Cambridge A Level Accounting 9706 — 2022 May/June Paper 1 · Variant 3
9706/13/M/J/22 · 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 scheme3 pages
Answers below. Sit the paper first if you are practising.
Questions as text
Q1 · Mia has agreed to supply goods to a customer on a sale or return basis
1 Mia has agreed to supply goods to a customer on a sale or return basis. At the end of her financial year, the customer has not indicated whether they will keep the goods. Which accounting concept should Mia apply to these items in her financial accounts? A matching B prudence C realisation D substance over form
Mark scheme: C
Q2 · Which item should be treated as capital expenditure?
2 Which item should be treated as capital expenditure? A cost of a printer for an existing computer system B rent paid on a factory, whilst the company negotiated the purchase of the factory C repainting the wooden office door D repair costs to a car which are not covered by insurance
Mark scheme: A
Q3 · A business has a financial year end of 31 December
3 A business has a financial year end of 31 December. It purchased a vehicle on 1 January 2019 for $30 000. The business depreciates vehicles at the rate of 20% per annum using the reducing balance method. Depreciation is charged on a month-by-month basis. The vehicle was sold on 30 September 2021. A profit on disposal of $3000 had been calculated. However, no entries had been made to record the depreciation for 2021. What was the effect of not recording the depreciation for 2021 on the profit on disposal? A $2880 overstated B $3840 overstated C $2880 understated D $3840 understated
Mark scheme: C
Q4 · A trader bought a machine on 1 January 2019
4 A trader bought a machine on 1 January 2019. He depreciated it at the rate of 10% per annum using the straight-line method. He sold this machine on 1 January 2021 for $4000. The profit on disposal was $200. How much had the machine cost on 1 January 2019? A $4560 B $4750 C $5040 D $5250
Mark scheme: B
Q5 · Which item is recorded on the credit side of a sales ledger control account?
5 Which item is recorded on the credit side of a sales ledger control account? A discount received B dishonoured cheques C interest on overdue accounts D set-off of amounts in the purchases ledger
Mark scheme: D
Q6 · The bank column of the cash book showed a credit balance of $2915
6 The bank column of the cash book showed a credit balance of $2915. This did not agree with the balance shown on the bank statement. It was then discovered that: 1 a bank transfer, $150, from a customer was not recorded in the cash book 2 a cheque, $450, received from a customer was not recorded on the bank statement 3 a cheque, $530, issued to a supplier was incorrectly recorded in the cash book as $350 but was correctly recorded by the bank 4 bank charge, $25, was not recorded in the cash book. When these items were adjusted, the cash book balance agreed with the bank statement balance. What was the balance shown on the bank statement before any adjustments were made? A $2520 debit B $2520 credit C $3420 debit D $3420 credit
Mark scheme: C
Q7 · The correction of which error would require an entry in the suspense account?
7 The correction of which error would require an entry in the suspense account? A A sales invoice, $45, was omitted from the sales journal. B Drawings, $60, were debited in the cash book and were credited to the drawings account. C Vehicle repairs, $100, were debited to the vehicles at cost account. D Wages, $150, were correctly recorded in the wages account and debited in the cash book.
Mark scheme: D
Q8 · The amount of the expense for rent and rates recorded in the income statement for the…
8 The amount of the expense for rent and rates recorded in the income statement for the year ended 31 December 2021 was $76 230. The following information was also available. balance brought forward balance carried forward 1 January 2021 31 December 2021 $ $ rent accrued 4000 6500 rates prepaid 770 820 How much was paid from the bank account for rent and rates during the year ended 31 December 2021? A $73 680 B $73 780 C $78 680 D $78 780
Mark scheme: B
Q9 · Which statements regarding the financial statements of a sole trader are correct?
9 Which statements regarding the financial statements of a sole trader are correct? 1 Cash drawings for the year are recorded in the income statement. 2 Gross profit for the year is shown in the statement of financial position. 3 Prepayments only appear in the income statement. 4 Trade receivables appear in the statement of financial position. A 1 and 2 B 2 and 3 C 3 and 4 D 4 only
Mark scheme: D
Q10 · A business provided the following information regarding its first year of trading
10 A business provided the following information regarding its first year of trading. $ credit sales 93 730 receipts from credit customers 76 500 irrecoverable debt written off 150 contra recorded between purchases ledger and sales ledger 80 The net trade receivables recorded in the statement of financial position at the end of the year were $16 660. What was the balance on the provision for doubtful debts account at the end of the year? A $340 B $490 C $500 D $650
Mark scheme: A
Q11 · Which items are recorded in the income statement of a sole trader?
11 Which items are recorded in the income statement of a sole trader? 1 interest payable on bank loan 2 interest on capital 3 transfer to general reserve A 1 and 2 B 1 and 3 C 1 only D 2 and 3
Mark scheme: C
Q12 · A summary of a trader’s bank statements for his first year of trading showed the…
12 A summary of a trader’s bank statements for his first year of trading showed the following amounts. $ receipts from credit customers 25 000 cash sales takings banked 82 000 The trader took $2000 every month from takings as drawings before banking the remaining takings. Trade receivables at the year end amounted to $9500. What was total revenue for the year? A $73 500 B $92 500 C $121 500 D $140 500
Mark scheme: D
Q13 · Jane provided the following information about her business
13 Jane provided the following information about her business. 1 January 2021 31 December 2021 $ $ total assets 108 000 119 000 current liabilities 7 500 11 500 During the year, the business took a long-term loan of $10 000 and Jane’s drawings totalled $12 000. What was Jane’s profit for the year ended 31 December 2021? A $7000 B $9000 C $19 000 D $29 000
Mark scheme: B
Q14 · Which factors may cause a partnership to revalue its tangible non-current assets?
14 Which factors may cause a partnership to revalue its tangible non-current assets? 1 admission of a new partner 2 change in the profit-sharing ratios 3 retirement of a partner A 1 and 2 B 1 and 3 C 1 only D 2 and 3
Mark scheme: B
Q15 · L and M were in partnership sharing profits and losses in the ratio of 2 : 1
15 L and M were in partnership sharing profits and losses in the ratio of 2 : 1. At 31 December 2021, the assets and liabilities of the partnership were as follows. $ non-current assets at net book value 600 000 inventory 50 000 trade receivables 40 000 bank 5 000 debit trade payables 20 000 capital and current account L 350 000 capital and current account M 325 000 The partnership closed on 31 December 2021. At that date the following took place. 1 The non-current assets were sold for $654 000. 2 Inventory was sold for $80 000. 3 All trade receivables were collected and trade payables were settled at their book values. 4 Realisation expenses were $6000. What was L’s share of the profit on realisation? A $50 000 B $52 000 C $56 000 D $60 000
Mark scheme: B
Q16 · X, Y and Z are in partnership sharing profits and losses in the ratio 5 : 2 : 3
16 X, Y and Z are in partnership sharing profits and losses in the ratio 5 : 2 : 3. Y is entitled to a salary of $18 000 per annum. Partners receive interest at 6% per annum on their capital account balances at the beginning of the year. At the beginning of the year, capital account balances were as follows. $ X 30 000 Y 22 000 Z 20 000 The profit for the year before Y’s salary and partners’ interest on capital is $140 000. What is Y’s share of the total profits? A $23 536 B $28 000 C $42 856 D $46 000
Mark scheme: C
Q17 · During the year, a business issued $1 ordinary shares at $1.20 each
17 During the year, a business issued $1 ordinary shares at $1.20 each. The directors proposed a final dividend at the end of the year. Which balances in the statement of changes in equity were affected by these transactions? ordinary share general retained share capital premium reserve earnings A J J B J J Jv Cc J Jv D J Jv
Mark scheme: A
Q18 · The following items were taken from the bank transactions of a company for a period
18 The following items were taken from the bank transactions of a company for a period. $ share issue proceeds 30 000 sale of non-current assets 5 000 dividend paid 9 000 increase in bank loan 6 000 What was the net increase in the company’s bank balance as a result of these? A $28 000 B $32 000 C $38 000 D $40 000
Mark scheme: B
Q19 · On 1 January 2021, W Limited had total revenue reserves of $122 000
19 On 1 January 2021, W Limited had total revenue reserves of $122 000. During the year ended 31 December 2021, the following took place. 1 A dividend of $7500 was paid. 2 An amount of $10 000 was transferred from retained earnings to general reserve. 3 Premises were revalued upwards by $19 800. For the year ended 31 December 2021, W Limited made a profit for the year of $32 000. What was the total of revenue reserves at 31 December 2021? A $136 500 B $141 800 C $146 500 D $156 300
Mark scheme: C
Q20 · What would increase the current ratio of a business?
20 What would increase the current ratio of a business? A buying goods on credit for $2000 and selling immediately for $3000 cash B paying wages of $1000 in cash C purchasing a non-current asset of $10 000 on credit D selling goods of $1000 at cost price on credit
Mark scheme: A
More questions on Analysis and communication of accounting information
Q21 · The following information is available for a business
21 The following information is available for a business. $ sales 36 000 purchases 21 000 inventory at 1 January 2021 3 500 inventory at 31 January 2021 2 800 What is the rate of inventory turnover for January? A 6.67 times B 6.89 times C 7.75 times D 11.43 times
Mark scheme: B
More questions on Analysis and communication of accounting information
Q22 · Which statements about a semi-variable cost are correct?
22 Which statements about a semi-variable cost are correct? 1 Part of the amount always changes for any level of output. 2 Part of the amount changes for a given level of output. 3 The amount always changes for a given level of output. A 1 and 2 B 1 and 3 C 2 and 3 D 2 only
Mark scheme: D
Q23 · A company has a financial year end of 30 November
23 A company has a financial year end of 30 November. It has no opening inventory at the beginning of the financial year. During the year, the following amounts of inventory are purchased. unit cost date quantity $ 30 March 330 40 1 November 288 50 Sales for the period are 500 units at $100 each. Inventory is valued using the average cost (AVCO) method. What is the value of inventory, to the nearest dollar, at the end of the year? A $4720 B $5270 C $5900 D $11 800
Mark scheme: B
Q24 · A business has the following budgeted data for a production of 50 000 units
24 A business has the following budgeted data for a production of 50 000 units. $ direct production cost 300 000 indirect labour 20 000 factory supervisor salaries 60 000 sales staff salaries 70 000 depreciation on machinery for production 80 000 depreciation on motor vehicles for delivery 50 000 administrative expenses 360 000 total costs 940 000 To determine the selling price, the business adds 40% on the cost of production. What would be the total selling price of 500 units? A $4200 B $5600 C $6440 D $7140
Mark scheme: C
Q25 · A trader rents a vehicle for $10 000 which allows him to cover 20 000 miles per financial…
25 A trader rents a vehicle for $10 000 which allows him to cover 20 000 miles per financial year. If this mileage is exceeded, an additional charge of $5000 is made. Which type of cost is this an example of? A fixed B semi-variable C stepped D variable
Mark scheme: C
Q26 · When might a business calculate its contribution to sales ratio rather than contribution…
26 When might a business calculate its contribution to sales ratio rather than contribution per unit? A when the break-even point needs to be expressed in units B when the business produces and sells several different products C when the value of fixed costs is uncertain D when there are limiting factors affecting production
Mark scheme: B
Q27 · The following information is available
27 The following information is available. $ selling price per unit 50 variable manufacturing expense per unit 26 variable selling expense per unit 4 total manufacturing overhead 360 000 total administrative overhead 120 000 What is the break-even point in units? A 15 000 B 18 000 C 20 000 D 24 000
Mark scheme: D
Q28 · K Limited manufactures and sells a single type of product
28 K Limited manufactures and sells a single type of product. The following budgeted information is available in respect of it. selling price $80 per unit variable costs $28 per unit total fixed costs $70 000 production and sales 3500 units How many extra units would the company need to produce and sell to increase the budgeted profit by $26 000? A 325 B 362 C 500 D 813
Mark scheme: C
Q29 · M Limited manufactures and sells two different colours of paint
29 M Limited manufactures and sells two different colours of paint. The following actual information is available for last year. red paint blue paint total $ $ $ revenue 350 000 150 000 500 000 direct materials and labour 180 000 65 000 245 000 allocated fixed overheads 110 000 88 000 198 000 profit / (loss) 60 000 (3 000) 57 000 The company is considering closing the blue paint department and using the extra space to increase revenue in red paint by 20%. Variable costs will increase in the same proportion as the increase in revenue. What would be the change in the total profit if this action is taken? A $3000 increase B $29 000 increase C $51 000 decrease D $85 000 decrease
Mark scheme: C
Q30 · Why might a business prepare budgets?
30 Why might a business prepare budgets? 1 to encourage planning and decision-making 2 to improve coordination between departments 3 to monitor and control costs A 1, 2 and 3 B 1 and 2 only C 1 and 3 only D 2 and 3 only
Mark scheme: A
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