Cambridge A Level Accounting 9706 — 2009 May/June Paper 1 · Variant 1
9706/11/M/J/09 · 30 questions · 30 marks · ≈34 min
The question paper and its mark scheme, free to read here and free to download. This is Cambridge’s own paper, exactly as it was sat.
Question paper12 pages
Mark scheme2 pages
Answers below. Sit the paper first if you are practising.
Questions as text
Q1 · A vehicle cost $30 000
1 A vehicle cost $30 000. The vehicle was later sold for $9000 and the profit on disposal was $1500. What was the accumulated depreciation of the vehicle on disposal? A $7500 B $9000 C $21 000 D $22 500
Mark scheme: D
Q2 · A transport business owned by a sole proprietor purchases a motor vehicle
2 A transport business owned by a sole proprietor purchases a motor vehicle. This is charged to the Motor expenses account. What are the effects of this on the end-of-year balance sheet? A fixed assets understated current assets understated B fixed assets overstated current assets overstated C fixed assets overstated capital account overstated D fixed assets understated capital account understated
Mark scheme: D
Q3 · A business buys a computer for $2200 on 1 January 2007
3 A business buys a computer for $2200 on 1 January 2007. The computer will be used for four years, after which time it will be sold for $280. The business uses the straight-line method of depreciation. What is the depreciation charge for the year ended 31 December 2008? A $480 B $550 C $960 D $1100
Mark scheme: A
Q4 · The following information is taken from the stationery account of a business
4 The following information is taken from the stationery account of a business. $ stock of stationery at beginning of the year 600 cash paid for stationery during the year 7000 amount owing for stationery at end of year 480 stock of stationery at end of year 800 How much should be debited to the profit and loss account for stationery? A $6680 B $6800 C $7280 D $8080
Mark scheme: C
Q5 · Development costs are capitalised
5 Development costs are capitalised. Which accounting principle is being applied? A business entity B historic cost C matching D materiality
Mark scheme: C
Q6 · The table shows information from a business at 30 November 2008
6 The table shows information from a business at 30 November 2008. $ Credit sales invoiced during financial year 80 000 Goods despatched to customers in November 2008 and invoiced in December 2008 5 000 Goods included in sales for November 2008 on a sale or return basis, but only sold in December 2008 – at invoice price 10 000 – at cost price 8 000 Which amount will appear in the trading account as sales for the year ended 30 November 2008? A $75 000 B $77 000 C $83 000 D $85 000
Mark scheme: A
Q7 · In preparing the profit and loss account, only realised profits and not anticipated…
7 In preparing the profit and loss account, only realised profits and not anticipated profits must be brought into account. In addition, all possible losses must also be taken into account. Which accounting principle does this describe? A accruals B consistency C going concern D prudence
Mark scheme: D
Q8 · Entries of $700 in the discount received account had not been entered in the creditors’…
8 Entries of $700 in the discount received account had not been entered in the creditors’ ledger. During the year a machine was sold for $1000. There was only one entry made and it was a credit in the bank account. What is the balance on the suspense account? A $1700 credit B $1700 debit C $2700 credit D $2700 debit
Mark scheme: B
Q9 · The correct balance on the purchases ledger control account is $63 000 but has been…
9 The correct balance on the purchases ledger control account is $63 000 but has been entered in the trial balance as $36 000. The difference on the trial balance has been entered in a suspense account. Which journal entry corrects this error? account to be debited $ account to be credited $ A purchases ledger control account 27 000 suspense account 27 000 B - suspense account 27 000 C suspense account 27 000 - D suspense account 27 000 purchases ledger control account 27 000
Mark scheme: D
Q10 · Who is most likely to use the creditors’ ledger?
10 Who is most likely to use the creditors’ ledger? A cashier B credit controller C creditors D purchases controller
Mark scheme: D
Q11 · A business sells some of its stock for $500 on credit to a customer
11 A business sells some of its stock for $500 on credit to a customer. The stock originally cost $600. What is the effect of this transaction on the balance sheet? current assets owner’s capital A decrease by $100 decrease by $100 B decrease by $100 increase by $100 C increase by $100 decrease by $100 D increase by $100 increase by $100
Mark scheme: A
Q12 · A company’s policy is to depreciate its equipment by 30 % annually using the reducing…
12 A company’s policy is to depreciate its equipment by 30 % annually using the reducing balance method. A piece of equipment which was two years old was sold for $6000 and the profit on sale was $1590. What was the cost price of the equipment? A $7590 B $9000 C $9600 D $11 025
Mark scheme: B
Q13 · Which expense is included in prime cost of manufacturing?
13 Which expense is included in prime cost of manufacturing? A depreciation of machinery B purchase of factory machinery C purchase of raw materials D supervisor’s wages
Mark scheme: C
Q14 · A company manufactured 3000 widgets and transferred them out of its factory at cost plus…
14 A company manufactured 3000 widgets and transferred them out of its factory at cost plus 20 %. per widget $ selling price 25 direct materials 6 direct labour 5 fixed overheads 4 What is the factory cost of goods manufactured as it would appear in the trading account? A $36 000 B $39 600 C $45 000 D $54 000
Mark scheme: D
Q15 · X and Y are partners in a business
15 X and Y are partners in a business. X receives an annual salary of $5000 from the partnership and the balance of profits and losses is shared between X and Y in the ratio of 3 : 2 respectively. In the last financial year, the net profit was $30 000. How much was credited to each partner for the year? X Y $ $ A 10 000 15 000 B 12 000 18 000 C 20 000 10 000 D 21 000 14 000
Mark scheme: C
Q16 · An extract from a company’s trial balance is shown
16 An extract from a company’s trial balance is shown. debit credit $ $ debtors’ control account – debit balances 225 000 debtors’ control account – credit balances 2 800 creditors’ control account – debit balances 3 200 creditors’ control account – credit balances 261 000 investment in another company 12 000 How much should be shown as trade debtors in the company’s financial statements? A $222 200 B $228 200 C $237 400 D $240 200
Mark scheme: B
Q17 · The following items appear in the subscriptions account of a club for a financial year
17 The following items appear in the subscriptions account of a club for a financial year. $ subscriptions received owed from the previous year 3 000 subscriptions paid in advance for next year 1 000 subscriptions income transferred to the income and expenditure account 50 000 subscriptions outstanding at year end 2 000 How much cash was received from members in the year? A $46 000 B $50 000 C $52 000 D $56 000
Mark scheme: C
Q18 · The directors of a company provide the following information
18 The directors of a company provide the following information. $ bank overdraft 1 200 equipment 12 000 long term loan 8 000 petty cash 900 stocks 2 500 trade creditors 3 000 trade debtors 2 000 What is the amount of the net current assets? A $1200 B $2400 C $3600 D $5200
Mark scheme: A
Q19 · A company profit and loss account includes: $000 dividend 300 increase in stock 200…
19 A company profit and loss account includes: $000 dividend 300 increase in stock 200 overheads 400 purchases 800 If the net profit percentage is 20 %, what is the figure for sales? A $1 120 000 B $1 250 000 C $1 625 000 D $1 750 000
Mark scheme: B
More questions on Analysis and communication of accounting information
Q20 · A shareholder sells some ordinary shares for more than he paid for them
20 A shareholder sells some ordinary shares for more than he paid for them. What is the effect on the company balance sheet? ordinary share capital share premium account A decrease decrease B decrease increase C no effect decrease D no effect no effect
Mark scheme: D
Q21 · At the beginning of the year a company has authorised share capital of 800 000 ordinary…
21 At the beginning of the year a company has authorised share capital of 800 000 ordinary shares of $0.25 each and an issued share capital of 400 000 ordinary shares of $0.25. During the year the company makes a further issue of 200 000 ordinary shares at a price of $0.60. What is the balance on the share capital account at the end of the year? A $150 000 B $220 000 C $250 000 D $350 000
Mark scheme: A
Q22 · Assets and liabilities of a business at its year end include the following information
22 Assets and liabilities of a business at its year end include the following information. $ accruals 5 000 bank overdraft 6 800 cash 600 prepayments 4 500 proposed dividend 12 000 stock 51 800 trade creditors 20 100 trade debtors 24 200 What is the current ratio? A 0.67 : 1 B 1.85 : 1 C 2.19 : 1 D 2.54 : 1
Mark scheme: B
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Q23 · Which actions would improve the liquidity (acid test) ratio of a business in the short…
23 Which actions would improve the liquidity (acid test) ratio of a business in the short term? 1 debtors paying their debts 2 delaying paying creditors 3 selling a number of surplus fixed assets 4 selling stock A 1 and 2 B 2 and 3 C 1 and 4 D 3 and 4
Mark scheme: D
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Q24 · A business has a debtor turnover period of 40 days based on year end debtors
24 A business has a debtor turnover period of 40 days based on year end debtors. Annual sales are $180 000 of which 13 % are cash sales. What is the year end debtors figure based on a year of 360 days? A $2600 B $17 400 C $20 000 D $45 200
Mark scheme: B
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Q25 · A company has an issued ordinary share capital of 240 000 ordinary shares of $0.50 each
25 A company has an issued ordinary share capital of 240 000 ordinary shares of $0.50 each. The company pays a total ordinary share dividend of $9600. The current market price of an ordinary share is $3.20. What is the current dividend yield? A 1.25 % B 2 % C 4 % D 8 %
Mark scheme: A
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Q26 · Which name is given to the difference between a company’s actual sales and break-even…
26 Which name is given to the difference between a company’s actual sales and break-even sales? A margin of safety B marginal cost C marginal C-V-P (cost-volume-profit) analysis D marginal revenue
Mark scheme: A
Q27 · What best describes cost of direct materials plus direct labour costs?
27 What best describes cost of direct materials plus direct labour costs? A absorption cost B marginal cost C prime cost D total cost
Mark scheme: C
Q28 · A company has the information shown below
28 A company has the information shown below. $ actual sales for August 320 000 break-even sales for August 400 000 total fixed costs for August 150 000 What is the margin of safety for August? A $80 000 negative B $80 000 positive C $170 000 negative D $250 000 positive
Mark scheme: A
Q29 · A business has fixed costs of $100 000
29 A business has fixed costs of $100 000. It sells a single product for $25 per unit, and its contribution to sales ratio is 40 %. What is the break-even point in units? A 6667 B 10 000 C 40 000 D 250 000
Mark scheme: B
Q30 · The following figures are given for a factory’s overheads and machine hours worked
30 The following figures are given for a factory’s overheads and machine hours worked. overhead machine hours total overhead costs absorption rate budgeted 122 000 $268 400 $2.20 actual 116 000 $261 000 $2.25 What was the under- or over-absorption of overhead for the quarter? A $5800 over-absorbed B $5800 under-absorbed C $7400 over-absorbed D $7400 under-absorbed
Mark scheme: B
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Cambridge’s own grade thresholds for 2009 May/June, Paper 1 · Variant 1. A higher threshold means an easier paper — the bar moves with how the cohort did.