Question 206

[1 marks]Sales ledger control account, subsidiary books and source documents
On 20 June 2018, Zvavanhu Stores returned defective goods valued at $400 to a supplier. In which subsidiary book was this transaction first recorded?

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Question 207

[1 marks]Sales ledger control account, subsidiary books and source documents
On 29 June 2018, Zvavanhu Stores paid $3 500 by cheque for insurance. In which subsidiary book was this transaction first recorded?
  1. APurchases Journal
  2. BGeneral Journal
  3. CCash Book
  4. DPetty Cash Book

Question 208

[1 marks]Sales ledger control account, subsidiary books and source documents
In C. Chido's sales ledger, S. Mwale's account was charged interest of $100 on 2 January 2018, increasing the amount he owed. What source document would C. Chido use to notify S. Mwale of this interest charge?

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Question 209

[1 marks]Sales ledger control account, subsidiary books and source documents
S. Mwale returned goods worth $200 to C. Chido on 12 January 2018, reducing the amount he owed. What source document would C. Chido issue to record this return?

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Question 210

[1 marks]Sales ledger control account, subsidiary books and source documents
On 10 January 2018, C. Chido sold goods on credit worth $3 000 to S. Mwale, increasing the amount he owed. Which source document did C. Chido use to record this sale?
  1. ASales invoice
  2. BStatement of account
  3. CCredit note
  4. DPurchase invoice

Question 211

[1 marks]Sales ledger control account, subsidiary books and source documents
C. Chido received payment of $800 by cheque from S. Mwale on 4 January 2018, reducing the amount he owed. What source document would C. Chido use as proof of this receipt?

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Question 212

[1 marks]Sales ledger control account, subsidiary books and source documents
C. Chido received $600 in cash from S. Mwale on 20 January 2018, reducing the amount he owed. What source document would C. Chido use as proof of this receipt?

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Question 301

[2 marks]Bank reconciliation, professional ethics and liquidity ratios
N. Hlabangana's cash book showed a closing balance of $15 000 overdrawn (credit balance) at 30 November 2021, before any bank reconciliation adjustments. Adjustments not yet in the cash book were: a credit transfer received from ABC Ltd of $13 500, a stop order payment for insurance of $3 000, and bank charges of $500. Calculate the updated cash book balance at 30 November 2021.

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Question 302

[2 marks]Bank reconciliation, professional ethics and liquidity ratios
N. Hlabangana's updated cash book balance at 30 November 2021 was $5 000 overdrawn. A cheque paid to B. Chirandu for $17 500 (cheque no. 3008) had not yet been presented to the bank, and a deposit from R. Ndlovu of $33 000 had not yet been credited by the bank. Calculate the balance as shown on the bank statement at 30 November 2021.

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Question 303

[1 marks]Bank reconciliation, professional ethics and liquidity ratios
In a bank reconciliation statement prepared from an overdrawn (credit) cash book balance, an unpresented cheque is...
  1. Aadded twice, once for the cash book and once for the bank statement.
  2. Badded, since the bank has not yet paid it out, so the bank's own figure is less overdrawn.
  3. Csubtracted, since the cheque has already left the business.
  4. Dignored, since unpresented cheques never affect an overdraft reconciliation.

Question 304

[1 marks]Bank reconciliation, professional ethics and liquidity ratios
In the same bank reconciliation, an uncredited deposit is...
  1. Aadded, since it increases the amount held.
  2. Bsubtracted, since the bank has not yet added it, so the bank's own figure is more overdrawn.
  3. Cignored, since the bank already knows about it.
  4. Dadded, because the cash book understated the deposit.

Question 305

[1 marks]Bank reconciliation, professional ethics and liquidity ratios
Which of the following is a cause of the difference between N. Hlabangana's cash book and bank statement balances at 30 November 2021, other than a timing difference in cheques or deposits?
  1. AA cash sale of $11 000 had not yet been banked.
  2. BThe cash book's opening balance was misstated.
  3. CA stop order for insurance of $3 000, paid directly by the bank, had not yet been entered in the cash book.
  4. DCheque no. 3007 was paid to the wrong supplier.

Question 306

[1 marks]Bank reconciliation, professional ethics and liquidity ratios
A professional accountant who does not disclose business information to third parties without proper authority is demonstrating which professional ethic?
  1. AProfessional behaviour
  2. BObjectivity
  3. CProfessional competence
  4. DConfidentiality

Question 307

[1 marks]Bank reconciliation, professional ethics and liquidity ratios
A professional accountant who avoids bias and conflicts of interest when exercising professional judgement is demonstrating which professional ethic?
  1. ADue care
  2. BIntegrity
  3. CObjectivity
  4. DConfidentiality

Question 308

[1 marks]Bank reconciliation, professional ethics and liquidity ratios
A professional accountant who is honest and truthful in all business and professional relationships is demonstrating which professional ethic?

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Question 309

[2 marks]Bank reconciliation, professional ethics and liquidity ratios
P. Sigauke's Statement of Financial Position at 30 June 2020 showed Inventory $60 000, Trade receivables $45 000 and Cash at bank $15 000 as current assets, and Trade payables $40 000 as the only current liability. Calculate the current ratio.

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Question 310

[2 marks]Bank reconciliation, professional ethics and liquidity ratios
P. Sigauke's current assets at 30 June 2020 were Inventory $60 000, Trade receivables $45 000 and Cash at bank $15 000, against Trade payables of $40 000. Calculate the quick ratio (acid test ratio).

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Question 401

[1 marks]Physical depreciation, subscriptions account and correction of errors
Which of the following is a cause of physical depreciation of a non-current asset?
  1. AA fall in the market price of similar assets.
  2. BChanging fashion making the asset less desirable.
  3. CWear and tear from regular use.
  4. DA competitor launching a better model.

Question 402

[1 marks]Physical depreciation, subscriptions account and correction of errors
Rust, rot or corrosion of a non-current asset through exposure to weather or moisture is an example of which type of depreciation?
  1. AEconomic depreciation
  2. BPhysical depreciation
  3. CTime depreciation only
  4. DObsolescence

Question 403

[2 marks]Physical depreciation, subscriptions account and correction of errors
Samakomva Burial Society's subscriptions in arrears were $1 080 and subscriptions in advance were $920 at 1 November 2019, the only asset and liability the Society had at that date. Calculate the Society's accumulated fund at 1 November 2019.

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Question 404

[3 marks]Physical depreciation, subscriptions account and correction of errors
Samakomva Burial Society received $12 100 in subscriptions during the year ended 31 October 2020. Subscriptions in arrears were $1 080 at the start of the year and $3 600 at the end; subscriptions in advance were $920 at the start and $1 400 at the end. Calculate the subscription income for the year to be transferred to the Income and Expenditure Account.

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Question 405

[2 marks]Physical depreciation, subscriptions account and correction of errors
C. Kondo's Purchases Book was undercast (added up short) by $500. By how much does correcting this error decrease net profit?

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Question 406

[1 marks]Physical depreciation, subscriptions account and correction of errors
C. Kondo recorded a credit sale of 870as870 as 780 in error. By how much does correcting this error increase net profit?

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Question 407

[2 marks]Physical depreciation, subscriptions account and correction of errors
C. Kondo paid $1 250 for electricity, but the payment was recorded in the Cash Book only and never posted to the Electricity account. By how much does correcting this error decrease net profit?

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Question 408

[3 marks]Physical depreciation, subscriptions account and correction of errors
C. Kondo's Commission Received of $2 000 was recorded on the debit side of the Commission Paid Account, instead of being credited to a Commission Received account. Calculate the total increase to net profit needed to correct this single error (removing the wrongly recorded expense and adding the missing income).

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Question 409

[1 marks]Physical depreciation, subscriptions account and correction of errors
C. Kondo's General Expenses Account was overstated by $600. By how much does correcting this error increase net profit?

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Question 410

[1 marks]Physical depreciation, subscriptions account and correction of errors
C. Kondo's drawings of $1 200 cash were wrongly debited to the Salaries Account. Correcting this error...
  1. Adecreases net profit by $1 200, since drawings must now be charged as an expense.
  2. Bhas no effect on net profit, since drawings are not a profit and loss item either way.
  3. Cincreases net profit by $2 400, since both Salaries and Drawings need correcting.
  4. Dincreases net profit by $1 200, since Salaries expense falls by $1 200 with no offsetting expense.

Question 411

[2 marks]Physical depreciation, subscriptions account and correction of errors
C. Kondo's net profit before correcting six errors was $18 000. Taking all six corrections together (a 500decrease,a500 decrease, a 90 increase, a $1 250 decrease, a $4 000 increase, a $600 increase and a $1 200 increase), calculate the corrected net profit.

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Question 501

[2 marks]Limited company statement of changes in equity and statement of financial position
Nehanda Distributors Ltd had 200 000 issued 10% preference shares of $2 each. Calculate the total annual preference dividend entitlement.

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Question 502

[2 marks]Limited company statement of changes in equity and statement of financial position
Nehanda Distributors Ltd's total annual preference dividend was $40 000, of which $20 000 was paid as an interim dividend during the year. Calculate the remaining preference dividend paid on 31 December 2020.

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Question 503

[2 marks]Limited company statement of changes in equity and statement of financial position
Nehanda Distributors Ltd had 100 000 issued ordinary shares of $1 each. The directors paid an ordinary dividend of $0,10 per share on 31 December 2020. Calculate the total ordinary dividend paid.

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Question 504

[3 marks]Limited company statement of changes in equity and statement of financial position
Nehanda Distributors Ltd's retained earnings (Profit and Loss Account) balance was $85 000 at 1 January 2020. During the year, profit of $70 000 was earned, $2 500 was transferred to general reserve, preference dividends of $40 000 were paid in total and ordinary dividends of $10 000 were paid. Calculate the retained earnings balance at 31 December 2020.

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Question 505

[2 marks]Limited company statement of changes in equity and statement of financial position
Nehanda Distributors Ltd's general reserve was $30 000 at 1 January 2020, and the directors transferred $2 500 to it during the year. Calculate the general reserve balance at 31 December 2020.

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Question 506

[3 marks]Limited company statement of changes in equity and statement of financial position
Nehanda Distributors Ltd's issued share capital totalled $500 000 (ordinary $100 000 plus preference $400 000), general reserve at 31 December 2020 was $32 500 and retained earnings at 31 December 2020 was $102 500. Calculate the total shareholders' funds at 31 December 2020.

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Question 507

[1 marks]Limited company statement of changes in equity and statement of financial position
Nehanda Distributors Ltd's authorised ordinary share capital was 150 000 shares of $1 each, but only 100 000 had been issued. The unissued 50 000 shares are...
  1. Anot shown as issued share capital, since they have not yet been allotted to shareholders.
  2. Bshown as a liability in the statement of financial position.
  3. Cwritten off against retained earnings.
  4. Dincluded in the issued share capital total regardless.

Question 508

[1 marks]Limited company statement of changes in equity and statement of financial position
Which of the following is a user of a company's accounting information?
  1. AA shareholder, to assess the return on their investment.
  2. BA random member of the public with no connection to the company.
  3. CA weather forecasting service.
  4. DA competitor's marketing department, to copy the company's advertising.

Question 509

[1 marks]Limited company statement of changes in equity and statement of financial position
Nehanda Distributors Ltd's 5% Debentures of $100 000 are shown in the statement of financial position as...
  1. Aa non-current liability, since they are a long-term source of finance.
  2. Ba current asset.
  3. Cpart of current liabilities, since interest is paid regularly.
  4. Dpart of share capital, since debenture holders share in profits.

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