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coDE 01239010
FORM TP 2015102 MAY/JLINE 2OI5

CA R I B B E A N EXAMINATIONS COUNCIL
CARIBBEAN SECONDARY EDUCATION CERTIFICATEO
EXA]VIINATION
PRINCIPLES OF ACCOUNTS
Paper 01- General ProficiencY
I hour 30 minutes
2l MAY 2015 (p.m.)

READ THE FOLLOWING TNSTRUCTIONS CAREFULLY.

l. This test consists of 60 items. You will have I hour and 30 minutes to answer them.

2. In addition to this test booklet, you should have an answer sheet.

J. Each item in this test has four suggested answers lettered (A), (B), (C), (D). Read each item
you are about to answer and decide which choice is best-

4. On your answer sheet, find the number which corresponds to your item and shade the space
having the same letter as the answer you have chosen. Look at the sample item below.

Samole Item

Prime cost is calculated by adding dirlct factory expenses to the Sample Answer

(A)
(B)
cost of goods sold
sale of fixed assets
@@oo
(C) sale of finished goods
(D) cost of materials used

The best answer to this item is "cost of materials used", so (D) fr"s U"en shaded'

5. If you want to change your answer, erase it completely before you fill in your new choice'

6. When you are told to begio, turn the page and work as quickly and as carefully as you can'
If you cannot answer it"*, go on to the next one. You may retum to that item later'
"n
7. The use of silent electronic calculators is allowed.

-r DO NOT TURI! THIS PAGE TJNTILYOU ARE TOLD TO DO SO.

I Copynght @ 2OL3 Caribbean Examinations Council
r An rights reserved.,
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l. The MAIN purpose of preparing -financial The balance of an Accounts Payable's

statements is to
Account is entered in the balance sheet
under the heading
(A) determine gross Profit
(B) make informed financial decisions
(A) capital
(c) meet the objectives of the business
(B) fixed assets
(D) determine whether caPital has (c) current assets
increased
(D) current liabilities

business receives $5 000 for rent

and
A
2. A nou-trading organization is MAINLY
deposits'this amount into its bank account'
concerned with
How will this nansaction be recorded?
(A) importing goods for resale
(A) Dr bank $5 000; Cr rent $5 000
(B) frading onlY with wholesalers
(B) Dr rent $5 000; Cr bank S5 000
(C) providing various services for its
(c) Dr cash $5 000; Cr rent $5 000
members
(D) Dr rent $5 000; Cr exPense 55 000
(D) making morimum Profit for the
ProPrietor

3. Which of the following states the correct

order of the stages in the accounting cycle,
before Final Accounts?

(A) Posting to ledger,journalizing, Fial

balance
(B) Posting to ledger, trial balance,
journalizing
(C) Journalizing,trialbalance,posting
to ledger
(D) Journalizing,postingtoledger,trial
balance

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Items 6-7 refer to the following Balance Sheet.

Belance Sheet of Boots'Sports Store

as at 3l December 2012
$ $
Capital r2 000 Land & building 9 000
Add Netprofit 4 000 MOtOr van 5 000
l6 000 Fixnues & fittings 600
Less Drawings (500) Inventory 450
Debtors 2so
Creditors " Bank 200,0
15 500 Cash 300
2 t00

l7 600_

6. What is the amount of total fixed assets? 7. What is the amount for toal current assets?

(A) s 9000 (A) $2 5s0

(B) $14 000 (B) $3 000
(c) sr4 600 (c) $3 600
(D) sls 050 (D) $8 600

8. Which ofthe following lists ofcurrent assets 9. A frader received an invoice for $4 000
-
is arranged in order of liquidity? Iess 25Yo tade discount. Subsequently,
he retumed one-eighth of the goods. What
(A) Accountsreceivable,prepa)nnents, amount would be entered in his Rehrrns
inventory, cash, bank Outwards Account?
(B) Prepayments,accountsreceivable,
cash, banh inventory (A) $375
(C) Cash,bank,prepayments,accounts (B) $400
receivable, inventory (c) $450
(D) Inventory, accounts receivable, (D) $500
prepayments, bank, cash

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10. Which of the following would I.IOT appear 14. The total credit of the bank column of a
in a Cash Book? Three-Column Cash Book is greater than
the total debit. The MosT likely reason
(A) Goods sold for cheque for this situation is that
(B) Payment for goods
(C) Goods bought for cash (A) there was an overdraft
(D) Goods sold on credit (B) transactions were omitted from the
debit side
(C) some figures were overstated on
11. A businessman offers a discount for prompt the credit side
payment for goods purchased. Under which (D) the incorrect transactions were
column in his Three-Column Cash Book, entered on the credit side
would this be entered?

(A) Bank 15. Money spent by a company on the purchase

(B) Cash or improvement of a fixed asset is referred
(C) Discount allowed to as
(D) Discount received
(A) liabilities
(B) purchases
t2. Credit notes issued for goods returned by a (C) capital expenditure
customer will be entered firstly in the (D) revenue expenditure

(A) refirns inward book

(B) retums outward book 16. Which of the following BEST describes
(C) sales returns and allowances the 'double ent4/'system of accounting?
account
(D) pruchases returns and allowances (A) A ledger account must have two
account sides.
(B) An account must be written t*'ice
in the ledger.
13. An articte is subject to a 2ox tr;a" aiscount. (C) Each transaction must be written
Its list price is $600. What is its sale price? in two subsidiary books.
(D) Each transaction must have a debit
(A) $120 entry and a credit entrY'
(B) $480
(c) s580
(D) s720

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17. A businessman incurred the following 20. The Trial Balance is prepared by using
expenses. balances from the

(A) Ledger
Factory repairs l56 000
(B) Joumal
Machinery repairs I S2 000 (c) Sales book
New machine l53 000 (D) Purchases book
New vehicle l$7 000

What is the total capital expendinue? 21. K. Khan, a debtor ofA and B Enterprises,
settles his debtof $ 120 less 2)% discount,
(A) $ 6000
(B) $ 7000 by cheque. How should the double enbry
(c) $ 8000 be recorded in the books of A and B
(D) $r0 000
Enterprises?

18. Mr Abel and Mr Blue purchased goods on

credit from Mr Kane valued at $50 and $75 (A) Dr K. Khan $l l7
respectively. Another customer paid cash Dr discount received $3
for goods amounting to $550. Mr Kane took Cr bank $ 120
goods at cost for himself amounting to $500.
Which of the following figures represents the (B) Dr K. Khan $l l7
total in Mr Kane's Sales Account? Dr discount allowed $3
Cr bank $ 120
(A) $ lzs
(B) s 425 (c) Dr bank $l l7
(c) $ 67s Dr discount allowed $3
(D) $l 175 Cr K. Khan $120

(D) Dr bank $l r7
19. A proprietor wins a motor vehicle valuei Cr discount received $3
at Sl0 000 and decides to put it into the Cr K. Khan $ 120
business. Which of the following entries
should be recorded?
22. The following information has been
(A) Dr motor vehicles account
extracted from Jack's books:
Cr drawings account
(B) Dr capital account
Opening stock $ 700
Cr motor vehicles account s6 200
Purchases
(C) Dr motor vehicles account
Sales $8 800
Cr capital account $ 800
Closing stock
(D) Dr bank account
Cr capital account What is the amount of the 'cost of sales'?

(A) $2 600
(B) s6 r0o
(c) s7 700
(D) $8 800

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Item 23 refers to the followingjnformation. 26. A company has a current ratio of 3:1.
Current liabilities are
A calculation to determine gross profit
percentage is as follows: Creditors $10 000
Accruals $ 5 000
185 530 100
529 800 l What is the the working capital amount?

23. What does the $529 800 represent?

(A) Sls 000
(B) s3o 000
(A) Total purchases
(c) $45 000
(B) Cost of sales
(D) $60 000
(C) Total sales
(D) Gross profit
Item 27 refers to the following balances
taken from the books of Sherida's Ltd on
30 April2012.
Item24 refers to the following data which
are taken from the records of a hardware
store at the end of its fiscal year. BALAI\TCES

$
Rentowing l$ 200
Sales 83 868 Cash I 53 500
Sales rehuns I 570 Creditors I St zOO

Discount allowed 9ll l$

Prepaidinsurance 300
Inventory at start 9 850 Bankoverdraft l$ 400
Inventory at close 11 075
Purchases 52 640
Purchases returns 762 27. What is the working capital of Sherida's
Ltd?

24. What is the gross profit of the hardware (A) $2 000

store? (B) $2 400
(c) s3 600
(A) szs 62s (D) $3 800
(B) s3164s
(c) $33 215
(D) s34 023 28. On-01 January 2Ot2; $10 000 was Paid
towards an advertising campaign. Of this
amount" $7 000 was used by 31 December
25. The working capitalofA. Young and Sons 2012.
is $15 500. The total amount of current
What was the amountofadvertising prepaid
assets is $16 500. What is the total amount
at year's end?
of current liabilities?

(A) $ I 000 (A) $ 3 000

(B) $ls (B) s 7 000
(c)
soo
$16 s00
(c) slo ooo
(D) $32 000
(D) $17 o0o

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29. Depreciation in accounting tenns can be Item 33 refers to the following information.
defined as the On 3l Janua4r, the cash book and a bank
statement of a business revealed the
(A) increase in value of an asset over following.
time
(B) moneysavedtoreplaceafixedasset
(C) cost of using a fixed asset for an

(D)
accounting period
straight line method or reducing
unpresented cheques | ,:,
balance method used by a Cashbookbalanceon3l I 680
business January

Bank charges not yet entered in | 25

The annualrentofabusiness is $6 000. The cashbook
business paid $5 000 during the prese'ntyear
I
and recorded $5 000 in its income statement. Deposits not credited on bark I
Which accounting concept was breached? statements for the Period I 2 l0
ing 3l
(A) Separate entity
(B) Consistency 33. The balance on the bank statement will be
(C) Pnrdence
(D) Accrual (A) S74s
(B) $7e5
(c) $820
31. How does an increase in bad debts affect a (D) $845
sole trader's financial statements?

(A) Increases the net profit 34. A standing order of $25 for insurance
(B) Decreases the gross profit appears in the debit column of the bank
(C) Increases the gross profit s0atement. This amount does not appear
(D) Decreases the net Profit in the cash book. How is this item treated
in order to update the cash book?

32. Control accounts are kept in order to assist (A) Credit the bank account with $25.
managernent in (B) Debit the bank account with $25.
(C) Add $25 to the bank statement
(A) limiting expenditure balance.
(B) limiting drawings (D) Subtra-ct $25 from the bank
(C) increasing profits statement balance.
(D) locating elrors

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Item 35 refers to the following information 36. Which of the following can be determined
provided by Kay, a sole trader. from an Opening Statement ofAffiairs?
$
0l May
(A) Sales
01 May Sales ledger balance @r) 3 000
(B) Capital
3l May
31 May Retums inwards 500
(C) Expenses
Bad debts 200
Discounts allowed 100
(D) Purchases

Cheques received from

debtors 7 000
Item 37 refers to the following information.
Sales ledger balance 4 000

What is IGy's credit sales for the month of Inventory at 0l January 2014
l$ I 500
35. | t ZOO
May? Purchases during the month I
Cost of goods sold I I 400
(A) s 6 800
(B) $ 8 800
(c) $1r 800 37. What is the inventoryat the endofJanuary?
(D) $r4 800
(A) $ 300
(B) $ s00
(c) $ 700
(D) $l 300

Item 38 refers to the following Balance Sheet information provided for a firrn as
at 0l January
2012.

$ $

2012 Bank 3 000

0l January Accounts receivable o)

lnventory I 000

Accounts paYable s00

5 500
GI)

38. What sum of money is represented by (D?

(A) sr 000
(B) s2 000
(c) $3 000
(D) $6 000

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39. Mr Miguel's capital on 0l January was
$40 000 and on 31 December $85 000. He 42. The total capital in a partnership is
withdrew $l 000 in inventory during the $30 000. Rose contributed $7 000 in cash
year. and a motor vehicle worth $3 000- Rosels
contribution to the parhership would be
What is his profit for the year? recorded in the joumal as

(A) $ s 000 Dr Cr

(B) $ 46 000 $$
(A) Cash l0 000
(c) $12s 000 Rose's capital l0 000
(D) sl26 000
(B) Rose's capital 7 000
Cash 7 000
40. According to the terrns of a Partnership
Agreement, partnerA is to be credited with
a salary of $5 000 per year. How will this
(C) Cash 7 000
Motor vehicle 3 000
will be recorded in the books? l0 000
Rose's capital

(A) Dr partner's crurent account'

(D) Rose's capital lo 000
cr cash Motor vehicle 3 000
(B) Dr parher's current account
Cash 7 000
Cr approPriation account
(C) Dr appropriation account
Cr partner's crurent account
(D) Dr appropriation account, Item 43 refers to the following table which
Cr cash shows the amount of capital invested by
four persons in a PartnershiP.

4t. Tom, Percy and John formed a partnership Person CaPital

and agreed that profits were to be shared in $
the ratio l: I :2 respectively. The net profit w 300
for the year was $18 900. What was Johh's x 200
share of the profit? Y 100
z 300
(A) $ 4725
(B) $ 9450 43. The parhers share profit and loss in the
(c) $14 175 proportion of their capital. What is Z's
(D) $18 900 share of the prott of $7 200?

(A) s 800
(B) $1 200
(c) $l 800
(D) $2,!00

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44. Mrs Allen invested $20 000,'Mrs Brown 47. A public limited company issued a
invested $5 000 and Mr Cable invested prospectus offering the shares described
$5 000 in the same business. The loss in the table below, for sale at par value.
sustained during the year was $ I 000. The
PartnershipAgreement is silent on the item Type ofshare No. of Par
of losses, although profits are to be split in units value
the ratio 2:2:l n favour of Allen, Brown 200 000
Ordinary $2
and Cable respectively. How much of the l0 000 $5
5olo Preference
loss must be borne by Mr Cable?
The issue was fully subscribed. How much
(A) $200 capital did the company raise?
(B) S240
(c) s30o (A) s 40 000
(D) $400 (B) $ 4s 000
(c) $400 000
(D) $4s0 000
45. A company earned a net profit of$60 000
for the year ending 30 September 2014.
Proposed dividend were: ordinary shares When a company declares a dividend of
48.
S10 000 and preference shares $15 000. l5olo, the dividend warrant sent to the
The company decided to transfer $8 000
shareholder who owns I 500 one-dollar
to a general reserve. The reained earnings
ordinary shares is
on 30 September 2014 were
(A) $ 100
(A) $27 00o (B) s 22s
(B) $33 000 (c) $l soo
(c) $3s 000 (D) $l 515
(D) $93 000

49. If the members of a business organization

46. SK Ltd was given permission to offer for form its management and credit committees,
sale l0 000 six per cent (6%) preference the entity (or organization) can best be
shares at 55 each and 20 000 ordinary shares described as a
at $3 each. All ofthe preference
shares and
three-quarters of the ordinary shares were (A) sole trader
fully paid up. What was the arnorurt of the (B) partrershiP
authorized share capital? (C) corporation .
(D) co-operative
(A) $ 30 ooo
(B) $ 82 500
(c) $ e5 o0o
(D) $l l0 000

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item SO refers to the following accounts.

Appropriation Account

$ $

Ta:<ation reserve l0 000.00 By balance 894.50

Preliminary 250.00 Net profit 26 tO6.sO
Transfer to general reserye 4 000.00
Preference share dividend 1?00.00
Ordinary share dividend 6 000.00

fl). Whatconclusions could be drawn from the aboveAppropriationAccount?

I. The company is engaged in profitable enterprise.

[I. The company is not doing too well.
m. More dividends can be given to the ordinary shareholders.

(A) I only
CB) II only
(C) I and III only
(D) II and III only

Item 5l refers to the following sunrmary 52. The Income and Expenditure Account
of receipts and payments for a club at 0l shows the
March.
(A) expendihre incurred and liabilities
owed for the period
Subscriptions received I Sg00
(B) income earned and expenditure
Rentpaid I S eO incurred for the period
Purchase of games and equipment | $150 (C) income eamed and assets owned
Postage of circulars I S ZO for thg period
Proceeds frombooksale I SZSO (D) assests owned and liabilities owed
for the period

51. What is the cash balance at 3l March?

(A) $180
(B) S280
(c) $320
(D) 5620

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the Asset Accounts of the Bayroe club

Item 53 refers to tbe following table wbich shows balances of
as at 30 June 2012.

Premises 5 400

Equipment 1 825
Furniture 960
Bank and cash ru0
Inventory and refreshments 72

53. The amount of its accumulated fund was

(A) $l 640
(B) $4 4e7
(c) $8 l8s
(D) $9 897

Item 54 refers to the following information.

40-Plus Golf Club

O
for the month ended 3l December 2014
sl $
Rent I 000 | Profit from bar I 500

Electricity s00 IGI) 3 500

Trips to Miami 5 500 | + Subs. due (end) 500

4 000

7 000 | _zigq

54. Which of the fotlowing BEST describes (I) and (II) shown in the tabJe?

(A) (r) Profit & loss account

(II) Rent received

(B) (D Trading account

(u) Subscription received

(c) (D Profit & loss account

(II) Subscription received

(D) (r) Income & exPenditure account

(ID Subscription received

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55. P. Hawk has a manufacturing business. The eost of his raw materials is $t 900. Rates and rent
total $2 000, and factory wages amount to $2 500.

The number of units produced is 640- What is the cost of ONE uait?

(A) $4
(B) $6
(c) $10
(D) $13

Item 56 refers to the following information.

J. Baynes Manufacturing Account for period ending 3l December 2014

Inventory ofrarv nraterials 0l January 2014 800

Purchases of raw materials during year 4500 Balance cld 6800

5300
Less closing inventory of raw materials
3l December 2014 1400

3900

Productive wages l 300

Fuel and porver 900

Lubricants 100

Rent and rates 400

200

6800 6S00

56. What is the cost of raw materials consumed?

(A) $ 8oo
(B) $l 200
(c) $3 e00
(D) $4 s00

57. The items, raw materials inventory work in progress inventory and finished goods inventory are
MOST likely seen together on the balance sheet of a

(A) garage
(B) shoe factory
(C) supermarket
(D) bus company

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58. S & B Limited's net income for the year 60' Which of the following are considered to
was $89 000. Of this arnoun! 58 000 was be statutory deductions, when preparing
transferred to general reserve, preference employees' earnings records?
dividend paid was 52 400 and ordinary
dividend proposedwas $6 500. The value I. Mortgage
of the retained profits for the yeur was II. lncome tax
ilI. National insurance
(A) $72 100
(B) $80 loo (A) I and II onlY
(c) $8r 000 (B) I and III onlY
(D) $8e ooo
(C) II and III onlY
(D) I,II and III

59. P.Amos is paid at the rate of $7 per hour for

a basic 40 hour week. During the week of
06 April 2}l2,heworked a basic week of
40 hours. The income tax due on his pay
is $20, and social security contribution is
5% of his gross pay. What is his net pay?

(A) $246
(B) $260
(c) $266
(D) $280

END OFTEST

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