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Pakistan School Muscat

MOCK Examination 2017

Name of Candidate________________________________

Accounting

Paper 1

0452/12

Candidates answer on the question paper.

No additional materials are required 1

hour 45 minutes

Read these instructions first

Write in dark blue or black pen,

You may use an HB pencil for any diagrams or graphs

Do not use staple, paper clips, glue or correction fluid.

Do not write in any barcodes.

Answer all questions

You may use a calculator

The businesses mentioned in this question paper are fictitious.

The number of marks is given in [] at the end of each question or part of question.
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There are 10 parts to Question 1.

For each of the parts (a) to (j) below there are four possible answers A, B, C and D.
Choose the one you consider correct and place a tick () against the correct
answer.

a) . Which of the following in the Balance Sheet of a business shows the owner how
well his business is doing?
a. Debtors
b. Drawings
c. Net profit
d. Working capital
b) A business provides the following information for the year ended 30 September
2002.

$
Sales 100,00
Cost of goods 0
sold 60,000
Expenses 15,000

What is the net profit for the year ended 30 September 2002?

a. 25,000
b. 40,000
c. 45,000
d. 52,000
c) A business applies the money measurement concept. Which would be recorded in
its accounting records?
a. The benefits of staff training
b. The cost of property owned
c. The effect of new laws
d. The value of the skills of its managers

d) A business bought a machine for $5000 and depreciated it by 20% a year. At the
end of Year 2,the total depreciation amounted to $2000. Using the concept of
consistency, how much is charged for depreciation in Year 3?
a. $400
b. $600
c. $1000
d. $2000
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e) Which document from a supplier reduces the amount owed by a customer?

a. Credit note
b. Debit note
c. Invoice
d. Statement

f) $ 2000 paid to machinery repairs is entered in machinery account, what kind of

error is this?
a. Commission
b. Compensating
c. Original entry
d. Principles

g) Annual sales figures are

Goods $ Trade Net $
discount $
110,000 16,500 93,500

What should be the credit entry in the sales account?

a) $77 000 credit
b) $93 500 credit
c) $110 000 credit
d) $126 500 credit
h) Ali receives a cheque from Hassan, a debtor, in payment for goods purchased by
Hassan on credit.
Where will Ali enter this payment?

a) Cash book and sales ledger

b) Cash book and purchases ledger
c) Nominal ledger and sales ledger
d) Nominal ledger and purchases ledger

i) A trial balance agrees, total debits and total credits being $50 000.
It is now discovered that an insurance payment of $200 had been wrongly entered in
the General Office Expenses account instead of the Insurance account.
What will the trial balance totals be after this error has been corrected?

a) $ 49,800
b) $ 50,000
c) $ 50,200
d) $ 50,400
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j) On 1 June, a business sold stock for $2000 cash and the money was paid into the
business's
bank account. What was the overall effect?

Increased Decrease
d
a) Stock Bank
b) Bank Stock
c) Cash Bank
d) Bank Cash

[Total 10]
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2-
(a) What is the name of the document sent to a customer by a supplier at the end of the month showing
the amount payable for credit sales?
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(b) Explain what is meant by the accounting principle of matching.

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(c) A payment from Dido is entered in Petras account in error. What type of error has been made?
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(d) At 31 March Marcus, had accrued $70 for water used for the month of March. On 5 April, he
received the water bill for March amounting to $80 and paid this bill on 21 April. He expects to receive
a bill for the month of April for $90. What amount will Marcus show in his profit and loss account for
water for the month of April?
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(g) Mish Limited has an issued share capital of 10 000 ordinary shares with a nominal value of $1 each
and 8 000 preference shares with a nominal value of $1.50 each. What is the total of the issued share
capital of the company? Show your workings.
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[Total 14]
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3-
The balance shown in the bank column in Safinas cash book at 30 April 2010 was $620 Dr. She
compares her cash book with the bank statement at 30 April and finds the following items had been
included on the bank statement but have not yet been entered in the cash book.

$
Bank charges 15
Direct debits paid 40
Bank interest received 20
Bank (credit) transfer from customer 130
Dishonored cheque from customer 65

REQUIRED
a) Write up Safinas cash book at 30 April 2010 and find the updated balance.
Safina Cash book (bank columns)

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b) Safina finds that at 30 April 2010 she has: recorded receipts in the cash book of $310 but not yet
deposited the money at the bank; written cheques, $250, and entered them in the cash book but they
have not yet been paid by the bank.

Complete the following pro-forma bank reconciliation statement at 30 April 2010 to

show the expected balance on the bank statement.

$
Balance on updated cash book at 30 April 2010
Adjustments:

Receipts not yet deposited at bank

Cheques written out not yet paid by bank

Expected balance on bank statement at 30 April 2010

In fact, the bank statement shows a balance of $680. [8]
REQUIRED
Suggest two possible errors which may have caused this difference. Explain how to
correct each error.
(i) Error
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Correction
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(ii) Error
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Correction
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[2]

[Total 18]
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4-
(a) Explain what is meant by the term other payable (accrued expense).

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Khalim has a furniture business and pays the fuel expenses of running a motor van. At 1 May 2010, he
had accrued fuel expenses of $30. For the year ended 30 April 2011 he paid fuel expenses of $340 by
cheque and at 30 April 2011 he had an unpaid bill for fuel of $50.

REQUIRED
(b) Write up Khalims fuel expenses account for the year ended 30 April 2011. Show the transfer to the
income statement for the year and any balance carried down at 1 May.

Khalim
Fuel expenses account

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(c) In the following table, place a tick (_) under the heading to show the correct category of each asset
shown on Khalims balance sheet.

Non-current Non-current Current asset

tangible asset intangible asset

Warehouse

Goodwill

Trade receivables

Motor van
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[4]
Khalim sells three types of chair and provides the following information about his inventory
at 30 April 2011.
Chair type Units in stock Cost per unit$ Selling price per unit $
Armchair 15 55 65
Dining chair 36 25 20
Folding chair 60 15 18

REQUIRED
(d) State the basis on which Khalim will value his inventory on 30 April 2011.

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(e) Calculate the value of Khalims inventory at 30 April 2011. Show all your workings.

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[Total 23]
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5-
(a) Explain what is meant by a non-current asset.

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Queresh has bought a machine costing $3600 for use in his business. He estimates the machine will
have a useful life of three years and will have a scrap value of $450 after that time. Queresh decides he
will depreciate the machine on the straight-line method.
REQUIRED
(b) Calculate the depreciation to be charged on the machine in Quereshs income statement for each of
the three years of its useful life. Show your workings.
(i) Year 1
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(ii) Year 2
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(iii) Year 3
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Queresh is preparing his financial statements for the year ended 30 September 2011 and has extracted
the following items from his trial balance at that date.
Queresh Trial Balance (extract) at 30 September 2011

$
Revenue (sales) 72 500
Rent receivable 6 500
Sales returns 800
Inventory at 1 October 2010 6 000
Raw materials (purchases) 48 800
Distribution expenses 2 580
Administrative expenses 8 225
Other operating expenses 1600
Finance costs 1 380
Drawings 12 000

No entry has yet been made for depreciation on the above machine.

The following additional information is available.

1 Queresh has valued his inventory at 30 September 2011 at $7600.
2 Rent receivable includes $1300 received in advance.
3 Additional administrative expenses of $375 are to be accrued.
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4 Depreciation (as calculated in (b) above) is to be included.

REQUIRED

(c) Prepare Quereshs income statement (showing the trading account) for the year ended
30 September 2011.

Queresh
Income Statement for the year ended 30 September 2011
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Queresh believes that his profit for the year is too small. He is considering not including the
depreciation charge on his machine in his income statement so the profit will be increased.

REQUIRED
(d) (i) Explain why Queresh should include the depreciation charge in his income statement.
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(ii) Suggest one other way in which Queresh may increase his profit for future years.
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[Total 30]
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6- Kinoto Limited are in business as printers. The following trial balance (after calculating net profit)
has been prepared from the companys accounting records for the year ended 30 June 2010. Kinoto
Limited

Trial Balance at 30 June 2010

$ $
Machinery 17 000
Office equipment 2 500
Provision for depreciation
Machinery 1900
Office equipment 500
Accrued expenses 300
Bank 25 000
Cash 200
Creditors 1 800
Debtors 33 500
Bank loan repayable 2016 5 000
Prepayments 600
Stock at 30 June 2010 3 900
Issued share capital (10 000 ordinary $1 shares) 10 000
Retained profit at 1 July 2009 47 200
Net profit for the year 16 000
82 700 82 700

The company proposes to pay a dividend of $0.25 per share and to transfer $5000 to a general reserve.
REQUIRED
(a) Prepare the companys profit and loss appropriation account for the year ended 30 June 2010.

Kinoto Limited Profit and Loss Appropriation account for the year
ended 30 June 2010
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(b) Prepare Kinoto Limiteds balance sheet at 30 June 2010.

Kinoto Limited
Balance Sheet at 30 June 2010
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(c) From the information above, calculate Kinoto Limiteds return on opening capital employed. Show
your workings and give your answer to two decimal places.
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[Total 25]
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