Marker Code Student Education Number

FA 'A VA E I L E A T UA S A M OA

GOVERNMENT OF SĀMOA
MINISTRY OF EDUCATION, SPORTS & CULTURE

SĀMOA SCHOOL CERTIFICATE EXAMINATION

ACCOUNTING
2014
QUESTION and ANSWER BOOKLET

TIME ALLOWED: 3 HOURS (plus 10 minutes reading time)

TOTAL MARKS: 200

This examination has TWO COMPULSORY Sections.

♦ SECTION A - MULTIPLE CHOICE (40 MARKS)

♦ SECTION B - FREE RESPONSE (160 MARKS)

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO.

1. Write your Student Education Number clearly in the right-hand box above and the
flap page at the back of this Booklet.
2. Write the Marker Code in the left-hand box above.
3. Answer ALL questions in the spaces provided in this Booklet.
4. Check that this Booklet contains pages 1 to 27 plus the flap page at the back.
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SECTION A MULTIPLE CHOICE 40 MARKS

Instructions

• Section A has 20 multiple choice questions worth TWO marks each.

• Answer ALL questions on the flap page at the back of this booklet.
• Write the letter of the best answer in the appropriate box provided.
• If you want to change your answer, cross your first answer and replace it with a second
answer next to the box like this: B C.

1. Accounting data is understandable when it is;

A. prepared and presented in a way that allows comparisons to be made.

B. not altered, influenced or designed to suit the needs of users.
C. available to users at relatively short intervals.
D. correctly interpreted by the users.

2. What source document does the accounting system use to facilitate recording in the Sales
Returns Journal?

A. Original copies of credit notes issued.

B. Carbon copies of credit notes issued.
C. Original copies of credit notes received.
D. Carbon copies of credit notes received.

3. The accounting element that refers to the inflow of resources into the business as a result of
sale of goods or services performed is

A. assets.
B. revenue.
C. expenses.
D. liabilities.

4. Which accounting concept states that all information necessary for interpreting reports should
be conveyed to users?

A. Going concern
B. Consistency
C. Materiality
D. Disclosure

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5. When the basic accounting equation is extended, it can be expressed in the following forms
except;

A. Assets + Expenses = Liabilities + Owner’s Equity + Revenues.

B. Assets = Liabilities + Owner’s Equity.
C. Assets = Liabilities + Owner’s Equity + (Revenues – Expenses).
D. Assets = Liabilities + Owner’s Equity + Profit.

6. Rosita runs a Hair Salon. She prefers cash basis accounting because revenue is recognised

A. at the earliest acceptable time.

B. at the latest acceptable time.
C. when it is received.
D. when it is earned.

7. What is the basis for classification of the Statement of Financial Position?

A. Accounts
B. Elements
C. Periods
D. Time

8. The report stating the net worth of an entity is called the

A. Financial Statement.
B. Revenue Statement.
C. Balance Sheet.
D. Trading Account.

9. For club accounting, subscriptions in advance represent

A. members contributions not yet received by the club.

B. contributions that are already received from members.
C. amounts paid back to members as bonus.
D. amounts owed by the members to the club.

10. When cash is received in payment of accounts receivable, total assets

A. increase with owners equity.

B. remain the same.
C. decrease.
D. increase.

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11. Which of the following is an example of an investment?

A. Patent
B. Goodwill
C. Trademark
D. Term Deposit

12. The sale of a fixed asset on credit would be recorded in the

A. General Journal
B. Sales Journal
C. Sales Returns Journal
D. Cash Receipts Journal

13. Which of the following is an advantage of keeping accounts payable subsidiary ledgers?

A. The business keeps track of how much it owes to accounts payable.

B. The general ledger contains all the details of individual accounts payable.
C. The business can use cycle billing to spread the monthly flow of work.
D. The business is more likely to pay accounts on time.

14. Computerized system is more efficient because of some advantages below except

A. power failure
B. error reduction
C. faster response time
D. speed of processing

15. Which accounting system best guides the location of ledger accounts?

A. Accounting Processes
B. Chart of Accounts
C. Cash-basis System
D. Accrual-basis system

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Use information below to answer Question 16.

Petty Cash Account

Nov. 1 Balance 150

30 Bank 50

16. How much was spent on Petty Cash expenses at the end of the month?

A. $50.00
B. $100.00
C. $150.00
D. $200.00

Use information below to answer Question 17.

TOTAL SALES IN PERCENTAGE

COGS – Cost Of Goods

NP Sold
20% COGS
45%
OE – Other Expenses

OE NP – Net Profit
35%

17. If total sales were $150,000 and dividend is 10% of the net profit. What is the amount in
dollars of this dividend?

A. $1,000
B. $3,000
C. $15,000
D. $30,000

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18. The ability of the business to meet its immediate debts is measured by the

A. current ratio
B. equity ratio
C. liquid ratio
D. debt ratio

19. A business has total assets of $200,000 and total liabilities of $50,000. The owner’s equity
ratio is

A. 0.25 : 1
B. 0.55 : 1
C. 0.75 : 1
D. 0.85 : 1

20. Why would an investor be interested in the Liquid Ratio? It

A. shows the effectiveness of using funds to finance the business.

B. indicates sufficient return to warrant staying in the business.
C. shows the amount that the investor is receiving.
D. indicates efficiency of generating income.

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SECTION B FREE RESPONSE 160 MARKS

Instruction

This Section contains FOUR questions, all of which must be answered in the spaces provided.

QUESTION ONE ACCOUNTING AND ITS APPLICATION [36 MARKS]

IN EVERYDAY LIFE

‘Yours to View’ is a Computer Technology business, owned by Brian and Toga.

1. Which government ministry can Brian and Toga’s business be registered under?

____________________________________________________________________________
1 mark

2. ‘Yours to View’ has been described as a partnership business.

State TWO disadvantages of being in a partnership.

(i) ______________________________________________________________________

(ii) ______________________________________________________________________
2 marks

3. What does it mean to say that Brian and Toga and their business are one legal entity?

____________________________________________________________________________
____________________________________________________________________________
1 mark

4. What type of business activity is ‘Yours to View’?

____________________________________________________________________________
1 mark

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5. Brian is considering expanding his business. Name TWO sources of finance that Brian could
access in order to carry out the expansion plans.

(i) ______________________________________________________________________

(ii) ______________________________________________________________________
2 marks

6. When Brian received an invoice from their financial accountant, he found a brochure attached,
outlining other accounting services offered.

Match each statement with the specialized accountant who would provide that service.
Write the letter of the Best answer in the spaces provided.

(i) Calculates and controls the costs of producing goods and services.
(ii) Provides financial information within the business operations.
(iii) Prepares tax returns and provides taxation advice.
(iv) Prepares reporting information to users.

Taxation Accountant Financial Accountant

Cost accountant Management Accountant

4 marks

7. Write the transaction for each double entry in the table below.

Debit Credit
(i) Bank $20,000.00 Loan from ANZ Bank $20,000.00
(ii) Accounts Receivables $2,500.00 Sales $2,500.00
(iii) Equipment $5,000.00 Accounts Payable $3,500.00
Bank $1,500.00
(iv) Motor Vehicle $210,000.00 Capital $210,000.00

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(i) ______________________________________________________________________
______________________________________________________________________
1 mark

(ii) ______________________________________________________________________
______________________________________________________________________
1 mark

(iii) ______________________________________________________________________
______________________________________________________________________
2 marks

(iv) ______________________________________________________________________
______________________________________________________________________
1 mark

8. The major role of an accountant for any business organization is to prepare financial statements
for internal and external users.

(i) What are external users of financial statements?

______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
2 marks

(ii) Give any TWO examples of external users and give reasons why they use the financial
statements by completing the table below.

External Users Reason

4 marks

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(iii) After these financial statements are prepared, an auditor should also look at these
financial statements. Explain the role of an auditor.

______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
2 marks

9. Brian and Toga purchased a delivery van for $70,000.00 on 1st March, 2012. The van’s
estimated useful life is 10 years and the estimated residual value is $10,000.00. The business
uses the Diminishing Value method at a rate of 10% per annum.

Complete the table given below.

DEPRECIATION ACCUMULATED BOOK

PERIOD COST
EXPENSE DEPRECIATION VALUE
28 February, 2013 $70,000

28 February, 2014

7 marks

10. The table below gives examples of information from ‘Yours to View’ financial statement.
Identify the concept that has been applied. Use a concept ONLY ONCE.

Financial Information Concept Applied

(i) Depreciation on Equipment $5,000.00

(ii) A long term loan of $25,000.00

(iii) Drawings $2,000.00

(iv) Purchased new tyres for the van $600.00

(v) Net Profit $12,850.00

5 marks

P7 P8 P9 P10 Q1

+ + + =
5 6 11 14 36
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QUESTION TWO ACCOUNTING PROCESS [57 MARKS]

1. Compare the Manual and Computer Accounting Methods for processing data to complete the
chart below with the best choice from the list of words provided.

Financial Statement Keyboard Source documents

General Ledgers Central Processing Unit Reports

Processing Methods Manual Computerised

Input
Process
Outputs
6 marks

2. Post the journals below to the ledger accounts shown and balance the accounts as at 30th
September, 2014.
Cash Receipts Journal
Date Particulars Discount Details Bank Sales Debtors Sundries
Allowed
2014
Sept. 2 Service Sales 3,000 3,000
4 L. Richards 100 100
8 Interest 80 80
M. Galo 200 280 200
16 Service Sales 1,800 1,800
18 G. Mageo 60 800 860
22 Service Sales 900 900
24 Commission 60 60
Service Sales 1,200 1,260 1,200
28 L. Richards 100 100
$60 $8,240 $6,900 $1,260 $140

Sales Journal
Date Particulars Debit Credit
2014
Sept 2 G. Mageo $1,200
17 L. Richards $1,400
28 R. Lee $800
Sales A/c (cr) $3,400

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Return Inwards and Allowances Journal

Date Particulars Debit Credit
2014
Sept 7 G. Mageo $80
30 R. Lee $20
Returns Inwards a/c (dr) $100

General Journal
Date Particulars Debit Credit
2014
Sept 1 R. Lee $50
Interest on overdue account $50
(being 10% interest charged
on overdue account)

(i) Debtors Subsidiary Ledgers

R. Lee Account
Date Particulars Folio Debit Credit Balance
2014
Sept 1 Balance 520 Dr

3 marks

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G. Mageo Account
Date Particulars Folio Debit Credit Balance
2014
Sept 1 Balance 800 Dr

3 marks

(ii) General Ledger

Sales Account
Date Particulars Folio Debit Credit Balance
2014
Sept 30

2 marks

Commission Account
Date Particulars Folio Debit Credit Balance
2014
Sept 24

1 mark

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Debtors Control Account

Date Particulars Folio Debit Credit Balance
2014
Sept 1 Balance 1,730 Dr

4 marks

3. The opening balance for Lewina Eric’s Bank Account on 1st July 2014 is $375.90dr. After
comparison with the bank records (which showed a credit balance of $399.10 at 31st July
2014), the following details were discovered;

• Unpresented cheques: No. 127 - $10.00, No. 128 - $77.40, No. 129 - $22.05 and No. 130 -
$82.56
• An outstanding lodgement of $219.40
• Bank fees $9.50
• Interest on mortgage $12.00
• Interest on investments $10.00
• Direct deposits $50.00

Other Information noted:

• Cash Receipts Journal totaled $2088.85

• Cash Payments Journal totaled $2076.76

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(i) Prepare the Bank Reconciliation Statement

Lewina Eric
Bank Reconciliation Statement as at 31st July, 2014

5 marks

(ii) Prepare the Cash at Bank Account.

Cash at Bank Account

6 marks

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4. The following extract has been taken from the Petty Cash Book of L.Smith Enterprises for the
month of February 2014.

L. Smith
Petty Cash Book
Date Particulars Voucher Ref Receipts Payments Fares Postage Stamps Books
No.
Feb 28 91.80 12.00 40.00 5.40 34.40
28 Balance 8.20
100.00 100.00
Mar 1 Balance 8.20
Bank CPJ 7 91.80

(ii) What is the amount of the Petty Cash Imprest account of L. Smith Enterprises?

____________________________________________ 1 mark
(ii) How much cash was left in the Petty Cash box on 28th February 2014?

____________________________________________ 1 mark
(iii) How much was the reimbursement cheque?

____________________________________________ 1 mark
(iv) Where would you look to find the reimbursement cheque number issued on the
1st March?

____________________________________________ 1 mark
(v) Post the Petty Cash expenses from L. Smith Petty Cash Book to Cash Payments journal.

L. Smith Enterprises
Cash Payments Journal

Date Particulars Cheque Discount Payments Bank Creditors Purchases Sundries

No.

4 marks

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5. Prepare the trial balance of Tanner Vili’s Grocery Store as at 30th June 2014, from the
ledger accounts below taking into account the TWO given adjustments.

Ledger Accounts.

Cash at Bank 2,400 Account Receivable 2,500

Creditors 2,400 Stock 390
Salary & Wages Expense 5,100 Sales 13,800
Rent Expense 3,200 Tanner Vili, Capital 7,200
Sundry Expense 2,300 Tanner Vili, Drawings 3,920
Salaries Payable 310 Mortgage Payable 2300
Equipment 6700

Adjustments:

(a) A payment of $1000 for salaries was not posted to the Cash at Bank account.

(b) A debit entry to record a withdrawal of $500 in cash by Tanner Vili was not posted.
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(i) Use the information on page 17 to prepare a correct trial balance for Tanner Vili’s
Grocery Store.

TANNER VILI’S GROCERY STORE

TRIAL BALANCE AS AT 30TH JUNE, 2014

Debit $ Credit $

9 marks

6. The balance day adjustments of Kaisara Realty Estate are given below.

(i) Depreciation on building $34,000.

(ii) Provision for Doubtful Debts to be $1,700.
(iii) Prepaid insurance $500.
(iv) Salaries expenses incurred but not yet recorded $450.
(v) Commission received in advance $500.

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(i) Show the effect of accounting for balance day adjustments on the accounting equation.
Write (+) positive and (-) negative where appropriate with the amounts.

Assets Expenses Liabilities O/Equity Revenues

(i)

(ii)

(iii)

(iv)

(v)

10 marks

P11 P12 P13 P14

+ + +
6 3 6 4

Q2
P15 P16 P18 P19

+ + + =
10 8 9 10 56
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QUESTION THREE FINANCIAL REPORTS [47 MARKS]

1. F. Tagaloa is a carpenter living in Apia. He presented you with his Trial Balance below and
requested that you:

(i) Prepare a fully classified Statement of Financial Performance.

(ii) Prepare a fully classified Statement of Financial Position.

F. Tuatagaloa
Trial Balance as at 30th September 2014

$ $
Accounts Receivables 2,000 Accounts Payables 15,000
Bank 3,500 Service Revenue 134,000
Supplies Inventory 18,000 Capital 53,000
Drawings 3,000 GST Clearing 2,000
Building 65,000
Equipment 6,000
Vehicle 42,000
Land 25,000
Rates 1,500
Interest Expense 2,000
Salary expense 32,000
Electricity 4,000
Totals $204,000 $204,000

Additional Information:

 Electricity of $200 was prepaid.

 Service Revenue of $14,000 earned but not yet received.
 Salary still to be paid is $2,300.
 Depreciation for all fixed assets to be 20% fixed installment.
 Doubtful Debts of 5%.
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(i)

F. TAGALOA CONSTRUCTION & BUILDING SERVICES

STATEMENT OF FINANCIAL PERFORMANCE 30TH SEPTEMBER, 2014

$ $ $

Revenue

Less Expenses
Servicing and Selling

Administrative and General

Financial

Total Expenses

Net Profit (Loss)

12 marks

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(ii)

F. TAGALOA CONSTRUCTION & BUILDING SERVICES

STATEMENT OF FINANCIAL POSITION – 30TH SEPTEMBER, 2014

Current Assets Current Liabilities

Long Term Liabilities

Fixed Assets

Owner’s Equity

22 marks

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2. Culture X-Club conducts Zumba every week at Maliu Mai, Apia.

The following information relates to Culture X-club.

Culture X-Club
Receipts and Payments for the year ended 30th June, 2014

Balance 1,200 Rent 2,400

Zumba Fees 5,800 Electricity 1,170
Sale of Zumba CDs 17,200 Posters & Brochures 600
Subscriptions 2,500 Honorarium (Specialist) 1,200
Loan from ANZ 24,800 Salary 1,200
Balance 44930
$51,500 $51,500

• Monthly rent of $50.00 was paid in advance.

• Subscriptions received of $200 relate to July 2014.
• 30 members have not paid their annual zumba fees of $10 each.
• Accumulated Fund 1st July, 2013 $5,000.

(i) Prepare the Income and Expenditure Account for the Club.
(ii) Show the Accumulated Fund Section of the Club’s Balance Sheet.
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(i)

Culture X-CLUB
Income and Expenditure Account for year ended 30 June, 2014

$ $
Income

Expenses

Excess of Income over Expenditure

11 marks

(ii)

Culture X-Club
Balance Sheet as at 20 June 2014 (extract)

Accumulated Fund:

3 marks

Q3
P21 P22 P23

+ + =
11 22 14 48
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QUESTION FOUR ANALYSIS AND INTERPRETATION [20 MARKS]

1. Use the extract below to answer the questions that follow.

Four Corner’s Kids Shop

Statement of Financial Performance for the month ended 30 June, 2014

Net Sales $9,500

Less: Cost of Sales

$2,200
Opening Inventory
900
Plus: Purchases
3,100
Goods Available for Sale
(1,000)
Less: Closing Inventory $2,100

Less: Expenses
$1,850
Selling Expenses
$1,700
Administrative Expenses
520
Financial Expenses $4,070

State the formula and calculate each of the following percentages.

(i) Mark Up % Formula _______________________________________

Calculation ____________________________________
Percentage _____________________________________

(ii) Gross Profit % Formula _______________________________________

Calculation ____________________________________
Percentage _____________________________________

(iii) Net Profit % Formula _______________________________________

Calculation ____________________________________
Percentage _____________________________________

9 marks

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2. Use this table to answer questions that follow.

Assets Liabilities Owner’s Equity

Debtors 60,000 Creditors 80,000 Capital 150,000

Inventory 40,000 Income in Advance 5,000 Net Profit 5,000
Prepayments 5,000 Loan 20,000 Drawings 2,500
Cash at Bank 15,000 Mortgage 200,000
Equipment 30,000
Land 200,000
Buildings 110,000

State the formula and calculate each of the following ratios.

(i) Return on Capital Formula ___________________________________

Calculation _________________________________
:1
Ratio __________________

(ii) Liquid Ratio Formula ____________________________________

Calculation __________________________________
:1
Ratio ___________________

(iii) Debt Ratio Formula _____________________________________

Calculation ___________________________________
:1
Ratio ___________________
9 marks

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3. What is the relationship between owner’s equity ratio and debt ratio?

____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
2 marks

P25 P26 P27 Q4

+ + =
9 9 2 20
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Student Education Number

FOR MARKER’S USE ONLY

.

M/C
40

Q1
36

Q2
56

Q3
48

Q4
20

TOTAL
200