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Edexcel
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Accounting
Paper 1
Paper Reference
4AC0/01
Total Marks
Instructions
Information
Advice
Turn over
P40268A
2012 Pearson Education Ltd.
1/1/1/1/1
*P40268A0120*
Section A
Answer ALL questions
Choose an answer A, B, C or D, and put a cross in the box .
If you change your mind about an answer, put a line through the box
and then mark your new answer with a cross .
1 Mr Patel buys goods for resale from Mr Singh on credit. The goods are unsuitable and
Mr Patel returns them without paying for them. Which document should
Mr Singh issue on receipt of the returned goods?
A
credit note
debit note
purchase invoice
receipt
(Total for Question 1 = 1 mark)
2 A business buys goods for cash. What are the entries in its books for this transaction?
account debited account credited
A
cash
purchases
cash
supplier
purchases
cash
supplier
cash
(Total for Question 2 = 1 mark)
purchases book
sales book
(Total for Question 3 = 1 mark)
4 Which of the following is recorded on the credit side of a creditors control account?
A
credit purchases
discount received
payments to creditors
purchases returns
(Total for Question 4 = 1 mark)
*P40268A0220*
5 Hanif provides the following information for the month of March 2012.
54 000
36 000
120 000
Discounts allowed
1 800
account credited
capital
motor vehicles
drawings
motor expenses
motor expenses
motor vehicles
motor vehicles
capital
(Total for Question 6 = 1 mark)
7 A trader records purchases of 250 in his books as 520. What type of error is this?
A commission
B compensating
C original entry
D principle
(Total for Question 7 = 1 mark)
*P40268A0320*
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8 A trader instructs his bank to make a payment of 100 to the electricity company
every month. Which term describes this instruction?
A
credit transfer
direct debit
personal cheque
standing order
(Total for Question 8 = 1 mark)
45 000
3 000
3 600
66 000
111 000
111 600
114 000
117 600
(Total for Question 9 = 1 mark)
10 At the end of the financial year a business owed one months rent. This was added to
rent paid during the year to calculate the total rent for the year. Which accounting
concept is being followed?
A
accruals
business entity
money measurement
prudence
(Total for Question 10 = 1 mark)
TOTAL FOR SECTION A = 10 MARKS
*P40268A0420*
SECTION B
Answer ALL questions.
11 Ashak Solona maintains a full set of accounting records and provides the following
information for the month of March 2012.
12 800
26 780
15 432
2 453
1 659
350
125
11 450
8 760
589
357
350
(a) Select the relevant figures and prepare the sales ledger (total debtors) control
account for the month of March 2012. Balance the account and bring down the
balance on 1 April 2012.
(10)
Sales ledger (total debtors) control account
Date
Narration
Date
Narration
*P40268A0520*
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(b) Explain how a contra entry (set off ) between the sales ledger and purchases
ledger can arise.
(3)
. . . . . . . . . . . . .................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........... ................................................................................................................................ . . . . . . . . . . . . . . . . . .
(c) State two advantages of preparing a sales ledger (total debtors) control account.
(2)
Advantage 1
. . . . . . . . . . . . .................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........... ................................................................................................................................ . . . . . . . . . . . . . . . . . .
Advantage 2
. . . . . . . . . . . . .................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........... ................................................................................................................................ . . . . . . . . . . . . . . . . . .
*P40268A0620*
12 James Ford, a sole trader, repairs and sells used motor vehicles. On 31 March 2012 his
books of account contained the following balances after the preparation of his final
accounts.
12 500
Stock of vehicles
45 000
Stock of materials
2 250
Debtors
560
Creditors
430
Capital
(a) (i)
5 000
64 880
(ii) Using the figures above, state the accounting equation for James Fords
business.
(3)
. . . . . . . . . . . . .................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........... ................................................................................................................................ . . . . . . . . . . . . . . . . . .
*P40268A0720*
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(iii) James is considering creating a provision for doubtful debts of 100. Explain
the effect that this would have on the accounting equation.
(3)
. . . . . . . . . . . . .................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........... ................................................................................................................................ . . . . . . . . . . . . . . . . . .
(b) (i)
Revenue expenditure
. . . . . . . . . . . . .................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........... ................................................................................................................................ . . . . . . . . . . . . . . . . . .
*P40268A0820*
(ii) Complete the following table, clearly showing whether the transaction
represents capital expenditure, revenue expenditure or neither.
(5)
Item
Capital/Revenue/Neither
*P40268A0920*
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13 The following balances were extracted from the accounting records of Twilight Ltd on
31 March 2012.
Sales
Purchases
Stock 1 April 2011
Salaries and wages
Directors remuneration
Audit fees
Heat and light
Debenture interest
Interim ordinary dividend
Communication expenses
Buildings Cost
Buildings Accumulated depreciation
Fixtures and fittings Cost
Fixtures and fittings Accumulated depreciation
10% Debentures 2020
Ordinary share capital (Fully paid)
Creditors
Debtors
Bank
Profit and loss account 1 April 2011
General reserve
000
940
472
125
64
10
4
28
10
50
20
500
50
100
20
200
1 000
80
120
467
326
25
The following additional information at 31 March 2012 should be taken into account.
t $MPTJOHTUPDLXBTWBMVFEBUb
t "VEJUGFFTPGbXFSFPVUTUBOEJOH
t 5IFPVUTUBOEJOHEFCFOUVSFJOUFSFTUJTUPCFQSPWJEFEGPS
t %FQSFDJBUJPOJTUPCFDIBSHFEPOCVJMEJOHTBUPOBTUSBJHIUMJOFCBTJTBOEPO
fixtures and fittings at 20% per annum on a reducing balance basis.
On 31 March 2012 the directors decide to:
t 5SBOTGFSUIFTVNPGbUPUIFHFOFSBMSFTFSWFBDDPVOU
t 1BZBGJOBMPSEJOBSZTIBSFEJWJEFOEPG
10
*P40268A01020*
(a) Prepare the trading and profit and loss account of Twilight Ltd for the year ended
31 March 2012.
(11)
Twilight Ltd
Trading and Profit and Loss Account
For Year Ended 31 March 2012
*P40268A01120*
11
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(b) Prepare the appropriation account of Twilight Ltd for the year ended 31 March 2012.
(5)
Twilight Ltd
Appropriation Account
For Year Ended 31 March 2012
(c) Stating clearly the formula used, calculate the gross profit margin for the year
ended 31 March 2012.
(2)
Formula
(d) Stating clearly the formula used, calculate the net profit margin for the year ended
31 March 2012.
(2)
Formula
12
*P40268A01220*
14 Sue Tang maintains a full set of accounting records and extracts a trial balance at the
end of each month.
(a) State the purpose of a trial balance.
(2)
. . . . . . . . . . . . .................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........... ................................................................................................................................ . . . . . . . . . . . . . . . . . .
(b) Identify two types of errors which are not identified by a trial balance.
(2)
Error 1
. . . . . . . . . . . . .................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........... ................................................................................................................................ . . . . . . . . . . . . . . . . . .
Error 2
. . . . . . . . . . . . .................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........... ................................................................................................................................ . . . . . . . . . . . . . . . . . .
(c) Describe two errors that could cause a trial balance not to balance.
(2)
. . . . . . . . . . . . .................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........... ................................................................................................................................ . . . . . . . . . . . . . . . . . .
*P40268A01320*
13
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Sue Tang extracted the following trial balance from her books on 30 April 2012.
Account
Bank
Capital
Cash
Creditors
Debtors
Drawings
Fixtures cost
Fixtures accumulated depreciation
Loan 2013
Loan 2015
Opening stock
Purchases
Rent rates and insurance
Sales
Debit
Credit
2 300
28 000
450
2 354
3 288
5 220
40 000
5 000
2 500
7 500
2 000
45 000
12 096
65 000
110 354 110 354
The following additional information at 30 April 2012 should be taken into account.
t
t
t
t
4UPDLXBTWBMVFEBUb
3FOUPGbXBTQSFQBJE
3BUFTPGbXFSFBDDSVFE
%FQSFDJBUJPOJTUPCFDIBSHFEPOGJYUVSFTBUQFSBOOVNPOBTUSBJHIUMJOF
basis.
14
*P40268A01420*
(f ) Evaluate the effects on Sue Tangs business of poor working capital management.
In your answer, you should make reference to how Sue might improve her
working capital situation.
(5)
. . . . . . . . . . . . .................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........... ................................................................................................................................ . . . . . . . . . . . . . . . . . .
*P40268A01520*
15
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15 The Lazy Days Social Club had the following balances in the books on 1 March 2011.
Bank balance
Equipment (Net Book Value)
Premises (Net Book Value)
Subscriptions owing
1 600 (Dr)
6 000
50 000
345
The following information for the year ended 29 February 2012 was provided.
Receipts and Payments Account
Narration
Narration
Purchase of new
equipment
Balance b/f
1 600
Subscriptions
5 000 Stamps
342
139
2 654
2 190
Social event
expenditure
1 739
Balance c/d
1 926
10 990
Balance b/d
2 000
10 990
1 926
The club treasurer also provided the following additional information on 29 February
2012.
t "MMFRVJQNFOUJTUPCFEFQSFDJBUFEVTJOHUIFTUSBJHIUMJOFNFUIPEBUBSBUFPG
per annum.
t -JHIUJOHBOEIFBUJOHPXJOHBNPVOUFEUPb
t 3BUFTQBJEJOBEWBODFBNPVOUFEUPb
t 5IFGJHVSFGPSTVCTDSJQUJPOTJOUIFSFDFJQUTBOEQBZNFOUBDDPVOUJODMVEFTb
owing from the previous year. As there is no prospect of the remaining amount
outstanding being received the club has decided to write this off as a bad debt.
t "UUIFFOEPG'FCSVBSZUIFSFXFSFTVCTDSJQUJPOTPXJOHPGb5IFSFXFSF
no subscriptions received in advance.
16
*P40268A01620*
(a) Prepare the income and expenditure account for the year ended 29 February 2012.
(11)
Lazy Days Social Club
Income and Expenditure Account
For year ended 29 February 2012
*P40268A01720*
17
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(b) Identify two differences between a receipts and payments account and an income
and expenditure account.
(4)
Difference 1
. . . . . . . . . . . . .................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........... ................................................................................................................................ . . . . . . . . . . . . . . . . . .
Difference 2
. . . . . . . . . . . . .................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........... ................................................................................................................................ . . . . . . . . . . . . . . . . . .
18
*P40268A01820*
BLANK PAGE
*P40268A01920*
19
BLANK PAGE
20
*P40268A02020*