Answers

ACCA Certified Accounting Technician Examination – Paper T3 (UK) June 2009 Answers
Maintaining Financial Records (UK Stream) and Marking Scheme

Section A

Question No Solution Question No Solution

1 D 11 B
2 B 12 A
3 A 13 D
4 C 14 B
5 D 15 A
6 B 16 C
7 D 17 B
8 B 18 D
9 C 19 C
10 A 20 B

Workings

3 £
Opening balance 422 Cr
Invoices 2,859 Dr
Refund 86 Cr
––––––
Closing balance 2,351 Dr
––––––
––––––

5 £
Opening balance 95 Cr
Correcting entry 190 Cr
––––
Closing balance 285 Cr
––––
––––
Entry on wrong side of cash account means that a credit entry of £95 was made. Thus, a correcting debit entry of £190 is required
in the cash account, leading to a credit entry in the suspense account.

6 As both of the items have been omitted entirely, the total of the listing and the ledger balance will agree (but both are incorrect).

9 £
Balance on account 358 Cr
Error in cheque 9 Dr
Interest 104 Cr
––––
Corrected balance 453 Cr
––––
––––

10 £
Profit 11,855
Accrual (796)
Prepayment (42)
–––––––
Corrected profit 11,017
–––––––
–––––––

12 £
Debtors balance 88,463
Write off (563)
–––––––
Remaining Balance 87,900 x 2% = £1,758 allowance required
less £1,468 existing allowance
–––––––
increase £290 charge (as increase)
–––––––
–––––––

13
16 The total of the profit and loss account debit column exceeds the total of the credit column by £8,654 (£122,182 – £113,528).
This represents a loss, which will be debited to the capital account in the balance sheet, increasing the total of the debit column
to £130,827, so that the balance sheet columns are equal.

17 Only the interest on the loan should be included in the profit and loss account. Interest on drawings is part of the appropriation of
profit.
Thus, the correct profit is £75,862 less £1,346 = £74,516.

18 £
Loss 8,650
Graham’s share (2/5) 3,460

£
Entries in current account Share of loss 3,460 Debit
Drawings 26,000 Debit
–––––––
Total 29,460 Debit
–––––––
–––––––

20 Opening stock £11,844

Closing stock £13,328
Increase £1,484
Cost of sales £139,856
Purchases £141,340 (Cost of sales plus increase in stock)

14
Section B Marks

1 (a) The following errors will be revealed by extracting a trial balance:

Single entry
either the debit or credit entry relating to a transaction is omitted
Error of transposition
two or more of the digits in an entry are reversed. For example an entry for £47 is entered as £74.
Double entry rules not applied
both entries for a transaction are entered on the same side of the ledger accounts.
Mark allocation: 1 mark for each error correctly identified 3

(b) User Primary need

Customers to ensure continuity of supply
Suppliers to confirm creditworthiness of entity
Investors to assess income and growth in wealth
Lenders to ensure that repayments and interest will be paid
Mark allocation: 1 mark for each need correctly identified 3
NB only three were required

(c) A provision is made when there is a degree of uncertainty relating to either the amount which must be paid,
or the date on which payment must be made.
As a provision is essentially a liability over which there is a degree of uncertainty, prudence dictates that the
best estimate of the amount which will eventually be paid, should be recognised in the balance sheet.
Mark allocation: 1 mark per valid point
e.g. uncertainty
timing
amount
prudence
recognise in balance sheet
to a maximum of 3

(d) A difference between the fixed assets recorded in the asset register and the physical presence of assets may
arise for the following reasons:
an asset has been sold, but has not been removed from the asset register;
an asset has been stolen;
an asset has been moved to another location, but this has not been recorded;
an asset has been acquired, but no record has been made in the asset register.
Mark allocation: 1 mark per valid point to a maximum of 3

(e) The historical cost concept means that transactions are initially recorded at their value when the transaction
took place. Furthermore, even if the value of an item has increased, the value of the item is not normally
revised. The main benefit of historical cost is that the measurement basis is objective.
Mark allocation 11/2 marks per valid point, to a maximum of 3
–––
15

2 (a) (i) Debtors Ledger Control Account

£ £
Balance as given 87,698 (iii) Credit note 942
(v) Cash sale 63 (iv) Daybook overstated 422
(vii) Invoices omitted 58 Balance 86,455
––––––– –––––––
87,819 87,819
–––––––
––––––– –––––––
–––––––
1 mark for each correcting entry 4
1/ for each balance 1 5
2
–––

15
 Marks
(ii) £ £
List of balances (as calculated) 87,817
(i) Balance omitted 86
(ii) Discount not recorded (5)
(iii) Credit note (942)
(iv) Cash sale 63
(vi) Offset (622)
(vii) Invoices omitted 58 (1,362)
––––– –––––––
86,455
–––––––
–––––––
1 mark for each correction 6
Agreed to corrected balance 1 7
–––

(b) Debtors should be reported as a current asset in the balance sheet.

The value should be the corrected balance on the control account less the debtors allowance, i.e.:
£
Corrected balance 86,455
Allowance (2,215)
–––––––
Reported 84,240
Mark allocation balance sheet 1
current asset 1
corrected balance 1
allowance deducted 1
–––
4
to a maximum of 3
–––
15

3 (a) (i) £
Trade-in value 22,750 1
Cheque paid 32,250 1 2
––––––– –––
55,000
–––––––
–––––––
(ii) Cost at July 2005 £44,000
Depreciation for year to 30 April 2006 £8,800 (£44,000 x 20%)
Net book value at 1 May 2006 £35,200
Depreciation for year to 30 April 2007 £7,040 (£35,200 x 20%)
Net book value at 1 May 2007 £28,160
Depreciation for year to 30 April 2008 £5,632 (£28,160 x 20%)
Net book value at 1 May 2008 £22,528 2
No depreciation in year of disposal,
thus net book value at disposal.
Trade-in allowance = proceeds £22,750 1 3
–––
Thus profit (£22,750 – £22,528) £222
(iii) Cost of machinery:
Net book value brought forward £170,650
Accumulated depreciation brought forward £98,450
––––––––––
Thus, cost brought forward £269,100
Cost of disposal £(44,000)
New machine £55,000
––––––––––
Cost for depreciation £280,100 1
––––––––––
––––––––––

16
 Marks
Accumulated depreciation:
Accumulated depreciation brought forward £98,450
Eliminated on disposal (£44,000 – £22,528) £(21,472)
––––––––––
£76,978 1
––––––––––
––––––––––
Net book value for depreciation £203,122 (£280,100 – £76,978)
Depreciation at 20% £40,624·40 1 3
–––
OR – ALTERNATIVE CALCULATION
Net book value brought forward £170,650
Net book value of disposal (ii) above £(22,528)
New machine (£22,750 + £32,250) £55,000
––––––––––
£203,122 2
––––––––––
––––––––––
Depreciation at 20% £40,624·40 1 3
–––
(iv) Charge for year:
Depreciation for year £40,624·40 1
Profit on disposal £(222·00) 1 2
––––––––––– –––
£40,402·40
–––––––––––
–––––––––––

(b) Machinery at cost

£ £
Balance brought forward 269,100 Disposal 44,000 1
Trade-in allowance 22,750 1
Cheque 32,250 Balance 280,100 1 3
–––––––– –––––––– –––
324,100 324,100
––––––––
–––––––– ––––––––
––––––––

(c) Cost of machinery £280,100·00

Accumulated depreciation (£76,978·00 + £40,624·40) £117,602·40 1
––––––––––––
£162,497·60 1 2
––––––––––––
–––––––––––– ––– –––
15

4 (a) £
Cost of stock 25,485
Write down (W1) 4,200
–––––––
Value of stock 21,285
–––––––
–––––––
W1 £ £
Cost of items 12,850
Selling price 10,000
Repackaging cost (1,350)
–––––––
Net realisable value 8,650
–––––––
Write down 4,200
–––––––
–––––––
Mark allocation:
recognition that value must be adjusted 1
correct calculation of stock value 1 2
–––

17
 Marks
(b) £
Opening stock 28,438
Purchases (net of purchases returns) 294,304
Carriage inwards 2,853
––––––––
325,595
Closing stock (21,285)
––––––––
304,310
––––––––
––––––––
Mark allocation:
inclusion of purchases returns 1
inclusion of carriage inwards 1
correct treatment of opening and closing stock 1
correct formula 1 4
–––

(c) £ £
Sales (net of sales returns) 516,565
Cost of sales (304,310)
–––––––––
Gross profit 212,255
Expenses:
Carriage outwards 6,944
Wages 102,387
Vehicle expenses (W2) 37,705
Office expenses 18,773
Depreciation Equipment 9,720
Vehicles 12,900 188,429
––––––––– –––––––––
23,826
–––––––––
–––––––––
W2 £
Vehicle expenses per TB 37,297
Accrual for fuel bill 1,458
Less prepayment (W3) (1,050)
–––––––
37,705
–––––––
–––––––
W3
Payment for 12 months £4,200 = £350 per month
Three months prepaid = £1,050
Mark allocation:
correct calculation of sales 1
correct calculation of vehicle expenses 2
inclusion of depreciation 1
correct inclusion/exclusion of other items 1 5
–––

(d) Current assets: £ £

Stock 21,285
Debtors 65,605
Prepayment 1,050 87,940 1
––––––– –––––––
–––––––
Current liabilities
Bank 22,854
Creditors 33,829
Accrual 1,458 58,141 1 2
––––––– –––––––
––––––– –––

18
 Marks
(e) £
Capital at 1 May 2008 127,385
Profit for year 23,826
––––––––
151,211
Drawings (31,500)
––––––––
Capital at 1 May 2009 119,711
––––––––
––––––––
Mark allocation:
1/ mark for each item 2
2
–––
15

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