ACADEMIC YEAR 2022

END OF FIRST TERM EXAMINATIONS

GRADE 10 – ACCOUNTS

NAME: …………………………………………………… DATE: …………………

PARENT’S SIGNATURE: …………………………….... SCORE: ………… / 80

TIME: 1 hour 30 minutes

Candidates to answer on the question paper.

Use calculator

INSTRUCTIONS

● Answer all questions.

● Use a black or dark blue pen.

● Write your name and date in the space provided at the top of the page.

● Write your answer to each question in the space provided.

● Do not use an erasable pen or correction fluid.

INFORMATION

● The total mark for this paper is 80.

● The number of marks for each question or part question is shown in brackets [ ]

Section A: Multiple choice questions

1. Which statement is correct?

A Accounting involves measuring profits and losses

B Accounting is the recording of financial transactions

C Book keeping involves communicating financial data

D Book keeping requires the use of ratio analysis

2. What is recorded in the sales journal?

A All money received from sales

B All sales transactions

C Cash sales transactions

D Credit sales transactions

3. Why is a trial balance prepared?

A To analyse financial transactions

B To assist preparation of financial statements

C To control the costs of the business

D To evaluate the performance of the business

4. A sales ledger control account had a debit balance of $10 000. It was found that a $2000 contra entry
to the purchases ledger control account had been entered on the wrong side of the sales ledger control
account.

What was the correct debit balance on the sales ledger control account?

A $6000 B $8000 C $12000 D $ 14000

5. Which error will be reviewed by the preparation of a trial balance?

A. an amount recorded twice as a debit entry

B a capital expenditure item treated as an revenue expenditure

 C a double entry made using an incorrect amount

D a transaction completely omitted from the books

6. Which statement is correct about a bank reconciliation statement?

A It contains bank charges and standing orders.

B It is part of double entry book-keeping.

C It is prepared by the bank

D It is prepared by the trader

7. The bank column of trader’s cash book showed a debit balance of $ 952. This did not agree with the
balance on the bank statement on the same date. The following differences were found:

Cheque not yet presented 134

Bank charges 11

Rent paid by credit transfer 310

What was the balance on the bank statement?

A $765 credit B $ 765 debit C $1 139 credit D $1139

8. What is the purpose of preparing a sales ledger control account?

A To calculate the total credit sales for the period

B To calculate the total sales for the period

C To check the arithmetical accuracy of the sales account

D To check the arithmetical accuracy of the sales account

9. What are the sources of information for entries in control accounts?

A bank statements

B books of prime entry

C ledger accounts

D sales invoices
10. A trader’s purchases on credit for April amounted to $2000. These purchases were subject to a trade
discount of 10% and also a cash discount of 5% for accounts paid within 30 days.
How much was entered in the purchases journal?
A $1700 B $1800 C $1900 D $2000

11. Goods returned by Zeena , 100, were debited to her account as 1000

What entries are required to correct this error?

Account to be debited $ Account to be credited $

A Suspense 900 Zeena 900
B Suspense 1100 Zeena 1100
C Zeena 900 Suspense 900
D Zeena 1100 Suspense 1100

12. What may appear on the debit side of a purchases ledger control account?

A Credit purchases

B Discount allowed

C Payments to credit suppliers

D Returns by credit customers

13. Which of the following items affect the gross profit?

A Expenses

B Land and buildings

C Bad debts

D Sales returns

14. What are assets?

A items that are bought for long-term use by a business

B items that are expected to be turned into cash in the near future

C items that are owned by or owed by a business

D items that are owned by or owed to a business

15. What is a trial balance?

A a list of balances in a business’s books on a certain date

B a list of the assets, liabilities and capital of a business on a certain date

C a summary of all a business’s transactions for the year

D a summary of the financial position of a business at the year end

Section B

16. Ruth Tembe is a trader. She employs a book keeper who maintains a full set of accounting records.
Ruth Tembe`s book keeper prepares a purchases ledger control account and sales ledger control
account at the end of each month. On 1 July 2009 the balances brought down on the purchases ledger
control account were as follows:

On 1 July 2009 the balances brought down on the purchases ledger control account were as follows:

Debit balance 15

Credit balance 3680

The book keeper provided the following information for the month ended 31 July 2009

Cheques paid to supplies 4650

Cheques received from customers 5660
Discount allowed 75

Discount received 90

Returns to suppliers 30

Returns to customers 111

Credit purchases 4800

Contra entry 200

Interest charged by suppliers on overdue account 420

August 1:
 Purchases ledger control account debit balance 105

Required:

a) Select the relevant figures and prepare Ruth Tembe’s purchases ledger control account for the month
ended 31 July 2009.

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b) State four purposes of preparing control accounts.

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c)State where the following items will appear in the sales ledger control account .If the item will not
appear in the sales ledger control account write ` No entry`.

Item Entry in the sales ledger control account

(i) Sales returns __________________________

(ii) Bad debts __________________________
(iii) Provision for doubtful debts __________________________
(iv) Interest charged on overdue account __________________________ [4]

17. Nadia is a trader. Her financial year ends on 31 March. She extracted a trial balance at 31 March
2020. The debit and credit totals did not agree. The difference was entered into a suspense account.
After Nadia prepared draft financial statements, she discovered the following errors.

1 The purchases account was overcast by $110.

2 $13 for discount allowed in February 2020 had been credited to the discount allowed account as $15.
3 A payment for insurance, $220, was correctly recorded in the cash book, but was recorded as $202 in
the insurance account.
4 Commission received, $65, had been debited to the account for commission payable. The entry to the
cash book had been correctly made.
5 Cash drawings, $85, were correctly entered in the cash book but were credited to the drawings account.
6 The cost of a vehicle repair, $190, had been debited to the motor vehicles account.
7 A payment of $100 to Robert had been posted to the account of Roberta.

Required:

a) Prepare the necessary journal entries to correct these errors.

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b) Prepare the suspense account. Include the original difference on the trial balance as a balancing
figure.
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c) Complete the following statement to show the effect on the profit for the year of correcting
errors 2–7. If there is no effect on profit write ‘nil’ in the ‘no effect’ column.
Calculate the corrected profit for the year. Ignore depreciation of non-current assets.

The first correction has been completed as an example.

Nadia
Statement of corrected profit for the year ended 31 March 2020
$
Draft profit for the year before corrections 6720
No Increase Decrease
Effect in profit in profit
$ $
Error 1 …………. 110 …………..
Error 2 …………. ……………. …………...
Error 3 …………. ……………. …………...
Error 4 …………. ……………. …………...
Erro 5 …………. ……………. …………...
Error 6 …………. ……………. …………...
Error 7 …………. ……………. …………...
__________ ___________ ___________ ___________
Corrected net profit ___________ [7]

d) State any four errors that do not affect the balancing of a trial balance.
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18. The cash book( bank columns of AB for the month of April 2007 were as follows.
Cash book( bank columns only)
Date Details amount($) Date Details Amount($)
2007 2007
April 1 Balance b/d 398 April 10 Lily 113
14 William 87 29 James 246
31 Sales 684 31 Balance c/d 910
1169 1269

AB bank statement for April 2007 showed the following:

Date Details Debit Credit Balance

2007 $ $ $

April 1 Balance 398 398Cr

18 Counter credit 87 485Cr

20 Cheque 404 113 372Cr

24 Dishonoured cheque 87 285Cr

30 SB Motor insurance company 36 249Cr

31 Bank charges 12 237Cr

The following errors were discovered.

1 AB had overcast the debit side of her cash book by $100

2 The bank should have charged the motor insurance to AB”s personal bank account not to the

business bank account.

a) Prepare an updated cash book of AB at the end of 31 April 2007.

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b) Prepare a bank reconciliation statement for AB at 31 April 2007.

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c) Explain the term “dishonoured cheque”.

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d) List any three advantages of preparing a bank reconciliation statement.

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