EXAM COVER SHEET

Student name:

Student ID

Campus:

Subject number: ACACC101A

Subject name: Accounting Foundations I

Semester 2, 2012

Time allowed 3 hours plus 20 minutes reading time

3:00pm 6:20pm Tuesday 20 November 2012

QUESTION BOOKLET

General instructions Marks

Write your answers using black or blue pen Total marks: 100

Answer all questions There are five questions. All question are
weighted equally i.e. 20% of the total.

All answers are to be made in the Answer Booklet.

Examination aids permitted as indicated

Standard dictionaries Bilingual Technical Programmable Non-

dictionaries dictionaries calculators programmable
calculators

No Yes No No Yes

Other examination aids permitted

None.

TAFE NSW Higher Education Semester 2, 2012 Page | 1

 Faculty of Business, Management, Economics and Law

EXAM NOTICE

TO BE WRITTEN ON THE BOARD AND READ TO THE

STUDENTS PRIOR TO READING TIME COMMENCING

ACACC101A Accounting Foundations I

3:00pm 6:20pm Tuesday 20 November 2012

There are 8 questions in the exam. The cover sheets show 5 questions.

Questions 1 - 4 (practical) are each worth 20%, making 80% in total.

Questions 5 8 (theory) combine to be worth 20%.
Students should allocate their time:

80% of the exam time to the practical questions (1 4)

20% of the exam time to the theory questions (5 8).
Assessment Event 5 Final Exam
Practical Questions - Answers to be entered in Answer Booklet
QUESTION 1 Bank Reconciliations

On 1 September 2011 the records of Thai Enterprises showed that the cash at bank ledger
account had a balance of $4,300 credit. The bank reconciliation at the 31 August contained
only one difference between the bank statement balance and the ledger balance, cheque
number 170 for $400 which was listed as unpresented. The following information is available
for September 2011.

CASH RECEIPTS JOURNAL

Date Particulars Amount Cash at bank
2011 $ $
Sept 4
Sales 300
Accounts receivable 3,720 4,020
17 Accounts receivable 3,000 3,000
28 Interest 600
29 Sundry 3,240 3,840
10,860 $10,860

CASH PAYMENTS JOURNAL

Date Particulars Cheque Cash at bank
2011 Number $
Sept 4 Lease expenses 239 900
7 BMT Ltd 240 440
10 Electricity 241 480
12 Wages 242 120
17 Internet service provider 243 340
Accounts payable 244 3,680
21 Telephone 245 440
23 Wages 246 80
$6,480

ACACC101A Accounting Foundations I

BANK STATEMENT September 2011

Thai Enterprises ABC Bank A/c No 1222344

BANK STATEMENT
Date Particulars Debits Credits Balance
2011 $ $ $
Sept 1 Balance forward 3,900 Dr
1 Cash and cheques 4,020 120 Cr
11 Fee 10
12 Cheque 241 480
12 Cheque 239 900 1,270 Dr
17 Rent collected 160 1,110 Dr
19 Cash and cheques 3,000 1,890 Cr
20 Cheque 240 440 1,450 Cr
20 Dishonoured cheque 80 1,370 Cr
29 Cheque 246 80 1,290 Cr
29 Cheque 244 3,680 2,390 Dr
30 Interest on debentures 400 1,990 Dr
30 Interest on overdraft 240 2,230 Dr

REQUIRED:
a) Set up the ledger bank account and post the unadjusted cash journal totals to the
account. Record the necessary adjustments up to the 30 September and balance the
account.
b) Prepare a bank reconciliation statement at 30 September 2011 to reconcile the
adjusted ledger cash at bank balance with the bank statement balance.

ACACC101A Accounting Foundations I

QUESTION 2 Accounting systems

The International Company presents the following information:

ACCOUNTS PAYABLE BALANCES at 1 November 2011.

$
S. Singapore 1,000
M. Malaysia 4,200
I. Indonesia 500
H. Hong Kong 6,400
$12,100

PURCHASES JOURNAL
Date Inv Account Purchases GST Accounts
Outlays Payable
2011 $ $ $
Nov 3 1442 Malaysia 1,190 119 1,309
Nov 4 12AA Singapore 580 58 638
16019 Hong Kong 2,000 200 2,200
Nov 7 1A57 K Korea 110 11 121
Nov 13 943 Malaysia 2,230 223 2,453
Nov 15 1760 Indonesia 60 6 66
$6,170 $617 $6,787

CASH PAYMENTS JOURNAL

Date Cheq Account Accounts Purchases Other GST Disc GST Bank
No. Payable Outlays Rev Outlays
2011 $ $ $ $ $ $ $
Nov 6 955 Purchases 430 43 473
7 956 Singapore 1,000 30 3 967
957 Indonesia 500 500
9 958 Electricity 90 9 99
13 959 Wages 1,220 1,220
960 Malaysia 4,200 40 4 4,156
19 961 Hong Kong 6,400 6,400
25 962 Purchases 180 18 198
30 963 Stationery 750 75 825
$12,100 $610 $2,060 $145 $70 $7 $14,838

GENERAL JOURNAL
Date Account Debit Credit
2011 $ $
Nov 9 Accounts payable control (Singapore) 35
Purchases returns 35

ACACC101A Accounting Foundations I

REQUIRED:

a) Post the relevant information from the journals to the general ledger accounts payable
control account. Balance the account. (Do not post to the other general ledger
accounts).
b) Set up the accounts payable subsidiary ledger accounts. Post from the journals to the
accounts payable subsidiary ledger and balance the accounts.
c) Reconcile the subsidiary ledger to the accounts payable control account by means of a
schedule of creditors balances as at 30 November 2011.

QUESTION 3 Accounting for Retailing

The following selected information is available for Thurston Wholesale Ltd for March 2013

Account $
Purchases 84 000
Sales 155 000
Freight Inwards 1 800
Discount Received 1 400
Beginning Inventory, 1 March 2013 60 000
Ending Inventory, 31 march 2013 36 400
Purchases returns and allowances 1 200
Sales Returns and Allowances 3 000
Freight Outwards 620
Rent Expense 1 500
Sales salaries expense 12 800
Discount Allowed 3 200
Depreciation expense office expense 120
Offices supplies expense 360
Office salaries expense 11 600
Advertising expense 2 200
Insurance expense 280

Required
A. Prepare the detailed income statement for Thurston Wholesale Ltd for the month ended 31
March 2013.
B. Calculate the ratio of gross profit to net sales and express as a percentage.
C. Calculate the ratio of profit to net sales and express as a percentage.
D. What might these ratios indicate?

ACACC101A Accounting Foundations I

QUESTION 4 Closing entries

Daniella Floss operates a dental surgery in the suburbs, and the trial balance shown below summarises
the years activities

Daniella Floss, Dentist

Unadjusted Trial Balance
As at 30 June 2013 Debits Credits
Cash at Bank 7 000
Fees revenue 610 000
Accounts Receivable 51 000
Equipment 300 000
Accumulated depreciation equipment 95 000
Dental Supplies 160 000
Office Supplies 8 000
Daniella Floss Capital 190 000
Daniella Floss Drawings 140 000
Accounts Payable 20 000
Wages expense nurse 100 000
Rent expense 50 000
Office expenses 29 000
General expenses 70 000
Total 915 000 915 000

The following additional information should be considered:

1. Inventory of dental supplies on hand at 30 June is $14 000

2. $3 000 office supplies are on hand at 30 June
3. Depreciation on equipment is $45,000
4. Rent of $4 500 has been paid in advance and has been debited to rent expense
5. Wages earned by the nurse but unpaid was $1 500

Required:
A. Journalise the adjusting entries.
B. Journalise the closing entries.

Theory Questions - Answers to be entered in Answer Booklet

QUESTION 5 Completing the accounting cycle

Explain the difference between the payment of cash dividends by a company and the
withdrawal of cash by a sole trader. What is the effect of each on:
a) Assets
b) Equity
c) Profit?

ACACC101A Accounting Foundations I

QUESTION 6 Cash Management and Control

A manager of a small online business believes that now most of their transactions take place
using electronic transfer of funds rather than cash or cheques they no longer need to do a
bank reconciliation each month as almost all funds transfers are electronic anyway and go
straight through the bank account. Explain to the manager why a bank reconciliation is still
necessary for their business.

QUESTION 7 Recording Transactions

Why are journals required as part of the recording process? Would not a set of ledger accounts be
sufficient? Discuss.

QUESTION 8 Controls

Multiple Choice
1. Which of these does not represent proper internal control of cash receipts?
a. Daily banking of receipts
b. Two people opening the mail
c. Paying accounts directly out of the cash register
d. Balancing the cash register after each employees' shift

2. How many of these are features of good internal control of cash payments?
1. separation of record-keeping and the authority to sign cheques
2. the use of pre-numbered cheques
3. preparing regular bank reconciliation statements
4. one person having responsibility for all aspects of a cash payment
a. One
b. Two
c. Three
d. Four

3. Internal control is defined to include which of the following?

a. Preparation of accounting reports
b. Measures to encourage compliance with business policies
c. Use of the double entry accounting system
d. The elimination of cash deficiencies

4. The assignment of tasks so that the work of one employee acts as a check on the work
of another is known as:
a. Division of responsibility
b. Safekeeping
c. Administrative control
d. Collusion

5. The statement about control accounts that is not correct is:

a. They provide summarised data
b. They follow the normal rules of debit and credit
c. They appear in the subsidiary ledger
d. They appear in the trial balance

ACACC101A Accounting Foundations I