Accounting O level P2 Topical Worked Solutions

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ACCOUNTING O-LEVEL PAPER 2 (TOPICAL & YEARLY) All Variants (2019-20 edition) Article# 102

Muhammad Nauman Malik FCMA, MS Accounting (Gold Medalist), MBA (Finance), DCMA, PIPFA, B.Com (Gold Medalist) Keynesian Institute of Management & Sciences (KIMS)

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All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the Author.

Cambridge International has not provided these questions or answers and can take no responsibility whatsoever for their accuracy or suitability for the examinations.

Title

Accounting O Level Paper 2 (Topical/Yearly) (Article# 102)

Author

Muhammad Nauman Malik Cell: 0321-8414262, 0300-8414262 E-mail: nauman.kims@gmail.com

Published by

Read & Write Publications

Printed by

Sadaat Printers Urdu Bazar Lahore

Composed by

Sharjeel Khan, Salman Buksh, Hayat, Shahab, Waqas, M. Awais, Usama Farooq, Ahmar, Awais Ahmad

Title designed by

Rashid Mehmood, Khalid Khursheed

Legal Advisor

Mian Tariq Ahmad (Advocate Supreme Court) Room No. 10, 11, 12 Al-Majeed Centre 1-Mozang Road, Lahore.

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Edition:

2019-20

Price

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PREFACE Being in accordance with the GCE O Level – 7110 (syllabus followed in Pakistan), the book provides an opportunity to strengthen the level of understanding and preparation for Cambridge exams.

The other books available in the market is based on Singaporean exams and does not include exams taken in Pakistan for November session. Moreover that book includes past papers on yearly basis whereas the book under review categorises them on topical as well as yearly basis.

In the book under review, the varying topics of the last nine years’ papers have been categorised in such a way that one can attain optimum skills in each of these. This can be very helpful in revising the syllabus and for preparing their final exams. In addition, the last five years’ papers at the end of the book provide compact questions with given references.

It is, however, advised that students must supplement their studies with the textbooks recommended by their teachers, since it is by no means a replacement for a good book.

I am indeed grateful to the students and the teachers who motivated me to undertake this task. Any further suggestions for improvement and intimation of errors will be much appreciated and acknowledged.

Muhammad Nauman Malik Email: nauman.kims@gmail.com Mob: 0300-8414262 0321-8414262

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TABLE OF CONTENTS (TOPICAL) PREFACE CHAPTER 1

3 ACCOUNTING BASICS

QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 CHAPTER 1

MAY 2014 P22 Q1 (E) ..................................................................................................................... 16 MAY 2017 P22 Q1 (E & F) ............................................................................................................... 16 MAY 2018 P23 Q1 (C & D) ............................................................................................................... 16 NOVEMBER 2018 P22 (A) Q1 (A) ..................................................................................................... 17 SOLUTIONS

QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 CHAPTER 2

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18

MAY 2014 P22 Q1 (E) ..................................................................................................................... 18 MAY 2017 P22 Q1 (E & F) .............................................................................................................. 18 MAY 2018 P23 Q1 (C & D) ............................................................................................................... 18 NOVEMBER 2018 P22 (A) Q1 (A) ..................................................................................................... 19 BOOKS OF ORIGINAL ENTRY

QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 QUESTION 5 QUESTION 6 QUESTION 7 QUESTION 8 QUESTION 9 QUESTION 10 QUESTION 11 QUESTION 12 QUESTION 13 QUESTION 14 QUESTION 15 QUESTION 16 QUESTION 17 QUESTION 18 QUESTION 19 QUESTION 20 QUESTION 21 QUESTION 22 QUESTION 23 QUESTION 24 QUESTION 25 QUESTION 26 QUESTION 27 QUESTION 28 QUESTION 29 QUESTION 30 QUESTION 31 QUESTION 32 QUESTION 33

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MAY 2012 P21 Q1 (A TO C) ............................................................................................................... 20 MAY 2012 P22 Q1 (B & C)................................................................................................................ 20 NOVEMBER 2011 P22 Q1 (A TO D)................................................................................................... 20 NOVEMBER 2012 P21 Q1............................................................................................................... 21 NOVEMBER 2012 P22 Q1............................................................................................................... 22 MAY 2013 P21 Q1 (A TO E) ............................................................................................................... 22 MAY 2013 P21 Q2 (A & B) ............................................................................................................... 22 MAY 2013 P22 Q1 (A TO D) .............................................................................................................. 23 NOVEMBER 2013 P21 Q1............................................................................................................... 23 NOVEMBER 2013 P22 Q1 (A & B) .................................................................................................... 24 MAY 2014 P21 Q1 (D TO F) .............................................................................................................. 24 MAY 2014 P21 Q2 (A) ..................................................................................................................... 24 MAY 2014 P22 Q1 (B TO D) .............................................................................................................. 25 NOVEMBER 2014 P21 Q1 (A & B) .................................................................................................... 25 NOVEMBER 2014 P22 Q1............................................................................................................... 26 MAY 2015 P21 Q1 (C) ..................................................................................................................... 27 MAY 2015 P22 Q1 .......................................................................................................................... 27 NOVEMBER 2015 P21 Q1 (A TO C) ................................................................................................... 28 NOVEMBER 2015 P22 Q1 (C TO F) ................................................................................................... 28 MAY 2016 P21 & 22 Q1 .................................................................................................................. 29 NOVEMBER 2016 P21 Q1 (A, B & E) ................................................................................................ 29 NOVEMBER 2016 P22 Q1 (C) .......................................................................................................... 30 NOVEMBER 2016 P22 Q2 (A) .......................................................................................................... 30 MAY 2017 P21 & 22 Q1 (A TO C) ..................................................................................................... 30 MAY 2017 P22 Q1 (A TO D)............................................................................................................. 31 NOVEMBER 2017 P21 Q1............................................................................................................... 31 NOVEMBER 2017 P22 Q1............................................................................................................... 32 MAY 2018 P22 Q1 (D & E) ............................................................................................................... 33 MAY 2018 P23 Q1 (A & B) ............................................................................................................... 33 NOVEMBER 2018 P21 Q1............................................................................................................... 34 NOVEMBER 2018 P22 Q1 (B TO D) ................................................................................................... 35 MAY 2019 P21 Q1 (A TO E) .............................................................................................................. 35 MAY 2019 P22 Q1 (A TO C).............................................................................................................. 36

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CHAPTER 2

SOLUTIONS

QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 QUESTION 5 QUESTION 6 QUESTION 7 QUESTION 8 QUESTION 9 QUESTION 10 QUESTION 11 QUESTION 12 QUESTION 13 QUESTION 14 QUESTION 15 QUESTION 16 QUESTION 17 QUESTION 18 QUESTION 19 QUESTION 20 QUESTION 21 QUESTION 22 QUESTION 23 QUESTION 24 QUESTION 25 QUESTION 26 QUESTION 27 QUESTION 28 QUESTION 29 QUESTION 30 QUESTION 31 QUESTION 32 QUESTION 33 CHAPTER 3 QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 QUESTION 5 QUESTION 6 CHAPTER 3 QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 QUESTION 5 QUESTION 6 CHAPTER 4

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MAY 2012 P21 Q1 (A TO C) ............................................................................................................... 37 MAY 2012 P22 Q1 (B & C)................................................................................................................ 37 NOVEMBER 2011 P22 Q1 (A TO D)................................................................................................... 37 NOVEMBER 2012 P21 Q1............................................................................................................... 38 NOVEMBER 2012 P22 Q1............................................................................................................... 38 MAY 2013 P21 Q1 (A TO E) ............................................................................................................... 39 MAY 2013 P21 Q2 (A & B) ............................................................................................................... 39 MAY 2013 P22 Q1 (A TO D) .............................................................................................................. 39 NOVEMBER 2013 P21 Q1............................................................................................................... 40 NOVEMBER 2013 P22 Q1 (A & B) .................................................................................................... 40 MAY 2014 P21 Q1 (D TO F) .............................................................................................................. 41 MAY 2014 P21 Q2 (A) ..................................................................................................................... 41 MAY 2014 P22 Q1 (B TO D) .............................................................................................................. 41 NOVEMBER 2014 P21 Q1 (A & B) .................................................................................................... 42 NOVEMBER 2014 P22 Q1............................................................................................................... 42 MAY 2015 P21 Q1 (C) ..................................................................................................................... 43 MAY 2015 P22 Q1 .......................................................................................................................... 43 NOVEMBER 2015 P21 Q1 (A TO C) ................................................................................................... 43 NOVEMBER 2015 P22 Q1 (C TO F) ................................................................................................... 44 MAY 2016 P21 & 22 Q1 .................................................................................................................. 44 NOVEMBER 2016 P21 Q1 (A, B & E)" ............................................................................................... 45 NOVEMBER 2016 P22 Q1 (C) .......................................................................................................... 45 NOVEMBER 2016 P22 Q2 (A) .......................................................................................................... 46 MAY 2017 P21 & 22 Q1 (A TO C) ..................................................................................................... 46 MAY 2017 P22 Q1 (A TO D)............................................................................................................. 46 NOVEMBER 2017 P21 Q1............................................................................................................... 46 NOVEMBER 2017 P22 Q1............................................................................................................... 47 MAY 2018 P22 Q1 (D & E) ............................................................................................................... 48 MAY 2018 P23 Q1 (A & B) ............................................................................................................... 48 NOVEMBER 2018 P21 Q1............................................................................................................... 48 NOVEMBER 2018 P22 Q1 (B TO D) ................................................................................................... 49 MAY 2019 P21 Q1 (A TO E) .............................................................................................................. 50 MAY 2019 P22 Q1 (A TO C).............................................................................................................. 50

BANK RECONCILIATION STATEMENTS

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MAY 2014 P21 Q1 (A TO C) ............................................................................................................... 52 NOVEMBER 2015 P22 Q1 (A & B) .................................................................................................... 52 NOVEMBER 2016 P21 Q1 (C & D)" .................................................................................................. 53 MAY 2017 P21 Q1 (D TO F) ............................................................................................................. 53 MAY 2018 P22 Q1 (A TO C) .............................................................................................................. 54 MAY 2019 P21 Q1 (F) ..................................................................................................................... 54 SOLUTIONS

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MAY 2014 P21 Q1 (A TO C) ............................................................................................................... 55 NOVEMBER 2015 P22 Q1 (A & B) .................................................................................................... 55 NOVEMBER 2016 P21 Q1 (C & D)" .................................................................................................. 55 MAY 2017 P21 Q1 (D TO F) ............................................................................................................. 56 MAY 2018 P22 Q1 (A TO C) .............................................................................................................. 56 MAY 2019 P21 Q1 (F) ..................................................................................................................... 56 ACCOUNTING CONCEPTS

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QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 QUESTION 5 QUESTION 6 QUESTION 7 QUESTION 8 QUESTION 9 QUESTION 10 QUESTION 11 QUESTION 12 QUESTION 13 QUESTION 14 CHAPTER 4

SOLUTIONS

QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 QUESTION 5 QUESTION 6 QUESTION 7 QUESTION 8 QUESTION 9 QUESTION 10 QUESTION 11 QUESTION 12 QUESTION 13 QUESTION 14 CHAPTER 5

QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 QUESTION 5 QUESTION 6 QUESTION 7 QUESTION 8 QUESTION 9

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MAY 2012 P22 Q2 (C) ..................................................................................................................... 61 NOVEMBER 2013 P21 Q2 (C) .......................................................................................................... 61 MAY 2014 P22 Q1 (A) ..................................................................................................................... 61 NOVEMBER 2014 P22 Q2 (E) .......................................................................................................... 61 MAY 2015 P21 Q4 (D) ..................................................................................................................... 61 MAY 2015 P22 Q2 (E) ...................................................................................................................... 61 NOVEMBER 2015 P21 Q3 (D).......................................................................................................... 61 MAY 2016 P21 & 22 Q2 (H) ............................................................................................................. 62 NOVEMBER 2016 P22 Q4 (C) .......................................................................................................... 62 MAY 2017 P22 Q2 (D) ................................................................................................................... 62 MAY 2017 P22 Q4 (D) ..................................................................................................................... 62 MAY 2018 P22 Q4 (E) ..................................................................................................................... 62 MAY 2018 P23 Q4 (A) ..................................................................................................................... 62 NOVEMBER 2018 P22 Q3 (D).......................................................................................................... 62

ACCOUNTING FOR DEPRECIATION

QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 QUESTION 5 QUESTION 6 QUESTION 7 QUESTION 8 QUESTION 9 QUESTION 10 CHAPTER 5

MAY 2012 P22 Q2 (C) ..................................................................................................................... 58 NOVEMBER 2013 P21 Q2 (C) .......................................................................................................... 58 MAY 2014 P22 Q1 (A) ..................................................................................................................... 58 NOVEMBER 2014 P22 Q2 (E) .......................................................................................................... 58 MAY 2015 P21 Q4 (D) ..................................................................................................................... 58 MAY 2015 P22 Q2 (E) ...................................................................................................................... 59 NOVEMBER 2015 P21 Q3 (D).......................................................................................................... 59 MAY 2016 P21 & 22 Q2 (H) ............................................................................................................. 59 NOVEMBER 2016 P22 Q4 (C) .......................................................................................................... 59 MAY 2017 P22 Q2 (D) ................................................................................................................... 59 MAY 2017 P22 Q4 (D) .................................................................................................................... 59 MAY 2018 P22 Q4 (E) ..................................................................................................................... 60 MAY 2018 P23 Q4 (B TO D) .............................................................................................................. 60 NOVEMBER 2018 P22 Q3 (D).......................................................................................................... 60

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NOVEMBER 2012 P21 Q2............................................................................................................... 63 MAY 2013 P21 Q4 .......................................................................................................................... 63 NOVEMBER 2013 P22 Q1 (C & D) .................................................................................................... 64 NOVEMBER 2014 P21 Q2 (A TO E) ................................................................................................... 64 NOVEMBER 2014 P22 Q2 (A TO D)................................................................................................... 64 MAY 2015 P22 Q2 (A TO D) .............................................................................................................. 65 MAY 2016 P21 & 22 Q2 (A TO D) ...................................................................................................... 65 NOVEMBER 2017 P21 Q2 (A TO D)................................................................................................... 66 NOVEMBER 2017 P22 Q3 (D).......................................................................................................... 66 MAY 2018 P23 Q2 (A TO E & G) ........................................................................................................ 67

SOLUTIONS

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NOVEMBER 2012 P21 Q2............................................................................................................... 68 MAY 2013 P21 Q4 .......................................................................................................................... 68 NOVEMBER 2013 P22 Q1 (C & D) .................................................................................................... 69 NOVEMBER 2014 P21 Q2 (A TO E) ................................................................................................... 69 NOVEMBER 2014 P22 Q2 (A TO D)................................................................................................... 70 MAY 2015 P22 Q2 (A TO D) .............................................................................................................. 70 MAY 2016 P21 & 22 Q2 (A TO D) ...................................................................................................... 71 NOVEMBER 2017 P21 Q2 (A TO D)................................................................................................... 71 NOVEMBER 2017 P22 Q3 (D).......................................................................................................... 72

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QUESTION 10 CHAPTER 6

BAD AND DOUBTFUL DEBTS

QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 QUESTION 5 CHAPTER 6

SOLUTIONS

FINANCIAL STATEMENTS OF SOLE TRADERS

QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4

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MAY 2012 P21 Q1 (D) ..................................................................................................................... 77 MAY 2012 P21 Q5 .......................................................................................................................... 77 MAY 2012 P22 Q1 (A & D) ............................................................................................................... 78 NOVEMBER 2012 P21 Q4............................................................................................................... 78 MAY 2013 P22 Q5 .......................................................................................................................... 79 MAY 2014 P22 5 ............................................................................................................................. 80 NOVEMBER 2015 P21 Q5............................................................................................................... 81 NOVEMBER 2015 P22 Q5............................................................................................................... 82 MAY 2016 P21 & 22 Q5 .................................................................................................................. 83 MAY 2017 P21 Q5......................................................................................................................... 84 NOVEMBER 2017 P21 Q5............................................................................................................... 85 MAY 2018 P22 Q5 .......................................................................................................................... 86 NOVEMBER 2018 P22 Q5............................................................................................................... 87 MAY 2019 P21 Q5 ......................................................................................................................... 87

SOLUTIONS

QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 QUESTION 5 QUESTION 6 QUESTION 7 QUESTION 8 QUESTION 9 QUESTION 10 QUESTION 11 QUESTION 12 QUESTION 13 QUESTION 14 CHAPTER 8

75

NOVEMBER 2013 P21 Q2 ( A & B) ................................................................................................... 75 NOVEMBER 2013 P22 Q2 (D & E) .................................................................................................... 75 MAY 2016 P21 & 22 Q2 (E TO G) ...................................................................................................... 75 MAY 2017 P22 Q2 (C & E) .............................................................................................................. 75 MAY 2019 P22 Q2(A & E) ............................................................................................................... 76

QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 QUESTION 5 QUESTION 6 QUESTION 7 QUESTION 8 QUESTION 9 QUESTION 10 QUESTION 11 QUESTION 12 QUESTION 13 QUESTION 14 CHAPTER 7

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NOVEMBER 2013 P21 Q2 ( A & B) ................................................................................................... 73 NOVEMBER 2013 P22 Q2 (D & E) .................................................................................................... 73 MAY 2016 P21 & 22 Q2 (E TO G) ...................................................................................................... 73 MAY 2017 P22 Q2 (C & E) .............................................................................................................. 74 MAY 2019 P22 Q2(A & E) ............................................................................................................... 74

QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 QUESTION 5 CHAPTER 7

MAY 2018 P23 Q2 (A TO E & G) ........................................................................................................ 72

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MAY 2012 P21 Q1 (D) ..................................................................................................................... 89 MAY 2012 P21 Q5 .......................................................................................................................... 89 MAY 2012 P22 Q1 (A & D) ............................................................................................................... 90 NOVEMBER 2012 P21 Q4............................................................................................................... 90 MAY 2013 P22 Q5 .......................................................................................................................... 91 MAY 2014 P22 5 ............................................................................................................................. 92 NOVEMBER 2015 P21 Q5............................................................................................................... 93 NOVEMBER 2015 P22 Q5............................................................................................................... 94 MAY 2016 P21 & 22 Q5 .................................................................................................................. 95 MAY 2017 P21 Q5......................................................................................................................... 96 NOVEMBER 2017 P21 Q5............................................................................................................... 98 MAY 2018 P22 Q5 .......................................................................................................................... 99 NOVEMBER 2018 P22 Q5............................................................................................................. 100 MAY 2019 P21 Q5 ....................................................................................................................... 101

PARTNERSHIP ACCOUNTS

103

MAY 2012 P22 Q5 ........................................................................................................................ 103 NOVEMBER 2013 P21 Q5............................................................................................................. 104 NOVEMBER 2013 P22 Q5............................................................................................................. 105 MAY 2014 P21 Q5 ........................................................................................................................ 106

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QUESTION 5 QUESTION 6 QUESTION 7 QUESTION 8 QUESTION 9 QUESTION 10 QUESTION 11 QUESTION 12 CHAPTER 8

SOLUTIONS

QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 QUESTION 5 QUESTION 6 QUESTION 7 QUESTION 8 QUESTION 9 QUESTION 10 QUESTION 11 QUESTION 12 CHAPTER 9 QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 QUESTION 5 QUESTION 6 QUESTION 7 QUESTION 8 QUESTION 9 CHAPTER 9 QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 QUESTION 5 QUESTION 6 QUESTION 7 QUESTION 8 QUESTION 9 CHAPTER 10 QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 QUESTION 5 QUESTION 6 QUESTION 7

NOVEMBER 2014 P22 Q5............................................................................................................. 107 MAY 2015 P22 Q5 ........................................................................................................................ 108 NOVEMBER 2015 P21 Q3 (A TO C) ................................................................................................. 109 NOVEMBER 2016 P21 Q5............................................................................................................. 110 NOVEMBER 2017 P22 Q5............................................................................................................. 111 MAY 2018 P23 Q5 ........................................................................................................................ 112 NOVEMBER 2018 P21 Q5............................................................................................................. 113 MAY 2019 P22 Q5 ....................................................................................................................... 115 117

MAY 2012 P22 Q5 ........................................................................................................................ 117 NOVEMBER 2013 P21 Q5............................................................................................................. 118 NOVEMBER 2013 P22 Q5............................................................................................................. 119 MAY 2014 P21 Q5 ........................................................................................................................ 121 NOVEMBER 2014 P22 Q5............................................................................................................. 122 MAY 2015 P22 Q5 ........................................................................................................................ 124 NOVEMBER 2015 P21 Q3 (A TO C) ................................................................................................. 125 NOVEMBER 2016 P21 Q5............................................................................................................. 125 NOVEMBER 2017 P22 Q5............................................................................................................. 127 MAY 2018 P23 Q5 ........................................................................................................................ 128 NOVEMBER 2018 P21 Q5............................................................................................................. 130 MAY 2019 P22 Q5 ....................................................................................................................... 131

CAPITAL & REVENUE

133

MAY 2013 P21 Q1 (F & G).............................................................................................................. 133 MAY 2013 P22 Q1 (E & F) .............................................................................................................. 133 NOVEMBER 2014 P21 Q2 (F) ........................................................................................................ 133 NOVEMBER 2014 P22 Q2 (F) ........................................................................................................ 133 NOVEMBER 2015 P21 Q1 (D & E) .................................................................................................. 133 NOVEMBER 2016 P22 Q2 (C & D) .................................................................................................. 134 NOVEMBER 2017 P21 (E & F) Q2 (E & F) ........................................................................................ 134 MAY 2018 P23 Q2 (F) ................................................................................................................... 134 MAY 2019 P21 Q2 (D) .................................................................................................................. 134 SOLUTIONS

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MAY 2013 P21 Q1 (F & G).............................................................................................................. 135 MAY 2013 P22 Q1 (E & F) .............................................................................................................. 135 NOVEMBER 2014 P21 Q2 (F) ........................................................................................................ 135 NOVEMBER 2014 P22 Q2 (F) ........................................................................................................ 135 NOVEMBER 2015 P21 Q1 (D & E) .................................................................................................. 135 NOVEMBER 2016 P22 Q2 (C & D) .................................................................................................. 136 NOVEMBER 2017 P21 (E & F) Q2 (E & F) ........................................................................................ 136 MAY 2018 P23 Q2 (F) ................................................................................................................... 136 MAY 2019 P21 Q2 (D) .................................................................................................................. 136 CORRECTION OF ERRORS

137

MAY 2012 P21 Q1 (E & F) .............................................................................................................. 137 MAY 2012 P22 Q2 (A & B) ............................................................................................................. 137 NOVEMBER 2012 P22) Q2 ........................................................................................................... 137 MAY 2013 P22 Q2 ........................................................................................................................ 138 NOVEMBER 2013 P21 Q3............................................................................................................. 138 MAY 2014 P21 Q2 (B & C) ) ............................................................................................................ 138 MAY 2014 P22 Q2 (B TO D) )........................................................................................................... 139

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QUESTION 8 QUESTION 9 QUESTION 10 QUESTION 11 QUESTION 12 QUESTION 13 QUESTION 14 QUESTION 15 QUESTION 16 QUESTION 17 QUESTION 18 QUESTION 19 QUESTION 20 QUESTION 21 CHAPTER 10

SOLUTIONS

QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 QUESTION 5 QUESTION 6 QUESTION 7 QUESTION 8 QUESTION 9 QUESTION 10 QUESTION 11 QUESTION 12 QUESTION 13 QUESTION 14 QUESTION 15 QUESTION 16 QUESTION 17 QUESTION 18 QUESTION 19 QUESTION 20 QUESTION 21 CHAPTER 11 QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 QUESTION 5 QUESTION 6 QUESTION 7 QUESTION 8 CHAPTER 11 QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4

NOVEMBER 2014 P21 Q1 (C) ) ...................................................................................................... 139 MAY 2015 P21 Q1 (A & B) ............................................................................................................. 140 NOVEMBER 2015 P21 Q2............................................................................................................. 140 NOVEMBER 2015 P22 Q2 (B TO D) ................................................................................................. 140 NOVEMBER 2016 P21 Q2 (C & D) ................................................................................................. 141 NOVEMBER 2016 P22 Q1 (A & B) .................................................................................................. 141 NOVEMBER 2016 P22 Q2 (B) ........................................................................................................ 141 MAY 2017 P21 Q2....................................................................................................................... 142 NOVEMBER 2017 P22 Q2............................................................................................................. 142 MAY 2018 P22 Q2 ........................................................................................................................ 143 NOVEMBER 2018 P21 (C & D) Q2 (C & D) ...................................................................................... 144 NOVEMBER 2018 P22 Q2 (A & B) .................................................................................................. 144 MAY 2019 P21 Q2 (A TO C)............................................................................................................ 144 MAY 2019 P22 Q1 (D TO F) ............................................................................................................ 144 146

MAY 2012 P21 Q1 (E & F) .............................................................................................................. 146 MAY 2012 P22 Q2 (A & B) ............................................................................................................. 146 NOVEMBER 2012 P22) Q2 ........................................................................................................... 146 MAY 2013 P22 Q2 ........................................................................................................................ 147 NOVEMBER 2013 P21) Q3 ........................................................................................................... 147 MAY 2014 P21 Q2 (B & C) ) ............................................................................................................ 148 MAY 2014 P22 Q2 (B TO D) )........................................................................................................... 148 NOVEMBER 2014 P21 Q1 (C) ) ...................................................................................................... 149 MAY 2015 P21 Q1 (A & B) ............................................................................................................. 149 NOVEMBER 2015 P21 Q2............................................................................................................. 149 NOVEMBER 2015 P22 Q2 (B TO D) ................................................................................................. 150 NOVEMBER 2016 P21 Q2 (C & D) ................................................................................................. 150 NOVEMBER 2016 P22 Q1 (A & B) .................................................................................................. 151 NOVEMBER 2016 P22 Q2 (B) ........................................................................................................ 151 MAY 2017 P21 Q2....................................................................................................................... 151 NOVEMBER 2017 P22 Q2............................................................................................................. 152 MAY 2018 P22 Q2 ........................................................................................................................ 153 NOVEMBER 2018 P21 (C & D) Q2 (C & D) ...................................................................................... 153 NOVEMBER 2018 P22 Q2 (A & B) .................................................................................................. 154 MAY 2019 P21 Q2 (A TO C)............................................................................................................ 154 MAY 2019 P22 Q1 (D TO F) ............................................................................................................ 154

CONTROL ACCOUNTS

156

MAY 2012 P21 Q2 (A & B) ............................................................................................................. 156 NOVEMBER 2013 P22 Q2 (A TO C) ................................................................................................. 156 MAY 2014 P22 Q2 (A) ................................................................................................................... 156 NOVEMBER 2015 P22 Q2 (A) ........................................................................................................ 157 NOVEMBER 2016 P21 Q2 (A & B) ................................................................................................. 157 MAY 2017 P22 Q2 (A & B) ............................................................................................................ 157 NOVEMBER 2018 P21 Q2 (A & B) ................................................................................................. 158 MAY 2019 P22 Q2 (B TO D) ........................................................................................................... 158 SOLUTIONS

160

MAY 2012 P21 Q2 (A & B) ............................................................................................................. 160 NOVEMBER 2013 P22 Q2 (A TO C) ................................................................................................. 160 MAY 2014 P22 Q2 (A) ................................................................................................................... 160 NOVEMBER 2015 P22 Q2 (A) ........................................................................................................ 160

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QUESTION 5 QUESTION 6 QUESTION 7 QUESTION 8 CHAPTER 12

NOVEMBER 2016 P21 Q2 (A & B) ................................................................................................. 160 MAY 2017 P22 Q2 (A & B) ............................................................................................................ 161 NOVEMBER 2018 P21 Q2 (A & B) ................................................................................................. 161 MAY 2019 P22 Q2 (B TO D) ........................................................................................................... 162 ACCOUNTS FROM INCOMPLETE RECORDS

QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 QUESTION 5 CHAPTER 12

NOVEMBER 2012 P22) Q3 (A TO C) ................................................................................................ 163 NOVEMBER 2014 P22 Q3............................................................................................................. 163 MAY 2015 P21 Q2 (A TO C) ............................................................................................................. 164 MAY 2016 P21 & 22 Q3 ................................................................................................................ 164 MAY 2018 P23 Q3 (A TO D) ............................................................................................................ 165 SOLUTIONS

QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 QUESTION 5 CHAPTER 13

ACCOUNTS OF NON PROFIT ORGANISATIONS

SOLUTIONS

QUESTION 1 QUESTION 2

176

MAY 2012 P21 Q3 ........................................................................................................................ 176 NOVEMBER 2013 P22 Q3............................................................................................................. 177 MAY 2014 P21 Q3 ........................................................................................................................ 178 MAY 2015 P22 Q3 ........................................................................................................................ 178 NOVEMBER 2017 P22 Q3 (A TO C) ................................................................................................. 179 MAY 2018 P22 Q3 ........................................................................................................................ 180 MANUFACTURING ACCOUNTS

QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 QUESTION 5 QUESTION 6 QUESTION 7 QUESTION 8 QUESTION 9 QUESTION 10 QUESTION 11 QUESTION 12 QUESTION 13 CHAPTER 14

171

MAY 2012 P21 Q3 ........................................................................................................................ 171 NOVEMBER 2013 P22 Q3............................................................................................................. 171 MAY 2014 P21 Q3 ........................................................................................................................ 172 MAY 2015 P22 Q3 ........................................................................................................................ 173 NOVEMBER 2017 P22 Q3 (A TO C) ................................................................................................. 173 MAY 2018 P22 Q3 ........................................................................................................................ 174

QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 QUESTION 5 QUESTION 6 CHAPTER 14

166

NOVEMBER 2012 P22) Q3 (A TO C) ................................................................................................ 166 NOVEMBER 2014 P22 Q3............................................................................................................. 166 MAY 2015 P21 Q2 (A TO C) ............................................................................................................. 167 MAY 2016 P21 & 22 Q3 ................................................................................................................ 168 MAY 2018 P23 Q3 (A TO D) ............................................................................................................ 169

QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 QUESTION 5 QUESTION 6 CHAPTER 13

163

182

NOVEMBER 2012 P21 Q3............................................................................................................. 182 NOVEMBER 2012 P22 Q5............................................................................................................. 182 MAY 2013 P21 Q5 ........................................................................................................................ 183 MAY 2014 P22 Q3 (A & B) ............................................................................................................. 184 NOVEMBER 2014 P21 Q5............................................................................................................. 185 MAY 2015 P21 Q5 ........................................................................................................................ 186 NOVEMBER 2015 P22 Q3 (A) ........................................................................................................ 187 NOVEMBER 2016 P21 Q3 (D)........................................................................................................ 188 NOVEMBER 2016 P22 Q5............................................................................................................. 188 MAY 2017 P22 Q5 ........................................................................................................................ 189 NOVEMBER 2017 P21 Q3 (A) ........................................................................................................ 190 NOVEMBER 2018 P22 Q2 (C) ........................................................................................................ 191 MAY 2019 P22 Q4 (C) .................................................................................................................. 192

SOLUTIONS

193

NOVEMBER 2012 P21 Q3............................................................................................................. 193 NOVEMBER 2012 P22 Q5............................................................................................................. 193

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QUESTION 3 QUESTION 4 QUESTION 5 QUESTION 6 QUESTION 7 QUESTION 8 QUESTION 9 QUESTION 10 QUESTION 11 QUESTION 12 QUESTION 13 CHAPTER 15

COMPANY ACCOUNTS

QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 QUESTION 5 QUESTION 6 CHAPTER 15

205

MAY 2012 P22 Q3 ........................................................................................................................ 205 NOVEMBER 2014 P21 Q3............................................................................................................. 205 MAY 2015 P21 Q3 ........................................................................................................................ 206 NOVEMBER 2016 P22 Q3............................................................................................................. 206 MAY 2017 P21 Q3....................................................................................................................... 207 NOVEMBER 2018 P21 Q3............................................................................................................. 207 SOLUTIONS

QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 QUESTION 5 QUESTION 6 CHAPTER 16

MAY 2013 P21 Q5 ........................................................................................................................ 194 MAY 2014 P22 Q3 (A & B) ............................................................................................................. 196 NOVEMBER 2014 P21 Q5............................................................................................................. 196 MAY 2015 P21 Q5 ........................................................................................................................ 198 NOVEMBER 2015 P22 Q3 (A) ........................................................................................................ 199 NOVEMBER 2016 P21 Q3 (D)........................................................................................................ 199 NOVEMBER 2016 P22 Q5............................................................................................................. 200 MAY 2017 P22 Q5 ........................................................................................................................ 201 NOVEMBER 2017 P21 Q3 (A) ........................................................................................................ 203 NOVEMBER 2018 P22 Q2 (C) ........................................................................................................ 203 MAY 2019 P22 Q4 (C) .................................................................................................................. 204

209

MAY 2012 P22 Q3 ........................................................................................................................ 209 NOVEMBER 2014 P21 Q3............................................................................................................. 209 MAY 2015 P21 Q3 ........................................................................................................................ 210 NOVEMBER 2016 P22 Q3 ............................................................................................................. 211 MAY 2017 P21 Q3....................................................................................................................... 211 NOVEMBER 2018 P21 Q3............................................................................................................. 212 RATIO ANALYSIS

QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 QUESTION 5 QUESTION 6 QUESTION 7 QUESTION 8 QUESTION 9 QUESTION 10 QUESTION 11 QUESTION 12 QUESTION 13 QUESTION 14 QUESTION 15 QUESTION 16 QUESTION 17 QUESTION 18 QUESTION 19 QUESTION 20 QUESTION 21 QUESTION 22 QUESTION 23 QUESTION 24

214

MAY 2012 P21 Q4 ........................................................................................................................ 214 MAY 2012 P22 Q4 ........................................................................................................................ 214 NOVEMBER 2012 P21 Q5............................................................................................................. 215 NOVEMBER 2012 P22 Q4............................................................................................................. 215 MAY 2013 P21 Q2 (C TO E) ............................................................................................................. 216 MAY 2013 P21 Q3 ........................................................................................................................ 216 MAY 2013 P22 Q4 ........................................................................................................................ 217 NOVEMBER 2013 P22 Q 4 ............................................................................................................ 217 NOVEMBER 2013 P21 Q4............................................................................................................. 217 MAY 2014 P21 Q4 ........................................................................................................................ 218 MAY 2014 P22 Q4 ........................................................................................................................ 219 NOVEMBER 2014 P21 Q4............................................................................................................. 220 NOVEMBER 2014 P22 Q4............................................................................................................. 221 MAY 2015 P21 Q4 (A TO C) ............................................................................................................. 221 MAY 2015 P22 Q4 ........................................................................................................................ 222 NOVEMBER 2015 P21 Q4............................................................................................................. 222 NOVEMBER 2015 P22 Q4............................................................................................................. 223 MAY 2016 P21 & 22 Q4 ................................................................................................................ 224 NOVEMBER 2016 P21 Q4............................................................................................................. 224 NOVEMBER 2016 P22 Q4 (A & B) .................................................................................................. 225 MAY 2017 P21 Q4....................................................................................................................... 226 MAY 2017 P22 Q4 (A TO C) ........................................................................................................... 227 NOVEMBER 2017 P21 Q4............................................................................................................. 227 NOVEMBER 2017 P22 Q4............................................................................................................. 228

12

QUESTION 25 QUESTION 26 QUESTION 27 QUESTION 28 QUESTION 29 QUESTION 30 CHAPTER 16

MAY 2018 P22 Q4 (A TO D) ............................................................................................................ 229 MAY 2018 P23 Q4 (B TO D) ............................................................................................................ 230 NOVEMBER 2018 P21 Q4............................................................................................................. 231 NOVEMBER 2018 P22 Q4............................................................................................................. 232 MAY 2019 P21 Q4 ....................................................................................................................... 232 MAY 2019 P22 Q3 ....................................................................................................................... 233

SOLUTIONS

QUESTION 1 QUESTION 2 QUESTION 3 QUESTION 4 QUESTION 5 QUESTION 6 QUESTION 7 QUESTION 8 QUESTION 9 QUESTION 10 QUESTION 11 QUESTION 12 QUESTION 13 QUESTION 14 QUESTION 15 QUESTION 16 QUESTION 17 QUESTION 18 QUESTION 19 QUESTION 20 QUESTION 21 QUESTION 22 QUESTION 23 QUESTION 24 QUESTION 25 QUESTION 26 QUESTION 27 QUESTION 28 QUESTION 29 QUESTION 30

235

MAY 2012 P21 Q4 ........................................................................................................................ 235 MAY 2012 P22 Q4 ........................................................................................................................ 235 NOVEMBER 2012 P21 Q5............................................................................................................. 236 NOVEMBER 2012 P22 Q4............................................................................................................. 236 MAY 2013 P21 Q2 (C TO E) ............................................................................................................. 237 MAY 2013 P21 Q3 ........................................................................................................................ 237 MAY 2013 P22 Q4 ........................................................................................................................ 238 NOVEMBER 2013 P22 Q 4 ............................................................................................................ 239 NOVEMBER 2013 P21 Q4............................................................................................................. 239 MAY 2014 P21 Q4 ........................................................................................................................ 240 MAY 2014 P22 Q4 ........................................................................................................................ 240 NOVEMBER 2014 P21 Q4............................................................................................................. 241 NOVEMBER 2014 P22 Q4............................................................................................................. 242 MAY 2015 P21 Q4 (A TO C) ............................................................................................................. 242 MAY 2015 P22 Q4 ........................................................................................................................ 242 NOVEMBER 2015 P21 Q4............................................................................................................. 243 NOVEMBER 2015 P22 Q4............................................................................................................. 244 MAY 2016 P21 & 22 Q4 ................................................................................................................ 244 NOVEMBER 2016 P21 Q4............................................................................................................. 245 NOVEMBER 2016 P22 Q4 (A & B) .................................................................................................. 245 MAY 2017 P21 Q4....................................................................................................................... 246 MAY 2017 P22 Q4 (A TO C) ........................................................................................................... 246 NOVEMBER 2017 P21 Q4............................................................................................................. 247 NOVEMBER 2017 P22 Q4............................................................................................................. 248 MAY 2018 P22 Q4 (A TO D) ............................................................................................................ 248 MAY 2018 P23 Q4 (B TO D) ............................................................................................................ 249 NOVEMBER 2018 P21 Q4............................................................................................................. 250 NOVEMBER 2018 P22 Q4............................................................................................................. 251 MAY 2019 P21 Q4 ....................................................................................................................... 251 MAY 2019 P22 Q3 ....................................................................................................................... 252

MAY 2017 - PAPER 21

253

MAY 2017 - PAPER 22

258

NOVEMBER 2017 - PAPER 21

263

NOVEMBER 2017 - PAPER 22

267

MAY 2018 - PAPER 22

272

MAY 2018 - PAPER 23

277

NOVEMBER 2018 - PAPER 21

282

NOVEMBER 2018 - PAPER 22

287

MAY 2019 - PAPER 21

292

MAY 2019 - PAPER 22

297

13

TABLE OF CONTENTS (YEARLY) 2011 NOVEMBER P22 Q1 (a to d) 2012 MAY P21 Q1 (a to c) Q1 (d) Q1 (e & f) Q2 (a & b) Q3 Q4 Q5 2012 MAY P22 Q1 (a & d) Q1 (b & c) Q2 (a & b) Q2 (c) Q3 Q4 Q5 2012 NOVEMBER P21 Q1 Q2 Q3 Q4 Q5 2012 NOVEMBER P22 Q1 Q2 Q3 (a to c) Q4 Q5 2013 MAY P21 Q1 (a to e) Q1 (f & g) Q2 (a & b) Q2 (c to e) Q3 Q4 Q5 2013 MAY P22 Q1 (a to d) Q1 (e & f) Q2 Q4 Q5 2013 NOVEMBER P21 Q1 Q2 (a & b)

20, 37 20, 37 77, 89 137, 146 156, 160 171, 176 214, 235 77, 89 78, 90 20, 37 137, 146 58, 61 205, 209 214, 235 103, 117 21, 38 63, 68 182, 193 78, 90 215, 236 22, 38 137, 146 163, 166 215, 236 182, 193 22, 39 133, 135 22, 39 216, 237 216, 237 63, 68 183, 194 23, 39 133, 135 138, 147 217, 238 79, 91 23, 40 73, 75

Q2 (c) Q3 Q4 Q5 2013 NOVEMBER P22 Q1 (a & b) Q1 (c & d) Q2 (a to c) Q2 (d & e) Q3 Q4 Q5 2014 MAY P21 Q1 (a to c) Q1 (d to f) Q2 (a) Q2 (b & c) Q3 Q4 Q5 2014 MAY P22 Q1 (a) Q1 (b to d) Q1 (e) Q2 (a) Q2 (b to d) Q3 (a & b) Q4 Q5 2014 NOVEMBER P21 Q1 (a & b) Q1 (c) Q2 (a to e) Q2 (f) Q3 Q4 Q5 2014 NOVEMBER P22 Q1 Q2 (a to d) Q2 (e) Q2 (f) Q3 Q4 Q5 2015 MAY P21 Q1 (a & b)

58, 61 138, 147 217, 239 104, 118 24, 40 64, 69 156, 160 73, 75 171, 177 217, 239 105, 119 52, 55 24, 41 24, 41 138, 148 172, 178 218, 240 106, 121 58, 61 25, 41 16, 18 156, 160 139, 148 184, 196 219, 240 80, 92 25, 42 139, 149 64, 69 133, 135 205, 209 220, 241 185, 196 26, 42 64, 70 58, 61 133, 135 163, 166 221, 242 107, 122 140, 149

14

Q1 (c) Q2 (a to c) Q3 Q4 (a to c) Q4 (d) Q5 2015 MAY P22 Q1 Q2 (a to d) Q2 (e) Q3 Q4 Q5 2015 NOVEMBER P21 Q1 (a to c) Q1 (d & e) Q2 Q3 (a to c) Q3 (d) Q4 Q5 2015 NOVEMBER P22 Q1 (a & b) Q1 (c to f) Q2 (a) Q2 (b to d) Q3 (a) Q4 Q5 2016 MAY P21 Q1 Q2 (a to d) Q2 (e to g) Q2 (h) Q3 Q4 Q5 2016 MAY P22 Q1 Q2 (a to d) Q2 (e to g) Q2 (h) Q3 Q4 Q5 2016 NOVEMBER P21 Q1 (a, b & e) Q1 (c & d) Q2 (a & b) Q2 (c & d)

27, 43 164, 167 206, 210 221, 242 58, 61 186, 198 27, 43 65, 70 59, 61 173, 178 222, 242 108, 124 28, 43 133, 135 140, 149 109, 125 59, 61 222, 243 81, 93 52, 55 28, 44 157, 160 140, 150 187, 199 223, 244 82, 94 29, 44 65, 71 73, 75 59, 62 164, 168 224, 244 83, 95 29, 44 65, 71 73, 75 59, 62 164, 168 224, 244 83, 95 29, 45 53, 55 157, 160 141, 150

Q3 (d) Q4 Q5 2016 NOVEMBER P22 Q1 (a & b) Q1 (c) Q2 (a) Q2 (b) Q2 (c & d) Q3 Q4 (a & b) Q4 (c) Q5 2017 MAY P21 Q1 (a to c) Q1 (d to f) Q2 Q3 Q4 Q5 2017 MAY P22 Q1 (a to d) Q1 (e & f) Q2 (a & b) Q2 (c & e) Q2 (d) Q4 (a to c) Q4 (d) Q5 2017 NOVEMBER P21 Q1 Q2 Q2 (a to d) Q3 (a) Q4 Q5 2017 NOVEMBER P22 Q1 Q2 Q3 (a to c) Q3 (d) Q4 Q5 2018 MAY P22 Q1 (a to c) Q1 (d & e) Q2 Q3 Q4 (a to d) Q4 (e)

188, 199 224, 245 110, 125 141, 151 30, 45 30, 46 141, 151 134, 136 206, 211 225, 245 59, 62 188, 200 30, 46 53, 56 142, 151 207, 211 226, 246 84, 96 31, 46 16, 18 157, 161 74, 75 59, 62 227, 246 59, 62 189, 201 31, 46 134, 136 66, 71 190, 203 227, 247 85, 98 32, 47 142, 152 173, 179 66, 72 228, 248 111, 127 54, 56 33, 48 143, 153 174, 180 229, 248 60, 62

15

Q5 2018 MAY P23 Q1 (a & b) Q1 (c & d) Q2 (a to e & g) Q2 (f) Q3 (a to d) Q4 (a) Q4 (b to d) Q5 2018 NOVEMBER P21 Q1 Q2 Q2 (a & b) Q3 Q4 Q5 2018 NOVEMBER P22 Q1 Q1 (b to d)

86, 99 33, 48 16, 18 67, 72 134, 136 165, 169 62 60, 230, 249 112, 128 34, 48 144, 153 158, 161 207, 212 231, 250 113, 130 17, 19 35, 49

Q2 (a & b) Q2 (c) Q3 (d) Q4 Q5 2019 MAY P21 Q1 (a to e) Q1 (f) Q2 (a to c) Q2 (d) Q4 Q5 2019 MAY P22 Q1 (a to c) Q1 (d to f) Q2 (a & e) Q2 (b to d) Q3 Q4 (c) Q5

144, 154 191, 203 60, 62 232, 251 87, 100 35, 50 54, 56 144, 154 134, 136 232, 251 87, 101 36, 50 144, 154 74, 76 158, 162 233, 252 192, 204 115, 131

Chapter 1

16 Read & Write Publications

CHAPTER 1

Accounting Basics

ACCOUNTING BASICS

QUESTION 1

MAY 2014 P22 Q1 (e)

The following balances were extracted from the books of Fashran on 30 April 2014. $ 6 450 9 230 68 400 29 800 5 100 22 350 830 24 000 7 800

Trade payables Trade receivables Revenue Purchases Inventory 1 May 2013 Expenses Bank overdraft Non-current assets Provision for depreciation – Non-current assets REQUIRED Prepare the trial balance showing Fashran’s capital at 30 April 2014.

QUESTION 2 (e)

MAY 2017 P22 Q1 (e & f)

Complete the table to state the effect of each of the following transactions made by Chung in April 2017.

Where there is no effect write ‘No effect’. The first transaction has been completed as an example.

Transaction Purchased goods on credit at a cost of $500 Sold goods on credit for $700 (cost $400) Paid Yang, a credit supplier, $2050 in full settlement of a debt of $2 200 Purchased goods, $130, and paid in cash (f)

[5]

State two reasons why book-keeping records are maintained.

QUESTION 3

Assets $ +500

Liabilities $ +500

Capital $ No effect

[9] [2] [Total: 20]

MAY 2018 P23 Q1 (c & d)

The following information is available for the month of April 2018 April 01 07 09 15 30

$ Drawing account 6 400 Capital account 9 000 Kusum paid $2 500 into the business bank account from her personal bank account.

Kusum cashed a cheque from the business bank account for $500 for her personal use.

The annual insurance premium, $750, was paid by cheque. This included $150 for the insurance of Kusum’s home.

Kusum prepared the financial statements. The profit for the year was $3 700.

Balances

REQUIRED (c) Prepare the following accounts for the month of April 2018.

Complete the appropriate year-end transfer from the drawings account.

Balance the capital account and bring down the balance on 1 May 2018. (i) Drawings account (ii) Capital account (d) Distinguish between book-keeping and accounting.

[5] [5] [2]

Chapter 1

QUESTION 4

17 Read & Write Publications

Accounting Basics

NOVEMBER 2018 P22 (a) Q1 (a)

An inexperienced book-keeper prepared the following trial balance for Alia’s business on 31 August 2018. The trial balance did not balance.

Trial Balance at 31 August 2018 Debit Credit $ $ Revenue 19 600 Purchases 9 800 Inventory at 31 August 2018 730 Rent receivable 400 Rent payable 800 General expenses 230 Non-current assets (at cost) 18 750 Provision for depreciation 3 970 Bank overdraft 30 Motor vehicle expenses 650 Trade receivables 2 990 Trade payables 1 090 Capital _____ 9 000 33 730 34 310 Additional information Inventory at 1 August 2018 was $870.

REQUIRED Prepare the corrected trial balance.

[5]

Chapter 1

18 Read & Write Publications

Accounting Basics

CHAPTER 1

SOLUTIONS

QUESTION 1

MAY 2014 P22 Q1 (e) Fashran Trial Balance at 30 April 2014 Dr $

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

Cr $ 6 450

9 230 68 400 29 800 5 100 22 350 830 24 000 _ ___ 90 480

QUESTION 2

7 800 7 000 90 480

MAY 2017 P22 Q1 (e & f)

(e) Transaction Purchased goods on credit at a cost of $500.

Sold goods on credit for $700 (cost $400).

Paid a supplier $2 050 in full settlement of a debt of $2 200.

Purchase goods, $130, and paid in cash. (f)

  

Assets $

Liabilities $

Capital $

+500 +300 –2 050 No effect

+500 No effect –2 200 No effect

No effect +300 +150 No effect

Book-keeping enables to ensure recording of all transactions.

It enables checking transactions through the use of a trial balance and control accounts.

It enables the production of the income statement and statement of financial position to be compiled more easily.

It shows the amount due to individual customers and suppliers thus avoiding overpayment.

Helps guard against errors and fraud.

 

QUESTION 3

MAY 2018 P23 Q1 (c & d)

(c) (i) 2018 Details April 01 Balance b/d 09 Bank 15 Insurance premium

(ii) 2018 April 30 30

Details Drawings Balance c/d

Drawing account $ 2018 6 400 April 30 500 150 7 050 Capital account $ 2018 7 050 April 01 8 150 07 _____ 30 15 200 May 01

Details Capital (balancing figure)

$ 7 050 ____ 7 050

Details Balance b/d Bank Income statement (profit for year) Balance b/d

$ 9 000 2 500 3 700 15 200 8 150

Chapter 1

(d)

19 Read & Write Publications

Accounting Basics

Bookkeeping is the detailed recording of all financial transactions of a business whereas Accounting is about preparing financial statements at regular intervals from the bookkeeping records.

Bookkeeping is the process of recording a firm’s financial transactions and is supported by documentary evidences.

Accounting on the other hand starts once the book-keeper finishes his work and that mainly measures, summarizes and then communicates this information recorded by book keeper in the form of accounting reports using acknowledged methods and techniques which may ultimately be used for decision making.

QUESTION 4 (a)

NOVEMBER 2018 P22 (a) Q1 (a) Trial Balance at 31 August 2018 Debit $

Revenue Purchases Inventory Rent receivable Rent payable General expenses Non-current assets (at cost) Provision for depreciation Bank overdraft Motor vehicle expenses Trade receivables Trade payables Capital

Credit $ 19 600

9 800 870 400 800 230 18 750 3 970 30 650 2 990 _____ 34 090

1 090 9 000 34 090