ZIMSEC O-Level Principles of Accounts Paper 1 November 2022 Question Paper

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

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

4051/1

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, $\mathbf{A}, \mathbf{B}, \mathbf{C}$ and $\mathbf{D}$. 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 10 printed pages and 2 blank pages. Copyright: Zimbabwe School Examinations Council, N2022.

Question 1

Which business is classified as a service provider?

A A business which repairs vehicles.

B A business which sells lubricant oils.

C A motor vehicles dealer.

D A spare parts supplier.

Question 2

Which stage is missing from the following accounting cycle? Transaction $\longrightarrow$ ? $\longrightarrow$ Subsidiary books $\longrightarrow$ Ledger.

A Income statement

B Source documents

C Statement of financial position

D Trial balance

Question 3

One of the disadvantages of using computers for processing accounting data is

A computers are expensive to install and maintain.

B computers can store large volumes of information.

C computers can process information quickly.

D computers can provide accurate information.

Question 4

A trader bought goods for $\$ 30000$ less $10 \%$ trade discount and $5 \%$ cash discount. The credit purchases were

A $\quad \$ 3000$.

B $\$ 4500$.

C $\quad \$ 25500$.

D $\$ 27000$.

Question 5

Which source document is issued when furniture is sold on credit?

A Credit note

B Debit note

C Invoice

D Voucher

Question 6

Motor van bought on credit from ABC Motors is recorded as follows:

A debit ABC Motors account, credit Motor van account.

B debit ABC Motors account, credit Purchases account.

C debit Motor Van account, credit ABC Motors account.

D debit Purchases account, credit ABC Motors account.

Question 7

Which error is revealed by a Trial balance?

A Discount allowed and discount received were both overcast by $\$ 25$.

B Furniture bought on credit from Peter for $\$ 245$ was entered in the books as $\$ 254$.

C Goods sold to Tendai for $\$ 1500$ were only recorded in Tendai's account.

D Office salaries of $\$ 300$ were debited to the Office equipment account.

Question 8

A trader created an allowance for bad and doubtful debts. This is an application of which concept?

A Going concern

B Historical cost

C Matching

D Prudence

Question 9

A trial balance totals failed to agree. Total debits were greater by $\$ 200$. The balance transferred to the Suspense account was

A $\quad \$ 200$ credit.

B $\$ 200$ debit.

C $\quad \$ 400$ credit.

D $\$ 400$ debit.

Question 10

An increase in the provision for bad and doubtful debts will

A decrease the gross profit.

B decrease the net profit.

C increase the gross profit.

D increase the net profit.

Question 11

A provision for bad and doubtful debts is created to show

A actual bad debts.

B actual debtors.

C possible bad debts.

D possible debtors.

Question 12

Painting costs for a new building were shown in the Income statement. What was the effect of this error on net profit and non-current assets?

Question 13

Which item is included in a Creditor's control account?

A cash purchases

B credit purchases

C discount allowed

D returns inwards

Question 14

Which of the following increases a bank overdraft in the cash book?

A Bank charges

B Credit transfer

C Dividends received

D Interest received

Question 15

Abantu sports club provided the following details:

| | $\$$ | | :--- | ---: | | Subscriptions received | 7900 | | Profit on disposal of furniture | 500 | | Club secretary expenses | 400 | | Clubhouse depreciation for the year | 300 |

The excess of income over expenditure was

A $\quad \$ 6700$.

B $\quad \$ 7200$.

C $\quad \$ 7700$.

D $\quad \$ 8000$.

Question 16

Which of the following is a profitability ratio?

A current ratio

B net profit percentage

C quick ratio

D rate of inventory turnover

Question 17

Which of $A, B, C$ or $D$ shows the calculation of gross profit?

A net profit + total expenses

B net profit - total expenses

C turnover + cost of sales

D turnover - total expenses

Question 18

Office equipment bought for $\$ 45000$ was sold for $\$ 10700$. Accumulated depreciation on disposal was $\$ 35500$.

What was the profit or loss on disposal?

A $\quad \$ 1200$ loss

B $\$ 1200$ profit

C $\quad \$ 20200$ loss

D $\$ 20200$ profit

Question 19

What reduces accumulated fund?

A Excess of expenditure over income.

B Excess of income over expenditure.

C Net loss.

D Net profit.

Question 20

Which of the following cost is not easily traceable to the product being manufactured?

A factory electricity

B machine operator's wages

C patent fees

D raw materials

Question 21

Which items are credited to a Partnership Appropriation account?

A drawings and partner's salary

B interest on drawings and net profit

C share of losses and drawings

D share of profits and interest on drawings

Question 22

A motor van with a cost price of $\$ 7000$ had an accumulated depreciation of $\$ 2500$. It was sold for $\$ 3000$.

The profit or loss made on the transaction was

A $\quad \$ 1500$ loss.

B $\quad \$ 1500$ profit.

C $\quad \$ 4000$ loss.

D $\$ 4000$ profit.

Question 23

What is the reward obtained by a shareholder for investing in a company?

A commission

B dividend

C interest

D salary

Question 24

An employee revealed business information to a competitor. Which business ethic was not observed?

A competence

B confidentiality

C objectivity

D subjectivity

Question 25

Which of the following is a nominal account?

A Creditor's account

B Debtor's account

C Machinery account

D Rent received account

Question 26

A sole proprietor took goods worth $\$ 700$ at cost price for own use. What is the effect of this transaction?

Question 27

A trader had the following information:

| | $\$$ | | :--- | ---: | | Sales | 15500 | | Returns outwards | 2000 | | Returns inwards | 2500 | | Purchases | 8000 | | Carriage inwards | 3000 |

What is the gross profit for the year?

A $\$ 4000$

B $\$ 5000$

C $\$ 7000$

D $\$ 9000$

Question 28

Which subsidiary book is part of double entry?

A Cash book

B Purchases day book

C Returns outwards book