ZIMSEC O-Level Principles of Accounts Paper 1 June 2018 Question Paper

ZIMBABWE SCHOOL EXAMINATIONS COUNCIL <br> General Certificate of Education Ordinary Level

**PRINCIPLES OF ACCOUNTS <br> PAPER 1 Multiple Choice**

JUNE 2018 SESSION 1 hour 30 minutes Additional materials: Multiple Choice answer sheet Soft clean eraser Soft pencil (type B or HB is recommended)

TIME 1 hour 30 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 answers, 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 11 printed pages and 1 blank page. Copyright: Zimbabwe School Examinations Council, J2018

Question 1

Which user of accounting information analyses financial statements before lending money to a business?

A bank

B debtor

C investor

D manager

Question 2

One of the disadvantages of partnerships is that

A better decisions are made.

B liability of the partners is unlimited.

C losses are shared among the partners.

D more capital can be used.

Question 3

Which component of a computer manipulates and stores accounting information?

A central processing unit

B keyboard

C printer

D visual display unit

Question 4

Which of the following transactions is recorded in the general journal?

A cheques issued for buying stationery

B credit purchase of inventory

C depreciation on office equipment

D goods returned to a supplier

Question 5

A debit balance in a purchases ledger control account indicates that the business has

A overpaid some suppliers.

B been paid by suppliers.

C not yet paid some suppliers.

D not balanced the account correctly.

Question 6

What is meant by the error of original entry?

A transaction not recorded

B transaction recorded once

C wrong amount recorded in the subsidiary book

D wrong personal account used

Question 7

One of the disadvantages of manual data processing is that

A it is less flexible.

B fraud is more difficult to discover.

C up to date information is made available faster.

D chances of arithmetical errors being made are high.

Question 8

The sales ledger contains

A personal accounts of creditors.

B personal accounts of debtors.

C the sales account.

D the sales returns account.

Question 9

A trader provided the following information

| | $ | | :--- | ---: | | Purchase cost of machinery | 160300 | | Transport cost of machinery | 17300 | | Installation cost of machinery | 14500 |

How much was debited to the machinery account?

A $160300

B $174800

C $177600

D $192100

Question 10

Which of the following is a reason for a cheque to be dishonoured?

A The drawer's account has an overdraft.

B The drawer has not been declared insolvent.

C The drawer has stopped payment.

D The drawer has signed alterations on the cheque.

Question 11

Why would a supplier give trade discount to a trader?

A to enable the trader to make profit

B to help the trader manage debts

C to increase the amount owed by the trader

D to reduce the expenses of the trader

Question 12

What document is sent by a supplier to a buyer to correct an undercast on an invoice?

A credit note

B debit note

C purchases invoice

D sales invoice

Question 13

Which of the following is a capital receipt?

A commission earned

B dividends earned from investments

C interest received from debtors

D proceeds from the sale of machinery

Question 14

On 3 June 2014 Tatenda bought goods on credit from Shuvai, list price $8000 less 15% trade discount.

On 7 June 2014 she returned goods with a net value of $700 to Shuvai. On making payment on 15 June 2014 she was offered a cash discount of 5%.

How much did Tatenda pay?

A $5795

B $6100

C $6460

D $7125

Question 15

Which item is not entered in a debtors ledger control account?

A contra entries

B dishonoured cheques

C provision for bad debts

D cash received from debtors

Question 16

A bank overdraft differs from a bank loan in that

A collateral security is required.

B interest paid on it is high.

C it is repaid over a long period of time.

D it is given to current account holders only.

Question 17

Subscriptions received in advance are recorded in the statement of financial position as a

A current asset.

B current liability.

C non-current asset.

D non-current liability.

Question 18

A business provided the following information.

| Cash book bank balance | $ | | :--- | :--- | | Credit transfer not entered in the cash book | 2400 debit | | | 1650 |

A cheque payment of $4600 was wrongly entered in the cash book as $6400.

What was the updated cash book balance?

A $2250 credit

B $2250 debit

C $5850 credit

D $5850 debit

Question 19

Dishonoured cheques are recorded on the

A credit side of the bank statement.

B credit side of the debtor's account.

C debit side of the bank statement.

D debit side of the cash book.

Question 20

On 31 December 2013 the trial balance of a trader failed to balance. The credits exceeded the debits by $300.

The difference should be

A debited to the Suspense Account.

B credited to the Suspense Account.

C debited to the Profit and Loss Account.

D credited to the Profit and Loss Account.

Question 21

Cash received from the sale of a motor vehicle is credited to the

A cash discount.

B motor vehicle account.

C motor vehicle disposal account.

D sales account.

Question 22

A motor vehicle was purchased at a cost of $35000 on 1 January 2014. It was depreciated at 25% per annum on cost.

On 31 December 2014 the motor vehicle was sold for $27500 cash.

What was the profit or loss on sale?

A $1250 profit

B $1250 loss

C $7500 profit

D $7500 loss

Question 23

The double entry for recording the share of loss in a partnership is

Question 24

The following information was taken from the books of a social club.

| | $ | | :--- | ---: | | Sale of refreshments | 39700 | | Owing to suppliers on 1 January 2014 | 1800 | | Paid to suppliers during the year | 26800 | | Owing to suppliers on 31 December 2014 | 2200 |

What was the profit on the sale of refreshment?

A $8900

B $12500

C $12900

D $13300

Question 25

At the end of a financial year, carriage outwards is charged to the

A purchases account.

B profit and loss account.

C sales account.

D trading account.

Question 26

How should inventory be valued?

A higher of cost and net realisable value

B higher of cost and selling price

C lower of cost and net realisable value

D lower of cost and selling price

Question 27

The journal of a trader showed the following entry.

| | Debit | Credit | | :---: | :---: | :---: | | B. Mushava | $ | $ | | B. Nyatongo | 15000 | | | | | 15000 |

Mushava and Nyatongo are suppliers of the trader.