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ZTNTB ABWE SCHOOL EXAMINATIONS COUI\CI
General Certificate of Education Advanced Level
ACCOUNTING 9197 tt.
PAPER I Multiple Choice
JUNE 2016 SESSION t hour 15 minutes
Additional materials:
Multiple Choice ansu'er sheet
Soft clean eraser
Soft pencil (tvpe B or HB is recommended)
TIME t hour 15 minutes
INSTRUCTIONS TO CANDIDATES
Do not open this booklet until you are told to do so.
Write your name, Centre number and candidate number on the answer sheet in the spaces provided
unless this has already been done for you.
There are forty questions in this paper. Answer all questions. For each question there are four
possible anslvers, A, B, C and D. Choose the one you consider correct and record your choice in
soft pencil on the separate answer sheet.
Read very carefully the instructions on the answer sheet.
INFORMATION FOR CANDIDATES
Each correct answer will score one mark. A mark will not be deducted for a wrong answer.
Any rough working should be done in this booklet.
Calculators may be used.
This question paper consists of 12 printed pages.
Copyright: Zimbabwe School Examinations Council, J2016.
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1 Capitalisation of development costs is an application of
A business entitY PrinciPle.
B historical cost PrinciPle.
C matching principle.
D materiality principle.
2 Which of the following items is entered in a partnership appropriation account?
A additional capital from a partner
B cash drawings by a Partner
C salary due to aPartner
D salary paid to a partner's wife
3 A business made a profit of $200 000, After the balance sheet date, the following events
occurred:
a non-adjusting event of $60 000 profit
an adjusting event of$80 000 Profit
a dividend of $40 000 was declared
The adjusted profit is
A $240 000.
B $280 000.
c $300 000.
D $340 000.
4 Current assets of a business would increase by
A paying invoices at a cash discount.
B purchasing a machine on credit.
C selling inventory at a loss.
D selling inventory at a profit.
5 The following balances appear in the accounts of a manufacturing company:
$
closing inventory of rawmaterials 12250
direct wages 81 400
purchases of raw materials 42 600
supervisors' wages 22 0A0
opening inventory of raw materials 13 900
The prime cost is
A $122 3s0.
B $124 000.
c $l2s 6s0.
D $147 650.
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A business had the following information at year end:
revenue s208 000
opening inventory $ t3 000
closing inventory $ 18 200
inventory turnover 10 times
The gross profit is
A $ 26 000.
B $ 52 000.
C $ 78 000.
D $156 000.
Convertible loan stock enables a company to
A increase gearing on conversion.
B increase the company equity at issue date.
C reduce company equity at issue date.
D reduce gearing on conversion.
8 A machine costing $36 000 was sold for $10 800 at a profit of $1 800"
What is the accumulated depreciation of the machine on disposal?
A $ 9000
B $23 400
c $25 200
D $27 000
Joe, a trader, does not keep double entry records.
The following information for the year is available:
s
Opening creditors 60 000
Payments to suppliers 300 000
Closing creditors 70 000
Discount received I 500
Cash purchases 50 000
What were the purchases for the period?
A $310 000
B $315 000
c $360 000
D $361 s00
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The purchases ledger control account balance
of $82 530 was entered in the trial balance as
10
was entered in a suspense account"
S+i iOO. The di{ference on the trial balance
Which entry(ies) correct(s) this error?
A credit suspense account with $35 370
account with
B a"liip*Jfrases teAgeicont ol with $35 370 and credit suspense
$3s 370
C debit suspense account with $35 370
purchases ledger control account
D debit suspense account with $35 370 and credit
with $35 370
account:
11 A club had the following items in its subscriptions
q
3 330
subscriptionsowingfrommembersatthebeginningoftheyear
1 110
subscriptions received in advance at year end
2220
subscriPtions owing at Year end
55 500
subscriPtions income for the Year
year?
How much subscriptions were received during the
A $51 060
B $s3 280
c $5s s00
D s57 720
12 which of the following would improve an acid test ratio?
1. delaYs in PaYing trade PaYables
2. receiPts from trade receivables
3. selling inventory
4. selling surplus non-current assets
A I andZ
B 1and4
C 2 and3
D 3and4
of profit or loss and other
13 The following information appears in a company's statement
comprehensive incomes.
increase in inventory $230
purchases $970
I
Given a margin of much are the sales?
;,how
A $863
B $888
c $1 400
D $1 440
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14 which of the following items are credited to sales ledger control account?
1. discount received
2. receipts from customers
3. returns inwards
4. sales
A 2and3
B I and2
C 2 and4
D 3 and4
15 A firm that has a bank overdraft of$6 288 receives a cheque of$655 from a debtor. It pays
for inventory invoiced at $3 000 less 20% trade discount and a cash discount of 5%.
What is the balance at bank after these transactions?
A $3 353 Cr
B $4 663 Cr
C $7 883 Dr
D $7 913 Dr
t6 A firm had the following figures extracted from its accounting records:
$
capital at start of year 20 000
drawings 7 000
capital ai end ofyear 30 000
additional furniture from the owner 4 000
The profit made during the year was
A $ 7000.
B $10 000.
c $13 000.
D $17 000.
17 The following information relates to an inventory item during a period.
200 units were bought at $32 each.
120 units were sold at $50 each.
20 units of the items in stock are damaged and can only be sold for $20 each.
The value of closing inventory is
A $2320.
B $1 920.
c $2 560.
D $4 000.
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18 The net cash generated from operating activities increases whert trade
A inventory increases.
B payables decrease.
C payables increase.
D receivables increase.
19 Ben and Chipo are business partners sharing profits and losses in the ratio 3: 2 respectively,
Ben receives a salary of $6 050, and net profit for the year is $36 300.
How much is credited to each partner for the year?
Ben Chipo
s$
A 12 100 18 150
B 18 150 12 100
c 2t 780 t4 52A
D 24200 12 100
20 A company had the following transaction during the month of January:
January 25 Rendered services to a client on credit for $500
31 Paid $1 500 cash to a creditor
Which of the following correctly reflects the net influence of the above transactions on the
company?
debtors cash net income creditors
$$$$
A -1 500 -1 000
B -2 000 +500 -1 500
c +500 -2 500 -500 -1 500
D +500 -1 500 +500 -1 500
2l An investor decided to set a company with the following assets and liabilities:
book value market value
Non-current assets 120 000 140 000
Current assets 100 000 90 000
Goodwill 30 000
ej@
Share capital 80 000
Retained profits 80 000
Current liabilities 60 000 25 000
22U09
The company should be sold for
A $160 000.
B $220 000.
c $235 000.
D $260 000.
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)7 Inventory originally costing
$l jO!1s
mventory would normally sell for {amaged and would cost $950 to replace. This
$l 200 but can now be sold il$iibo ut., repairs
costing $200.
This inventory would be valued
at
A $ e00.
B $ esO.
C $1 000.
D $r 100.
23 A company issues:
50 000 .rdinary shares of
$6 each at a premium of $4 per
4yo Debentures of $400 000. share
What would be the increase
in the company,s net assets?
A $300 000
B $s00 000
c $700 000
D $900 000
24 A club has 100 members pay $6 [Link]
lvho
members had not paid their
*rr"f
.[Link].
each. At the end of ayear,4
what will be the entries for subscriptions
in the financiar statements?
statement of
income and
financial position expenditure account
A current assets $24
income 9576
B current assets $24
income $600
C current liabilities $24
income $576
D current liabilities $24
income $600
25 The following information rerates
to the business of Taku:
cash book balance $
cheques not yet credited by 16 250 credir
the bank 26 000
unpresented cheques
bank charges not yet entered 3 900
in the cash book 2 6A0
of $520 had been corectly entered
in the cash book but entered by
fr$:"t" the bank as
The bank statement balance
is
A $40 6S0 credit.
B $40 680 debit.
C $41220 credir.
D $41220 debit.
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26 X and y are partners sharing profits or losses equally. They agree to admit Z as an eqlaal
partner upon a payment of $ 130 000 as capital and share of goodwill. Tlie goodwill is
SZg OOO and no goodwill account is to be opened.
After the admission of Z, which alternative shows the cortect effect in the capital accounts?
x Y Z
$ $ $
A 13 000 credit l3 000 credit 104 000 credit
B 13 000 credit 13 000 credit 26 000 debit
C 39 000 credit 39 000 credit 78 000 debit
D 39 000 debit 39 000 debit 208 000 credit
,,,1
P Ltd is to purchase the business of Q Ltd for $120 000 cash. The net asset values of the
two businesses at the date of purchase were P Ltd $325 000 and Q Ltd $104 000.
P Ltd's net asset value immediately after the purchase was
A $289 000.
B $325 000.
c $429 000.
D $445 000.
28 A company had the following information for the year ended 3l December 2012.
$
10% debentures (2015) 26 000
operating profit before interest and tax 48 100
tax payable 11 700
The interest cover is
A 18,5 times.
ts 17,5 times.
C 14 times.
D 13 times.
29 A club had the following assets and liabilities on 30 June 2013:
s
non-current assets 13 100
cash at bank 8 384
electricity owing 786
rent prepaid | 179
subscriptions: in advance 4 978
in arrears 7 467
The accumulated fund on 30 June 2013 is
A $24 366.
B $23 s80.
C $19 388.
D $r8 602.
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30 A book selling firm has a constant gross profit margin and a constant level of annual sales.
Its inventory increases annually.
What effect does the increase in inventory have on inventory turnover and gross profit?
inventory turnover gross profit
(times)
A decreases increases
B decreases no effect
C increases decreases
D increases no effect
3l An investor has $6 million.
In w'hich of the following projects should the investor invest in?
Proiect Initial outlay NPV ($)
1 $4,5 m lion 720 000
2 $3 mil on 420 000
J $2,25 million 336 000
4 $1,5 million 60 000
A and3
1
B I and4
C 2 and3
D 2 and4
?) A chair is made from 4 kg of raw material. Production is based on the following data:
budgeted sales 5 000 chairs
budgeted decrease in inventory of raw materials 1 200 kg
budgeted increase in inventory of chairs 800 chairs
How many kilograms of raw materials will be purchased?
A 18 000
B 18 800
C 22 000
D 23 200
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JJ Tire diagram below shows a break-even analysis chart.
$
Cost/Revenue
Ourput (units)
The line XY shows total
A costs.
B fixed costs.
C sales.
D variable costs.
34 An entity had the following information:
net present value discount rate
fi,/
s /o
383 000 10
(246 000) 15
The internal rate of return is
A t2%.
B 12,504.
C T3%,
D 13,20A"
35 A company sells its product for $60 a unit and has variable costs of $36 per unit.
company's fixed costs are at $240 000 and are expected to be $312 000.
How many more units should be sold to break even?
A 3000
B 5200
c 10 000
D 13 000
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36 Reported profits under marginal costing and absorption costing principles are the same
when
A units bought exceed units sold.
B units produced equal units sold.
C units produced exceed units sold.
D units sold exceed units produced.
37 Production and costs of manufacturing are as follows:
production for the period 2 400 units
closing inventory 400 units
direct material costs $12 000
direct labour costs $ 6000
factory fixed expenses $ 4080
Closing inventory is valued at marginal cost.
What is the closing value of finished goods?
A S3 000
B $3 600
c $3 680
D $4 416
38 A product is produced at the following standard costs:
material x 3 kg at $2,40 per kg
I 200 units were produced at the following costs:
material x 3 500 kg at $7 560.
The material usage variance is
A $216 adverse.
B $216 favourable.
C $240 adverse.
D $240 favourable.
39 Budgeted figures for producing cement are as follows:
production 6 000 units
sales revenue $54 000
variable costs $24 000
overheads ue llYo of sales
What is the standard cost per unit?
A$+
B $4,40
c $4,90
D$5
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All of the following variances measure changes in volume except
A labour efficiencY.
B labour rate.
C material usage.
D sales quantity.
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