MZILIKAZI HIGH SCHOOL

MID YEAR EXAMS: JULY 2024

PRINCIPLES OF ACCOUNTING
FORM 3
TIME ALLOWED: 2 HOURS
TOTAL MARKS: 60

INSTRUCTIONS
 Answer all questions from both Section A and Section B
 Number your answers following the numbering on the Question Paper.
 For Section A, each question has four possible answers A, B, C and D. Choose the one you consider
correct and only write the letter for your chosen answer on the provided answer sheet. If for question 1,
your chosen answer is A, only write A for question 1.
 For Section B, answer the question in full in the provided answer sheet.
 Write your name in full and your class.
 Write neatly and legibly.
 You may use a calculator.

SECTION A

1 Which one is the correct accounting equation?

A Assets – Capital = Liabilities B Assets = Capital + Liabilities
C Liabilities + Capital = Assets D Liabilities + Assets = Liabilities

2 The following are assets except

A Bank overdraft B Inventory
C Cash D Accounts receivable

3 The correct order for current assets is .

A Cash, bank, inventory, accounts receivable
B Accounts receivable, bank, inventory, cash
C Inventory, accounts receivable, bank, cash
D Bank, inventory, cash, accounts receivable

4 Purchases are .
A Goods bought on credit B Goods sold on credit
C Goods sold for cash D Goods bought on credit
 2

5 The general journal is used for .

A correction of errors B recording cash sales
C recording cash purchases D recording capital

6 If sales have been undercast, the gross profit will .

A Increase B decrease C change D not change

7 The following errors are revealed by the trial balance except .

A error of commission B error of principle C transposition error D casting error

8 If the purchase of a motor van was omitted from the books, this is an error of .

A Principle B commission C omission D original entry

9 A credit balance in the bank means .

A an overdraft B a loan C an asset D all of the above

10 Net profit is .

A sales less COGS B sales less expenses C sales less sales D gross profit less
returns expenses

11 Prepaid expenses are .

A expenses paid in advance B expenses due but not unpaid
C recording cash purchases D all of the above

12 Unused stationery at the end of the year will be recorded under in the Balance Sheet.

A non current assets B current assets C current liabilities D all of the above

13 Accounts receivable were 15 000, Provisions for bad debts 5%. The provisions will be .

A 500 B 150 C 350 D 750

14 The figure for accounts receivable after subtracting provisions for bad debts in question 13 above is
.

A 12 000 B 14 250 C 15 750 D all of the above

15 When a Trial Balance fails to agree by 2 500 on the debit side, the suspense account will be recorded
on the side.

A 2 500 debit side B 2 500 credit side C 2 500 on both sides D all of the above
 Total marks for Section A: 15

SECTION B

The following information was taken from the books of B. Banda for the year ended 30 June 2023.

Debit Credit
Purchases 165 000
Sales 139 320
Drawings 17 060
Carriage Inwards 5 400
Inventory 1 July 2022 14 300
Buildings 120 000
Office furniture 23 200
Rent received 2 320
Returns inwards 2 600
Returns outwards 3 000
Insurance 900
Stationery 1 880
Accounts receivable 13 600
Accounts payable 9 020
Wages 20 600
Electricity 6 640
Discount allowed 650
Discount received 450
Cash 8 740
Bank 5 400
Provisions for bad debts 800

Additional information

1. Inventory at 30 June 2023 was valued at 12 800

2. Stock of stationery on 30 June 2023 was valued at 880

3. Insurance prepaid was 180

4. Wages owing were 400

5. The provision for bad debts is to be increased to 960

Required to prepare

a) The Income Statement of B. Banda for the year ended 30 June 2023 (25)

b) A statement of Financial Position B. Banda as at 30 June 2023 (20)

Total marks for Section B: 45

*****END OF QUESTION PAPER*****