ZIMBABWE SCHOOL EXAMINATIONS COUNCIL General Certificate of Education Ordinary Level PRINCIPLES OF ACCOUNTING 4051/1 PAPER 1 Multiple Choice NOVEMEBER 2018 SESSION 1 hour 30 minutes ‘Additional materials ‘Multiple Choice answer sheet Soft clean eraser Soft pencil (type B or HB is recommended) TIME | hour 30 minutes INSTRUCTIONS TO CANDIDATES Do not open this booklet until you are told to do so, Write your name, Centre number and candidate number on the answer sheet in the spaces provided unless this has already been done for you. ‘There are forty questions in this paper. Answer all questions. For each question there are four possible answers, A, B, C and D. Choose the one you consider correct and record your choice in soft peneil on the separate answer sheet. Read very carefully the instructions on the answer sheet. INFORMATION FOR CANDIDATES Each correct answer will score one mark. A mark will not be deducted for a wrong answer. Any rough working should be done in this booklet Calculators may be used. Copyright: Zimbabwe School Examinations Council N2018, © ZIMSEC N2018‘The document used to record goods sold on credit is A abank statement. B _acredit note. CC asstatement of account. D __aninvoice. The personal accounts of suppliers are found in the A general ledger. B private ledger. C purchases ledger. D sales ledger. A liability of the business to the owner is recorded in the A capital account, B creditor’s account. C drawings account. D loan account. Which is a computer output device? A keyboard B mouse C printer D scanner An advantage of using a computerised accounting system is that A expensive software is used. B__ itis difficult to change from one system to another, C __itrequires skilled personnel. D__ there are less chances of arithmetical errors. A credit sale of an old cabinet valued at $3 000 to B, Ndlovu is recorded in a A cashbook. B general journal. C petty cashbook. D sales journal. 40si/1 N201810 ul ‘The double entry for the purchase of paper and envelopes on credit is Debit Credit A creditor stationery. B_ creditor paper and envelopes. C stationery creditor. D__ paper and envelopes creditor, The difference between cash discount and trade discount is that cash discount is A allowed to encourage bulk buying. B deducted on the gross price. CC notentered in the books of account. D _ offered for prompt payment. The monthly petty cash float of a business is $500, payments for July 2013 total $425. How much is reimbursed to restore the imprest? A 875 B $425 Cc $00 D $925 The entry for bad debts in a debtors account is obtained from the A general journal. B _ purchases journal. C sales journal, D sales returns journal. The sales ledger control account is debited with A bad debits. B contra entries. C discount allowed. D _dishonoured cheques. 40st N201812 13 14 15 16 A trader provided the following information on 31 July 2013. $ Sales ledger control account balance, 01 July 5 600 debit Credit sales 16 000 Cheques received from debtors 17200 ‘Whaat is the sales ledger control account balance on 31 July? A $4400 B $6800 Cc — $27.600 D $38 800 Capital expenditure is the A additional capital paid in by the owner of the business. B_ cost of running the business on a day to day basis. C money spent on buying non-current assets. D money spent in selling non-current assets. In the reducing balance method, the depreciation rate is applied on the A book value of fixed assets. B _ cost of the fixed asset C market value of the fixed asset. D__ residual value of the fixed asset. The balance as per adjusted cashbook is $1 721 debit. Unpresented cheques amount to $150 and bank lodgements not yet credited total $242. The balance as per bank statement is A $1571 B $1629. Cc $1813. D $1871. A credit balance of $600 in the rent payable account means $600 has been paid for rent. $600 has been received for rent. $600 is owed by the business for rent. $600 is owed to the business for rent. pomp 4051/1 N2018 10a7 18 19 20 ‘The credit purchase of stationery, valued at $1 500, from V. Mabasa had been debited to Mabasa’s account and credited to stationery account, The double entry to correct this error is, caw Debit Credit stationery $1 500 Mabasa $1 500. stationery $1 500 purchases $1 500. stationery $3 000 Mabasa $3 000. stationery $3 000 purchases $3 000. The balance on 1 January 2011 in the provision for bad debts account was $550. The provision for bad debts for the current year is $600. ‘The amount of provision for bad debts to be charged to the profit and loss account is A B c D $50, $550. $600. $1 150, Which error prevents the totals of atrial balance from agreeing? A B c D No record had been made for a computer worth $1 200 brought into the business by the owner. The payment of $1 000 cash for rent had been debited to the electricity account. The purchases account had been debited twice for goods worth $2 000 bought from L. Mhashu. The sale of shop fittings worth $3 000 on credit to L. Maseko had been credited to the sales account. In the balance sheet, accrued expenses are shown as com> current assets. current liabilities. non-current assets. non-current liabilities. 405i 2018 FES2 2 23 ‘The following information is provided by a trader. s Inventory 5.000 Bank overdraft 1200 Cash in hand 900 Creditors 1800 Stock of stationery 600 Working capital is A $3500. B $4700. C $5300. D $9500. The current ratio of a business indicates its ability to A buy stock. B _ pay employees. C pay off current liabilities. D pay offnon-current liabilities. The double entry for closing the drawings account is Debit Credit A appropriation account drawings account. B capital account drawings account. C drawings account appropriation account. D drawings account capital account. What does a debit balance in a capital account mean? the business is insolvent the business is solvent the owner invested more capital the owner took goods for own use onw> 40si/1 N2018 1227 A manufacturer bought a machine for $40 000. Its estimated useful life is five years after which its value would be $12 000. Depreciation is charged on a straight line method. What is the annual depreciation charge? A $2400 B $5600 Cc $8000 D $12.00 ‘The following information relates to the business of D. Mablangu. 8 Inventory: 1 January 2010 10.000 31 December 2010 30000 Purchases 140 000 ‘The rate of stockturn is A 4 times. B 6 times. C7 times D 12 times. The following information is provided by a trader. s Total current assets 60.000 Inventory/stock 10.000 Total current liabilities 20.000 The acid test ratio is A B c D S31 5: 1. ‘The main source of income for a club or society is A donations. B _ proceeds from dances. C sale of refreshments. D subscriptions. 405i N2018 1329 30 31 32 Which of the following is not recorded in the receipts and payments account? A. fixed assets bought in previous years. B fixed assets bought in the current year. C payments to creditors during the year. D subscriptions received during the year. ‘The following information relates to a football club. s Subscriptions received during the year 12.000 Subscriptions owing at start of the year 1200 Subscriptions owing at the end of the year 800 The amount of subscriptions shown in the income and expenditure account is A $10 000. B $1160. Cc $1240. D ‘$1400. Which items are part of direct costs? A depreciation on plant and patent fees, B machinery repairs and royalties C manufacturing wages and factory insurance D royalties and hire of special plant A manufacturer provides the following information. s Cost of raw materials consumed 175.000 Total overhead costs 151.000 Manufacturing wages 90.000 Royalties 10.000 What is the prime cost? A $265 000 B $275 000 C $326 000 D $426 000 40si/1 N2018 1433 34 35 36 If closing stock is overvalued, there is A a decrease in gross profit only. B a decrease in both gross profit and net profit. C an increase in gross profit only. D an increase in both gross profit and net profit. A disadvantage of partnerships is that partners A eam interest on capital. B share ideas. C share losses. D share profits. The following information relates to a partnership on 31 December 2013. 8 Net profit 100 000 Interest on capital: Pida 12 000 Ndoda 15.000 Interest on drawings: Pida 3000 Ndoda 2.000 Whaat is the balance of profit available for sharing? A $68 000 B $78 000 Cc $12000 D $132,000 When the purchase price of a business is more than the value of net assets taken over the difference is known as A goodwill. B retained profit. C revaluation profit. D surplus. 405i N2018 15,37 38 39 Ina joint stock company debentures eam a fixed rate of A dividend. B interest. C loss. D_ profit Ordinary shareholders A are creditors of the company. B are paid before debenture-holders. C donot participate in the control of the business. D__ cat dividends only if there is profit. The following information relates to a business for the year ended 31 March 2012. Capital on 1 April 2011 Capital on 31 March 2012 Drawings for the year Profit or loss for the year is A $1350 loss. B $1350 profit. C $7950 loss. D $7950 profit. A business was purchased at a price of $75 000. $71 000 and liabilities taken over were $6 000. Whaat is the value of goodwill? A $2000 B $4000 Cc $1000 D $65 000 405i N2018 16 s 16 000 11350 3300 The value of assets taken over wasSumame Forename(s) Centre Number Candidate Number C 2 © ZIMBABWE SCHOOL EXAMINATIONS COUNCIL General Certificate of Education Ordinary Level PRINCIPLES OF ACCOUNTING 4051/2 PAPER 2 NOVEMBER 2018 SESSION 2 hours 30 minutes Allow candidates 5 minutes to count pages before the examination. TIME — 2 hours 30 minutes INSTRUCTIONS TO CANDIDATES Check that all the pages are in the booklet and ask the invigilator for a replacement if there are duplicate or missing pages. ‘Write your name, (Surname and Forename(s)), Centre number and candidate number in the spaces provided at the top of this page and your Centre number and candidate number in the box at the top right comer of every page of this paper. Answer all questions. ‘Write your answers in the spaces provided on the question paper. Use biack or blue ball-point pen only. All calculations must be shown adjacent to the answer, Calculators may be used. INFORMATION FOR CANDIDATES ‘The number of marks is given in brackets [ ] at the end of each question or part question. Amounts used in this Question Paper are for calculation purposes only. ‘The businesses described in this paper are entirely fictitious, Copyright: Zimbabwe School Examinations Council, N2018. ©ZIMSEC N2018 221 Answer all questions. T. Dhlodhlo manufactures household electric metres, for Zimbabwe Electricity Supply Authority, ZESA. The following trial balance was extracted from his books on 31 December 2016. Debit | Credit $ s Capital 150 000 Drawings 18.000 Inventory, 1 January 2016. Raw materials 12.550 Work in progress 5.000 Finished goods 10 200 Purchases of raw materials 120 000 ‘Manufacturing wages 72.000 Factory supervisory salary 16 000 Import duty on raw materials 13300 Patent fees 15.450 Factory power 24.000 General office expenses 31.700 Factory insurance 19000 Provision for bad debts 500 Sales of finished goods 300.450 Plant and machinery, at cost 60.000 Office equipment, at cost 45.000 Provision for depreciation, 1 January 2016: Plant and machinery 12.000 Office equipment 6750 Bank 6 500 Trade receivables 9.000 Trade payables 8.000 477700 | 477700 ‘The following information is also available on 31 December 2016: (Inventory: Raw materials $21 600 Work in progress $ 4 600 Finished goods $55 500 (i) Manufacturing wages due $ 3.000 iii) Depreciation is provided for as follows: = Plant and machinery, 20% per annum using the reducing balance method. - Office equipment, 15% per annum using the straight line method. (iv) Factory insurance prepaid $4 000, (v) The provision for bad debts is to be adjusted to 5% of the trade receivables. 40512 N2018 231 Prepare: (a) _ T. Dhlodhlo’s Manufacturing Account for the year ended 31 December 2016, showing clearly the cost of raw materials consumed, prime cost and the total cost of production to be transferred to the Trading Account. 40512 2018 24@ 40512. N2018 25 5](b) the Income Statement, for the year ended 31 December 2016. 40512 2018 261 (b) (1 2 The following balances appeared in the books of D. Mwale: 1 January 2016 31 December 2016 s Land and buildings, at cost 400 000 Office equipment, at cost 150.000 Inventory 80 000 Trade receivables 56.000 Bank 62.800 Dr Trade payables 40.000 General expenses owing 16 800 Additional information: $ 400 000 200 000 90 000 60 000 22.000 Cr 30.000 10 000 (During the year ended 31 December 2016, Mwale withdrew $70 000 from the business bank account for personal use. (ii) The business bought some additional office equipment worth $50 000 at cost, on 30 June 2016, Depreciation on office equipment is at the rate of 10% per annum on cost for each month of ownership. (ii) On 31 December 2016, a provision for doubtful debts was created at 22% of the trade receivables, 4512 N2018 a7(@) — @ Calculate capital on 1 January 2016. GBI (ii) Draw up a Statement of Affairs Account showing profit or loss for the year ended 31 December 2016. 405122 N2018 28@ w 40512 N2018 29(b) The following errors relate to the business of S. Patel, a general dealer, for the month of December 2016. 2016 December 8 Sundry Expenses Account and Commission Eamed Account were both understated by $50 000, 12 The account of N. Richard, a supplier, was credited with goods worth $300 000 purchased from H. Hassims. 18 Payment for repairs to business machinery totalling $360 000, was charged to the Machinery Account. 26 Cash sales amounting to $20 000 had been credited to the Cash Account and debited to the Sales Account, (Show the journal entries required to correct the above errors. (Narratives are not required) 4si2 N2018 30) @ [8] (ii) State the type of error made on: December 12, December 26. [2] 40s12.Na2018 31@ ‘The partnership business of Phillie and Panashe runs two departments, fumiture and grocery. The following balances were extracted from their books on 30 June 2016, after the preparation of the Departmental Trading Account, Dr Cr $ 3 Gross profit: furniture 102 000 Grocery 78.000 Capital: Phillie 250 000 Panashe 300 000 Inventory at 30 June 2016: Furniture 60.000 Grocery 40.000 Trade payables 27 100 Machinery, at cost 80.000 Motor vehicles, at cost 120000 Provision for depreciation, 1 July 2015 Motor vehicles 72 000 Trade receivables 46.000 Wages and salaries — staff 49 100 Cash at bank 70.000 General expenses 34.000 Premises, at cost 240.000 Drawings: Phillie 30.000 Panashe 50.000 Salary: Panashe 10.000 329100 829.100 ‘The following additional information was available on 30 June 2016. tt, Depreciation is provided for as follows: Machinery 20% per annum on cost. Motor vehicles 25% per annum using the reducing balance method. 2. 3. 4. Salaries and wages owing to office staff amounted to $3 100. General expenses included rates prepaid for $4 000. The partnership deed included the following: Interest on partner’s capital was allowed at the rate of 10% per annum. Capital accounts to remain fixed, Interest on drawings is charged at the rate of 2% per annum. Panashe is entitled to an annual salary of $12 000. Phillie and Panashe share profits and losses in the ratio of 5:6 respectively. 4012 N2018 32(a) Prepare the partnership combined Profit and Loss Account and an Appropriation Account for the year ended 30 June 2016. 40512 N2018 33@ 4012 N2018 34 [13](b) Complete the following information table. Transaction/Event ‘Accounting Concept (i Calculating depreciation using the same ‘method each year. i) Recording non-current assets at cost. (iii) Recording revenue eared during an accounting period whether cash was received or not. (iv) Recording non-cash expenses so as not to overstate profits (v) Recording a business transaction twice. [5] (© For each of the following transactions, state the source document. @ Sold an old machine for $3 000 on credit to D. Danello. (i) A cheque for $10 000 received from T. Trust, a debtor, was returned by the bank marked R/D. 2] 0512. 2018 35@ ‘The following information was extracted from the books of Tingadene Ltd Company for the year ended 31 December 2015. $ Purchases 912.000 Sales 1218 000 Opening inventory 42.000 Sales returns 18.000 Purchases returns 6000 Customs duty 30.000 Rate of stocktum, 15 times Mark up 335% Calculate, showing your workings: @ — tumover, [2] Gi) margin, [2] 40512. N2018 36@ (iii) gross profit, 2] (iv) cost of goods sold, 2) (¥) closing inventory. GB) 40s12.Na2018 374 (b) Prepare: On 31 December 2016, Chamwandipa’s Cash Book (bank columns) showed a debit balance of $13 300. On the same day, the Bank Statement showed a credit balance of $10 800. Comparison of the Cash Book with the Bank Statement revealed the following differences: () Deposits not yet credited by the bank totalled $6 000. (ii) Bank charges totalling $500 were not recorded in the Cash Book. (ii) Cheques amounting to $4 500 were not yet presented for payment at the bank. (iv) A credit transfer not yet entered in the Cash Book amounted to $2 500. (v) A cheque for $3 800 deposited by Chamwandipa was wrongly credited by the bank as $800 but was correctly recorded in the Cash Book. (an updated Cash Book. (41 40512 N2018 38) (i) a Bank Reconciliation Statement on 31 December 2016. (61 @ On | November 2014, Zvinodiwa Women’s Club had the following balances in their nominal ledger: s Subscriptions received in advance 2.000 Subscriptions owing 1500 Rent owing 800 During the year ended 31 October 2015 the following transactions took place: 8 Subscriptions received 10500 Rent paid 6800 40512 N2018 39@ On 31 October 2015, the following information was available. s Subscriptions received in advance 1800 Subscriptions owing 1.200 Rent outstanding 600 ‘The club’s financial year ends on 31 October. Prepare for the club, showing clearly the amount to be transferred to the Income and Expenditure Account: @ Subscriptions Account, 40st N2018 40 (6)@ (i Rent Account. (41 (b) The following information is available from the books of Liberty Clothing Company Ltd on 30 June 2016, after preparation of the company’s Appropriation Account, Authorised Share Capital 300 000 Ordinary Shares of $2 each 400 000 10% Preference shares of $1 each Issued Share Capital 200 000 Ordinary Shares of $2 each, fully paid. 350 000 10% Preference shares of $1 each, fully paid, 11% Debentures $260 000 General Reserve $ 70.000 Retained Income c/f $130 000 405122018 a(>) (Prepare a Statement of Financial Position extract at 30 June 2016, showing the details and totals of the capital fund. 19) 40512 2018 a2(>) i) Calculate the preference dividend for the year ended 30 June 2016, 0] 40512. N2018 43