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' CSEC POA June 2003 P1

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1. Which of the following are real accounts?

L Furniture A/c
5. At the end of the year the capital of a
business was $33 000. At the beginning of
the year the capital was $28 000. During
II. Debtors Ne the year the owner withdrew for personal
III. Capital Ne use $2 000. What was his net profit for the
IV. Motorcar Ne year?

(A) I and II only (A) $ 5 000

(B) I and IV only (B) $ 7 000
(C) II and III only (C) $30000
(D) II and IV only (D) $61000

2. Which of the following items on a balance . 6. Mr Abel and Mr Blue purchased goods on
sheet would differ MOST in presentation credit to the valueof$50and$75 respectively
when comparing the books of a company from Mr Kane. Another customer paid cash
• and books of a sole trader? for goods amounting to $550. Mr Kane took
goods at cost for himself amounting to $500.
(A) Capital Which of the followingfigures represents the
(B) Current assets balance in Mr Kane's Sales Account?
(C) · Currentliabilities
(D) Fixed assets (A) $125
(B) $425 '\

(C) $675
3. An employee works for 45 hours EACH (D) $925
week at $4 per hour for a 40 hour week and
$6 per hour for overtime. His gross weekly ... ·.
wage is 7. '.. ~·

Capital R. Winsome .. $60 ()()() . i·

(A) $180 Capital H. Winsome $30 ()()()
(B) $190
(C) $240
(D) $270 The above table shows the amount of capital
investedbyR&HWinsomeinabusiness. If
interest on capital was agreed at 5 per cent,
4. Which of the followin.g states the what is the combined total amountofinterest
CORRECT order of the stages in the on capital earned by them?
accounting cycle?
(A) $1 500
(A) ·Journalizing, Posting to Ledger, (B) $2 500
Trial Balance, Final Accounts (C) $3 000
(B) Journalizing, Trial Balance, Post- (D) $4 500
ing to Ledger, Final Accounts
(C) Posting to Ledger, Journalizing,
Trial Balance, Final Accounts t;.1><ST SECoivo
(D) Posting to Ledger, Trial Balance, ~...at- LIBRARY '1-1'_...
Journalizing, Final Accounts 0 636-2585
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· Which of the following books of original 11. Morris purchased$ I 000 worth of furniture
entry should be used to record bad debts? for office use and entered it in the Journal as
' . purchases. How will this error affect his
(A) Sales Journal Balance Sheet?
(B) Sales Return Journal
(C) GeneraJJournal (A) Fixed Assets and Net Profit will be
decreased by $1 000.
(D) Returns Outwards Journal
(B) Fixed Assets and Net Profit will be.
increased by $1 000.
Item9 refers to the following information. (C) Current Assets and Net Profit will
be increased by $1 000.
(D) Current Assets and Net Profit will
$ not be affected.
Cash a~ bank and in hand 5 000
Trade debtors 2400
Stock in hand 4600 12. Mr Harry, a grocer, bought a typewriter on
Accrued expenses 700 credit from Tan Company. Which of the
• following journal entries will be made for
Trade creditors 4 800
this transaction in Mr Harry's books?

(A) Dr. Purchases Account,

9. What is the working capital? Cr. Tan Account
(B) Dr. Typewriter Account,
(A) $5000 Cr. Cash
(B) $6500 (C) Dr. Tan Account,
(C) $7200 Cr. Purchases Account
(D) $11300 (D) Dr. Typewriter Account,
Cr. Tan Company

Item 10 refers to the balances extracted from

Mr Martin's ledger and shown below. 13' An article is subject to a 20% trade discount.
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Its list price is $600. What is its sale price?

$ (A) $120
Opening stock 7000
Purchases
Sales
4000
IOOOO
(B)
(C)
(D)
$480
$580
$720
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Sundry expenses I IOO
Closing stock 3 400

10. What was the cost of goods sold by Mr

Martin?

(A) $2400
(B) $2600
(C) $6400
\ (D) $7600
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 item 14 refers to the foilowini jnformation.

Appropriation ~ccount

$ $

Taxation Reserve 10000 By balance 894.50

Preliminary Expenses 250 Net Profit 26106.50
Transfer to General Reserve 4000
Preference Share Dividend I 200
Ordinary Share Dividend 6000

14. What conclusions could be drawn from the above Appropriation Account?

L The company has recently come into existence.

IL The company is engaged in profitable enterprise.
III. The company is not doing too we! I.
IV. More dividends can be given to the ordinary share holders.

(A) II and IV only

(B) III and·IV only
(C) ·I,IlandlVonly
(D) I, III and IV only

15. Under which of the following conditions 16. The purpose of an appropriation account is to
would atrial balance still balance?
(A) change capital expenditure as
I. A transaction was completely left agreed upon in the Articles of
out. Association
IL Both a debit and credit entry were (B) show how the net profit is distrib-
overstated by the same amount. uted in a partnership or co-
III. A debit entry was left out. operative
IV. Both a debit and credit entry were (C) make appropriate changes related
understated by the same amount. to net profit as agreed upon in
the Articles of Association
(A) I. II and III only (D) enter all capital and revenue
(B) I, II and IV only expenditure as stipulated in the
(C) I, III and IV only Partnership Act
.~D) II, III and IV only

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On January I, a firm's capital is $4 600. On 20. The Sales Return Journal is used to record
December 31, of the same year, the following goods
infonnation was provided: Drawings $850, 0

Total assets $10 000, Loan outstanding $950, (A) sold by the business
Creditors $4 000. What was the net profit that (B) returned by the business
year? (C) returned to the business
(D) sold to the business
(A) $ 450
(B) $1 300 Item 21 refers to the following information.
(C) $1400
(D) $1 700
V.Jones $

18. A businessman incurred the following Net pay 1 200

expenses: Income tax 300
National insurance 50
Factory repairs $6000
Machinery repairs $2000
New machine $3 000
New vehicle $7000 21. Using the information above, what was Mr.
Jones' gross pay?
What was the total capital expenditure?
(A) $ 850
(A) $6000 (B) $ 950
(B) $ 7 000 (C} $1 450
(C) $8000 (D) $1 550
(D) $10000

22. What would be the effect on a firm's

19. The net profit of a firm was shown as $1 600 Balance Sheet of the purchase of equipment
and it was later discovered that discounts on credit?
received were undercast by $10 and purchases
were understated by $36. The corrected net (A) Asset Increased; Liability
profit was Decreased
(B) Asset Increased; Liability
(A) $1 574 Increased
(B) $1 610 (C) Asset Decreased; Liability
(C) $1 636 Increased
(D) $1646 (D) Asset Decreased; Liability
Decreased

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 !tem23 refers to the following information. 26. The following deductions :ire made trom
the salary of an employee.

Stock January I $ 300

Purchases $3 400 !oEDUCTIONS
Gross protit $1500
Sales $4500 Income tax 35%
Stock Dec. 31 $ 700 National housing 2%
Education tax 1%

23. What is the rate of turnover?

What is the total amount which should be
(A) 2 times deducted from the employee's salary of
(B) 3 times $1800 per month?
(C) 6 times
(D) 9 times (A) $486
(Bl $648
(CJ $684
Item 24 refers to the following information. (0) $846

$
Prime cosi 10000 27. The summarized position of Foster and
Overheads 16 000 ScottLimitedatMarch6, 2002 was:
Work in progress January l, - 3000
Work in progress December 31 _, .5 000 $ ,
Current liabilities 60000
Current assets !00000
Fixed assets 200000
24. What was the cost of production of finished
Long-term liabilities 150000
goods for the year?

(A) $14 000

. What was the capital of Foster and Scott
(B) $18000 ,. Limited at March 6, 2002?
(C) $21 000
(D) $24 000
(A) $ 40 000
(B) $ 90 000
(C) $150 000
25. Jn a factory raw materials used amounted
(D) $190000
to$4000, manufacturingwages$1200and
other direct expenses $400. What was the
prime cost of articles produced?

(A) $4 400
(B) $4 800
(C) $5 200
(D) .. $5 600

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 Items 28 - 29 refer to the following information.

Dr Cr Balance
- $ $ $

Dec. I Bal. b/f 60

5 Cheque 90

14 Unit Trust: Standing Order 100

20 P. Palmer: Credit Transfer 30

29 Bank Charges 85

29. What does this Bank Statement balance

28. The bp.lance as per Bank Statement was a
represent?
(A) credit balance of $5
(A) An overdraft
(B) debit balance of $65
credit-balance of $125 (B) A direct debit
(C)
(C) A credit transfer
(D) debit balance of $5
(D) A dishonoured cheque

. '; 32. The total amount of $30.00 in the Discount

130, Single-entry accounting refers to a situation
Allowed column, was posted to the wrong
where
sideofthediscountaccount. How should this
every debit entry is balanced by an error be corrected?
(A)
equal credit entry
credit and debit are not recorded in (A) . Debit Discount Allowed Account,
(B)
separate columns $30.00
(C) all the information is recorded in (B) Credit Discount Allowed Account.
one book $30.00
thefirrnemploysonlyoneaccountant. (C) Debit Discount Allowed Account,
(D)
$60.00
(D) Credit Discount Allowed Account,
31. A business has total assets valued at$225 000
$60.00
and total liabilities at $97 000. The owner
values the business at$ I 50000.

What is the goodwill?

(A) .. $ 22000
(B) $ 53000
(C) $ 75 000
(D) $128000

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 33. A and B had a partnership and shared 36. Which of the following MUST be stated
when making up a complete journal entry?
profits and losses 32 and 3I respective
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I. Date
They admitted C to the partnership. In II. Account to be debited
addition to capital, C had to pay $3 600 for III. Account to be credited
goodwill. How much did A and B receive as IV. Narration
their respective share ofgoodwill?
(A) I and II only
(A) A receives $1 200, (B) I and Ill only
B receives $2 400 (C) I, II and Ill only
(B) A receives $2 400, (D) I, II, III and IV
B receives $ l 200

(C) A receives $I 800, 37. Which of the following BEST describes a

B receives $3 600 trial balance?
(0) A receives $3 600,
B receives $3 600 I. A list of Balances of Accounts
II. A Financial Statement
III. An Account
IV. A check on the accuracy of the
34. When· a company declares a dividend of
double entry system
15%, the dhddend.warrant sentto the share
holder owning I 500 $I ordinary shares is
(A) I and II only
(B) land IV only
(A). $ )00
(C) I, II and III only
(B) $ 225
(C) $1 500 (D)_ ... I, lll. il!ld· IV only
(0) $1 515
38. Goodwill is classified as
35. The maximum capital a company can issue
. (A) a long term liability
to the public is called
(B) an intangible fixed asset
(C) a current liability
(A) authorised capital
(0) a tangible fixed asset
(B) issued capital
(C) subscribed capital
(0) paid up capital
39. The account which discloses the gross profit
or loss is called the

(A) Profit and Lost Account

(B) Appropriation Account
(C) Trading Account
(0) Cash Account

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40. Mr Andrews and Mr Beddoe were in partnership, sharing profits and losses equally. On April 3.
2002, Mr Chung was admitted to the partnership, paying $18 000 into the bank account of the
business. This sum represented Chung'sone third ( 1/3) share of the goodwill of the business. The
profits in the new partnership are to be shared equally. ·

If a Goodwill account is to be maintained, what are the entries necessary to record its creation?

(A) Dr. Goodwill Ale $ 6000

Cr. Capital Ale : Andrews $ 2000
: Beddoe $ 2000
:Chung $ 2000

(B) Dr. Goodwill Ale $18000

Cr. Capital Ale: Andrews $ 6000
:Beddoe $ 6000
:Chung $ 6000

(C) Dr. Goodwill Ale $18000

Cr. Capital Ale : Chung $18000

(D) Dr. Goodwill Ale $54 000

Cr. Capital Ale : Andrews $18000
: Beddoe $18000
: Chung $18000

41. The trial balance is prepared by using 43. Which of the following factory expenses is
balances from the considered a direct expense?

(A) Purchases Book (A) Rent

(B) Journal (B) Wages
(C) Ledger •( C) Salaries
(D) Sales Book (D) · -Depreciation

42. Because of an error in posting, the Purchases 44. Patrick is to join ·Dennis and Tony in
Account was understated by$ i 00 in respect
partnership. Patrick brings to the partnership
of goods purchased on credit. What are the
as capital, furniture valued at $3 000 and a
journal entries necessary to correct this
motor van worth $5 000. In addition, he is to
error?
pay a premium of$ I OOOtobeshared between
(A) Debit Supplier, Dennis and Tony. How much would be the
Credit Purchases amount of Patrick's capital?

(B) Debit Purchases, (A) $4000

.. Credit Supplier (B) $6000
(C) $8000
(C) Debit Debtors,
(D) $9 000.
Credit Purchases Returns
(DJ Debit Purchases Returns,
Credit Debtors

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 45. .fn the Trading Account. Returns Outwards 50. Ram Singh purchased goods valuedat$500
is deducted from on credit. He paid off his bill wiihin the grace
period and so received a 10% cash discount.
{A) Carriage Outwards How much did he pay th_e firm?
{B) Carriage Inwards
(C) Pure hases · (A) $ 50
(D) Sales (B) $450
(C) $490
(D) $550
46. Which of the following entries in the three.
column cash book are contra entries?
51. ASuspenseAccoun.tsb9wsadebitbalance.
(A) Dr Cash, Cr Cash Which of the' following could give rise to
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Dr Cash, Cr Bank·
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(B) such a balance?
{C) Cr Cash, Cr·Barii<:·
{D) Dr Bank, Cr Bank (A)· The discount received was under-
cast in the Cash Book.
(B) The figure taken from an i!1voice is
47. Which of the following is ·NOT a nominal incorrect', but . the postings are
account? correct -""
(C) A sales invoice could notbe'found.
.G!Uriag_e; lnwai;ds . . CJ?) ,·c3t"rF~... ~~C(C<llted
Corilinis5i.oru. · ~ · ..=>~iutlle!'debti>r;'sr:account:.
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48. .WJiile~JW:\th.~noticedL
· Huckenterea on thedebitside'.oftheum:c- ePi<Y :\voi:img·'C3i;iirai .,
.. columnQisfiBook.1~lloftfi~tolfowmgr·. l~). :r~~'?l'Jfd' .. "i
entries. to. the Ledgei:,w.oµld
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make?
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(C) capital o~ed.
(D) cash balance
(A) Debit Cash Account
{B) Debit Account of C. Huck
(C) Credit Cash Account 53. Closing stock at ·year end is incorrectly
(D) ..Credit Account ?f C. Huck 'valuedc Which of the following will be
affected?·

49, OnJanuary.2,2002, J_Brown 1 a debtor, was I: Cost of sales ·

declaredbaBlcrupt.. He owed.Elmer Browne II. Gross profit
Ltd $800 for goods purchased .. What effect III. Net purchases
would this have on the balance sheetofElmer IV. Working capital
Browne Ltd?
(A) l and II. only
(A) 'Closingstock'is reduced by $800. (B) ID and IV only
{B) 'Closingstock'. isincreasedby$800. (C) l, ll and IV only
(C) 'Debtors' is increased by $800. (D) ll, Ill and IV on! y
(0) 'Debtors' is decreased by $800.
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54. Tom, Percy and John formed a partnership 58. K. Khan, a debtor of A and B Enterprises
and agreed that profits were to be shared in settles his debt of$ l 20 less 2Y2% discount,
the ratio of!: l :2 respectively. The net profit · by cheque: The double entry in the books
for the year was $18 900. What was John's of A and B Enterprises should be
share ofthe profit?
(A) Dr. K. Khan $117
(A) $ 4 725 Dr. Discount Received $ 3
(B) $ 9450 Cr. Bank $120
(C) $14 175
(D) $18900 (B) Dr. K. Khan $117
Dr. Discount Allowed $ 3
Cr. Bank $120
55. A businessman will keep control accounts
in order to (C) Dr. Bank $117
Dr. Discount Allowed $ 3
(A)
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ensure that all entries relating to the Cr. K. Khan $120
subsidiary ledgers have been
entered (C) Dr. Bank $117
(B) re~ucethe number ofaccounts kept Dr. Dis~ount Received $ 3
in the ledger Cr. K. Khan $120
(C) control all the employees
(D) make all accounts equal
59. Which ofthe following assets is the MOST
liquid?
56. When a trial balance does NOT agree, the
difference is placed in a (A) Cash
(B) Debtors
(A) Depreciation Account (C) Equipment
(B) Suspense Account (D) Stock
(C) Discounts Allowed Account
(D) Bad Debts Account
60. A credit balance in the Bank column of the
i:;ash.Book denotes
57. Mrs Green is adry goods merchant. Which ~

of the following transactions would result (A) a balance in the Cash Account
in a debit to her Cash Account? (B) an overdraft on the firm's bank
account
(A) Sold goods for cash (C) cash received by the bank
(8) Paid cash to office cleaner (D) receipts from cash sales
(C) Bought goods for cash
(D) Paid instalment on loan

IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.

OOIOS llF 2003