a) a ZIMBABWE SCHOOL EXAMINATIONS COUNCIL General Certificate of Education Advanced Level ACCOUNTING 9197/1 PAPER 1 Multiple Choice JUNE 2017 SESSION J hour 15 minutes ensil (Qe B or HB is recommended) TIME 1 hour 15 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. “The businesses in this question paper are intended to be fictitious. This question paper consists of 12 printed pages. Copyright: Zimbabwe Schoo! Examinations Council, 32017, ezIMSEC B07 {Turn overrecorded in the statement of financial position as 1] should be Negative goodwil A acapital reserve. B an investment. Can intangible asset. D — aliabitity ise, the accounting treatment jetor for own Use, propre If goods are taken by the it and credit purchases account. and credit inventory account, t and credit drawings account, ventory account. ‘A. debit drawings accoun' B debit drawings account C debit purchases account an D debit sales account and cre’ £2 400. It has paid for materials invoiced at $1 509 ., ei A cheque of $225 is receivey’ i bank balanct : etean et 30 ‘% and a settlement discount of 10 %. from a debtor. What is the bank balance after these transactions? A $1125 B $1575 Cc $1680 D $1725 The following information relates to a business on 31 December 2014: s Bank statement balance 11325 Cr Uncleared deposits 1355 Unpresented cheques 3145 Bank credit recorded twice in error 325 Wah bank balance will Appear in the statement of financial Position at 31 December A $9410 B $10060 Cc $12590 Ds $13.240 Depreciation is the Saep 2 3 & - 8 F 3 5 91971 RoW3 6 —_Belowis an extract ct of the Statement of Financial position as at 31 September 2013 Cost Accumulated | Net Book Depreciation | Value “tai s $ Building . Plast ant Mace 1 200.000 200 000 1,000 000 fachinery | 140 000 62.600 7,400 ‘The depreciation on Plant and Machinery was charged at 10 % straight line instead of 10 % reducing balance method. wet isthe accumulated depreciation on Plant and Machinery after eomecting the A $48.600 B $57740 Cc $70340 D = -$76.600 iu ‘A business is about to be closed down as it has insufficient funds to pay its accounts payables. The owner places avery low value om his inventory in the statement of financial position. Which concept is applied? ‘A Going concern B — Materiality Cc Money movement D Subjectivity 8 Anextract from the trial balance as at 2013 js shown below. Debit Credit $ 5 Trade payables control account 2.600 53 600 Trade receivables control account 71200 1.600 ‘An invoice for goods received on 29 June 2013 for $2 000 was omitted from the trade payables ‘control account. Which figure of trade payables should appear in the statement of financial position as at 30 June 2013. A $51 000 B $55 200 Cc $55 600 D $57 200 sig7n 2017 {Turn over Nii lal9 10 BT the year, the following errors were discovered. When preparing final accounts for the 3 : dercast by $600. (The Sales Day Book #25 Ot accrued overtime wages of $400, made Gi) No adjustment had been made OT Gii) Prepaid rent of $800 had . If the draft net profit figure is $16 100, what is the corrected net profi A $15 100. B S17 100. Cc $17 500. D $1790. What isthe effect on the current ratio and quick ratio of a business when it uses cash tp buy inventory? Current ratio Quick ratio A decreases decreases B decreases increases C nochange decreases D nochange increases Inventory should be valued at the lower of cost and net realisable value. The table shows information about four products, Product ¥ = a : 5 s : s Cost 36 38 34 ced Realisable value 30 56 34 52 Selling expenses 6 4 o Athow much should the total inventory be valued? A $iag Bo 8154 C gtk D s17 From which of the following do rey enue reserves arise? 4 The isue of shares at Premium, e redemption of reserves nen C The revaluation of non cuenta = D The trading activites ofa a ‘ompany, 91971 01W W 5 A company re-values it ‘slves ils buildings upwards, What isthe impact on the following ratios? Gearin, 8 Return on capital A decrease stent YW deetease mene C increase die D inctease ieee A business had the following information for the year: mark up 2 7 | $ Opening inventory 5200 Closing inventory 7.600 Sales 161 600 What is the value of purchases? aA $94 743 B $113 120 c $115 520 D $120 720 ‘A business has an accounting year that ends on 30 September. Its insurance premiums Premiums have been paid in the past three are paid in advance on 1 July each year. years as follows: s 2011 3.600 2012 4000 2013 4800 How much will be debited in the income statement for insurance on 30 September 2013? A $4000 ; B $4 200 Cc $4600 D $4800 sig1 2017 {Turn over18 lowing errors does not affect the trial balance agreement? Which of the followin $3,000 paid for rates was correctly entered in the bank account but amount of | FOO ‘ aiid in the rates account as debited in the commission payable account, ission receivable of $400 was B_ Commission receival er $300 were entered in the purchases retums journal plier $3 CC Retums outwards to su as $210. D___ TheSales Day Book was undercast by $400, { Mutiro's inventory was stolen when his business was burgled on 20 February All of Mutiro’s im 2012. The following information was made available for the period 1 January to 20 February 2012: s Inventory (1 January 2012) 11 500 Sales 21000 Purchases 19 os Mark up 335% ‘What is the value of the stolen inventory? A $1400. B $14750, Cc $1650. D $2000. The following information relates toa club fora year, Number of members 120 Annual subscription per member $20 Subscriptions owing atthe beginning of the year §200 Subscriptions atthe end of the year $120 How much should be credited tothe income and expenditure account as annual subscriptions? A $2080 B $2320 C $2400 D $2520 9197 017” 4 Which biadn ah departmnenty) 4 © used iy Pron the coat of wisucing plant and machin wineon A Replacemy me ent on i Prevent dispioualy Original cont D Netbook vate A company tra afer y PH je mark up of 20%, ‘The in om the manufneturing, account to the income statement at let prices of the clusing inventory of finished woods were % follows: Ye mh Bie 000 Year 3 S91 200 What was the pr Provision for unrealived profit charged against profit for year ” A $800 B $1200 Cc $14a0 D $2400 ‘The summarised statement of finanei ’ parinerahip Is given eee financial position of Murombo and Mupfurmisa in Goodwill 24 Hn Net assets 57.600, BLGO0 Capital accounts: Murombo 48 000 Mupfumisa 33.600, 81.000 inisa have previously shared profits and [osses in the ratio 2:1 but ued and shown in Murombo and Mupfur have now decided to change the ratio to 3:2, Goodwill is to be re-val jal position at $60 000. the statement of finane’ What fs the new balance in ‘Murombo's capital account? A $62 400 B $69,600 c $7200 D $84 000 919771 2017 [Turn over23 24 25 8 authori: i shares of $1 each, has y wil rised share capital of 400 000 ordinary i ea Sot ee edly shares of $1 each and $200 000 6 % debentures. ore profit is $40 000 and $20 000 is to be transferred to the asset replacement reserv What is the maximum rate of dividend that can be paid on ordinary shares? A 2% orn . . f Acot chased a building for $50 000. The settlement was made by a payment o $48 000 and the part exchange of one of the company’s own buildings for $6 000. The building given in part exchange had a written down value of $14 000 and a resale value of $4 000. Which amount should be shown in the statement of cash flow for the acquisition of the buildings? A $44 000 B $48 000 c $50 000 D $58 000 A company redeems its debentures at a premium, How may the company record the premium on redemption? A Debit bank account B Debit capital redemption reserve C Debit share capital account D Debit share premium account A company paid $900 000 to acquire the business of a sole trader. ‘The sole trader's assets and liabilities were valued as follows: s Non current assets 350.000 Current assets 150 000 Current liabilities 25000 Long-term loan 50.000 How much was paid for goodwill? $325 000 $375 000 $425 000 $475 000 paw 91970 2017n 2 Earnings per share jg caley lated us A Profit after ng i ttt lp Profit bef 28 tax, py peterence dividends. D Brofit befor nt efrence dividends and transfert 6 crest Preference dividends. 7% preference dividends ‘and transfer to general reserve. Which cost wil fatt ag Producti ion is red A variable cost per uni “= B total variable cost " C total fixed cost D fixed cost per unit eral reserve. One product is made an 4 Sold by a company, incurring the following costs: 24 kgs of materi al 9 labour hours ror Production overheads Sie Selling overheads Soe wa unit ‘What isthe total direct cost per unit? A $144 B $360 Cc $372 D $382 Sales for a company in December 2014 are budgeted to be $20 (000 and are expected to increase by $4.000 each month. 10 % of the sales will be ‘cash sales and credit customers are expected to pay after one month, Which amount will be shown inthe cash budget for receipts from customers in February 20152 A $20 800 B $24 000 Cc $24 400 D $28 000 Which expense is classified as a variable cost of a furniture manufacturer? Factory manager's salary Plant depreciation Royalties Vehicle insurance paw suv 2017 {Tura over31 32 3 34 a ae Which statement best describes job costing? i ific order. ulates the cost of meeting a speci ; fA Soting mel a cat of prourng mubes of went costin cK Sac eaiall ‘that enables overheads to be absorbed into the cost of a co: Product. D A costing method that separates fixed costs from variable costs. Which of the following would appear in a cash budget? A bad debis B cash discount C depreciation D_ - Joan repayments The cost of using a landline phone is made up of a monthly rental charge and the cost of individual phone calls. What type of cost is this? A fixed B semi-variable C stepped D variable A business sells its products for $20 per unit and has variable costs of $12 per unit, The following are fixed costs for the year: factory rent $ 60000 other fixed costs $140 000 What is the break-even point? A 7500 units B 17 500 units c 10 000 units D 25 000 units ‘A company is asked to make a computer fora customer. It provides the following: yaw materials $2200 direct labour 60 hours at $28 per direct labour hour overheads $20 per direct labour hour mark up 30% on total cost What is the price charged to the customer? A $3 556 B $5 044 c $5 080 D $6 604 9197/1 2017 sb7 38 Cost ele ment ‘Output level | Output level Di 4.000 units_| 8 000 units an 60 00 120 000 Ditect labour 96 000 192.000 6 0 2 Producti ‘oduction ovetheads 152.000 184.000 308 000 496-000 The cost of producing 6 000 units j is A $282 000. B $354.00, C $402 000, D $462 000. The following information relates to the last three months" production for a company. . Budgeted Actual Total production hours 120 000 135 000 Production hours per unit 15 1,35 Total production cost $360 000 What is the budgeted cost per unit? A $1,50 B $3 Cc $4 D $4,50 ‘The following information relates to direct materials in a company: Actual Budgeted 88 000 litres at $13, 20 per litre 83 000 litres at $12 per litre What is the direct materials price variance? A $99 600A B $99 600 F ic $105 600 A D $105 600 F sisi nov (Turn over40 12 The following information relates 10 8 project: Net present value Discount factor 5% $15.00 10% ($4 000) What is the internal rate of return (IRR) on the project? A oe Bo «895% iG 10% D —11,82% Which of the following is the safest form of investment in a Limited Company? debentures ordinary shares preference shares short term loan poe