Cambridge A Level Accounting 9706 — 2014 May/June Paper 1 · Variant 2
9706/12/M/J/14 · 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 · Hedley has 100 items of inventory in his warehouse and five more with a customer on a…
1 Hedley has 100 items of inventory in his warehouse and five more with a customer on a sale or return basis. He provides the following information. $ per unit historic cost paid 60 selling price 85 current replacement cost 65 Which value should appear in the statement of financial position for inventory? A $6000 B $6300 C $6825 D $8500
Mark scheme: B
Q2 · When preparing a sole trader’s annual accounts, no adjustment was made for a prepayment…
2 When preparing a sole trader’s annual accounts, no adjustment was made for a prepayment at the end of the year. What is the effect of this omission? A current assets overstated owner’s capital overstated B current assets understated owner’s capital understated C profit for the year overstated trade payables understated D profit for the year understated trade payables understated
Mark scheme: B
Q3 · Which statement is correct?
3 Which statement is correct? A The balance on the bad debts recovered account is carried down to the next accounting period. B The balance on the bad debts recovered account is credited to the income statement. C The balance on the provision for doubtful debts account is calculated before the deduction of bad debts. D The balance on the provision for doubtful debts account is not included in a trial balance.
Mark scheme: B
Q4 · A trader took out a 6% bank loan of $30 000 on 1 November 2013, to be repaid in full in…
4 A trader took out a 6% bank loan of $30 000 on 1 November 2013, to be repaid in full in 10 years’ time. Interest is to be paid annually. No interest had been paid by 30 April 2014. How should this be recorded in the statement of financial position at 30 April 2014? current liabilities non-current liabilities $ $ A 0 30 000 B 900 30 000 C 1 800 30 000 D 30 900 0
Mark scheme: B
Q5 · A non-current asset is depreciated due to passage of time
5 A non-current asset is depreciated due to passage of time. Which type of non-current asset is it? A a computer which has become out of date B a lease with a fixed life in terms of years C a machine which is subject to rust and breakdown D a mine which loses value as coal is extracted
Mark scheme: B
Q6 · On 1 June 2011, a company purchases machinery for $18 000
6 On 1 June 2011, a company purchases machinery for $18 000. The company depreciates machinery at 20% per annum using the reducing balance method. The machinery was sold on 1 June 2013 for $9400. What is the profit / loss on the disposal of the machinery? A loss $1400 B loss $2120 C profit $1400 D profit $2120
Mark scheme: B
Q7 · A trial balance failed to agree
7 A trial balance failed to agree. A suspense account was opened. The following errors were then discovered. 1 The sales returns journal had been undercast by $850. 2 The purchases journal had been overcast by $975. What was the opening balance on the suspense account before the correction of the errors? A $125 credit B $125 debit C $1825 credit D $1825 debit
Mark scheme: A
Q8 · The bank column of a cash book showed a credit balance of $5000
8 The bank column of a cash book showed a credit balance of $5000. There were unpresented cheques amounting to $1500. The bank statement showed bank charges of $700 not in the cash book. What is the balance on the bank statement? A $3300 debit B $4200 debit C $4200 credit D $5800 credit
Mark scheme: B
Q9 · What would cause a trial balance not to balance?
9 What would cause a trial balance not to balance? A a casting error in the cash account B a transposition error in extracting the trial balance C discounts allowed posted to discounts received account D misposting of an invoice to a creditor’s account
Mark scheme: C
Q10 · X buys from and sells goods to Y
10 X buys from and sells goods to Y. At the end of the month, X owes Y $3200 and Y owes X $1941. Which double entry records the contra entry in X’s books? Dr Cr $ $ A purchases ledger control account 1259 sales ledger control account 1259 B purchases ledger control account 1941 sales ledger control account 1941 C sales ledger control account 1259 purchases ledger control account 1259 D sales ledger control account 1941 purchases ledger control account 1941
Mark scheme: B
Q11 · A business provides the following information
11 A business provides the following information. $ revenue 140 000 opening inventory 22 000 closing inventory 24 500 purchases 120 000 Goods are sold at cost plus 25%. The owner has taken goods for own use but has not recorded these as drawings. What is the value of the goods taken for own use? A $5500 B $10 500 C $12 500 D $17 500
Mark scheme: A
Q12 · For the eleven months ended 31 August 2013, snack bar takings were correctly recorded at…
12 For the eleven months ended 31 August 2013, snack bar takings were correctly recorded at $109 340. For September 2013, the snack bar takings were mixed up with other income. The snack bar profit margin was 30%. The table shows figures for the snack bar for September 2013. $ opening inventory at cost 6303 purchases 8844 closing inventory at cost 7370 What was the gross profit of the snack bar for the year ended 30 September 2013? A $27 566 B $36 135 C $36 593 D $43 912
Mark scheme: B
Q13 · A sole trader runs a retail store
13 A sole trader runs a retail store. Which department is most likely to close? A the one with a negative contribution B the one with a negative profit C the one with a positive contribution D the one with a positive profit
Mark scheme: A
Q14 · A business owner suspects a loss of cash has occurred
14 A business owner suspects a loss of cash has occurred. He provides the data shown. $ cash balance at the start of the month 150 cash balance at the end of the month 100 cash banked 10 200 cash sales for the month 10 500 How much cash has been lost? A $200 B $250 C $300 D $350
Mark scheme: D
Q15 · Which items would appear in a partnership’s appropriation account, in the absence of a…
15 Which items would appear in a partnership’s appropriation account, in the absence of a partnership agreement? 1 profit for the year 2 partners’ interest on drawings 3 partners’ salaries 4 partners’ share of profits A 1 and 2 B 1 and 4 C 2 and 3 D 3 and 4
Mark scheme: B
Q16 · A partnership makes a profit for the year of $108 000 before taking account of…
16 A partnership makes a profit for the year of $108 000 before taking account of appropriations. Other financial information is as follows. X Y Z salary – – $10 000 capital balance $50 000 $40 000 $10 000 profit sharing ratio 5 3 2 Interest on capital is allowed at 8% per annum. What is Z’s share of the profit for the year? A $18 000 B $18 800 C $28 000 D $28 800
Mark scheme: D
Q17 · A business has settled a legal dispute with a customer and expects to pay him $10 000…
17 A business has settled a legal dispute with a customer and expects to pay him $10 000 before the end of the next financial year. Which heading is this amount included under in the company’s statement of financial position for this financial year? A capital and reserves B current liabilities C non-current assets D non-current liabilities
Mark scheme: B
Q18 · Simon provides the following information about his costs for the year
18 Simon provides the following information about his costs for the year. $ raw materials 16 100 factory depreciation 2 400 production labour 18 000 factory supervisor 8 500 factory heating 1 100 carriage in 1 500 rent 12 000 administration costs 11 500 Half of the rent relates to the factory and half to the offices. What is the total of indirect manufacturing costs? A $18 000 B $19 500 C $35 500 D $35 600
Mark scheme: A
Q19 · A shareholder sells some shares for less than he paid for them
19 A shareholder sells some shares for less than he paid for them. What happens to the share capital of the company? A decreases by the nominal value of the shares sold B decreases by the sales proceeds of the shares sold C increases by the amount received from the sale of the shares D remains the same as before
Mark scheme: D
Q20 · Which shares are entitled to have arrears of dividend carried forward to future years?
20 Which shares are entitled to have arrears of dividend carried forward to future years? A cumulative preference shares B non-cumulative preference shares C ordinary shares D redeemable shares
Mark scheme: A
Q21 · A company issues shares at a premium
21 A company issues shares at a premium. Which effect does the issue have on the company’s statement of financial position? net assets share capital A decrease decrease B decrease no effect C increase increase D increase no effect
Mark scheme: C
Q22 · A company’s financial statements include the following
22 A company’s financial statements include the following. $ profit before interest 200 000 profit for the year 140 000 issued share capital 500 000 reserves 160 000 non-current liabilities 380 000 What is the return on capital employed? A 19.2% B 21.2% C 30.3% D 40.0%
Mark scheme: A
More questions on Analysis and communication of accounting information
Q23 · A business sells a single product
23 A business sells a single product. This year the gross profit margin and net profit margin were both lower than last year. What is the reason for this change? A decrease in carriage out B decrease in sales returns C increase in carriage in D increase in purchases returns
Mark scheme: C
More questions on Analysis and communication of accounting information
Q24 · The following information is given about four products
24 The following information is given about four products. Which product makes the most gross profit? inventory turnover average inventory mark up on cost (per annum) in units % A 8 times 1000 15 B 6 times 1000 30 C 7 times 1000 25 D 10 times 1000 20
Mark scheme: D
More questions on Analysis and communication of accounting information
Q25 · A company’s non-current asset turnover figure rises from 3.4 times in Year 1 to 4 times…
25 A company’s non-current asset turnover figure rises from 3.4 times in Year 1 to 4 times in Year 2. Sales revenue has been constant. What explains the change? A The cost of repairs to non-current assets had decreased. B The cost of repairs to non-current assets had increased. C The depreciation charge for the year was higher than the cost of non-current assets purchased. D The depreciation charge for the year was lower than the cost of non-current assets purchased.
Mark scheme: C
More questions on Analysis and communication of accounting information
Q26 · Gordon sells goods on credit to Sybil
26 Gordon sells goods on credit to Sybil. Which information from Sybil’s financial statements is of greatest interest to him? A current ratio B gross profit margin C mark up D return on capital employed
Mark scheme: A
More questions on Analysis and communication of accounting information
Q27 · A company uses absorption costing and makes and sells one product
27 A company uses absorption costing and makes and sells one product. In the last month budgeted overheads totalled $60 000. Budgeted production was 15 000 units and budgeted sales were 14 000 units. The company now decides to apply marginal costing principles for last month. Which effect will this have on profits? A $3500 decrease B $3500 increase C $4000 decrease D $4000 increase
Mark scheme: C
Q28 · A business has the following total overheads for two different output levels
28 A business has the following total overheads for two different output levels. total overheads output $ (units) 200 000 20 000 216 000 30 000 What is the total fixed overheads cost? A $16 000 B $48 000 C $168 000 D $216 000
Mark scheme: C
Q29 · The data relates to the production of three products
29 The data relates to the production of three products. product X product Y product Z $ $ $ contribution per unit 160 175 190 fixed overhead per unit 125 130 160 labour hours per unit 1 1.25 0.75 The company is experiencing a shortage of labour. In which order should the products be ranked to maximise profit? 1 2 3 A X Y Z B Y X Z C Z X Y D Z Y X
Mark scheme: C
Q30 · Sybil owns a vehicle which on 1 August 2014 will be shown at a cost of $10 000 with…
30 Sybil owns a vehicle which on 1 August 2014 will be shown at a cost of $10 000 with accumulated depreciation of $6000. On that date she expects to trade it in against a new vehicle with a cost of $15 000, receiving a trade-in allowance of $3500. Which figure will appear in Sybil’s cash budget for August 2014? A $5000 B $11 000 C $11 500 D $15 000
Mark scheme: C
What was in this paper
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What you needed in this session
Cambridge’s own grade thresholds for 2014 May/June, Paper 1 · Variant 2. A higher threshold means an easier paper — the bar moves with how the cohort did.