Cambridge Past Paper Questions

Which factors should be considered when setting a budget? 1 availability of skilled labour 2 production capacity 3 quality of goods to be produced

Which actions are taken in respect of the totals of a three-column cash book at the end of an accounting period?

Which item is an example of capital expenditure?

On 1 July 2021, Tim bought a delivery van for $10000. He paid an additional $900 to have racks fitted inside, and $800 for a year's insurance. Tim ...

A business has a year end of 31 December. It purchased a non-current asset on 1 January 2020 for $100000. The asset was depreciated using the reduc...

What is entered in the sales ledger control account? 1 cash sales 2 increase in provision for doubtful debts 3 returns inwards

A trial balance included a suspense account. The bank balance of $28412 had mistakenly been entered as an overdraft and placed on the credit side a...

Which statement is correct?

The following information is available for a business at 31 December 2021. general expenses in arrears 1 January $420, general expenses in advance ...

When would the year end value of inventory need to be adjusted? 1 when inventory has not yet been paid for 2 when selling price has fallen below co...

A business had a draft profit for the year of $250000. The following errors were then discovered. 1 Depreciation charged was $25000. The figure sho...

A capital account for a sole trader contained three entries, in addition to the opening and closing balances. What did these entries represent?

The year end of a business is 31 December 2021. On 5 January 2022, inventory was counted and valued at cost, $30000. The following was then discove...

A sole trader provided the following information for the year ended 31 December. non-current assets increased by $25000, current assets increased b...

P and Q are in partnership sharing profits and losses equally. On 1 January 2021, the partnership had net assets of $410000. At that date, R was ad...

X and Y are in partnership, sharing residual profits and losses equally. Partners are charged 2% interest on their drawings. Y is entitled to a sal...

Which statements are correct? 1 Dividends can be paid out of the general reserve. 2 Rights issues can be made from the share premium account. 3 The...

A limited company had the following balances on 1 January 2021. revaluation reserve $20000, retained earnings $142000. Profit for the year ended 31...

The bank balance of a limited company was $390000 before the following transactions took place. 1 An issue of 500000 new shares of $0.50 each was m...

What might cause a decrease in a company's non-current asset turnover?

The following information for a limited company at 31 December 2021 is available. ordinary share capital $300000, retained earnings $110000, 8% deb...

Which statements about stepped costs are correct? 1 fixed within a range of activity levels 2 fixed whatever the level of activity 3 include fixed ...

A production worker is paid $15 per hour for working 8 hours a day. Overtime is paid at the rate of time and a fifth (basic pay plus 20%). A produc...

A retailer made the following purchases of inventory in October. 5 Oct: 50 units at $500, total cost $25000; 12 Oct: 50 units at $500, total cost $...

A company has two departments in its factory. The details are shown. Machining department: budgeted fixed overheads $180000, budgeted hours 6000. A...

What would cause overheads to be over-absorbed?

A company has the following information for producing 2000 units of a product. sales revenue $85000, direct materials $30000, direct labour $14000,...

The following information is available about two products. Product 1 per unit: material X 2 kilos, material Y 3 kilos, direct labour 3 hours. Produ...

A company provides the following information about its product. selling price $100, variable cost per unit $40, fixed costs $21600, break-even poin...

What are possible limitations of a budgetary control system? 1 Budgets are based on estimates. 2 Budgets may lead to staff demotivation. 3 Budgets ...

Why did Amitav prefer to form a partnership with Lennie rather than set up as a sole trader?

A credit customer cleared her debt of $600 after deducting a cash discount of $12. How would the customer account appear in the books of the suppli...

What is the advantage of keeping a full set of double entry books of account?

At the start of a financial period, the owner's capital account of a business showed a balance of $85000. During the period, the owner introduced t...

A business has incorrectly recorded a vehicle purchase as a vehicle repair. The business does not charge depreciation on assets in the year of purc...

Non-current assets at the end of Year 1 were recorded at cost, $500000, and carrying value, $360000. During Year 2, certain assets were sold. They ...

The cost of repainting a property was debited to the property account. Which type of error was made?

A trial balance does not balance. The difference has been entered in a suspense account. The following errors are found. 1 A cash payment of $630 f...

What are the benefits of preparing a bank reconciliation statement? 1 acts as a deterrent to fraud 2 identifies out-of-date cheques 3 prevents the ...

At the month end, a business bank statement showed a credit balance of $12697. This did not agree with the cash book balance. The following differe...

Which statements identify the advantages of using a purchases ledger control account as part of the accounting system? 1 Compensating errors within...

The sales ledger control account of a trader showed a debit balance of $28500 at the end of the financial period. This did not agree with the total...

At the start of the year on 1 January, a business had an inventory of stationery which had cost $3740. On that date, $1200 was owed to suppliers fo...

The following information is extracted from the records of a business for a financial year. $ at 1 January rent paid in advance 4000 during the y...

Which items would affect a sole trader's gross profit? 1 carriage inwards 2 cash discounts allowed 3 commission received 4 trade discounts received

John and Mary are in partnership. After the first year of operation, the current accounts of both partners had a debit balance. What might have cau...

The following information is available for a partnership at the end of the financial year. $ residual loss 3000 total salaries to partners 5000 t...

A limited company intends to issue shares at a price above the par value. Which items, apart from the bank balance, will be affected by the share i...

The following information is available for a limited company for a financial year ended on 31 December. $ total equity on 1 January 492 000 profi...

A business has a rate of inventory turnover of 17 times. What is the numerator in the calculation?