Surname

Initial(s)
Centre
Paper Reference
No.

7 0 1 1 0 1
Candidate
Signature
No.

Paper Reference(s)

7011/01 Examiners use only

London Examinations Team Leaders use only

GCE
Accounting Question Leave
Number Blank

Ordinary Level 1

Friday 15 May 2009 Afternoon 2

Time: 3 hours 3
4
5
Materials required for examination Items included with question papers 6
Nil Source booklet




Instructions to Candidates
In the boxes above, write your centre number, candidate number, your surname, initial(s) and
signature.
Answer BOTH questions in Section A and ALL questions in Section B.
All calculations must be shown.
Write your answers in the spaces provided in this question paper.
Do not return the insert with the question paper.

Information for Candidates
The marks for individual questions and the parts of questions are shown in round brackets: e.g. (2).
There are 6 questions in this question paper. The total mark for this paper is 200.
There are 24 pages in this question paper. Any blank pages are indicated.
Calculators may be used.
The source material for use with questions 1 to 6 is in the enclosed source booklet.

Advice to Candidates
Write your answers neatly and in good English.

Total
This publication may be reproduced only in accordance with

Turn over
Edexcel Limited copyright policy.

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2009 Edexcel Limited.
Printers Log. No.

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SECTION A

Answer BOTH questions in this section

Source material for use with question 1 can be found on pages 2 and 3 of the source booklet.

1. (a) Prepare Kofi Appiahs sales day book and sales returns day book, showing columns
for goods, VAT and total.

Sales Day Book

Sales Returns Day Book

(12)


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(b) Prepare the account of Vernon Chan in the ledger of Kofi Appiah. Balance the account
at 30 April 2009 and bring down the balance to begin the next month.
Vernon Chan Account

(10)


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(c) Explain why suppliers sometimes allow cash discounts to their customers.

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(4)

(d) Prepare Kofi Appiahs petty cash book for the period from 1 April to 14 April.
Balance off the petty cash book to show the final balance. (There is no need to bring
this balance down.)

Debit Details Credit

Total Office Postage Wages VAT
Supplies

(18)


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(e) What actions might the petty cashier take if the amount of money in the petty cash
box did not equal the balance on the petty cash book?

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(4) Q1

(Total 48 marks)


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Source material for use with question 2 can be found on pages 4 and 5 of the source booklet.

From the information provided:

2. (a) prepare the trading account and profit and loss account for the year ended 31 March
2009;
Trading and Profit & Loss Account for the year ended 31 March 2009


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(22)


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(b) prepare the balance sheet at 31 March 2009;
Balance Sheet as at 31 March 2009


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(22)

(c) comment on the level of drawings taken out by Curly Kale.

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(4) Q2

(Total 48 marks)
TOTAL FOR SECTION A: 96 MARKS


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SECTION B

Answer ALL questions in this section

Source material for use with question 3 can be found on page 6 of the source booklet.

3. (a) Showing your workings, calculate for both 2007 and 2008 (to two decimal places):

(i) the net profit ratio;

Net Profit Ratio

(ii) the return on capital employed;

Return on Capital Employed

(iii) the current ratio;

Current Ratio

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(iv) bad debts as a percentage of debtors.

Bad Debts as a Percentage of Debtors

(12)

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Felicity believes that the financial performance of her business is better in 2008 than it was
in 2007.

(b) Evaluate her claim, making equal reference in your answer to her profitability and
liquidity.

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(10)

(c) Give two ways in which a business could increase its working capital.

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(4) Q3

(Total 26 marks)

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Source material for use with question 4 can be found on page 7 of the source booklet.

4. (a) Update Pedro Garcias cash book to find the balance at 30 April 2009.

Cash Book

(6)

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(b) Prepare a bank reconciliation statement at 30 April 2009 to reconcile the bank
statement balance with the up-to-date cash book balance.

Bank Reconciliation Statement at 30 April 2009

(10)

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Pedro believes that it is useful to draw up a bank reconciliation statement but a friend has
told him that such a statement is of only limited usefulness.

(c) Evaluate these two views.

(10) Q4

(Total 26 marks)

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Source material for use with question 5 can be found on page 8 of the source booklet.

5. (a) Prepare the computer account in Ram Singhs ledger for the years ended 31 December
2007 and 31 December 2008.

Computer Account for years ended 31 December 2007 and 2008

(4)

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(b) Prepare the provision for depreciation account for the years ended 31 December 2007
and 31 December 2008.

Provision for Depreciation Account for years ended 31 December 2007 and 2008

(7)

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(c) Prepare the disposal account for the computer system at 31 December 2008.

Disposal Account at 31 December 2008

(7)

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A business can use either the straight line method or the diminishing balance method when
depreciating its fixed assets.

(d) Explain two advantages of each of these methods.

(8) Q5

(Total 26 marks)

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Source material for use with question 6 can be found on page 9 of the source booklet.

6. (a) Prepare Vasos trading and profit & loss account for the year ended 31 December
2008. Show all your calculations.

Trading and Profit & Loss Account for the Year ended 31 December 2008

(14)

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(b) Prepare Vasos balance sheet as at 31 December 2008.

Balance Sheet as at 31 December 2008

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(12) Q6

(Total 26 marks)
TOTAL FOR SECTION B: 104 MARKS
TOTAL FOR PAPER: 200 MARKS

END

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