Accounting

Explanation 1 mark

Omar keeps a small float of notes and coins so that minor office expenses can be paid immediately. Give the name of the system by which this float ...

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Explanation 1 mark

Omar is thinking about opening a petty cash account alongside his cash book. Give one benefit he would gain by doing so.

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Explanation 1 mark

Priya records all her credit sales in a sales journal. State one advantage of keeping this book of prime entry.

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Explanation 1 mark

Priya also gives a trade discount to some buyers. In your own words, give the meaning of this term.

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Explanation 1 mark

Some goods Priya bought on credit arrived damaged and she wants to send them back. Name the document she would send to her supplier to record this ...

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Explanation 1 mark

Some of Nadeem's goods had become shop-soiled, so in his financial statements that inventory was shown at less than the price he paid for it. State...

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Explanation 1 mark

Name the accounting principle that Nadeem was following when he valued that inventory in this way.

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Explanation 1 mark

Priya offers some of her customers a cash discount. In your own words, explain what is meant by this term.

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Explanation 1 mark

Accountants separate a business's spending into two kinds. Explain the meaning of capital expenditure.

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Explanation 1 mark

Accountants separate a business's spending into two kinds. Explain the meaning of revenue expenditure.

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Explanation 1 mark

Money coming into a business is also split into two kinds. Explain the meaning of capital receipts.

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Explanation 1 mark

Money coming into a business is also split into two kinds. Explain the meaning of revenue receipts.

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Explanation 2 marks

Nadeem is disappointed with his return on capital employed (ROCE). Suggest two things he could do that would raise it.

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Explanation 2 marks

Nadeem's rate of inventory turnover is slower than he would like. Suggest two things he could do to speed it up.

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Explanation 2 marks

At the month end the cash counted in Omar's petty cash tin did not agree with the balance shown on his petty cash account. State two possible reaso...

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Explanation 3 marks

Devi has offered to join Marisol as a partner in the valeting business. State three advantages this would bring to Marisol.

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Explanation 3 marks

If Marisol accepts Devi as a partner they will draw up a partnership agreement. Apart from the way profits or losses are to be divided, identify th...

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Explanation 4 marks

Nadeem wants to measure how well his business uses the finance invested in it. His profit for the year before loan interest is $27 000, he has paid...

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Explanation 4 marks

Marisol runs a car valeting business. She employs two valeters and rents a spare room above the premises to a tenant, Devi. Her running costs are r...

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Evaluation 5 marks

Devan has to decide whether to set up and keep a provision for doubtful debts. Advise him on what he should do, justifying your answer with argumen...

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Explanation 5 marks

Priya keeps a sales ledger control account. On 1 October the total owed by her credit customers was $12 400. During October the following took plac...

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Evaluation 5 marks

Advise Amara whether or not she should allow her credit customers a cash discount if they make payment within 21 days. Justify your answer with arg...

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Evaluation 5 marks

Nadia is weighing up whether to let customers pay by card as well as in cash. Advise her on whether to go ahead, justifying your answer with two ar...

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Explanation 1 mark

Nadia's bank statement shows an entry described as a dishonoured cheque. Explain what is meant by this term.

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Explanation 1 mark

Which accounting principle is a business following when it sets up a provision for doubtful debts? Give its name.

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Explanation 1 mark

Marcus has drawn up his trial balance and the two totals are not the same. Give the name of the account he must open so that the totals can be brou...

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Explanation 1 mark

Corvin Limited keeps a provision for doubtful debts. Say what this provision represents.

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Explanation 1 mark

Give the main reason why Marcus opens that account.

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Explanation 2 marks

Priya depreciates her vehicles by the reducing balance method. Give one benefit and one drawback of using this method.

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Explanation 2 marks

Some mistakes in the ledger still leave a trial balance with matching totals. Give the names of two kinds of error of this sort.

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Explanation 3 marks

Suppose instead that Priya had disposed of the tipper truck to a dealer on 1 March 2026 for $22 500. Work out the resulting profit or loss on dispo...

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Explanation 4 marks

Priya runs a garden landscaping business. She bought a tipper truck on 1 September 2022 for $64 000, paid by bank transfer. Its residual value was ...

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Explanation 4 marks

Salma's draft profit for the year was $18 600. She then discovered three matters: a payment of $1 200 for a new delivery counter had been recorded ...

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Evaluation 5 marks

Nadia checks her cash book against her bank statement only once a year, at her financial year end. Her bookkeeper has suggested that this check sho...

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Evaluation 5 marks

Advise Bina whether she should buy the new larger van. Justify your answer by providing advantages and disadvantages of buying it.

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Evaluation 5 marks

KL Trading Limited could hold on to its cash longer by settling supplier invoices later than agreed. Advise the directors whether this would be a s...

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Explanation 6 marks

Rashid's cash book, before updating, shows a debit balance of $2 480 on 31 March 2025. He then finds the following: bank charges of $95 and a stand...

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