CANDJDAIE PJ,EASENQTE'

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TEST CODE O123 90 l O
FORM TP 2022027 1 - - - - - - - - 1 JANUARY2022

CAR I BB EA N EXAMINATIONS COUNCIL

CARIBBEAN SECONDARY EDUCATION CERTIFICATE®

EXAMINATION

PRINCIPLES OF ACCOUNTS

Paper 01 - General Proficiency

1 hour 30 minutes

(06 JANUARY 2022 (p.m.))

READ THE FOLLOWING INSTRUCTIONS CAREFULLY.

l. This test consists of 60 items. You will have l hour and 30 minutes to answer them.

2. In addition to this test booklet, you should have an answer sheet.

3. Each item in this test has four suggested answers lettered (A), (B), (C), (D). Read each item you
are about to answer and decide which choice is best.

4. On your answer sheet, find the number which corresponds to your item and shade the space having
the same letter as the answer you have chosen. Look at the sample item below.

Sample Item

Prime cost is calculated by adding direct

factory expenses to the Sample Answer

(A) cost of goods sold

(B) cost of materials used
(C) sale of finished goods
(D) sale of non-current assets

The best answer to this item is "cost of materials used", so (B) has been shaded.

5. If you want to change your answer, erase it completely before you fill in your new choice.

6. When you are told to begin, tum the page and work as quickly and as carefully as you can. If you
cannot answer an item, go on to the next one. You may return to that item later.

7. You may use a silent, non-programmable calculator to answer items.

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO.

Copyright © 202 I Caribbean Examinations Council

All rights reserved.
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1. A trader had an opening capital of $3 900. 5. Partnerships are formed for the purpose of
If his drawings were $900 and his closing
capital was $4 860, what was his net profit? I. combining capital from different
persons
(A) $ 900 II. benefiting from different skills and
(B) $ 960
(C) specializations
$1 860
III. sharing ideas, experience and
(D) $3 000
responsibilities

2. (A) I and II only

The MAIN internal users of accounting (B) I and III only
information are
(C) II and III only
(A) managers
(D) I, II and III
(B) competitors
(C) local communities 6.
(D) government agencies A company's rent expense account had an
opening debit balance of $2 000. During
the year $6 000 was paid for rent. At the
3. end of the year there was a closing debit
Which ofthe foJlowing terms describes the
exchange of goods and services? balance of $1 500 in the account.

(A) Journal What was the rent expense recorded for the
year?
(B) Transaction
(C) Trial balance
(A) $6 000
(D) Statement of financial position (B) $6 500
(C) $7 500
4• . (D) $9 500
Which of the following list of activities
shows the correct order of the stages in the
accounting cycle, before final accounts? 7. Which of the following is usually used to
complete a general journal entry?
(A) Posting to ledger, trial balance,
journalizing (A) Narration
(B) Journalizing, trial balance, posting (B) Description of assets
to ledger (C) Description of liabilities
(C) Journalizing, posting to ledger, trial (D) Identify book to post entry
balance
(D) Posting to Iedger,journalizing, trial
balance
 -3-

12. P. Hawk has a manufacturing business.

Item 8 refers to the following balances at The cost of his raw materials is $ I 900.
the end of a financial period. Rates and rent total $2 000, and factory
$ wages amount to $2 500.
Motor vehicles 2 000
The number of units produced is 640.
Payables 3 000
2 000 What is the cost of ONE unit?
Receivables
Capital 11 000
10 000 (A) $ 4
Building
(B) $ 6
What is the TOTAL amount for the assets? (C) $10
8.
(D) $13
(A) $12 000
(B) $13 000 Item 13 refers to the following information.
(C) $14 000
(D) $15 000 $
Assets
10 000
Furniture
9. The cash book is BEST used for recording 2 000
Cash at bank
1 000
(A) inventory sold for cash Cash in hand
Motor vehicles 12 000
(B) inventory returned for cash
6 000
(C) inventory purchased for cash Debtors
(D) cash receipts and cash payments 20000
Premises

13. The value of the non-current assets is

10. Which of the following items are examples
of current liabilities? (A) $ 9 000
(B) $20 000
I. Mortgages (C) $42 000
IL Accounts payable (D) $51 000
III. Accrued wages

(A) I and II only 14. Which of the following accounts are

(B) I and III only nominal?
(C) II and III only
(D) I, II and III (A) Wages and rent
(B) Stock and debtors
(C) Machinery and plant
11. Which of the following entries in a three- (D) Creditors and fixtures
column cash book are contra entries?

Debit cash 15. When a proprietor withdraws cash or other

(A)
Credit bank assets from a business, what effect does this
have on drawings or capital?
(B) Debit cash
Credit cash (A) Capital is increased.
(B) Capital is decreased.
(C) Credit cash
(C) Drawings are decreased.
Credit bank
(D) Neither drawings nor capita\ 1s
(D) Debit bank affected.
Credit bank
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16. . When a trial balance fails to agree, the 20.

difference is entered in the Accrued revenue is classified in the
statement of financial position as
(A) control account
(A) capital
(B) reserve account
(C) suspense account (B) current assets
(D) provision account (C) current liabilities
(D) non-current assets

17. A motor van was credited from AG Motors 21.

for use in a business. How should this be A businessman bought a new computer for
recorded? $6 000. He paid $4 000 in cash and traded
in his old computer. What is the entry to
(A) Debit motor vehicle record this transaction?
Credit bank
Debit Credit
(B) Debit motor van expense
$ $
Credit bank (A) Debit old computer 2 000
(C) Debit purchases Debit cash 4 000
Credit AG Motors Credit new computer 6 000
(B) Debit new computer
(D) Debit motor vehicle 4 000
Debit cash 2 000
Credit AG Motors Credit old computer 6 000
(C) Debit old computer
6 000
Debit cash 4000
18. During the year, a company bought
Credit new computer 2 000
stationeryfor$220 and used $120worth of (D)
Debit new computer 6 000
it. What is the expenditure for stationery that
Credit old computer 2 000
would be posted to the income statement? Credit cash 4 000
(A) $340
(B) $220
(C) $120
(D) $100

19. The total credit of the bank column of a

three-column cash book is greater than the
total debit. The MOST likely reason for
this situation is that

(A) there was an overdraft

(B) transactions were omitted from the
debit side
(C) some figures were overstated on
the credit side
(D) the incorrect transactions were
entered on the credit side

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Item 22 refers to the following summary 25. Which of the following accounts BEST
of receipts and payments for the month of describe the final accounts of a non-trading
March for an NGO. organization?

I. Receipts and payments

$ II. Income and expenditure
III. Income statement
Subscriptions received 300
(A) I and II only
Rent paid 60 (8) I and III only
(C) II and III only
Purchase ofgames and equipment 150
(D) I, II and III
Postage of circulars 20
26. In calculating the gross profit percentage,
Proceeds from book sale 250
gross profit should be divided by

22. Which of the following amounts is the cash (A) cost of goods sold
balance at 31 March? (8) net purchases
(C) net profit
(A) $180 (D) net sales
(B) $280
(C) $320
(D) $620 27. Mahera Grocery used the 'order of
permanence' method to prepare its state-
ment of financial position. Which of the
23. Which of the following documents following lists is in the correct sequence,
acknowledges a loan to a company at a
based on this method?
fixed rate of interest?
(A) Land, building, machinery, motor
(A) Debenture vehicle
(B) Licence (8) Building, machinery, motor vehi-
(C) Flyer cle, land
(D) Stock (C) Building, motor vehicle, land,
machinery
24. A business receives $5 000 for rent revenue (D) Land, building, motor vehicle,
and deposits this amount into its bank machinery
account. How will this transaction be
recorded?
28. Which ofthe following financial documents
(A) Debit rent $5 000 shows the net earnings of a business?
Credit bank $5 000
(A) Income statement
(B) Debit cash $5 000 (B) Appropriation account
Credit rent revenue $5 000 (C) Statement of financial position
(D) Receipts and payments account
(C) Debit rent revenue $5 000
Credit rent expense $5 000

(D) Debit bank $5 000

Credit rent revenue $5 000
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Item 29 refers to the following table.

Period of Debt Accounts Receivable Provision for Bad Debts

Over 3 years $6 000 3% ofaccounts receivable
Over 2 years $4 000 2% ofaccounts receivable
Over 1 year $8 000 1% ofaccounts receivable

29. What is the TOTAL provision for doubtful debts?

(A) $180
(B) $340
(C) $400
(D) $500

30. Anassetpurchasedfor$1 000isdepreciated 32. Which of the following entries should be

at the rate of 10% per annum using the made to create an allowance for doubtful
reducing balance method. What is the book debts account?
value of the asset at the beginning of the
third year? (A) Debit profit and loss
Credit provision for doubtful
(A) $ 800 debts
(B) $ 810
(C) $ 900 (B) Debit provision for doubtful debts
(D) $1 190 Credit profit and loss

(C) Debit profit and loss

31. A public limited company issued a Credit bad debts
prospectus offering the shares described in
the following table for sale at par value. (D) Debit bad debts
Credit provision for doubtful debts

lypeofShare No.ofUnits ParValue

Ordinary 200 000 $2

5% preference 10 000 $5

The issue was fully subscribed. How much

capital did the company raise?

(A) $ 40 000
(B) $ 45 000
(C) $400 000
(D) $450 000

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Item 33 refers to the following account.

Appropriation Account
$ $

Taxation reserve 10 000 Balance b/f 894

Preliminary expenses 250 Net profit 26106
Transfer to general reserve 4 000
Preference share dividend 1 200
Ordinary share dividend 6 000

33. What conclusion could be drawn from the appropriation account above?

I. The company is engaged in profitable enterprise.

II. The company is not doing too well.
III. More dividends can be given to the ordinary shareholders.

(A) I only
(B) II only
(C) I and Ill only
(D) II and III only

The owner of a business does not keep Item 35 refers to the following infonnation
34.
proper accounting records but she knows provided by a business.
her capital on 1 January was $40 000 and
$85 000 on 31 December. She withdrew Item $
$1 000 in inventory during the year. Total unpresented cheques 120
Lodgement not entered on bank 150
What is her profit for the year? statement
Balance per cash book 560
(A) $ 5 000
(B) $ 46 000
35. What is the balance per bank statement?
(C) $125 000
(D) $126 000
(A) $120
(B) $150
(C) $340
(D) $530

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01239010/JICSEC 2022
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36. The working capital of A. Young and Sons Item 38 refers to the following information.
is $15 500 and current assets is $16 500.
What is the total current liabilities?
$
(A) $ 1 000
(B) $15 500 Inventory at I January 2020 I 500
(C) $16 500
(D) $32 000 Purchases during the month 1200

Cost of goods sold 1400

37. Mrs Allen invested $20 000 and Mrs Brown
and Mr Cable invested $5 000 each into the
same business. The loss sustained during 38. What is the inventory at the end of
the year was $1 000. The partnership January?
agreement is silent on the item of losses ,
although profits are to be split in the ratio (A) $ 300
2:2: l in favour of Allen, Brown and Cable (B) $ 500
respectively. (C) $ 700
(D) $1 300
How much of the loss must be borne by Mr
Cable?
39. A company declares a dividend of 15%.
(A) $140
What is the value of the dividend warrant
(B) $200
sent to the shareholder who owns 1500 $1
(C) $300 ordinary shares?
(D) $400
(A) $ 100
(B) $ 225
(C) $1 500
(D) $1 515

40. Rose contributed $7 000 in cash and a motor vehicle worth $3 000 to a partnership. Rose's
contribution to the partnership would be recorded in the journal as

Debit Credit
$ $
Cash
(A) 10 000
Rose's capital 10 000
(B) Rose's capital 7 000
Cash 7 000
(C) Cash 7 000
Motor vehicle 3 000
Rose's capital 10 000
(D) Rose's capital 10 000
Motor vehicle 3 000
Cash 7 000

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44. In preparing its final accounts, a business

On 2 March 2017, L. Lan bought goods omitted to include returns inwards. Which
41, worth $630.00 on credit. He received a of the following items will be affected by
3% trade discount on this amount. The this omission?
invoice also stated 2% 20 days, net 30 days.
How much would L. Lan pay for the goods I. Net sales
if he pays on 8 March 2020? II. Net purchases
III. Gross profit/loss
(A) $595.00
(B) $598.88 (A) I and II only
(C) $611.10 (B) I and III only
(D) $630.00 (C) II and III only
(D) I, II and III

Item 42 refers to the following balances

extracted from Mrs Martin's ledger. 45. Which ofthe following items on a statement
of financial position would differ MOST in
$ presentation when comparing the books of
a company and the books of a sole trader?
Opening inventory 7 000

4 000 (A) Capital

Purchases (B) Current assets
10 000 (C) Current liabilities
Sales
(D) Non-current assets
Sundry expenses I 100

Closing inventory 3 400

46. An article is subject to a 20% trade
discount. Its list price is $600. What is its
42. What was the cost of goods sold by sale price?
Mrs Martin?
(A) $120
(A) $2 400 (B) $480
(B) $2 600 (C) $580
(C) $6 400 (D) $720
(D) $7 600

47. How does an increase in bad debts affect

43. A photocopying machine valued at $5 000
a sole trader's financial statements?
is depreciated at 10% using the straight line
metbod. What is its book value after TWO
(A) Decreases the gross profit
years?
(B) Increases the gross profit
(A) $4 000 (C) Decreases the net profit
(B) $4 050 (D) Increases the net profit
(C) $4 500
(D) $4 980

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48. Andy Williams is a petty cashier. If he has

Item 50 refers to the information for Jessie
a float of $200 and spends $180, how much Ltd.
should he be reimbursed at the end of the
period?
Account $
(A) $ 20 Prime costs 20 000
(B) $180 Factory overheads 15 000
(C) $200
Opening work in progress 5 000
(D) $380
Closing work in progress 3 000
Opening stock of finished goods I 000
Item 49 refers to the following list of Closing stock of finished goods 2 000
balances.

Account $
50. What is the cost of production for Jessie
Cash at bank and in hand Ltd?
5 000
Trade receivables
2 400 (A) $33 000
Inventory in hand $36 000
4 600 (8)
Accrued expenses (C) $37 000
700
Trade payables (D) $38 000
4 800

49. From the information above, the working

capital amount is Item 51 refers to the following information.

(A) $ 5 000 Bank Account

(8) $ 6 500
(C) $ 7 200 Balance b/d 20000 Purchases 15 000
(D) $1J 300
Sales 2 000 Balance c/d ?

51. What is the closing balance of the bank

account?

(A) $2 000
(B) $3 000
(C) $5 000
(D) $7 000

52. If revenue expenditure is overstated, which

of the following items will be affected?

(A) Sales
(8) Surplus
(C) Inventory
(D) Working capital

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The total of the return outwards journal is transferred to the

53,
(A) debit side of the purchases account
(B) credit side of the purchases account
(C) debit side of the return outwards account
(D) credit side of the return outwards account

Item 54 refers to the following information.

J. Baynes Manufacturing Account for the Period Ended 31 December 2017

$
$

Inventory of raw materials 1 January 2017 800

Balance carried forward 6 800
Purchases of raw materials during year 4 500
5 300
Less closing inventory of raw
1 400
materials 31 December 2017
3 900
l 300
Productive wages
900
Fuel and power
100
Lubricants
400
Rent and rates
200
Insurance 6 800
6 800

54. What is the cost of the raw materials consumed?

(A) $ 800
(B) $1 200
(C) $3 900
(D) $4 500

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01239010/J/CSEC 2022
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refers to the following information 58. The following information relates to a

for KO Ltd. privately managed charity.

Opening capital $3 000 $

Drawings $ 500 Opening bank balance 3 000
Net loss $1 500 l January 2021
Operating expenses l 000
55. What is the closing capital of KO Ltd?
Receipts from barbecue 5 000
(A) $1 000 Receipts from donations 1 000
(B) $2 000 Receipts from garage sale 3 000
(C) $4 000
(D) $5 000 What is the charity's closing bank balance
at the end of the year?

56. A. Portap bought inventory for $500 on (A) $ 9 000

credit. In which book of prime entry will (B) $11 000
this be recorded? (C) $12 000
(D) $13 000
(A) Cash book
(B) Sales journal
(C) General journal Item 59 refers to the following list of
(D) Purchases journal balances.

$
57. Karen and Garth, partners in a business,
share profits and losses in the ratio 2:1. Work in progress 1 January 1 600
What is their respective share ifthe business Work in progress 31 December 1 700
makes a net profit of $3 600?
Cost of materials used 3 000
(A) Karen $2 400: Garth $1 200 Indirect expenses
(B) Karen $1 800: Garth $1 800 3 200
(C) Karen $1 200: Garth $2 400 Factory wages 5 000
(D) Karen $1 200: Garth $1 200
59. Using the list of balances above, what is
the cost of goods produced?

(A) $ 8 000
(B) $ 8 700
(C) $ 11 100
(D) $ 11 200

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60, Inventory was purchased from M. Smith on credit for $2400 but posted to N. Smith's account.
The item would be corrected in the journal as follows

(A) Debit M. Smith $2 400

Credit Purchases $2 400

(B) Debit M. Smith $2 400

Credit N. Smith $2400

(C) Debit Purchases $2400

Credit M. Smith $2 400

(D) Debit N. Smith $2 400

Credit M. Smith $2 400

END OFTEST

IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON TIDS TEST.

01239010/J/CSEC 2022