ZIMSEC O-Level Principles of Accounts Paper 1 June 2023 Question Paper

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

PRINCIPLES OF ACCOUNTING <br> PAPER 1 Multiple Choice

JUNE 2023 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, J2023.

Question 1

A business organisation that raises capital by issuing shares is a

A limited company.

B not for profit making organisation.

C partnership.

D sole proprietor.

Question 2

Which is the first stage of the accounting cycle?

A ledger

B source documents

C subsidiary books

D transactions

Question 3

Manual processing of data

A is cheap.

B is flexible.

C is more accurate.

D processes data fast.

Question 4

Nomsa and Norman are in an equal partnership. Norman was entitled to a monthly salary of $\$ 2000$. Their annual net trading profit was $\$ 20000$.

Nomsa's annual share of profit or loss was

A $\quad \$ 2000$ loss.

B $\$ 2000$ profit.

C $\$ 9000$ loss.

D $\$ 9000$ profit.

Question 5

Which source document matches with the subsidiary book?

A Debit note - Purchase Journal

B Credit note - Sales Journal

C Invoice - General Journal

D Receipt - Petty Cash Book

Question 6

The imprest system is associated with which subsidiary book?

A Cash book

B Petty cash book

C Purchases day book

D Sales day book

Question 7

A private motor vehicle brought into the business by the proprietor is recorded as

| | debit | credit | | :--- | :--- | :--- | | A | Capital account | Drawings account. | | B | Capital account | Motor vehicles account. | | C | Drawings account | Capital account. | | D | Motor vehicles account | Capital account. |

Question 8

When a Trial balance fails to agree, the difference is entered in a

A bank account.

B cash account.

C current account.

D suspense account.

Question 9

The maximum share capital a company can raise is called

A authorised share capital.

B called up share capital.

C issued share capital.

D paid up share capital.

Question 10

The following Bank Account appeared in the books of a trader.

**Bank Account**

| 2017 | | \$ | 2017 | | \$ | | :--- | :--- | :--- | :--- | :--- | :--- | | January 7 | Balance b/d | 2500 | January 5 | Equipment | 5000 | | | Sales | 8000 | 10 | Wages | 1500 |

What is the closing balance in the account?

A $\$ 2500$

B $\$ 4000$

C $\$ 6500$

D $\$ 10500$

Question 11

Which accounting concept states that the business has no intention to close in the near future?

A consistency

B going concern

C historical cost

D prudence

Question 12

Which of the following is entered in the profit and loss account?

A carriage inwards

B carriage outwards

C returns inwards

D returns outwards

Question 13

A sale of goods for $\$ 500$ to a debtor was credited to his account in error.

The debtor's account should be corrected by a

A credit entry of $\$ 500$.

B credit entry of $\$ 1000$.

C debit entry of $\$ 500$.

D debit entry of $\$ 1000$.

Question 14

The accuracy of the Trade receivables ledger and the Trade payables ledger is checked by preparing a

A Bank reconciliation statement.

B Control account.

C Trial balance.

D Statement of affairs.

Question 15

Which of the following increases a favourable bank balance?

A credit transfer

B dishonoured cheque

C direct debit

D standing order

Question 16

Current ratio is expressed as

A $\quad \frac{\text { current assets }}{\text { current liabilities }}$.

B $\quad \frac{\text { current liabilities }}{\text { current assets }}$.

C $\quad \frac{\text { total assets }}{\text { total liabilities }}$.

D $\quad \frac{\text { total liabilities }}{\text { total assets }}$.

Question 17

A statement of affairs is used to calculate

A bank balance.

B credit purchases.

C credit sales.

D opening capital.

Question 18

In a Not for profit making organisation, the purchase of sports equipment by cheque is shown in the

A income and expenditure account and the statement of financial position.

B receipts and payment account and the statement of financial position.

C receipts and payments account only.

D statement of financial position only.

Question 19

In a manufacturing business royalties are part of

A cost of raw materials.

B direct cost.

C indirect cost.

D trading cost.

Question 20

Drawings taken by a partner are

A debited to Appropriation account.

B debited to Current account.

C credited to Appropriation account.

D credited to Current account.

Question 21

Which of the following is part of shareholders' funds?

A Authorised share capital.

B Interest on debenture.

C Loan capital.

D Retained profits.

Question 22

The following was taken from the books of a trader.

| 2017 | \$ | | ---: | ---: | | May 1 Wages owing | 6000 | | 31 Wages paid by cheque | 11500 | | 31 Wages paid in advance | 1600 |

The amount transferred to the Income Statement was

A $\quad \$ 3900$.

B $\quad \$ 7100$.

C $\quad \$ 15900$.

D $\$ 19100$.

Question 23

An accounts clerk failed to account for petty cash of $\$ 75$.

Which business ethic was violated?

A competence

B compliance

C confidentiality

D objectivity

Question 24

Stationery bought for resale on credit is recorded in the

A Cash book.

B General Journal.

C Purchases day book.

D Sales Journal.

Question 25

On 1 January 2001 a trader bought a motor vehicle for $\$ 20000$. It was expected to be sold for $\$ 5000$ after 10 years.

What was the accumulated depreciation for the motor vehicle on 31 December 2004 if the straight line method was used?

A $\$ 1500$

B $\$ 2000$

C $\$ 6000$

D $\$ 8000$

Question 26

Cash withdrawn from the bank for private use is recorded as

| | debit | credit | | :--- | :--- | :--- | | A | Bank account | Cash account. | | B | Bank account | Drawings account. | | C | Cash account | Bank account. | | D | Drawings account | Bank account. |

Question 27

Goods bought by cheque are recorded in which subsidiary book?