PAGE 128

1 Kulbir commenced trading on 1 January 2013 with cash $350, bank $3000, motor vehicle For
$6500 and a loan from Sanjay of $5000. Examiner’s
Use
REQUIRED

(a) Prepare Kulbir’s opening entries in the general journal and show her capital at
1 January 2013. A narrative is required.

General Journal
Debit Credit
$ $

.............................................................................................. ........................ ........................

.............................................................................................. ........................ ........................

.............................................................................................. ........................ ........................

.............................................................................................. ........................ ........................

.............................................................................................. ........................ ........................

.............................................................................................. ........................ ........................

.............................................................................................. ........................ ........................

.............................................................................................. ........................ ........................

[3]

On 28 January 2013 Kulbir sold her motor vehicle to Aktar Allam on credit for $6500. On the
same day she purchased on credit from Aston Motors Limited a new vehicle for $10 000.

(b) Show the entries in the general journal to record the sale of the old motor vehicle and
the purchase of the new motor vehicle.

General Journal
Debit Credit
$ $

.............................................................................................. ........................ ........................

.............................................................................................. ........................ ........................

.............................................................................................. ........................ ........................

.............................................................................................. ........................ ........................

.............................................................................................. ........................ ........................

.............................................................................................. ........................ ........................

.............................................................................................. ........................ ........................

.............................................................................................. ........................ ........................

.............................................................................................. ........................ ........................

[6]
© UCLES 2013 7110/22/O/N/13
 PAGE 129

(c) Give two other uses of the general journal. For

Examiner’s
1 ....................................................................................................................................... Use

..........................................................................................................................................

2 .......................................................................................................................................

...................................................................................................................................... [2]

(d) Kulbir operates on a mark-up of 25%. The table below contains transactions carried out
by Kulbir in her first week of trading. Complete the table for each transaction. The first
transaction has been completed as an example.

Source Book of prime Effect on

2013 Transaction
document entry profit

Goods sold, cost price $400, on

Jan 4 Invoice Sales journal Increase $100
credit to Keen

Keen returned goods, selling

Jan 5
price $80

Payment made to J Singh, $323

Jan 6 in cash, after deducting $17
cash discount

Kulbir withdrew $200 from the

Jan 7
bank for personal use

[9]

[Total: 20]

© UCLES 2013 7110/22/O/N/13 [Turn over

 PAGE 147

1 Akma received the following bank statement on 30 April 2014:

Date Details Debit Credit Balance

$ $ $
1 April Balance 614 Dr
2 April Cheque – Stanning 88 702 Dr
10 April Cash receipt 1204 502 Cr
12 April Cheque – Chong 640 138 Dr
18 April Paying in – Trinity Stores 780 642 Cr
20 April Cheque – Pang 94 548 Cr
22 April Charges 16 532 Cr
25 April MDA Electricity – S.O. 104 428 Cr
28 April Dividend receipt 41 469 Cr

Akma compared the bank statement with her cash book.

REQUIRED

(a) Bring the cash book of Akma up to date. Balance the cash book and bring down the balance.

Cash Book (bank columns)

$ $

8 April Sales 1204 1 April Balance b/d 614

18 April Trinity Stores 780 2 April Stanning 88

23 April Xain 73 8 April Chong 640

24 April Li Ye 37 23 April Zaine 59

.................................................... 27 April Pang 94

.................................................... ....................................................

.................................................... ....................................................

.................................................... ....................................................

.................................................... ....................................................

.................................................... ....................................................

.................................................... ....................................................
[5]

© UCLES 2014 7110/21/M/J/14

 PAGE 148

(b) Prepare the bank reconciliation statement at 30 April 2014.

Bank Reconciliation Statement at 30 April 2014

$ $
Balance as per bank statement 469

Plus
..................................................................................................

..................................................................................................

..................................................................................................

Less
..................................................................................................

..................................................................................................

Balance as per cash book ........................................................

[4]

(c) State the meaning of the accounting abbreviation S.O.

...................................................................................................................................................

...............................................................................................................................................[1]

© UCLES 2014 7110/21/M/J/14 [Turn over

 PAGE 149

On 1 April, Trinity Stores owed Akma $800. During the month of April, Akma recorded the following
transactions with Trinity Stores.

8 April Akma supplied goods to Trinity Stores with a list price of $900, less 20% trade
discount.
10 April Trinity Stores returned goods supplied by Akma on 8 April with a list price of
$100.
18 April Trinity Stores paid the balance due on 1 April less 2½% cash discount.

REQUIRED

(d) Prepare the account of Trinity Stores in the books of Akma. Balance the account and bring
down the balance.

Trinity Stores account

Date Details $ Date Details $

[6]

(e) Name the document that Akma would issue to Trinity Stores on 10 April.

...............................................................................................................................................[1]

(f) State two reasons why Akma might give Trinity Stores trade discount.

1 ................................................................................................................................................

...................................................................................................................................................

2 ................................................................................................................................................

...............................................................................................................................................[2]

[Total: 19]

© UCLES 2014 7110/21/M/J/14

 PAGE 168

1 (a) (i) Explain the difference between book-keeping and accounting.

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

.......................................................................................................................................[2]

(ii) Explain the accounting entity principle.

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

.......................................................................................................................................[2]

Fashran sells goods to Hajar. On 1 April Hajar owed Fashran $2100. The following transactions
occurred in April 2014.

5 April Fashran sold goods on credit to Hajar, list price $2000, less 20% trade discount.
7 April Hajar returned goods purchased on the 5 April, list price $240.
18 April Hajar paid the balance of her account at 1 April and was allowed 2% cash discount.

REQUIRED

(b) Prepare the account of Hajar in the ledger of Fashran for April 2014. Balance the account and
bring down the balance.

Hajar account

Date Details $ Date Details $

[5]

© UCLES 2014 7110/22/M/J/14

 PAGE 169

(c) Name the document that Fashran will issue on the following dates:

Date Document
5 April Fashran sold goods on credit to Hajar
Hajar returned goods to Fashran purchased on
7 April
the 5 April
Fashran issues a summary of Hajar’s account
30 April
for the month of April
[3]

(d) State the sub division of the ledger in which the account of Hajar would appear.

...............................................................................................................................................[1]

© UCLES 2014 7110/22/M/J/14 [Turn over

 PAGE 170

The following balances were extracted from the books of Fashran on 30 April 2014.

$
Trade payables 6 450
Trade receivables 9 230
Revenue 68 400
Purchases 29 800
Inventory 1 May 2013 5 100
Expenses 22 350
Bank overdraft 830
Non-current assets 24 000
Provision for depreciation – Non-current assets 7 800

REQUIRED

(e) Prepare the trial balance showing Fashran’s capital at 30 April 2014.

Fashran
Trial Balance at 30 April 2014

Dr Cr
$ $
Trade payables
Trade receivables
Revenue
Purchases
Inventory 1 May 2013
Bank overdraft
Expenses
Non-current assets
Provision for depreciation – Non-current assets
Capital

[5]

[Total: 18]

© UCLES 2014 7110/22/M/J/14

 PAGE 206

1 Maria had the following assets and liabilities on 1 May 2014.

$
Inventory 1950
Amount payable – Midland Telecoms 400
Bank 550 Dr
5% Bank loan (repayable 30 April 2018) 2500
Fixtures and fittings 1500

REQUIRED

(a) Calculate the following.

(i) Owner’s capital

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

.......................................................................................................................................[1]

(ii) Capital employed

...........................................................................................................................................

.......................................................................................................................................[1]

© UCLES 2014 7110/22/O/N/14

 PAGE 207

The following related to the purchase of telephone services for the three months to 31 July 2014.

31 May Paid Midland Telecoms’ balance on 1 May 2014 by cheque.

26 June Received a telephone bill from Midland Telecoms $1200.
15 July Paid telephone bill received on 26 June by cheque less 2% cash discount.
31 July Prepared an income statement for the three months to 31 July 2014. It was
estimated that $130 was owing.

REQUIRED

(b) Prepare the following ledger accounts for the three months to 31 July 2014.

Midland Telecoms account

Date Details $ Date Details $

[5]
Telephone expenses account
Date Details $ Date Details $

[4]

(c) Name and explain the accounting concept applied in estimating the telephone expenses
owing on 31 July 2014.

Accounting concept

...................................................................................................................................................

Explanation ...............................................................................................................................

...................................................................................................................................................

...............................................................................................................................................[3]

© UCLES 2014 7110/22/O/N/14 [Turn over

 PAGE 208

The following were some of the transactions which took place in July.

5 July Purchased inventory on credit.

10 July Goods returned by a credit customer.
20 July Paid wages in cash.
25 July Disposed of fixtures and fittings on credit.

REQUIRED

(d) Complete the following table for the above transactions naming the source document prepared
by Maria and the book of prime entry used. The first item has been completed as an example.

Source document Book of prime entry

5 July Purchase invoice Purchases journal

10 July

20 July

25 July

[6]

[Total: 20]

© UCLES 2014 7110/22/O/N/14

 PAGE 242

1 The following balances were available from the books of Priya on 1 April 2015.

$
Putil 3000 credit
Wages 1750 debit

The following transactions took place in April 2015.

April 5 Paid Putil half of his outstanding balance on 1 April by cheque, less 2% cash discount
April 8 Bought goods on credit from Putil, $800, less 20% trade discount
April 19 Paid wages in cash $450
April 23 Returned goods, list price $200, purchased on 5 April
April 26 Sold a non-current asset at book value, $2000, on credit

REQUIRED

(a) Complete the following table. The first item has been completed as an example. Where the
owner’s capital is not affected, write ‘No effect’.

Date Transaction Source Book of prime Effect on

document entry owner’s capital
$
April 5 Paid Putil half of his outstanding Cheque Cash book +30
balance on 1 April by cheque, less counterfoil
2% cash discount
April 8 Bought goods on credit from Putil,
$800, less 20% trade discount
April 19 Paid wages in cash $450

April 23 Returned goods, list price $200,

purchased on 8 April
April 26 Sold a non-current asset at book
value, $2000, on credit
[12]

© UCLES 2015 7110/22/M/J/15

 PAGE 243

(b) Prepare the account of Putil for the month of April 2015. Balance the account and bring down
the balance on 1 May 2015.

Putil account

Date Details $ Date Details $

[5]

Priya prepared her income statement on 30 April 2015. She calculated that wages, $150, were
prepaid at that date.

REQUIRED

(c) Prepare the wages account for the month of April 2015 including the transfer to the income
statement. Balance the account and bring down the balance on 1 May 2015.

Wages account

Date Details $ Date Details $

[3]

[Total: 20]

© UCLES 2015 7110/22/M/J/15 [Turn over

 PAGE 330

1 Gabi is in business buying and selling goods on credit. The following details relate to the account
of her customer, Kacela, for the month of September 2016.
$
September 1 Opening balance owed by Kacela to Gabi 900
9 Invoice sent to Kacela 730
14 Credit note sent to Kacela 25
30 Cheque received and banked by Gabi 860
30 Discount allowed by Gabi 40

REQUIRED

(a) Prepare the account of Kacela in the books of Gabi. Balance the account and bring down the
balance on 1 October.

Kacela account

Date Details $ Date Details $

[6]

(b) Name the sub-division of Gabi’s ledger which will contain the account of Kacela.

...............................................................................................................................................[1]

On 30 September 2016 the balance on the bank account in the books of Gabi was $450 debit.

Gabi received a bank statement for September 2016. The differences between the bank account
and the bank statement were as follows:

1 A cheque for $50 paid to J Simpson had not been presented for payment.

2 Bank charges, $230, had been charged to Gabi’s account but were not recorded in Gabi’s
books.

3 The bank had received a dividend payment, $120, which was not recorded in Gabi’s books.

4 The cheque received from Kacela, $860, was not recorded on the bank statement.

© UCLES 2016 7110/21/O/N/16

 PAGE 331

REQUIRED

(c) Update the bank account of Gabi. Balance the account and bring down the updated balance
on 1 October.

Bank account

Date Details $ Date Details $

2016
Sept 30 Balance b/d 450

[3]

(d) Prepare the bank reconciliation statement on 1 October 2016. Start with the updated bank
account balance.

Bank Reconciliation Statement at 1 October 2016

Balance on bank account ...................................................................

Plus .................................................................................................

.................................................................................................

Less .................................................................................................

.................................................................................................

Balance on bank statement ................................................................

[4]

© UCLES 2016 7110/21/O/N/16 [Turn over

 PAGE 332

(e) Complete the table for the transactions shown. Name the source document and the book of
prime entry used by Gabi. The first item has been completed as an example.

Source document Book of prime entry

Sold goods on credit Sales invoice Sales journal

Paid wages in cash

Purchased office fixtures on

credit
Goods returned by a credit
customer
[6]

[Total: 20]

© UCLES 2016 7110/21/O/N/16

 PAGE 365

1 Nor purchases goods from Adam. On 1 April Nor owed Adam $1500. The following transactions
occurred in April 2017.

April 9 Adam sold goods to Nor on credit, list price $1200, less 20% trade discount.

11 Nor returned goods purchased on 9 April, list price $100.

28 Nor paid by cheque the balance on her account at 1 April and was allowed 3% cash
discount.

REQUIRED

(a) Prepare the account of Adam in the ledger of Nor for April 2017. Balance the account and
bring down the balance on 1 May 2017.

Adam account

Date Details $ Date Details $

[5]

(b) Name the:

(i) book of prime (original) entry in which the transaction on 9 April would be recorded by
Nor.

.......................................................................................................................................[1]

(ii) document that Adam would send to Nor on 11 April.

.......................................................................................................................................[1]

(iii) GLYLVLRQRI1RU·VOHGJHULQZKLFKWKHDFFRXQWRI$GDPZRXOGEHNHSW

.......................................................................................................................................[1]

© UCLES 2017 7110/21/M/J/17

 PAGE 366

(c) State one reason why Adam would allow Nor:

(i) trade discount

...........................................................................................................................................

.......................................................................................................................................[1]

(ii) cash discount

...........................................................................................................................................

.......................................................................................................................................[1]

Question 1(d) is on the next page.

© UCLES 2017 7110/21/M/J/17 [Turn over

 PAGE 367

On 30 April 2017 Nor received the following bank statement.

Date Details Debit Credit Balance

2017 $ $ $

April 1 Balance 490 Cr

April 5 Rent receivable 200 690 Cr

April 13 XYZ Supplies Ltd 450 240 Cr

April 20 The Repair Company 175 65 Cr

April 20 Cash sales banked 640 705 Cr

April 25 Commission 250 955 Cr

April 25 United utilities – DD 150 805 Cr

April 27 Cash withdrawal 90 715 Cr

April 29 Dividend 15 730 Cr

Nor compared the bank statement with her cash book.

REQUIRED

(d) Bring the cash book (bank columns) of Nor up to date. Balance the cash book and bring
down the balance on 1 May 2017.

Cash Book (bank columns)

Date Details $ Date Details $

2017 2017
April 1 Balance b/d 490 April 11 XYZ Supplies Ltd 450
April 5 Rent receivable 200 April 14 West Electricity 325
April 18 Cash sales 640 April 17 The Repair Company 175
April 30 Cash sales 510 April 27 Cash 90
April 28 Adam 1455

[4]

© UCLES 2017 7110/21/M/J/17

 PAGE 368

(e) Prepare the bank reconciliation statement at 30 April 2017.

Bank Reconciliation Statement at 30 April 2017

$
Balance on bank statement 730 Credit

Plus ............................................................................................................................................

...................................................................................................................................................

...................................................................................................................................................

Less ...........................................................................................................................................

...................................................................................................................................................

...................................................................................................................................................

Balance on bank account ..........................................................................................................

[4]

(f) Explain the abbreviation DD as used in the United utilities payment on 25 April.

...................................................................................................................................................

...................................................................................................................................................

...................................................................................................................................................

...............................................................................................................................................[2]

[Total: 20]

© UCLES 2017 7110/21/M/J/17 [Turn over

 PAGE 400

1 Aqil had the following assets and liabilities on 1 May 2017.

$
Amount owing to Weston Water Supplies 700
Inventory 2250
Bank 90 Credit
5% Bank loan (repayable 30 June 2022) 5000
Motor vehicle 9500

REQUIRED

(a) Calculate the:

(i) 2ZQHU·VFDSLWDO

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

.......................................................................................................................................[1]

(ii) Capital employed

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

.......................................................................................................................................[1]

7KHIROORZLQJUHODWHGWRWKHSXUFKDVHRIZDWHUVXSSOLHVIRU$TLO·VEXVLQHVVIRUWKHWKUHHPRQWKV
to 31 July 2017.

May 18 Paid Weston Water Supplies the balance on 1 May 2017 by cheque less
2% cash discount.

July 16 Received a water bill from Weston Water Supplies, $1500.

31 Aqil prepared an income statement for the three months to 31 July 2017. It was
estimated that $340 was outstanding for water at that date.

© UCLES 2017 7110/21/O/N/17

 PAGE 401

REQUIRED

(b) Prepare the following ledger accounts for the three months to 31 July 2017. Show the
transfer to the income statement where appropriate. Balance the accounts and bring down
the balances on 1 August 2017.

Weston Water Supplies account

Date Details $ Date Details $

Water expense account

Date Details $ Date Details $

[9]

© UCLES 2017 7110/21/O/N/17 [Turn over

 PAGE 402

(c) Name and explain the accounting principle or concept applied in estimating the water expense
owing on 31 July 2017.

Accounting principle or concept

...................................................................................................................................................

Explanation

...................................................................................................................................................

...................................................................................................................................................

...................................................................................................................................................

...............................................................................................................................................[3]

(d) &RPSOHWHWKHIROORZLQJWDEOHIRUWKHWUDQVDFWLRQVUHFRUGHGLQ$TLO·VERRNVLQ-XO\7KH
first transaction has been completed as an example.

Source Book of prime

document entry
July 19 Sold inventory on credit Sales invoice Sales journal

July 20 Credit customer returned

goods to Aqil

July 23 Paid wages in cash

July 25 Purchased motor vehicle

on credit

[6]

[Total: 20]

© UCLES 2017 7110/21/O/N/17