SECTION A

Answer ALL questions.

Some questions must be answered with a cross in a box . If you
change your mind about an answer, put a line through the box and
then mark your new answer with a cross .
[10X1=10]

1. Given the following, what is the amount of Capital? Assets: Premises £20,000; Stock £8,500; Cash
£100. Liabilities: Creditors £3,000; Loan from A Adams £4,000
(A) £21,100
(B) £21,600
(C) £32,400
(D) £21,400

2. Which of the following is correct?

(A) Profit does not alter capital
(B) Profit reduces capital
(C) Capital can only come from profit
(D) Profit increases capital

3. Which of the following best describes the meaning of ‘Purchases’?

(A) Items bought
(B) Goods bought on credit
(C) Goods bought for resale
(D) Goods paid for

4. Which of the following should not be called ‘Sales’?

(A) Office fixtures sold
(B) Goods sold on credit
(C) Goods sold for cash
(D) Sale of item previously included in ‘Purchases’

5. Which of the following best describes a trial balance?

(A) Shows the financial position of a business
(B) It is a special account
(C) Shows all the entries in the books
(D) It is a list of balances on the books

6. Is it true that the trial balance totals should agree?

(A) No, there are sometimes good reasons why they differ
(B) Yes, except where the trial balance is extracted at the year end
(C) Yes, always
(D) No, because it is not a balance sheet
7. Which of the following are incorrect?

(A) (ii) and (iv) only

(B) (iii) and (iv) only
(C) (ii) and (iii) only
(D) (i) and (iii) only

8. Which of the following are correct?

(A) (i) and (ii )

(B) (ii) and (iii )
(C) (i) and (iii )
(D) (i ), (ii) and (iii )

9. Which of the following is a liability?

(A) Machinery
(B) Creditors for goods
(C) Motor Vehicles
(D) Cash at Bank

10. Which of the following statements is correct?

 SECTION B
11.
[10X1=10]

12. Complete the gaps in the following table:

[10X1=10]
13. Enter the following transactions of an antiques shop in the accounts and extract a trial
balance as at 31 March 2017.
[20X1=20]
2017

16. The following balances remained in the books of Aaron Crow, a sole trader, after the
preparation of his trading account for the year ended 30 April 2016.
[15X1=15]
(a) Prepare a trial balance at 30 April 2016 to calculate the capital at that date.

17. On 28 February 2017 the following balances remained in the books of R Hopkins after
the preparation of the trading and profit and loss account for the year.
[15X1=15]
(a) Prepare the Financial Position of R Hopkins as at 28
February 2017.