Question Answer Marks
1(a) Ayesha 9
Cash
Book
Date Details Disc Cash Bank Date Details Disc Cash Bank
. .
2023 $ $ $ 2023 $ $ $
Aug 1 Balance b/d 250 Aug 1 Balance b/d 4010
17 Jack 156 2 Petty cash 94
24 Sales 3820 30 Bank 2000
29 Capital 5000 31 Asma (1) 22 858
30 Cash 2000 Bank charges (1) 53
31 Jamil (1) 11 539 Jack (Dis. chq) (1) 156
Hina (1) 260 Insurance (1) 50
Balance c/d 1976 2828
2023 11 4070 7955 22 4070 7955
Sept 1 Balance b/d
1976 2828
(1)OF (1)OF
+ (1) OF totalling both discount columns
1(b) Bank overdraft/amount Ayesha owed the bank 1
1(c) Amount withdrawn from the cash to transfer to the petty cash book/amount given in cash to the petty cashier 1
1(d) This is a contra entry (1) Money was transferred to the bank account from the cash account (1) 2
Question Answer Marks
1(e) Ayesha 5
Bank Reconciliation Statement at 31 August 2023
$ $
Balance on bank statement (1)OF 1147
Amounts not yet credited
Cash (1) 2000
Cheque – Jamil (1)OF 539 2539
3686
Cheque not yet presented
Asma (1)OF 858
Balance in cash book (1)OF 2828
Alternative presentation
Ayesha
Bank Reconciliation Statement at 31
August 2023
$ $
Balance in cash book (1)OF 2828
Cheque not yet presented
Asma (1)OF 858
3686
Amounts not yet credited 2000
Cash (1) 539 2539
Cheque – Jamil (1)OF 1147
Balance on bank statement (1)OF
Question Answer Marks
1(f) Obtain the correct bank balance 2
Identify errors in the bank columns of the
cash book Identify errors on the bank
statement
Assist in discovering fraud and
embezzlement Identify amounts/cheques
not credited by the bank Identify cheques
not presented
Identify stale cheques
Understand/reconcile the differences between the bank account/bank column in cash book and the bank
statement
Any 2 reasons (1) each
Question Answer Marks
2(a) Payment of annual insurance premium revenue expenditure 6
Purchases of goods for re-sale revenue expenditure
(1) Proceeds of sale of old shop fittings at book value
capital receipt (1)
Cost of new shop fittings capital expenditure
(1)
Delivery charge on new shop fittings capital expenditure (1)
Cash sales revenue receipt (1)
Loan from bank capital receipt (1)
2(b) transaction account(s) debited account(s) credited 9
$ $
Nabil transferred his private motor motor vehicles 18 000 (1) capital 18 000 (1)
vehicle,
$18 000 to the business.
Purchased stationery, $44, on credit stationery 44 (1) Tahir 44 (1)
from Tahir.
Paid office cash, $490, into the bank 490 (1) cash 490 (1)
business bank account.
Settled Vijay’s account of $200 by bank Vijay 200 (1) bank 196 (1)
transfer after deducting 2% cash discou
discount. nt 4 (1)
receive
d
Question Answer Marks
2(c) debit credit 5
colum colum
n n
rent and rates given
capital
motor vehicle at cost
purchases returns
discount received
Tarek, a credit supplier Any 2 correct
items (1)
insurance
bank overdraft
operating expenses
5 year bank loan
drawings
carriage outwards
Question Answer Marks
3(a) Waliyah 7
Romysa
account
Date Details $ Date Details $
2024 2024
Feb 1 Balance b/d (1) 320 Feb 12 Bank (1) 320
16 Sales (1) 200 24 Cash (1) 400
18 Bank (1) 320 27 Irrecoverable 120
debts (1OF)
840 840
3(b) +1 Dates 3
Waliyah
Irrecoverable debts account
Date Details $ Dat Details $
2024 e
Feb 27 Total to date 674 202 Income statement 794
Romysa (1OF) 120 4 * __
794 Feb 28 (1OF) 79
4
+1
Dates
Question Answer Marks
3(c)(i) 1 March 2023 Balance b/d 4
This is the amount of the provision for doubtful debts at the start or brought down or initial provision (of the
financial year).
(1)
Double entry: provision for doubtful debts }
debit }(1)
28 February 2024 Balance c/d
This is the total of the provision for doubtful debts at the end of the year or to be brought down or new
provision
Or This is the amount of provision for doubtful debts required for the following financial year (1)
Double entry: provision for doubtful debts }
credit }(1)
3(c)(ii) This is the difference between the opening and closing provision for doubtful debts. (1) This is the surplus 2
provision which is transferred to the income statement. (1)
There is a decrease or reduction in provision (1) and this is added to gross profit or additional income (1)
3(d) Waliyah should fix the credit limit for each customer (1) 4
Waliyah should send invoices and month end statement of accounts promptly(1)
Waliyah should ask for the references at the time of selling on credit (1)
No further goods should be supplied until the amount due is paid (1 )
Question Answer Marks
4(a)(i) 6
Cost NRV Valuation
packs of paper 4.50 8.00 4.50 240 = 1080 (1)
packs of envelopes 5.50 + 1.00 = 10.00 – 1.50 = 6.50 225 = 1462.50 (1)
6.50 8.50
notepads 4.00 + 2.00 = 5.00 5.00 150 = 750 (1)
6.00
boxes of pencils 3.50 6.00 3.50 96 = 336 (1)
Total 3628.50 (2) or (1)OF
4(a)(ii) Prudence (1) 1
Question Answer Marks
4(b)(i) Capital Revenue 4
expenditu expenditu
re re
Computer printer paper }
Computer equipment } (1)
Installation of computer (1)
equipment
Motor vehicle }
Insurance of motor vehicle } (1)
Delivery of motor vehicle (1)
4(b)(ii) Recording low value non-current assets can be costly and time consuming (1) 2
The cost could be greater than the benefit gained from treating as a non-current asset (1)
Items not significantly affecting profit or the non-current assets need not be recorded as a non-current asset
(1)
What is material for a small business may not be material for a larger business (1)
Max (2)
4(c) overstated understate 2
d
Effect on capital (1)
Effect on liabilities (1)
4.(d)
Arguments in favor:
Share of ideas
Increased capital
Can expand easily
Sharing of losses / risks
Award any two marks (2)
Arguments against:
Sharing of profits
Conflicts in decision making
Act of one partner affects the reputation of whole business
Award any two marks (2)
Award (1) mark for the advice
5(a)
Nabiha
Income Statement for the year ended 31 March 2022
$ $
Revenue 78 580
Inventory 1 April 2021 4 690
Purchase 18 240
22 930
Carriage inwards (1)
850
Drawings (450) (1)
Returns (1 600) (1)
21730
Inventory 31 March 2022 (3 870) (1)
Cost of sales (17 860) (1 OF)
Gross profit 61 570
Add:
Discount received 330 (1)
Decrease in Provision for doubtful debts 160 (1)
62 060
Less
Equipment running expenses 2650 (1)
General running expenses 8 400 (1)
Wages 15 300 (1)
Insurance 3640 (1)
Power and water 2 300 (1)
Advertising costs 5 100 (1)
Discount allowed 1 650 (1)
(31440)
Profit for the year 30620 (1 OF)
[15
]
5 (b)
Capital / equity section:
Capital at 1 April 2021 50000 (1)
Add: Profit for the year. 30620 (1 OF)
Less: Drawings (8500 +450). (8950). (2)
Capital at 31 March 2022. 71670. (1)
