AS & A Level Accounting (9706) — October–November 2023, Paper 13

Inventories are valued at the lower of cost and net realisable value in the statement of financial position. Which accounting concept is being applied? A duality B historic cost C…

Which statements describe ways in which the security of data can be ensured within a computerised accounting system? 1 avoiding the use of updates from the accounting software…

On 1 January, Ann owed Sam $400. She paid the amount due on 6 January after deducting a 2% cash discount. How did Ann record this? A Debit: bank $392, discount allowed $8; Credit:…

An improvement to business premises has been incorrectly treated as an expense in the financial statements. What is the effect on the financial statements after this error has…

A business incurs the following business expenditure during the year. Item $ --- --- purchase of a machine 9 700 3-year maintenance for the machine 10 000 replacing the wheels of…

What is a reason for providing for depreciation of non-current assets? A to ensure non-current assets are replaced when they are worn out B to match the cost to the revenue earned…

A business uses the straight-line method of depreciation. A machine which it has owned for three years has a carrying value of $13 000 at the end of the third year. When…

Sammy paid a credit supplier $190 in full settlement of a debt of $200. He omitted to record the discount. How did the correction of this error affect Sammy's statement of…

The trial balance of a business did not agree and a suspense account was opened. The following errors were then discovered. 1 The sales journal total of $9150 had been credited to…

Which items are used to update the cash book when preparing a bank reconciliation statement? 1 an amount directly collected by a supplier from the business's bank account 2 an…

The year-end balance in the cash book was $23 780. This was different from the balance on the bank statement. The difference was due to the following items. Item $ --- --- a bank…

Which item is not recorded in the sales ledger control account? A allowance for irrecoverable debts B dishonoured cheque C returns inwards D settlement discount

The closing balance of a purchases ledger control account was $7480. It did not agree with the total of the suppliers' balances in the purchases ledger. The following two errors…

Which statements are correct? 1 An increase in the allowance for irrecoverable debts increases profit for the year. 2 Irrecoverable debts decrease profit for the year. 3 Rental…

A business paid an annual rent of $24 000. At the beginning of the year, on 1 January, there was accrued rent of $4000. Rental payments during the year were as follows: Date $ ---…

A business adds a mark-up of 25% to all goods sold. The following information is available for the year ended 30 June. Item $ --- --- receipts from credit customers 284 300…

A partnership agreement only provides for interest on capital at a rate of 6% and interest on drawings at a rate of 8%. What will be the interest payable on a loan from a partner?…

L and M are in partnership. The following information relates to the financial year. Item L $ M $ --- --- --- drawings 20 000 30 000 interest on drawings 1 200 1 800 interest on…

Which items will not form part of the equity of a limited company? 1 long-term bank loan 2 share premium 3 retained earnings 4 revaluation reserve A 1, 3 and 4 B 1 only C 2, 3 and…

Which is an internal stakeholder? A bank B debenture holder C employee D potential investor

In the last financial year, R Limited had sales revenue of $190 000 and operating expenses of $108 000. In the current financial year, the directors think that if they increase…

The following information is available for a business. Item $ --- --- total purchases 820 000 credit purchases 740 000 opening inventory 60 000 closing inventory 80 000 total…

Which characteristic describes an indirect cost? A a cost that cannot be controlled by company managers B a cost that cannot be directly traced to individual cost units or cost…

The manufacture of product type X incurs a specific cost. Data relating to this is as follows: units produced 6000 9000 --- --- --- cost per unit $3 $2 Which type of cost is this?…

A company makes a single type of product and sells it for $12 per batch. The variable cost is $4 per batch. Fixed costs have been absorbed based on a normal activity level of 1000…

A business operates a system of absorption costing. Which statements are correct? 1 Overheads would be over absorbed if the actual activity level was below the budgeted level. 2…

A business uses an overhead absorption rate of $20 per direct labour hour. In April budgeted direct labour hours were 6000 and actual direct labour hours were 6100. Overheads for…

Which statement is an argument for using marginal costing? A International accounting standards require use of marginal costing. B Marginal costing data enables the use of…

The following information is available for a business. Item Value --- --- total fixed costs $15 000 variable cost $12 per unit selling price $20 per unit break-even point 1875…

Which assumption does not apply for cost-volume-profit (CVP) analysis? A All units produced are sold. B Only a single type of product is produced and sold. C Total fixed costs…