Question 1 of 8Trial balance
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Which of the following accounts has a credit balance?
A business values inventory at the lower of cost and net realisable value.
KC (Pvt) Ltd's accounting year ends on 30 September.
James prepared his financial statements without adjusting for accrued expenses.
Users of accounting information can be classified into
In a statement of financial position, a loan payable after one year is classified as
A credit balance of $250 has been omitted from the list of balances extracted from the sales ledger.
A credit balance on Melody's account in a trade receivables ledger means that
Repairs to machinery of $2 500 has been entered in the Machinery account.
According to IAS 2, inventory should be valued at the lower of
Cost of an asset includes
If depreciation of non-current assets was not included in the Income Statement,
Accumulated fund represents
A club's surplus of income over expenditure for a year is represented by
A company has three inventory items with the following details:
A private limited company may not
Prime cost includes
In a manufacturing company, loose tools will be depreciated using the
Which one appears in a trade receivables control account?
Which one is a variable cost?
The following information relates to product X.
The net present values of a project have been calculated as follows:
Which of the following methods of investment appraisal is based on profits?
Sensitivity analysis indicates
The four branches of accounting are
Leaving reserves in their most flexible form means
The current ratio considered to be acceptable should be in the range
The following diagram shows the break-even chart.
Which of the following best describes the money measurement concept?
Which of the following errors does not affect the trial balance agreement?
The following information is available at 30 April 2024.
What should be disclosed by way of a note in the financial statements for each class of depreciable asset?
A company has an authorised share capital of 800 000 ordinary shares of $1,00 each. The net profit after taxation for the year is $150 000. The market value of each share is $3,00.
Which of the following is a distributable reserve?
A sales journal total of $7 160 was entered in the sales account as $7 640.
What do the following break-even charts show regarding the profitability and risk attached to products X and Y?
Capitalisation of development costs is an application of
Which of the following items is entered in a partnership appropriation account?
The diagram below shows a break-even analysis chart.
Maria had trade payables of $19,840 at 1 January 2015. During the year ended 31 December 2015 she paid $354,240 to trade payables in cash, and her trade payables balance increased by $10,560 to $30,400 by 31 December 2015 (no discounts or returns affected the account). Calculate Maria's credit purchases for the year.
Maria's opening inventory on 1 January 2015 was $54,400 and her closing inventory on 31 December 2015 was $35,200. Her credit purchases for the year were $364,800, and she made no cash purchases of goods for resale. Calculate her cost of sales for the year ended 31 December 2015.
Maria's cost of sales for the year ended 31 December 2015 was $384,000. She marks up her goods sold by 33⅓% on cost. What was her gross profit for the year?
Green Limited has 60,000 4% redeemable preference shares of $1 each. On 30 May 2015 a full year's preference share dividend was declared and paid. Calculate the amount of the preference dividend.
Green Limited had 140,000 ordinary shares of $1 each in issue. On 30 June 2015 it made a rights issue of one new ordinary share for every ten ordinary shares held, at a price of $1.60 per share. Calculate the total cash proceeds from the rights issue.
Green Limited had 60,000 4% redeemable preference shares of $1 each. On 30 June 2015 it redeemed 25% of these preference shares at a premium of 10%. What amount in total was paid to redeem the shares?
In Process I of Shaba Limited, 5,000 litres of direct material were input for the quarter. Normal loss is 20% of input. Calculate the normal loss in litres for Process I.
In Process I of Shaba Limited, 5,000 litres of direct material were input and normal loss is 20% of input. The actual output from Process I for the quarter was 3,800 litres. Calculate the abnormal loss in litres.
In Process I of Shaba Limited, direct materials were 5,000 litres at $0.50 per litre, direct labour was $800, and production overhead was charged at 200% of direct labour. Normal loss is 20% of input and any loss can be sold as scrap for $0.30 per litre. What is the cost per litre of the expected output in Process I, after deducting the scrap value of the normal loss?
In Process II of Shaba Limited, the transfer from Process I was 3,800 litres valued at $1.15 per litre. Additional direct materials were 4,000 litres at $0.80 per litre, direct labour was $1,753, and production overhead was charged at 100% of direct labour. Normal loss is 10% of input, with any loss sold as scrap for $0.70 per litre. There was no work in progress. Calculate the cost per litre (per complete unit) of Process II's expected output.
During October 2015, James Limited received $335,426 through the bank from amounts recorded against trade receivables. This total included a cheque for $48 that actually related to commission received, not a receipt from a credit customer. Calculate the amount that should actually be credited to the sales ledger control account as cash received from trade receivables.
A credit customer of James Limited was granted a monthly rebate of 5% on purchases of $800. Calculate the amount of the rebate.
Which of the following is a genuine benefit of preparing a sales ledger control account and a purchases ledger control account?
In accounting, a master budget is best described as:
A firm forecasts September sales revenue of $180 000, of which 30% is for cash. Cash customers pay in the month of sale and are allowed a 5% cash discount. Calculate the cash received from cash sales in September.
A company plans to issue 20 000 ordinary shares of $1 each in October at an issue price of $1.20 per share. Calculate the total cash proceeds expected from the share issue.
On dissolution of a partnership, trade receivables of $27 000 paid their accounts in full after receiving a 5% cash discount. Calculate the amount of cash received from trade receivables.
Freehold property with a book value of $130 000 was sold on dissolution of a partnership at 10% above its book value. Calculate the sale proceeds received for the freehold property.
On dissolution of a partnership, trade payables of $26 000 were settled and a 10% discount was received from them. Calculate the amount of discount received.
A manufacturer completed 3 000 units during the year at a unit cost of $100. Completed goods are transferred to the trading account at a mark up of 20% on cost. Calculate the profit on manufacture for the year.
A business sold 2 950 units for $442 500. Its opening inventory of finished goods at transfer value was $24 000, goods transferred in from the factory during the year were $360 000, and closing inventory of finished goods at transfer value was $30 000. Calculate the gross profit for the year.
Cumulative preference shares are preference shares on which:
Henry started a business by paying $26 000 into the bank, and later paid a bank loan of $21 200 into the same account. All other bank receipts were takings banked from the cash till. Payments out of the bank during the year totalled $512 396 and the bank balance at the year end was $32 600. Calculate the amount banked from the cash till during the year.
State what the prudence concept requires a business to do when it prepares its financial statements.
A club received $6 000 in subscriptions during the year. Subscriptions in arrear were $1 920 at the start of the year and nil at the end, and subscriptions in advance were $270 at the start and $360 at the end. Calculate the subscriptions income for the year.
How does the accounting treatment of a bad debt differ from that of a doubtful debt?
A club's receipts and payments account for the year ended 31 December 2013 shows a debit balance of $79 978. A subscription of $60 that had been credited in the bank account was not entered in the receipts and payments account, and a direct debit of $245 for stationery was also omitted. Calculate the updated cash and bank balance at 31 December 2013.
A trader banked $379 360 received from trade receivables during the year ended 31 December 2014 and used a further $96 300 of receipts for cash payments without banking it. Trade receivables were $90 310 at 1 January 2014 and $86 240 at 31 December 2014. Calculate the sales for the year.
P. Moyo, a sole trader, had the following at 1 January 2015: premises at cost $80 000, fixtures and fittings at valuation $8 000, motor vehicles at net book value $7 000, inventory $22 000, trade receivables $13 750, rent prepaid $600, petty cash 16 500, trade payables $16 500 and wages accrued $1 000. Calculate his capital at 1 January 2015.
A bookkeeper posts the cost of a new delivery van to the motor expenses account. The trial balance still agrees. What kind of error is this?
State one use of absorption costing in a manufacturing business.
In budgetary control, what is meant by the principal budget factor?
What is standard costing?
Karimba Limited had ordinary share capital of $1 200 000 in shares of $0,50 each. The directors made a bonus issue of one new share for every six shares already in issue. How many bonus shares were issued?
After a bonus issue, Karimba Limited had 2 800 000 ordinary shares of $0,50 each in issue. The directors then made a rights issue of one new share for every five shares now held, at a price of $0,70 per share. What were the total cash proceeds from the rights issue?
A company's directors propose a final dividend at the year end, but shareholders have not yet approved it at the annual general meeting. How should the proposed dividend be treated in the financial statements for that year?
An item of machinery had a carrying value of $100 000. Following an impairment review, it could be sold for $65 000 (fair value less costs to sell), and its value in use was $70 000. At what amount should the machine be shown in the statement of financial position after the impairment review?
An item of machinery had a carrying value of $100 000. It could be sold for $65 000 (fair value less costs to sell), and its value in use was $70 000. What is the impairment loss to be charged against profit for the year?
Medals Limited's machinery had accumulated depreciation of $340 000 at the start of the year and $450 000 at the end of the year, with no machinery disposed of during the year. What was the depreciation charge on machinery for the year ended 31 December 2018?
Medals Limited sold vehicles that had originally cost $75 000 for $12 000. The accumulated depreciation on these vehicles at the date of sale was $58 000. What was the loss on disposal of the vehicles?
Medals Limited sold buildings that had originally cost $240 000 for $320 000, realising a profit on disposal of $101 000. What was the net book value of the buildings at the date of sale?
Medals Limited's inventory was $400 000 at 31 December 2017 and $470 000 at 31 December 2018. What was the increase in inventory during the year, as used in preparing the statement of cash flows?
Which of the following is a genuine benefit of preparing a statement of cash flows, in addition to the income statement and statement of financial position?
Mr Reedy sells goods at a mark-up of 25% on cost. Goods with a selling price of $6 250 were returned by a customer shortly after the year end, having been invoiced and delivered to the customer before the year end. What was the cost price of these returned goods?
Goods held in inventory had a cost of $7 500. They were damaged and could only be sold for $1 500 after incurring repair costs of $150. At what amount should these goods be included in inventory, applying the lower of cost and net realisable value rule?
Goods with a selling price of $12 500 (cost $10 000, based on Mr Reedy's 25% mark-up on cost) were sent to a customer on a sale or return basis before the year end. The customer had not yet indicated whether he would keep the goods. How should these goods be treated in the seller's closing inventory at the year end?
Unused stationery costing $3 500 had mistakenly been included in the physical count of trading inventory at 10 April 2016. How should this amount be treated when calculating the correct trading inventory figure?
Which of the following is an advantage of the FIFO (First In, First Out) method of inventory valuation, compared with AVCO (weighted average cost)?
Project A has an initial outlay of $180 000 and an increase in working capital of $15 000. Its profits over its four-year life are $14 000, $10 000, $20 000 and $14 000. Using average annual profit divided by average investment (assuming a nil residual value), calculate the accounting rate of return (ARR), correct to two decimal places.
Project B has an initial outlay of $160 000 and an increase in working capital of $6 000. Its profits over its four-year life are $13 000, $9 800, $17 000 and $16 200. Using average annual profit divided by average investment (assuming a nil residual value), calculate the accounting rate of return (ARR), correct to two decimal places.
For Project A, the total present value of the future cash inflows discounted at Mbire Limited's 10% cost of capital is $198 418. The initial investment (an outlay of $180 000 plus an increase in working capital of $15 000) is $195 000. What is the net present value (NPV) of Project A?
Green Valley Manufacturing Company Ltd: opening raw materials $72,000, purchases of raw materials $982,000, carriage inwards of raw materials $5,400, closing raw materials $88,000. Calculate the cost of raw materials consumed.
Wise Ltd's machinery account at cost, year ended 30 June 2017, opens with a balance of $200 000. Machines are purchased during the year: Machinery 5 cost $30 000 (1 October 2016), Machinery 6 cost $20 000 (1 April 2017), Machinery 7 cost $45 000 (1 May 2017, bought from Wellingtons Company on credit). What is the total cost of machinery purchased during the year?
A manufacturing partnership held raw material stocks of $60 000 at the beginning of the year and $44 000 at the end of the year. Raw material purchases for the year were $560 000. Calculate the cost of raw materials consumed for the year.
A company had 300 000 ordinary shares of $1 each in issue at the start of the year. In January it made a bonus issue of one ordinary share for every five held, and in April it made a rights issue of one ordinary share for every four then held, fully subscribed at $1.50 per share. Calculate the cash raised by the rights issue.
A tennis club's assets and liabilities at 1 January 2001 were: club premises $80,000, furniture and fittings $45,000, motor vehicles $60,000, sports equipment $42,500, stock of refreshments $8,640, subscriptions owing by members $830, rent and rates paid in advance $1,750, bank balance $29,140, water and electricity outstanding $700, subscriptions paid in advance by members $360 and creditors for refreshments $7,250. Calculate the accumulated fund of the club at 1 January 2001.
A partnership paid railage of $9,600,000 during the year and a further $2,400,000 was still owing at the year end. One sixth of the railage cost was incurred in delivering goods to customers. Calculate the railage that is treated as carriage inwards and charged in the trading account.
A social club paid $26,500 to its bar suppliers during the year ended 31 May 2007. Amounts owing to bar suppliers were $6,400 at 1 June 2006 and $3,200 at 31 May 2007. Calculate the bar purchases for the year.
A company has 800,000 ordinary shares of $1 each in issue. Under a scheme of capital reduction each ordinary share is to be reduced by $0.25. Calculate, in dollars, the amount released to the capital reduction account by the reduction of the ordinary share capital.
The Quartet made no disposals of plant and equipment during the year ended 31 December 2005. Calculate the depreciation charged on plant and equipment for that year. Give your answer in $ 000.
Calculate the sales (turnover) of Tana's business for the year ended 31 December 2010, using the net profit given in the notes and the net profit percentage given for her business.
Digits Ltd had 160,000 ordinary shares of $1 each in issue when, on 16 September 2005, it made a one for four bonus issue. Calculate the nominal value of the bonus shares issued.
A partner had made a 6% loan of $12,000 to his partnership. On the dissolution he is to receive sufficient 8% debentures in the purchasing company to give him the same annual return as the loan gave him. Calculate, in dollars, the nominal value of 8% debentures he must receive.
A trader's trade receivables were $17 000 at the start of the year and $21 000 at the end. During the year $214 000 was received from trade receivables, bad debts of $2 300 were written off, discounts of $1 700 were allowed and customers returned goods worth $3 800. Calculate the sales invoiced to credit customers for the year.
A retailer values her closing inventory at $25 000 at selling price. She fixes her selling prices by marking up the goods by 25% on cost. Calculate the value of the closing inventory at cost.
A sole trader's draft profit for the year ended 30 April 2015 is $40,000. After the accounts were drafted these errors were found: inventory costing $7,500 has a net realisable value of only $4,000; interest at 4% per annum on a $100,000 loan had not been accrued; no depreciation had been charged on equipment with a book value of $270,000, on which the rate is 5% per annum reducing balance; vehicle repairs of $10,000 had been debited to the motor vehicles account, which is depreciated at 10% per annum; and a customer owing $1,800 was declared bankrupt and is to be written off in full. Calculate the corrected profit for the year.
The following relate to a trader's trade receivables for December 2016, when all sales and purchases were on credit: opening debit balances $15,000; sales for the month $300,000; returns inwards $6,000; amounts received from trade receivables by cheque $279,000; discounts received $2,800; discounts allowed $9,000; bad debts written off $6,000; customers' cheques dishonoured $3,000; provision for doubtful debts $2,400; returns outwards $6,000; debit balances transferred to the trade payables ledger $2,433. Calculate the closing balance of the trade receivables control account at 31 December 2016.