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CSEC POA June 2005 P1 PDF
CSEC POA June 2005 P1 PDF
i 90minutes
( 24 MAY 2005 (p.m.)
Sample Item
Prime cost is calculated by
(A) adding direct factory expenses to cost of
Sample Answer -
(B)
materials used
adding indirect factory expenses to cost of
•®©@
materials used
(C) subtracting direct factory expenses from
(D)
cost of materials used
subtracting indirect factory expenses from
cost of materials used
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The best answer to this item is "adding direct factory expenses to cost of materials used" , so answer
space (A) has been blackened
I 4.
5.
If you wantto change your answer, be sure to erase your old answer completely and fill in yournew
choice.
When you are told to begin, turn the page and work as quickly and as carefully as you can. If you cannot
I answer an item, omit it and go on to the next one. You can come back to the harder item later. Your
score will be the total number of correct answers.
6. This test consists of 60 items. You will have 90 minutes to answer them.
7. Do not be concerned that the answer sheet provides spaces for more answers than there are items in
this test.
8. The use of silent electronic calculators is allowed.
DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO
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1. Which of the following items on a balance 5. The purchase of a motor van on credit from
sheei would differ MOST in presentation Things Caricom Motors Co. for use in the
when comparing the booksofacompany and business should be recorded as
books of a sole trader?
(A) debit Motor Van Expense Account,
(A) Capital credit Bank Account
(B) Current assets (B) debit Purchases Account, credit
(C) Current liabilities Things Cari com Motors Co. Ac-
(D) Fixed assets count
(C) debit Motor Vehicle Account, credit
Bank Account
2. Tom, Percy and John formed a partnership (D) debit Motor Vehicle Account,
and agreed that profits were to be shared in credit Things Cari com Motors
ratio I :1 :2respectively. Thenetprofitforthe Co.Account
year was $18 900. What was John's share of
the profit?
~refers to the following extract from a
(A) $ 4 725 trading account:
(B) • $ 9450
(C) $14175 $
(D) $18900 Opening stock 200
Sales 900
Purchases 500
3. An employee works for 45 hours each week Closing stock 300
at $4 per hour for a 40-hour week and $6 per
hour for overtime. What is his gross weekly
wage? 6. What is the gross profit?
4. Control accounts are kept to assist 7. At the end of the year the capital of a business
management in was $33 000. At the beginning of the year the
capital was $28 000. During the year the
(A) limiting expenditure owner withdrew for personal use $2 000.
(B) increasing profits What is his net profit for the year?
(C) locating errors
(D) limiting drawings (A) $ 5 000
(B) $ 7 000
(C) $30000
(D) $61000
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8. A trader received an invoice for $4000 less 10. A business which owns goods valued at$500,
25% trade discount. Subsequently he also has a van valued at $1 000; it owes $50
for goods. What is the capital of the business?
returned one-eighth ( 1J) of the goods. (A) $ 1 050
What amount would beentered in his (B) $ 1450
(C) $ 1 500
Returns Outwards Account? (D) $ 1550
(A) $375
(B) $400 11. The working capital of A. Young and Sons
(C) $450 is$15 500, and Current Assets are$16 500.
(D) $500 What are the total Current Liabilities?
(A) $ I 000
9. Credit notes issued for goods returned by a (B) $ 15 500
customer will be entered firstly in the (C) $ 16500
(D) $32000
(A) Returns Outward Book
(B) Returns Inward Book
(C) · Sales Returns and Allowances Ac-
count
(D) Purchases Returns and Allowances
Account
$ $
Transfer to statutory reserve 24000 Surplus for the year bid 80000
Transfer to special reserve 5 600 Undistributed surplus
Proposed dividend 5% 20000 b/f from last year 11 170
Undistributed surplus carried to next year ?
91170 91170
(A) $ 11 170
(B). $41570
(C) $ 49 600
(D) $ 91 170
2001 $ 2001 $
(A) $ 2 050
(B) $3100
(C) $ 3 550
(DJ $ 5 600
$ $
J4. WhatisLagoon'sworkingcapital?
(A) $500
(B) $600
(C) $750
(D) $800
15. On December31, 2002, the Balance Sheet of 16. The MAIN reason why a sole: proprietor may
Mr J. W. Ward showed the following: consider joining with one or more other per-
sons to form a partnership is
Fixed assets $80000
Current assets $35000 (A) he can work Jess if many people are
Liabilities $30750 doing the same job
(B) the business would attract more cus-
What is Ward's capital? tomers
(C) the business would get additional capi-
(A) $45 250 tal and management skills
(B) $65000 (D) the business would be recognised
(C) $80000 by the government
(D) $ 84250
Dr Cr Balance
$ $ $
5 Cheque <;K)
29 Bank charges 85
(A) An overdraft
(B) A direct debit
(C) A credit transfer
(D) A positive balance
18. Which of the following assets is the MOST 21. A proprietor wins a motor van valueq
liquid? $10 000 and decides to put it into the
.business. Which of the following is the
(A) Cash correct entry?
(B) Debtors
(C) Equipment (A) Debit Motor Vehicles Account,
(D) Stock Credit Drawings Account
19. The items raw materials stock, work in (B) Debit Capital Account,
progress stock, and finished goods stock, Credit Motor Vehicles Account
are MOST likely seen together on the bal-
ance sheet of a (C) Debit Motor Vehicles Account,
Credit Capital Account
(A) supermarket
(B) bus company (D) Debit Bank Account,
(C) garage Credit Capital Account
(D) shoe factory
(A) $ 1 995
(B) $2095
(CJ $2100
(D) $2850
22. Herbert paid Smith and Co. $380 to settle an account of $400.
What entries should be made in Herbert's books?
$ $
Appropriation Account
$
Taxation Reserve 10000 By balance 894.50
Preli mi nary expenses 250 Net profit 26106.50
Transfer to General Reserve 4000
Preference share dividend I 200
Ordinary share dividend 6000
23. . What conclusions could be drawn from the above Appropriation Account?
24. A business operates its petty cash on the 26. Which of the following statements BEST
imprest system. At the beginning of the describes the 'double entry' system of book-
month, the petty cashier was given $200outof keeping?
which she spent $152. How much will she be
reimbursed? (A) A ledger account must have two
sides.
(A) $ 48 (B) An account must be written twice in
(B) $152 the ledger.
(C) $200 (C) Each transaction must have a debit
(D) $352 entry and a credit entry.
(D) Each transaction must be written in
two subsidiary books.
25. Which of the following entries in the three-
column cash book are contra entries?
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27. Morris purchases $1 000 worth of furniture 30. A photo-copying machine valued at$5 OOOis
for office use and enters it in the Journal as depreciated at I 0% per annum using the
purchases. How will this error affect his . 'straight-line method'. What is its book value
Balance Sheet? after two years?
35. Gross Profit % 45% 39. An invoice is a document made out when
Sales $9000 goods are
From the table above, what is the gross profit? (A) overcharged
(B) returned
(A) $4000 (C) undercharged
(B) $4050 (D) sold
(C) $4950
(D) $9000
40. A company is allowed by law to sell I 00 000
36. A trader sent Mr Jones an invoice charging shares at $1.00 each. Half of these shares
him for 10 articles at $68 instead of $65. were bought by the public.
Which note should the trader subsequently
send to Mr Jones to rectify the error? What is the authorized capital?
37. WhichofthefollowingBESTdescribesatrial
balance? 41. Because of an error in posting, the Purchases
Account was understated by $100 in respect
I. A list of Balances of Accounts of goods purchased on credit. What are the
II. A Financial Statement journal entries necessary to correct this error?
III. An Account
IV. A check on the accuracy of the (A) Debit Supplier,
double entry system Credit Purchases
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Mohammed Patel,
Statement of Affairs
As at December 3 l , 1997
$ $ $
- Drawings 300
Capital at end ?
Liabilities 1 500
5 500 5 500
=
(A) $1300
(B) $1500
(C) $ 1 600
(D) $1 800
$
Beginning capital 30000
Ending capital 40000
Drawing during period 4000
Additional investment .
during period 3 000
(A) $ 7 000
(B) $ 9000
(C) $11 000
(D) $ 17000
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44. The excess of the income over the expendi- 46. The Cash Book is BEST used for recording
ture of a non-profit-making organization is
called (A) cash receipts and cash payments
(B) goods returned for cash
(A) gross profit (C) goods purchased for cash
(B) net profit (D) goods sold for cash
(C) accumulated fund
(D) surplus
47. On January 2, 1995, J. Brown, a debtor,
was declared bankrupt. He owed Elmer
45. Payne and Quarless decided to admit Rose as Browne Ltd $800 for goods purchased.
a new partner. The total capital after the What effect would this have on the balance
admission of Rose will be $30 000, of which sheet of Elmer Browne Ltd?
Rose is tocontribute$10000for an interest in .
the capital. If Rose brought in cash and a (A) 'Closing stock' is reduced by $800.
motor van valued at $3 000, his admission (B) 'Closing stock' is increased by $800.
would be recorded in the journal as (C) 'Debtors' is increased by $800.
(D) 'Debtors' is decreased by $800.
Dr. Cr.
$ $
48. Under which of the following conditions
(A) Cash 10000 would a trial balance still balance?
Rose;scapital 7000
I. A transaction was completely left
(B) Rose's capita! 7000 out.
Cash 7000 II. Both a debit and credit entry were
overstated by the same amount.
(C) Cash 7000 III. A debit entry was left out.
Motor van 3000 IV. Both a debit and credit entry were
Rose's capi ta! 10000 understated by the same amount.
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$ $
Prime cost 4500 Trading 6 100
Factory overheads 2500
7000
Opening stock of work progress 5 000
x xxx
(A) $ 500
(B) $1400
(C) $2400
(D) $5000
50. Mr Smith does not keep proper records. He 51. A Suspense Account was opened for an error
began business with $10000 in the business of$30found in the Trial Balance. Laterit was
bank ale. He uses his vehicle and building observed that sales were understated by $30.
worth $6 000 and $15 000 respectively, as This item would be corrected in the journal by
part of his business. Customers owe him
$4000. He withdrew$! 500forpersonaluse (A) Dr. Trading,
and owed creditors $2 000. Cr. Suspense
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52. In.a factory, raw materials used amounted 56. A trader paid hisclient$500by cheque. What
to $4 000, manufacturing wages $1 200 and will be the correct entry in the trader's Cash
other direct expenses $400. What was the Book?
prime cost of articles produced?
(A) Debit Bank Ale,
(A) $4400 Credit Cash Ale
(B) $ 4 800
(C) $ 5 200 (B) Credit Bank Ale only
(D) $5600
(C) Credit Bank,
Debit Cash Ale
53. Closing stock at year end is incorrectly (D) Credit Cash Ale only
valued. Which of the following will be
affected?
57. The balances of the asset accounts of the
Bayroe Club as at June 30, 1994 were:
I. Cost of sales
IL Gross profit
$
III. Net purchases
Premises 5 400
IV. Working capital
Equipment 1 825
Furniture 960
(A) ·I and II only
Bank and cash 1 640
(B) III ar;d IV only
Stock ofrefreshments 72
(C) I, II and IV only
(D) II, III and IV only
The amount of the accumulated fund was
(A) $1640
54. Joyce and Keller are in partnership having
(B) $4497
capital of $14 000 and $18 000 respectively.
(C) $8185
Before admitting a new partner, Wong,
(D) $9897
with $10000, into the business, they agreed
that the partnership be valued at $42 000.
The goodwill is therefore 58. K. Khan, a debtor of A and B Enterprises
settles his debtof$120 less 2\/2% discount, by
(A) $ 1 000 cheque. The double entry in the books of A
(B) $ 2000 and B Enterprises should be
(C) $ 8 000
(A) Dr. K. Khan $117
(D) $10000
Dr. Discount Received $ 3
Cr. Bank $120
55. A proprietor withdraws cash from his busi- (B) DrK. Khan $ 117
ness for his own use. What will be the Dr. Discount Allowed $ 3
entri,;s for this transaction? Cr.Bank $120
(A) Dr. Cash Ale, Cr. Bank Ale (C) Dr. Bank $117
(B) Dr. Cash Ale, Cr. Drawings Ale Dr. Discount Allowed $ 3
(C) Dr. Drawings Ale, Cr. Cash Ale Cr. K. Khan $120
(D) Dr. Bank Ale, Cr. Cash Ale
(D) Dr.Bank $ 117
Cr. Discount Received $ 3
Cr. K. Khan $120
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Item 59 refers to the following information. · 60. X, Y and Z have just commenced bu'sln(,ss as
partners with X investing$100000, Y -$50
000andZ-$50000as their opening capitals.
V. Jones $
However, in drafting the partnership agree-
Net Pay 1200 ment they did not treat the issue of sharing of
Income Tax 300 profits.
National Insurance 50
How should the net profit of $18 000 (afterall
other appropriations) be shared amongst X, Y
59. What is Mr Jones' gross pay? and Z?
IF YOU FINISH BEFORE TTh1E IS CALLED, CHECK YOUR WORK ON THIS TEST.
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