Semester C Examination Period 2024
ECOM058 Principles of Accounting Duration: 2 hours
YOU ARE NOT PERMITTED TO READ THE CONTENTS OF THIS QUESTION PAPER UNTIL
INSTRUCTED TO DO SO BY AN INVIGILATOR
Answer ALL questions
Cross out any answers that you do not wish to be marked
Calculators are permitted in this examination. Please state on your answer book the name and
type of machine used.
Complete all rough workings in the answer book and cross through any work that is not to be
assessed.
Possession of unauthorised material at any time when under examination conditions is an
assessment offence and can lead to expulsion from QMUL. Check now to ensure you do not have
any notes, mobile phones, smartwatches or unauthorised electronic devices on your person. If you
do, raise your hand and give them to an invigilator immediately.
It is also an offence to have any writing of any kind on your person, including on your body. If you
are found to have hidden unauthorised material elsewhere, including toilets and cloakrooms it will
be treated as being found in your possession. Unauthorised material found on your mobile phone
or other electronic device will be considered the same as being in possession of paper notes. A
mobile phone that causes a disruption in the exam is also an assessment offence.
EXAM PAPERS MUST NOT BE REMOVED FROM THE EXAM ROOM
Examiner: Luca Larcher
© Queen Mary University of London, 2024
Page 2 ECOM058 (2024)
Question 1
Consider the following adjusted trial balance prepared for the year ended on 31/12/2023:
Dr (£) Cr (£)
share capital 30,000
cash 24,000
trade receivables 16,000
buildings at cost 65,000
accumulated depreciation 40,000
sales returns 2,000
Inventory 12,000
retained profits 32,500
discounts received 1,500
doubtful debt provision 700
COGS 31,000
sales 76,000
rent 11,000
rent prepayment 4,000
electricity 5,100
machinery at cost 30,000
accumulated depreciation 17,400
depreciation 7,400
electricity accrual 600
bad debt expense 1,000
change in doubt debt provision 200
change in defective goods
2,000
provision
interest expenses 2,000
bank loan 10,000
a) Use the adjusted trial balance to prepare the income statement for 2023.
[15 marks]
b) Use the adjusted trial balance to prepare the balance sheet at 31/12/2023.
[15 marks]
ECOM058 (2024) Page 3
Question 2
Consider the following table outlining the inventory movements during the year to
31/12/2023:
date transaction units unit price (£)
01/01/2023 opening inventory 300 20
10/02/2023 purchase 500 18
03/03/2023 sale 600 30
12/03/2023 purchase 100 18
24/05/2023 purchase 700 16
03/06/2023 sale 200 25
07/09/2023 sale 500 25
21/10/2023 purchase 300 14
07/11/2023 purchase 400 12
21/11/2023 sale 200 20
a) Calculate the cost of goods sold and the final inventory for the year ended
31/12/2023 using LIFO. Show your calculations.
[15 marks]
b) Without making any calculations, would final inventory have been higher or lower
using FIFO instead? Justify your answer.
[5 marks]
Question 3
Record the following transaction in the appropriate T accounts, indicating the type of each
account that you use (i.e. asset, liability, etc.). Each transaction should be identified by its
number.
1. sell goods for £35,000 in cash
2. pay wages for £8,000 in cash
3. purchase goods for resale for £8,000 on credit
4. sell goods for £6,000 on credit
5. receive a payment of £4,000 from a credit customer
6. open a bank loan for £10,000, receive the proceeds in cash
[20 marks]
Page 4 ECOM058 (2024)
Question 4
a) List and describe the fundamental qualitative characteristics of accounting
information according to the International Accounting Standards Board framework.
[10 marks]
b) List and describe the fundamental enhancing characteristics of accounting
information according to the International Accounting Standards Board framework.
[10 marks]
c) What are the key attributes of intangible assets according to the International
Accounting Standards? Describe them briefly providing examples.
[10 marks]
End of Paper
