ROYAL COLLEGE PORT-LOUIS

FORM III

CANDIDATE NAME

CLASS

PRINCIPLES OF ACCOUNTS October 2015

1 hour 30 mins

Candidates answer on the Question Paper.

No Additional Materials are required.

READ THESE INSTRUCTIONS FIRST

Write your name and class on all the work you hand in.
Write in dark blue or black pen.
You may use a soft pencil for any diagrams or graphs.
Do not use staples, paper clips, highlighters, glue or correction fluid.

Answer all questions.

Workings must be shown.
You may use a calculator.

At the end of the examination, fasten all your work securely.

The number of marks is given in brackets [ ] at the end of each question or part question.

The total marks for this question paper is 50.

For Examiner’s Use

1 /5

2 /7

3 /38

Total /50

This document consists of 8 printed pages.

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Question 1 For
Examiner’s
Circle the correct answer for questions (i) to (v) below: Use

(i) Which of the following double entries is the correct way to record the purchase of
goods from James, paying by cheque?

Debit Credit
A James Purchases
B Purchases James
C Purchases Bank
D James Return Inwards

(ii) Which term best describes the following: “Goods returned by the customers to the
business”?

A Carriage inwards
B Return inwards
C Return outwards
D Carriage outwards

(iii) The owner of a business purchased stationery for business use and paid by cash.
What are the entries to record this?

Debit Credit
A Cash Purchases
B Cash Stationery
C Purchases Cash
D Stationery Cash

(iv) Which one of the following transactions is represented by the entries:

Debit Equipment, Credit Sam?

A Purchased goods on credit from Sam.

B Purchased equipment from Sam and paid by cash.
C Bought equipment on credit from Sam.
D Sold equipment on credit to Sam.

(v) What does a Trial Balance show?

A The list of customers and suppliers of the business.

B The profit made by the business during the accounting period.
C The list of ledger balances at the end of the accounting period.
D The cash balance remaining at the end of the accounting period.

[Total: 10]
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Question 2 For
Examiner’s
(i) Name the term used to describe the recording of transactions in the books of a Use
business.

……………………………………………………………………………………..............[2]

(ii) Stephen decides to start a business by opening a bank account with $ 15,000.
To which account in his ledger will this amount be credited?

………………………………………………………………………………………..........[2]

(iii) State one reason why a customer would return goods to its supplier?

……………………………………………………………………………………..................

………………………………………………………………………………………..........[2]

(iv) To which account, should the purchase of motor vehicles for resale, be debited?

………………………………………………………………………………………..........[2]

(v) What is the purpose of preparing a Trial Balance?

………………………………………………………………………………………..............

………………………………………………………………………………………..........[2]

(vi) What is the alternative term for “Purchases Returns”?

……………………………………………………………………………………..............[2]

(vii) Define the term “equity/capital”

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……………………………………………………………………………………............[2]

[Total: 14]

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Question 3 For
Examiner’s
The following transactions took place in the books of Hajra during the month of September Use
2015:

Date Transactions Debit Credit

Sept 1 Hajra started business with the following:

- Cash in hand $ 850.

- Cash at bank $ 3,400.

Sept 2 Purchased goods on credit from Kelly $ 1 800.

Sept 5 Paid cash $ 400 to Kelly.

Sept 9 Sold goods on credit to Benito $ 1 150.

Sept 10 Benito returned goods worth $ 250 to the business.

Sept 16 Paid electricity and water expenses by cash $ 175.

Sept 25 Received a cheque of $ 750 from Benito.

Sept 27 Received rent by cheque $300.

Sept 28 Bought office equipment and paid by cheque $2 450

Sept 30 Hajra took cash $ 25 from the business for her

personal use.

REQUIRED:

(a) State for each transaction above, the account which is to be debited and the
account which is to be credited. [22]

(b) In the books of Hajra,

(i) Label the Ledger drawn up in pages 5, 6 and 7. [1]

(ii) Prepare Ledger Accounts. Close the accounts at the end of September,
and bring down any balances. [31]

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In the books of Hajra For

Examiner’s
Use

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For
Examiner’s
Use
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For
Examiner’s
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(c) Explain what a credit balance on the Bank Account represents. For
Examiner’s
……………………………………………………………………………………….............. Use
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……………………………………………………………………………………............[2]

[Total: 56]

Question 4

From the following list of balances, prepare a Trial Balance for the business of
Nigel, with a proper heading at 30 September 2015. [20]

$
Bank 5 128
Capital 67 470
Carriage on purchases 612
Carriage on sales 1 103
Interest received 994
Drawings 18 432
Inventory 26 110
Light and heat 2 734
Motor expenses 2 682
Motor vehicles 18 450
Office expenses 6 033
Printing and stationery 876
Wages 12 045
Purchases 76 551
Repairs and renewals 1 058
Return inwards 764
Return outwards 1 219
Revenue 113 140
Trade payables 16 535
Trade receivables 26 780

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[Total: 20]

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