Cambridge A Level Accounting 9706 — 2015 Oct/Nov Paper 1 · Variant 1
9706/11/O/N/15 · 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 business receives a $50 000 deposit from a customer for a product which is to be…
1 A business receives a $50 000 deposit from a customer for a product which is to be delivered after the end of the financial year. How should this be shown in the statement of financial position at the year end? A current assets B current liabilities C non-current assets D non-current liabilities
Mark scheme: B
Q2 · Derek places advertisements in monthly magazines
2 Derek places advertisements in monthly magazines. In September 2014 Derek paid $900 for advertisements to appear in the October 2014 to March 2015 editions of one magazine. In December 2014 he paid a further $880 for advertisements to appear in the January 2015 to April 2015 editions of another magazine. Which amount was shown for advertisements under other receivables in Derek’s statement of financial position at 31 January 2015? A $520 B $820 C $960 D $1260
Mark scheme: C
Q3 · A business prepared its draft financial statements
3 A business prepared its draft financial statements. It was later discovered that an adjustment for prepaid rent was required. What is the effect of this adjustment? expenses current assets A decrease decrease B decrease increase C increase decrease D increase increase
Mark scheme: B
Q4 · A trader purchased fixtures and fittings on credit from a supplier
4 A trader purchased fixtures and fittings on credit from a supplier. These were faulty and were returned to the supplier. Which entry in the trader’s books of account recorded the return? account to debit account to credit A fixtures and fittings supplier B purchases returns fixtures and fittings C supplier fixtures and fittings D supplier purchases returns
Mark scheme: C
Q5 · A business had a draft loss for the year of $4650
5 A business had a draft loss for the year of $4650. Further adjustments were required. 1 a write off of $165 for bad debts 2 a reduction of $300 in the provision for doubtful debts What was the loss for the year after these adjustments? A $4185 B $4515 C $4785 D $5115
Mark scheme: B
Q6 · Which entries are made to transfer cash discount obtained from suppliers to the financial…
6 Which entries are made to transfer cash discount obtained from suppliers to the financial statements at the end of the year? debit entry credit entry A trade payables account income statement B discount received account income statement C income statement trade payables account D income statement discount received account
Mark scheme: B
Q7 · A motor vehicle retailer has the following transactions
7 A motor vehicle retailer has the following transactions. 1 issue of shares 2 sale of motor vehicles 3 sale of surplus premises Which transaction(s) are capital income? A 1 only B 1 and 3 C 2 only D 2 and 3
Mark scheme: B
Q8 · Which item appears as a reserve in a statement of financial position?
8 Which item appears as a reserve in a statement of financial position? A bank overdraft B provision for depreciation C provision for doubtful debts D share premium
Mark scheme: D
Q9 · A trader adjusts his financial statements for a prepayment of $15 000 for three months’…
9 A trader adjusts his financial statements for a prepayment of $15 000 for three months’ property rental. Which accounting concept has he applied? A consistency B matching C materiality D prudence
Mark scheme: B
Q10 · What is meant by the historical cost principle?
10 What is meant by the historical cost principle? A Each transaction must have a debit and credit of equal value. B Reported profits are realistic and not overstated. C Similar transactions should be recorded in the same way. D Transactions are recorded at actual cost.
Mark scheme: D
Q11 · A business provides the following information
11 A business provides the following information. $ cash received from customers 200 000 opening trade receivables 40 000 closing trade receivables 30 000 discounts allowed 5 000 provision for doubtful debts 4 000 How much are the credit sales? A $190 000 B $195 000 C $199 000 D $215 000
Mark scheme: B
Q12 · The trial balance of a business does not agree
12 The trial balance of a business does not agree. The difference has been entered in a suspense account. The error was caused by a cheque for $400 from Omar being debited to Omar’s account. Which entries correct this? account debited $ account credited $ A bank 400 suspense 400 B suspense 400 Omar 400 C suspense 800 Omar 800 D suspense 800 bank 800
Mark scheme: C
Q13 · A business has the following balances at the end of its financial period
13 A business has the following balances at the end of its financial period. $ trade receivables 10 620 bad debt not yet written off 260 provision for doubtful debts brought forward 460 What should the business do if it wishes to maintain the bad debt provision at 5% of trade receivables? A Decrease the existing provision by $58. B Increase the existing provision by $58. C Decrease the existing provision by $71. D Increase the existing provision by $71.
Mark scheme: B
Q14 · Motor vehicles purchased for $530 000 at the start of the year have been incorrectly…
14 Motor vehicles purchased for $530 000 at the start of the year have been incorrectly depreciated for the whole year at 10% instead of 25%. Ledger balances after the entries have been posted: $ motor vehicles at cost 530 000 provision for depreciation 53 000 Which entries will correct the error? account to be debited $ account to be credited $ A income statement 79 500 provision for depreciation 79 500 of motor vehicles B income statement 132 500 provision for depreciation 132 500 of motor vehicles C provision for depreciation 79 500 income statement 79 500 of motor vehicles D provision for depreciation 132 500 income statement 132 500 of motor vehicles
Mark scheme: A
Q15 · At the year end a company discovers that some inventory is damaged
15 At the year end a company discovers that some inventory is damaged. This inventory originally cost $2000 and to replace it would now cost $1900. It would normally sell for $2400 but can now only be sold for $2200 if repairs costing $400 are undertaken. At what value should the damaged inventory be shown in the financial statements? A $1800 B $1900 C $2000 D $2200
Mark scheme: A
Q16 · Which entries are made to record interest on capital in partnership accounts?
16 Which entries are made to record interest on capital in partnership accounts? debit credit A appropriation account capital account B appropriation account current account C capital account appropriation account D current account appropriation account
Mark scheme: B
Q17 · Two partners, X and Y, have a capital account of $10 000 each and share profits and…
17 Two partners, X and Y, have a capital account of $10 000 each and share profits and losses equally. They agree to admit Z to the partnership and continue to share profits and losses equally. There is no goodwill account in the books. At that time goodwill is valued at $15 000 but is not to be retained in the books of account. What will be the balance on X’s capital account after the admission of Z? A $10 000 B $12 500 C $15 000 D $17 500
Mark scheme: B
Q18 · A manufacturing business incurs the following costs
18 A manufacturing business incurs the following costs. 1 carriage inwards 2 depreciation of plant 3 wages Which item(s) can be shown as either a direct cost or an indirect cost in the manufacturing account? A 1 only B 1 and 2 C 2 and 3 D 3 only
Mark scheme: D
Q19 · A fitness club operates a shop selling sports shoes
19 A fitness club operates a shop selling sports shoes. Which statement is correct? A The inventory of shoes appears in the receipts and payments account. B The payments to suppliers are adjusted for trade payables in the income and expenditure account. C The profit made appears in the trading account and the income and expenditure account. D The sales proceeds and payments to suppliers are netted off in the receipts and payments account.
Mark scheme: C
Q20 · On 1 January a business had an inventory of 100 units at a cost of $10 each
20 On 1 January a business had an inventory of 100 units at a cost of $10 each. The following transactions then took place. units purchased units sold February 50 March 60 at $11 each April 70 at $12 each 100 May 30 All sales are made at $13 per unit. The business values its inventory on a FIFO basis. What is the value of the inventory at the end of May? A $390 B $550 C $600 D $650
Mark scheme: C
Q21 · Information from a partnership’s accounts is shown
21 Information from a partnership’s accounts is shown. $ profit for the year before interest 15 000 interest on partner’s loan to the firm 1 000 interest on capital 2 000 drawings 10 000 Which profit figure is to be appropriated between the partners? A $3000 B $13 000 C $14 000 D $15 000
Mark scheme: C
Q22 · The following information relates to the subscriptions of a club
22 The following information relates to the subscriptions of a club. in advance in arrears $ $ at the start of the year 50 75 at the end of the year 150 120 Cash for subscriptions received during the year was $3750. What was the subscription income for the year? A $3695 B $3750 C $3755 D $3805
Mark scheme: A
Q23 · An asset with accumulated depreciation of $72 400 is sold for $46 500
23 An asset with accumulated depreciation of $72 400 is sold for $46 500. There is a loss on disposal of $23 000. What was the cost of the asset? A $48 900 B $95 900 C $118 900 D $141 900
Mark scheme: D
Q24 · Which item will not be shown as part of the equity in the statement of financial position…
24 Which item will not be shown as part of the equity in the statement of financial position of a limited company? A debentures B ordinary share capital C retained earnings D share premium
Mark scheme: A
Q25 · A decrease in which ratio indicates a better performance for a business?
25 A decrease in which ratio indicates a better performance for a business? A inventory turnover in days B non-current asset turnover C return on capital employed D trade payables turnover
Mark scheme: A
More questions on Analysis and communication of accounting information
Q26 · Which line represents total cost?
26 Which line represents total cost? Z break-even point Y $ M X W O units A OW B OZ C MX D MY
Mark scheme: D
Q27 · A company makes one product with a selling price of $384 per unit
27 A company makes one product with a selling price of $384 per unit. Costs are as follows. per unit direct materials 4 kilos at $8 per kilo direct labour 8 hours at $12 per hour selling and distribution $40 The mark up is 50%. What is the factory overhead absorption rate per labour hour? A $3 B $5 C $11 D $22
Mark scheme: C
Q28 · A business provides the following information for August
28 A business provides the following information for August. $ actual revenue 340 000 break-even revenue 370 000 forecast revenue 365 000 What was its margin of safety in August? A +$25 000 B –$25 000 C +$30 000 D –$30 000
Mark scheme: D
Q29 · A company’s profit for a period using marginal costing was $70 000
29 A company’s profit for a period using marginal costing was $70 000. Opening inventory was 2000 units and closing inventory 2500 units. The fixed production overhead absorption rate is $10 per unit. What was the profit under absorption costing? A $50 000 B $65 000 C $75 000 D $90 000
Mark scheme: C
Q30 · A business sold 10 000 units at $20 each
30 A business sold 10 000 units at $20 each. It had fixed costs of $15 000. Costs per unit of production were as follows. $ direct materials 7 direct labour 5 variable production overhead 3 variable sales overhead 2 What was the contribution? A $15 000 B $30 000 C $35 000 D $50 000
Mark scheme: B
What was in this paper
The subtopics covered by these 30 questions, and how many questions each got. Open one in a new tab to see every Cambridge question on it.
What you needed in this session
Cambridge’s own grade thresholds for 2015 Oct/Nov, Paper 1 · Variant 1. A higher threshold means an easier paper — the bar moves with how the cohort did.