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CSEC POA June 2002 P1 -2-
1. Employees of a business are entitled to
Item 5 refers to the following information.
annual profit sharing bonus of 20%. Profit
for the year was $10 000 before tax and $
bonus. If tax is to be 30%. What is the
amount for bonus? Caniage inwards 125
Sales 5 500
(A) $1 400 . Returns inwards 365
(B) $2 000 Purchases 4 520
(C) $4400 Closing stock 900
(D) $7 000

5. Using the information above, what will be

2. Control accounts are kept so as to assist the cost of goods sold?
management in
(A) $3 620
(A) limiting expenditure (B) $3 745
(B) locating errors (C) $4 645
(C) increasing profits (D) $4 985
(D) limiting drawings

Item 6 refers to the following information:

3. Ms Morris purchases $1 000 worth of fur-
niture for office use and entered it in the Stock at Jan 1, 1994 $ 500
journal as purchases. How will this error Purchases during the month $1 200
affect her Balance Sheet? Cost of goods sold $1 400
(A) Fixed assets and net profit will be
decreased by $1 000. 6. What is the stock at the end of January?
(B) Fixed assets and net profit will be
increased by $1 000. (A) S 300
(C) (B) $ 700
Current assets and net profit will be
increased by $1 000. (C) $ 500
(D) Current assets and net profit will (D) $1 200
NOT be affected.
7. The follo\ving deductions are made from
th.e salary of an employee
4. An invoice is a document made out when
goods are DEDUCTIONS

(A) overcharged Income tax 35°/o

(B) returned National housing 2%
(C) undercharged Education tax 1%
(D) ·sold
Whqt is the total amount which should be
deducted from the employee's salary of
$ J 800 per month?

(A) $486
(B) $648
(C) $684
(D) $846

OOJO~l(F 2.002 - ....

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 - . ~·

- 3-

8. Under which of the following conditions 9. The purpose of an appropriation account is

would a trial balance still balance? to

I. A transaction was completely left (AJ change capital expenditure as

out. agreed upon in the Articles of
I I. Both a debit.and credit entry were Association
overstated by the same amount. (BJ show how the net profit is distrib-
Ill. A debit entry was left out. uted in a partnership or co-opera-
IV. Both a debit and credit entry were tive
understated by the same amount. (C) make appropriate changes related
to net profit as agreed upon in the
(A) I, II and Ill only Articles of Association
(B) I, II and IV only (DJ enter all capital and revenue ex-
(C) l, Ill and IV only penditure as stipulated in the Part-
(DJ II, llI and IV only nership Act

IO. A businessman bought a new typewriter for $6 000. He paid $4 000 in cash
and traded in his old typewriter. What is the entry to record this transaction?

Dr. Cr.

(A) Dr. new typewriter $6 000

Cr. old typewriter $2 000
Cr. cash $4 000

(B) Dr. old typewriter $2 000

Dr. cash $4 000
Cr. new typev-.Titer $6 000

(C) Dr. new typewriter $4 000

Dr. cash $2 000
Cr. old typewriter $6 000

(D) Dr. old typewriter $6 000

Dr. cash $4 000
Cr. ne\v type\.vriter $2 000

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00 I 051/f 2002 il
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 /'

-4-
-.
11. What are the TWO most frequently used 15. Which of the following is entered in the
methods of calculating provision for de- Purchases Account of a grocery?
preciation?
(A) Goods for sak·
{A) Revaluation and Straight Line (B) Duplicating machines
Methods (C) Typewriters
{B) Depletio.n Unit and Reducing Bal- (D) Office stationery
ance Methods
{C) Machine Hour and Revaluation
Methods 16. A trader draws up a Trial Balance in order
{D) Straight Line and Reducing Bal- to
ance Methods
(A) ascertain the need for a suspense
account
12. The excess of the income over the expendi- (B) check for errors in the balance sheet
ture of a non-profit-making organization is (C) ascertain the total amounts owing
called to him and by him
(D) test the arithmetic accuracy of
(A) gross profit double-entry postings
(B) net profit
(C) accumulated fund
(D) surplus 17. Jn which book would a trader enter the
writing-off of a debt of a bankrupt cus-
tomer? ·
13. ,Patrick is to join Dennis and Tony in part-
nership. Patrick brings to the partnership (A) Sales Journal
as capital, furniture valued at $3 000 and a (B) General Journal
motor van worth $5 000. In addition, he is (C) Returns Journal
to pay a premium of$ I 000 to be shared (D) Purchases Journal
between Dennis and Tony. How much
would be the amount of Patrick's capital?
18. Which of the following would NOT be
(A) $4 000 considered part of the prime cost of manu-
(B) $6 000 factured goods?
(C) $8 000
(D) $9 000 (A) Office manager's wages
(B) Machine operator's wages
(C) Raw materials used
14. Which of the following states the correct (D) Freight on raw material
order of the stages in the accounting cy-
cle?
19. Credit notes issued for goods returned by
(A) Journalizing, Posting to Ledger, customer will be entered firstly in the .
Trial Balance, Final Accounts
(B) Journalizing, Trial Balance, Post- (A) Returns outward ·book
ing to Ledger, Final Accounts (B) Re-turns inward book
(C) Posting to Ledger, Journalizing, (C) Sales returns and allowances
Trial Balance, Final Accounts account
(D) Posting to Ledger, Trial Balance, (D) Purchases returns and allowances
Journalizing, Final Accounts account

~~~~~~n~n~1~n:<~1~rcL:~·nn~1'--~~~~,~~~~~--:~~~~~~~~o~o~o-N_T_o~T-H_£~N-E_x_T~P-A_o_E~~~-i
L·

•.
 -5-

20. A standing order of $25 for insurance 23.

appears in the debit column of the Bank W's Capital $300
Statement. This amount does not appear in X's Capital $200
the Cash Book. How is this item treated in Y's Capital .. $100
order to up date the Cash Book? Z's Capital $30

(A) Subtract the· $25 from the Bank

Statement Balance. W, X, Y and Z are partners sharing profits
(B) Add $25 to the Bank Statement and losses in proportion to their capital.
Balance. The capital of each is shown in the table
(C) Credit the Bank Account with $25. above.
(D) Debit the Bank Account with $25.
What is Z's share of a profit of $7 200?

21. A Suspense· Account was opened for an (A) $ 800

error of $30 found in the trial balance. (B) $1 200
Later it was observed that sales were w1- (C) $1 800
derstated by $30. This item would be (D) $2 400
corrected in the journal by

(A) Dr. Trading, 24. How should the totals of the Discount
Cr. Suspense Allowed and Discount Received columns
(B) Dr. Suspense, be posted when the Cash Book is ruled off?
Cr. Goods
(C) Dr. Sales, (A) Debit Discount Allowed,
Cr. Suspense Credit Discount Received
(D) Dr. Suspense, (B) Debit Discount Allowed,
Cr. Sales Credit Cash
(C) Debit Discount Received,
Credit Discount Allowed
22. Goods were purchased from M. Smith on (D) Credit Discount Received,
credit for $2 400 but posted to N. Smith's Debit Cash
Account. The item would be corrected in
the journal as follows
25. At the start of the financial year, a trader
(A) Dr. !vi. Smith $2 400, has creditors of $3 200. He paid cash of
Cr. Purchases $2 400 $14 900 to them during the year, and at the
end of the year, the balance of his debt was
(B) Dr. M. Smith $2 400, $2 800. What was the trader's total credit
Cr. N. Smith $2 400 purchases for the year?

(C) Dr. Purchases $2 400, (A) $12 100

Cr. M. Smith $2 400 (B) $14500
(C) $15 300
(D) Dr. N. Smith $2 400, (D) $17700
Cr. M. Smith $2 400

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001051/F 2002
 -6-

26. Which of the following is a Book of Origi- 29. Which-0fthe following transactions should
nal Entry and is also part of the General be debited in the Cash Ac"count?
Ledger?
(A) Bought goods for cash from
(A) Cash Book J. Jones
(B) Journal (B) Paid office cleaner cash
(C) Sales Day Book (C) Sold goods for cash
(D) Purchases Day Book (D) Paid on loan account

Item 27 refers to the following informa- 30. A proprietor withdraws cash from his busi-
tion. ness for his own use. The entries are

$ (A) Dr. Cash A/c; Cr. Bank A/c.

Opening stock of raw materials 500 (B) Dr. Cash A/c; Cr. Drawings A/c.
Purchases 2 000 (C) Dr. Drawings A/c; Cr. Cash A/c.
Closing stock of raw materials I 000 (D) Dr. Bank A/c; Cr. Cash A/c.
Direct labour 3 000
Factory overheads 4 500
Opening stock of work in progress 31. A and B had a partnership and shared
2 000
Closing stock of work in progress 3 000 profits and losses~ and .1. respectively.
3 3
They admitted C to the partnership. In
27. From the above information, the cost of
goods manufactured is addition to capital, Chad to pay, for Good-

will, $3• 600. How much did A and B

(A) $ 7 000
(B) $ 8 000 receive as their respective share of Good-
(C) $ 9 000 will?
(D) $11 000
(A) A receives $1 200.
B receives $2 400.
28. P. Hawk has a manufacturing business.
.His raw materials cost $1 900. Rates and (B) A receives $2 400,
renttotal $2 000, and factory wages amount B receives $1 200.
to $2 500.
(C) A receives $1 800,
The number of units produced is 640. What B receives $3 600.
is the cost of one unit?
(D) A receives $3 600,
(A) $ 4 B recei,·es $3 600.
(B) $ 6
(C) . $10
(D) $13 32. The-maximum _capital a company can issue
to the public is called

(A) authorised capital

(B) issued capital
(C) subscribed capital
(D) paid up capital

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001051/F 2002
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 -7-

Item 33 refers to the following figures 37.. On January l,afirm'scapitalis$4600. On

taken from a manufacturing account: December 31, of the sam.eyear, the follow-
ing infonuation was provided: Drawings
$ $850, Total assets $10 000, Loan outstand-
Prime costs 29 950 ing $950, Creditors $4 000. What was the
Factory overheads 11 250 net profit that year?
Manufacturing wages 22 000
(A) $ 450
(B) $! 300
33. What is the cost of raw materials con- (C) $1 400
sumed'! (D) $! 700

(A) $ 7 950
(B) $ 8 700 38. Which of the following is NOT a nominal
(C) $11 750 account?
(D) $33 000
(A) Carriage inwards
(B) Commission
34. A company purchased $I 500 worth of (C) Furniture
paint and was told that if the amount was (D) Discount allowed
paid within ten days, it would only have to
pay $I 350. In other words it received a
39. In preparing the accounts of a club, the
(A) I 0% cash discount account which is used to record expenses
(B) I 0% trade discount and income is called the
(C) 15% mark down
(D) 15% quantity discount (A) Revaluation Account
(B) Income and Expenditure Acc0tmt
(C) Appropriation Account
35. When a company declares a dividend of (D) !v!anufacturing Account
15%, the dividend warrant sent to the share-
holder 01ming I 500 $1 ordinary shares is
I tern 40 refers to the following information.
(A) $ 100
(B) $ 225 Trader's list price $400
(C) $1 500 Trade discount 10%
(D) $1 515

40. What is the cost of purchases entered in the

36. Which of the following accounts shows Ledger?
how profits and losses are shared among
p:irtners? (A) S360
(B) $390
(A). Profit and Loss Account (C) $410
(B) Appropri:ition Accow1t (D) $440.
(C) Current Account
(D) Income and Expenditure Account

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001051/F 2002 !i
 -8-

41. A club treasurer found, on closing his books, 45. Which of the following are NOT cash
that $50 subscription had been paid in transactions?
advance. Where would this amount ap-
pear? I. Bought goods paying by cheque
II. Sold goods receiving payment on
(A) On the debit side of the Income & delivery
Expenditure Account III. Paid balance owed to M. Merchan-
(B) On the credit side of the Income & danny
Expenditure Account IV. Sold motor lorry on two years terms
(C) Among the Liabilities on the Bal-
ance Sheet (A) I and Ill only
(D) Among the assets on the Balance (B) II and III only
Sheet (C) II and IV only
(D) II, III and IV only

42. Joanne Barnett is a dressmaker. She bought

100 metres of material from S. Wright for 46. A plant valued at $4 000 is depreciated at
$100 cash. Which of the following is the 10% per annum using the diminishing bal-
correct double entry for this transaction in ance method. \)/hat is its value after TWO
Barnett's ledger? years?

(A) Dr. Materials Ale; (A) $3 200

Cr. S. Wright's Ale. (B) $3 240
(B) Dr. Materials Ale; (C) $3 920
Cr. Cash Ale. (D) $3 980
(C) Dr. Cash Ale;
Cr. S. Wright's Ale.
(D) Dr. Cash Ale; 47. The balances of the asset accounts of the
Cr. Materials Ale. ~ayroe Club as at June 30, 1994 were:

Premises $5 400
43. A retailer purchases goods worth $3 000. Equipment $1 825
He receives 30% trade discount and 5% Furniture $ 960
cash discount. What did he pay? Bank and cash $1 640
Stock of refreshments $ 72
(A) $1 995
(B) $2 095
(C) $2 100 The amount of his accumulated fund was
(D) $2 850
(A) sl 640
(B) $4 497
44. The total assets of a business were $9 000 (C) $8 185
and the. total liabilities $3 000. A vendor (D) $9 897
offered $10 000 for the business. What
amqunt was given for goodwill?

(A) $ 1 000
(B) $ 2 000
(C) $ 4 ooo
(D) $16000

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001051/F 2002
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Item 48 refers to the following Appropriation Account: _

Appropriation Account

$ $
Taxation reserve IO 000 By balance 894.50
Preliminary 250 Net profit 26 106.50
Transfer to general reserve 4 000
Preference share dividend I 200
Ordinary share dividend 6 000

48. What conclusions could be drawn from the above

Appropriation Account?

I. The company has recently come into existence.

I
~ . II. The company is engaged in profitable enterprise.
III. The company is not doing too well.
IV. More dividends can be given to the ordinary share
rI holders.

(A) II and IV only

(B) III and IV only
(C) I, Il and IV only
(D) I, Ill and IV only

49. A businessman incurred the following ex- 50. To record a credit sale to S. John, which of
penses: the following entries must be made?
.

Factory repairs $6 000 I. Debit Sales Account

Machinery repairs $2 000 IL Credit Sales Account
New machine $3 000 111. Debit S. John's Account
New vehicle $7 000 IV. Credit S. John's Account
\
(A) I and 11 only
What was the total capital expenditure? (B) I and IV only
(C) II and III only
(A) $ 6 000 (D) II and IV only
(B) $ 7 000
(C) $ 8 000
(D) $IO 000

l~~~~~O-OI_O_S_l~~20_0_2~~~~--;-:~~;--:~~~~~~~~G-O~O-N_T_O~TH~E-N_E_XT~P-A_G_E~--:--~i
 - 10 -

51. 55. Closing stock at year end was NOT calcu-

lated correctly. Which of the following
Cost of raw materials $7 800 will be affected?
Manufacturing wages $21 000
Rent and truces $1 000 I. Cost of sales
Indirect wages $9 000 II. Gross profit
Royalties $ 200 III. Net purchases
Machinery depreciation $ 600 IV. Working capital
General Expenses $ 400
(A) I and II only
From the factory expenses given in the (B) Ill and IV only
above table what is the productive cost of (C) I, II and IV only
· goods manufactured? (D) II, III and IV only

(A) $29 000

(B) $30 000 Items 56 - 57 refer to the follo\\ing bal-
(C) $39 000 ances taken from the books of Sherida's
•CD) $40 000 Ltd on April 30, 1997 .

52. Prime Cost is $79 110 and overheads is BALANCES

$4 720 .. What is the cost of production? -
Rent owing $ 200
(A) $ 4 720 Cash S3 500
(B) $74 390 Creditors $1 200
(C) $79 110 Prepaid insurance $ 300
(D) $83 830 Bank overdraft $ 400

53. B. Black purchased goods for $400 and

56. What is the working capital of Sherida's
received I 0% discount. Later he returned
Ltd?
goods worth$ I 00, because they were faulty.
How much did he receive for the goods
(A) $2 000
returned?
(B) $2 400
(C) $3 600
(A) $ 10
(D) $3 800
(B) $ 40
(C) $ 90
(D) $1 000
57. What is the Current Ratio of Sherida's Ltd?

54. The net profit of a firm was shown as (A) 1: 1

$1 600 and it was later discovered that (B) 1.5: 1
discounts received were under-cast by $10 (C) 2.1 : 1
and purchases were understated by $36. (D) 3.1 :
the corrected net profit was

(A) $1 574
(B) $1 610
(C) $1 636
(D) $1 646

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001051/F 2002

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 - 11 -

58. A credit balance b/f in the Sales Ledger 60. A Suspense Account showed a debit bal-
Control Ale represents an overpayment ance. Which of the following could have
given rise to such a balan.ce?
(A) to creditors
(B) by debtors (A) The discount received was overcast
(·'::) to debtors in the Cash Book.
(D) by creditors · (B) The figure taken from an invoice is
incorrect, but the postings are
correct.
59. Which of the following is the correct entry (C) The book-keeper could not find a
when a debtor is UNLIKELY to pay off his sales invoice.
debt? (D) Cash received had been credited
l\\~ce to the Debtor's Accow1t
(A) Dr. Debtors Ale,
Cr. Bad Debts Ale.
(B) Dr. Debtors Ale,
Cr. Provision for Bad Debts Ale.
(C) · Dr. Bad Debts Ale,
Cr. Debtors Ale.
(D) Dr. Profit & Loss Ale,
Cr. Provision for Bad Debts Ale.

IF YOU FINISH BEFORE TThfE IS CALLED, CHECK YOUR \VORK ON THIS TEST.

OOlOSl/F 2002
I