Calculation and understanding of accounting ratios — Paper 1 · IGCSE Accounting 0452

19 AB Stores had the following transactions. 1 The owner invested a further $20 000 capital. 2 $2000 was paid to trade payables. 3 A long-term loan of $5000 was repaid. By how much would the working capital increase after these transactions? A $13 000 B $15 000 C $20 000 D $27 000

1 marks

Answer: B

This question in 0452/12 Feb/March 2020

20 The balances in the books of a business included the following. $ goodwill 10 000 premises 25 000 trade receivables 9 500 trade payables 6 000 inventory 15 000 cash at bank 500 debit long-term loan 5 000 What was the capital employed? A $50 000 B $54 000 C $60 000 D $65 000

1 marks

Answer: B

This question in 0452/12 Feb/March 2020

29 The average inventory of a business was $40 000. The rate of inventory turnover was 5 times a year. Mark-up was 20%. What was the revenue for the year? A $160 000 B $200 000 C $240 000 D $250 000

1 marks

Answer: C

This question in 0452/12 Feb/March 2020

31 Jake had current liabilities of trade payables and had current assets of inventory, trade receivables and cash at bank. Which measure would improve his current ratio? A buying additional inventory and paying in cash B decreasing drawings C revaluing non-current assets D selling inventory on credit rather than for cash

1 marks

Answer: B

This question in 0452/12 Feb/March 2020

29 A trader provided the following information. $ for the year ended 31 March 2020 revenue 250 000 purchases: cash 125 000 credit 115 000 at March 2020 trade payables 9 765 What was the trade payables turnover? A 14 days B 15 days C 29 days D 31 days

1 marks

Answer: D

This question in 0452/11 May/June 2020

30 On 1 January 2019 current assets totalled $16 000 and the current ratio was 2 : 1. On 31 December 2019 the current liabilities had increased by 50% and the current ratio was 1.5 : 1. What was the value of the current assets on 31 December 2019? A $16 000 B $18 000 C $32 000 D $36 000

1 marks

Answer: B

This question in 0452/11 May/June 2020

31 A company provided the following information about its liquid (acid test) ratio. Year 1 1.2 : 1 Year 2 1.4 : 1 Year 3 1.6 : 1 Which would explain the changes in the ratio? A Inventory is increasing. B Other payables are decreasing. C Trade payables are increasing. D Trade receivables are decreasing.

1 marks

Answer: B

This question in 0452/11 May/June 2020

30 Sabelo’s liquid (acid test) ratio was higher on 1 January 2019 than it was on 31 December 2019. What could have caused this? A bank overdraft decreased B inventory decreased C other payables decreased D trade receivables decreased

1 marks

Answer: D

This question in 0452/12 May/June 2020

30 Sabelo’s liquid (acid test) ratio was higher on 1 January 2019 than it was on 31 December 2019. What could have caused this? A bank overdraft decreased B inventory decreased C other payables decreased D trade receivables decreased

1 marks

Answer: D

This question in 0452/13 May/June 2020

27 A trader made the following forecasts for the business for the next financial year. average inventory $80 000 rate of inventory turnover 6 times mark-up 25% What are the forecast sales for the next financial year? A $360 000 B $480 000 C $576 000 D $600 000

1 marks

Answer: D

This question in 0452/11 Oct/Nov 2020

28 Kim’s trade payables turnover increased. What could have caused this? A Kim’s customers took longer to pay their accounts. B Kim’s credit purchases increased. C Kim’s sales revenue increased. D Kim took longer to pay her credit suppliers.

1 marks

Answer: D

This question in 0452/11 Oct/Nov 2020

29 A company provided the following information about its rate of inventory turnover. year 1 24 times year 2 25 times year 3 27 times What would explain the changes in the ratio? A cost of sales is decreasing B inventory is increasing C sales volume is increasing D selling price is increasing

1 marks

Answer: C

This question in 0452/11 Oct/Nov 2020

30 A company provided the following information about its current ratio. year 1 2.3 : 1 year 2 2.4 : 1 year 3 2.5 : 1 What would explain the changes in the ratio? A Inventory is decreasing. B Other payables are increasing. C Other receivables are increasing. D Trade receivables are decreasing.

1 marks

Answer: C

This question in 0452/11 Oct/Nov 2020

31 A trader wants to improve his gross margin. How can this be done? A Reduce administrative expenses. B Reduce depreciation of equipment. C Reduce rate of cash discount allowed. D Reduce rate of trade discount allowed.

1 marks

Answer: D

This question in 0452/11 Oct/Nov 2020

27 A trader made the following forecasts for the business for the next financial year. average inventory $80 000 rate of inventory turnover 6 times mark-up 25% What are the forecast sales for the next financial year? A $360 000 B $480 000 C $576 000 D $600 000

1 marks

Answer: D

This question in 0452/12 Oct/Nov 2020

28 A company provided the following information about its current ratio. year 1 2.3 : 1 year 2 2.4 : 1 year 3 2.5 : 1 What would explain the changes in the ratio? A Inventory is decreasing. B Other payables are increasing. C Other receivables are increasing. D Trade receivables are decreasing.

1 marks

Answer: C

This question in 0452/12 Oct/Nov 2020

29 A trader wants to improve his gross margin. How can this be done? A Reduce administrative expenses. B Reduce depreciation of equipment. C Reduce rate of cash discount allowed. D Reduce rate of trade discount allowed.

1 marks

Answer: D

This question in 0452/12 Oct/Nov 2020

30 Meesha provided the following information for her first year of trading. $ sales (1000 units at $10 each) 10 000 cost of sales (1000 units at $4.50 each) 4 500 gross profit 5 500 In her second year of trading, Meesha reduced the selling price and sold 1500 units. Her gross profit decreased by $250. There was no change in the cost per unit. What was the total value of sales in the second year of trading? A $9750 B $10 250 C $12 000 D $12 500

1 marks

Answer: C

This question in 0452/12 Oct/Nov 2020

31 AB Limited and CD Limited both started business on 1 January 2019 with an ordinary share capital of $100 000. Neither company had any debentures or loans. Both companies had the same profit in 2019. Only AB Limited paid a dividend. The return on capital employed (ROCE) was calculated using closing capital employed. Which statement about AB Limited’s ROCE is correct when compared to that of CD Limited? A It is higher because the dividend reduced retained earnings. B It is lower because the dividend reduced capital employed. C It is lower because the dividend reduced the profit for the year. D It is the same as that of CD Limited.

1 marks

Answer: A

This question in 0452/12 Oct/Nov 2020

27 A trader made the following forecasts for the business for the next financial year. average inventory $80 000 rate of inventory turnover 6 times mark-up 25% What are the forecast sales for the next financial year? A $360 000 B $480 000 C $576 000 D $600 000

1 marks

Answer: D

This question in 0452/13 Oct/Nov 2020

28 Kim’s trade payables turnover increased. What could have caused this? A Kim’s customers took longer to pay their accounts. B Kim’s credit purchases increased. C Kim’s sales revenue increased. D Kim took longer to pay her credit suppliers.

1 marks

Answer: D

This question in 0452/13 Oct/Nov 2020

29 A company provided the following information about its rate of inventory turnover. year 1 24 times year 2 25 times year 3 27 times What would explain the changes in the ratio? A cost of sales is decreasing B inventory is increasing C sales volume is increasing D selling price is increasing

1 marks

Answer: C

This question in 0452/13 Oct/Nov 2020

30 A company provided the following information about its current ratio. year 1 2.3 : 1 year 2 2.4 : 1 year 3 2.5 : 1 What would explain the changes in the ratio? A Inventory is decreasing. B Other payables are increasing. C Other receivables are increasing. D Trade receivables are decreasing.

1 marks

Answer: C

This question in 0452/13 Oct/Nov 2020

31 A trader wants to improve his gross margin. How can this be done? A Reduce administrative expenses. B Reduce depreciation of equipment. C Reduce rate of cash discount allowed. D Reduce rate of trade discount allowed.

1 marks

Answer: D

This question in 0452/13 Oct/Nov 2020

30 A trader provided the following information. $ non-current assets 132 000 current assets 28 000 current liabilities 12 000 interest paid on loan 2 000 Return on capital employed was 12.5%. What was the profit for the year before loan interest? A $16 500 B $18 250 C $18 500 D $20 500

1 marks

Answer: C

This question in 0452/12 Feb/March 2021

31 Which change would cause an increase in the liquid (acid test) ratio? A a decrease in inventory B an increase in inventory C a decrease in the provision for doubtful debts D an increase in the provision for doubtful debts

1 marks

Answer: C

This question in 0452/12 Feb/March 2021

32 Abhinav provided the following information. year ended year ended 31 December 2019 31 December 2020 $ $ purchases 112 500 124 000 cost of sales 115 500 120 000 inventory $ 1 January 2019 7000 31 December 2019 4000 31 December 2020 8000 What was the rate of turnover of inventory for the year ended 31 December 2020? A 15 times B 20 times C 21 times D 30 times

1 marks

Answer: B

This question in 0452/12 Feb/March 2021

20 What is added to owner’s capital to calculate capital employed? A current assets B current liabilities C non-current assets D non-current liabilities

1 marks

Answer: D

This question in 0452/11 May/June 2021

28 A trader provided the following information. $ revenue 120 000 inventory at the start of the year 9 600 inventory at the end of the year 10 200 A mark-up of 25% is applied. What were the purchases for the year? A $89 400 B $90 600 C $95 400 D $96 600

1 marks

Answer: D

This question in 0452/11 May/June 2021

29 George provided the following information. $ non-current assets 15 000 inventory 12 000 trade receivables 18 000 trade payables 8 000 His liquid (acid test) ratio was 1.2 : 1. What was his bank overdraft? A $7000 B $15 000 C $17 000 D $29 500

1 marks

Answer: A

This question in 0452/11 May/June 2021

30 A trader provided the following information. $ $ revenue 3600 opening inventory 100 purchases 2600 2700 closing inventory 300 2400 gross profit 1200 It was found that the closing inventory should have been $400. What was the correct rate of inventory turnover? A 6 times B 8 times C 9.2 times D 14.4 times

1 marks

Answer: C

This question in 0452/11 May/June 2021

31 The current ratio of X is 2 : 1. The current ratio of Y is 1.3 : 1. What does a comparison of these ratios show? A X has fewer liabilities than Y. B X has more liquidity than Y. C Y has fewer current assets than X. D Y has more inventory than X.

1 marks

Answer: B

This question in 0452/11 May/June 2021

24 What is added to owner’s capital to calculate capital employed? A current assets B current liabilities C non-current assets D non-current liabilities

1 marks

Answer: D

This question in 0452/12 May/June 2021

30 A trader provided the following information. $ cost of sales 80 000 expenses 4 000 profit for the year 16 000 What was the profit margin? A 16% B 20% C 21.05% D 26.67%

1 marks

Answer: A

This question in 0452/12 May/June 2021

31 A trader provided the following information. $ $ revenue 3600 opening inventory 100 purchases 2600 2700 closing inventory 300 2400 gross profit 1200 It was found that the closing inventory should have been $400. What was the correct rate of inventory turnover? A 6 times B 8 times C 9.2 times D 14.4 times

1 marks

Answer: C

This question in 0452/12 May/June 2021

32 Sally’s business has reached the overdraft limit set by the bank of $1500 and is not able to pay its debts when they fall due. Sally is considering the following proposals. 1 asking the bank to increase the bank overdraft limit to $2000 2 borrowing $2000 from a relative and paying the money back in six months 3 obtaining a loan from the bank of $2000 repayable in two years 4 paying $2000 from Sally’s personal bank account into the business bank account Which proposals will improve the working capital of the business? A 1 and 2 B 1 and 4 C 2 and 3 D 3 and 4

1 marks

Answer: D

This question in 0452/12 May/June 2021

34 The current ratio of X is 2 : 1. The current ratio of Y is 1.3 : 1. What does a comparison of these ratios show? A X has fewer liabilities than Y. B X has more liquidity than Y. C Y has fewer current assets than X. D Y has more inventory than X.

1 marks

Answer: B

This question in 0452/12 May/June 2021

24 What is added to owner’s capital to calculate capital employed? A current assets B current liabilities C non-current assets D non-current liabilities

1 marks

Answer: D

This question in 0452/13 May/June 2021

30 A trader provided the following information. $ cost of sales 80 000 expenses 4 000 profit for the year 16 000 What was the profit margin? A 16% B 20% C 21.05% D 26.67%

1 marks

Answer: A

This question in 0452/13 May/June 2021

31 A trader provided the following information. $ $ revenue 3600 opening inventory 100 purchases 2600 2700 closing inventory 300 2400 gross profit 1200 It was found that the closing inventory should have been $400. What was the correct rate of inventory turnover? A 6 times B 8 times C 9.2 times D 14.4 times

1 marks

Answer: C

This question in 0452/13 May/June 2021

33 Company X and Company Y provided the following information. Company X Company Y gross margin 36.7% 42.6% profit margin 5.4% 5.4% Which statement is correct? A Both companies earned the same amount of profit for the year. B Company X had a better gross margin than Company Y. C Company Y had a larger proportion of expenses than Company X. D The cost of sales of Company X was lower than that of Company Y.

1 marks

Answer: C

This question in 0452/13 May/June 2021

34 The current ratio of X is 2 : 1. The current ratio of Y is 1.3 : 1. What does a comparison of these ratios show? A X has fewer liabilities than Y. B X has more liquidity than Y. C Y has fewer current assets than X. D Y has more inventory than X.

1 marks

Answer: B

This question in 0452/13 May/June 2021

21 BCD Limited provided the following information. $ ordinary shares 300 000 retained earnings 200 000 debentures 170 000 How much was the equity and the capital employed? equity capital employed $ $ A 300 000 470 000 B 300 000 670 000 C 500 000 470 000 D 500 000 670 000

1 marks

Answer: D

This question in 0452/11 Oct/Nov 2021

29 Which information is required to calculate the return on capital employed for a sole trader? A gross profit, non-current liabilities, owner’s capital B gross profit, non-current liabilities, working capital C operating profit for the year, non-current liabilities, owner’s capital D operating profit for the year, non-current liabilities, working capital

1 marks

Answer: C

This question in 0452/11 Oct/Nov 2021

30 What is the best indicator of the liquidity of a business? A current ratio B liquid (acid test) ratio C return on capital employed D working capital

1 marks

Answer: B

This question in 0452/11 Oct/Nov 2021

31 A trader provided the following information for the year ended 31 May 2021. $ trade payables on 1 June 2020 12 250 trade payables on 31 May 2021 42 000 credit purchases for the year 319 375 What was the trade payables turnover (days) for the year ended 31 May 2021? A 31 days B 34 days C 48 days D 62 days

1 marks

Answer: C

This question in 0452/11 Oct/Nov 2021

32 A business provided the following information about its gross margin. Year 1 40% Year 2 38% Year 3 35% What could explain the changes in the gross margin? A Cost of sales is decreasing. B Expenses are decreasing. C Quantity of goods sold is decreasing. D Selling price is decreasing.

1 marks

Answer: D

This question in 0452/11 Oct/Nov 2021

28 Roshan’s sales for his first year of trading were $55 000. His gross profit margin was 20%. The closing inventory was $3200. What were the purchases for the year? A $41 250 B $44 000 C $44 450 D $47 200

1 marks

Answer: D

This question in 0452/12 Oct/Nov 2021

29 Which information is required to calculate the return on capital employed for a sole trader? A gross profit, non-current liabilities, owner’s capital B gross profit, non-current liabilities, working capital C operating profit for the year, non-current liabilities, owner’s capital D operating profit for the year, non-current liabilities, working capital

1 marks

Answer: C

This question in 0452/12 Oct/Nov 2021

30 What is the best indicator of the liquidity of a business? A current ratio B liquid (acid test) ratio C return on capital employed D working capital

1 marks

Answer: B

This question in 0452/12 Oct/Nov 2021

21 BCD Limited provided the following information. $ ordinary shares 300 000 retained earnings 200 000 debentures 170 000 How much was the equity and the capital employed? equity capital employed $ $ A 300 000 470 000 B 300 000 670 000 C 500 000 470 000 D 500 000 670 000

1 marks

Answer: D

This question in 0452/13 Oct/Nov 2021

29 Which information is required to calculate the return on capital employed for a sole trader? A gross profit, non-current liabilities, owner’s capital B gross profit, non-current liabilities, working capital C operating profit for the year, non-current liabilities, owner’s capital D operating profit for the year, non-current liabilities, working capital

1 marks

Answer: C

This question in 0452/13 Oct/Nov 2021

30 What is the best indicator of the liquidity of a business? A current ratio B liquid (acid test) ratio C return on capital employed D working capital

1 marks

Answer: B

This question in 0452/13 Oct/Nov 2021

31 A trader provided the following information for the year ended 31 May 2021. $ trade payables on 1 June 2020 12 250 trade payables on 31 May 2021 42 000 credit purchases for the year 319 375 What was the trade payables turnover (days) for the year ended 31 May 2021? A 31 days B 34 days C 48 days D 62 days

1 marks

Answer: C

This question in 0452/13 Oct/Nov 2021

32 A business provided the following information about its gross margin. Year 1 40% Year 2 38% Year 3 35% What could explain the changes in the gross margin? A Cost of sales is decreasing. B Expenses are decreasing. C Quantity of goods sold is decreasing. D Selling price is decreasing.

1 marks

Answer: D

This question in 0452/13 Oct/Nov 2021

31 Wayne provided the following information. $ $ revenue 12 800 opening inventory 1 000 purchases 10 500 11 500 closing inventory 1 600 9 900 gross profit 2 900 What was Wayne’s gross profit margin? A 22.66% B 25.22% C 27.62% D 29.29%

1 marks

Answer: A

This question in 0452/12 Feb/March 2022

32 A trader provided the following information for the year ended 31 December. $ total cash and credit purchases of goods for re-sale 150 000 cash purchases of goods for re-sale 17 000 credit purchases of non-current assets 25 000 His trade payables at that date were $8000. What was the trade payables turnover? A 17 days B 20 days C 22 days D 24 days

1 marks

Answer: C

This question in 0452/12 Feb/March 2022

34 Azim and Bashir are both sole traders. They provided the following information. Azim Bashir $ $ profit for the year ended 31 December before interest 17 200 15 000 long-term loan at 31 December – 12 500 capital at 31 December 86 000 25 000 What was Azim’s return on capital employed? A double Bashir’s B half of Bashir’s C one-third of Bashir’s D three times Bashir’s

1 marks

Answer: B

This question in 0452/12 Feb/March 2022

30 A business provided the following information. opening inventory $6800 closing inventory $6000 rate of inventory turnover 5 times What were the purchases for the year? A $29 200 B $31 200 C $32 000 D $32 800

1 marks

Answer: B

This question in 0452/11 May/June 2022

31 Jerry started his business on 1 January 2022 with no opening inventory. On 19 April 2022, a fire destroyed all his inventory. Jerry provided the following information for the period 1 January 2022 to 19 April 2022. revenue $30 200 purchases $25 600 gross margin 25% What was the value of inventory destroyed on 19 April 2022? A $1800 B $2950 C $3450 D $5750

1 marks

Answer: B

This question in 0452/11 May/June 2022

32 A trader provided the following information. $ profit for the year 24 000 working capital 20 000 capital 120 000 non-current liability 30 000 What was the return on capital employed? A 14.12% B 16.00% C 17.14% D 20.00%

1 marks

Answer: B

This question in 0452/11 May/June 2022

26 Tahir provided the following information for his first year of trading. $ sales 170 000 sales returns 6 000 purchases 129 000 Tahir’s gross margin was 25%. What was the value of closing inventory? A $1000 B $2200 C $6000 D $7500

1 marks

Answer: C

This question in 0452/12 May/June 2022

27 A business provided the following information. opening inventory $6800 closing inventory $6000 rate of inventory turnover 5 times What were the purchases for the year? A $29 200 B $31 200 C $32 000 D $32 800

1 marks

Answer: B

This question in 0452/12 May/June 2022

28 A trader provided the following information at the end of the financial year. $ revenue 80 000 gross profit 20 000 expenses 12 000 What was the profit margin? A 10% B 15% C 25% D 40%

1 marks

Answer: A

This question in 0452/12 May/June 2022

29 A trader provided the following information. $ profit for the year 24 000 working capital 20 000 capital 120 000 non-current liability 30 000 What was the return on capital employed? A 14.12% B 16.00% C 17.14% D 20.00%

1 marks

Answer: B

This question in 0452/12 May/June 2022

26 Tahir provided the following information for his first year of trading. $ sales 170 000 sales returns 6 000 purchases 129 000 Tahir’s gross margin was 25%. What was the value of closing inventory? A $1000 B $2200 C $6000 D $7500

1 marks

Answer: C

This question in 0452/13 May/June 2022

27 A business provided the following information. opening inventory $6800 closing inventory $6000 rate of inventory turnover 5 times What were the purchases for the year? A $29 200 B $31 200 C $32 000 D $32 800

1 marks

Answer: B

This question in 0452/13 May/June 2022

28 A trader provided the following information at the end of the financial year. $ revenue 80 000 gross profit 20 000 expenses 12 000 What was the profit margin? A 10% B 15% C 25% D 40%

1 marks

Answer: A

This question in 0452/13 May/June 2022

29 A trader provided the following information. $ profit for the year 24 000 working capital 20 000 capital 120 000 non-current liability 30 000 What was the return on capital employed? A 14.12% B 16.00% C 17.14% D 20.00%

1 marks

Answer: B

This question in 0452/13 May/June 2022

32 Maya had annual revenue of $100 000. In year 1, her gross margin was 45% and her profit margin was 5%. In year 2, her gross margin was 40% and her profit margin was 3%. What happened to Maya’s cost of sales and expenses in year 2? cost of sales expenses A decreased decreased B decreased increased C increased decreased D increased increased

1 marks

Answer: C

This question in 0452/13 May/June 2022

31 Thabo provided the following information. revenue $250 000 gross margin 20% rate of inventory turnover 5 times What was the average inventory for the year? A $10 000 B $37 500 C $40 000 D $50 000

1 marks

Answer: C

This question in 0452/11 Oct/Nov 2022

32 How can a trader increase her current ratio? A keep inventory at the lowest possible level B obtain a long-term bank loan C reduce the trade receivables turnover D sell goods for cash instead of on credit

1 marks

Answer: B

This question in 0452/11 Oct/Nov 2022

29 Thabo provided the following information. revenue $250 000 gross margin 20% rate of inventory turnover 5 times What was the average inventory for the year? A $10 000 B $37 500 C $40 000 D $50 000

1 marks

Answer: C

This question in 0452/12 Oct/Nov 2022

30 Naeema provided the following information. $ revenue 28 000 gross profit 11 900 profit for the year 3 500 What was her profit margin? A 12.5% B 29.4% C 30.0% D 42.5%

1 marks

Answer: A

This question in 0452/12 Oct/Nov 2022

31 When calculating the liquid (acid test) ratio, what is compared to the liquid assets? A current liabilities B intangible assets C non-current assets D non-current liabilities

1 marks

Answer: A

This question in 0452/12 Oct/Nov 2022

32 A trader provided the following information. year 1 year 2 gross profit $40 000 $75 000 gross margin 35% 35% profit margin 11% 22% What would explain these changes? A an increase in selling price and a decrease in sales quantity B an increase in selling price and an increase in expenses C an increase in sales quantity and a decrease in selling price D an increase in sales quantity and a decrease in expenses

1 marks

Answer: D

This question in 0452/12 Oct/Nov 2022

31 Thabo provided the following information. revenue $250 000 gross margin 20% rate of inventory turnover 5 times What was the average inventory for the year? A $10 000 B $37 500 C $40 000 D $50 000

1 marks

Answer: C

This question in 0452/13 Oct/Nov 2022

32 A company provided the following list of balances at 30 September 2022. $ cash in hand 150 bank loan – repayable 31 December 2022 2 000 bank loan – repayable 1 May 2024 3 000 bank overdraft 400 trade receivables 8 000 other receivables 275 inventory 24 000 trade payables 6 000 other payables 95 What was the current ratio? A 1 : 1 B 2.83 : 1 C 3.82 : 1 D 4.06 : 1

1 marks

Answer: C

This question in 0452/12 Feb/March 2023

33 Alan provided the following information about his business. liquid (acid test) ratio 2.5 : 1 current liabilities $12 000 inventory $6000 What was the value of his current assets? A $15 000 B $24 000 C $30 000 D $36 000

1 marks

Answer: D

This question in 0452/12 Feb/March 2023

31 A trader provided the following information. credit sales $36 000 cash sales 10% of total sales net profit margin 30% How much is the net profit? A $9720 B $10 800 C $11 880 D $12 000

1 marks

Answer: D

This question in 0452/11 May/June 2023

32 The table shows the gross margin and profit margin for four businesses. Which business controls its overheads most efficiently? gross margin profit margin % % A 40 17 B 37 15 C 35 14 D 30 12

1 marks

Answer: D

This question in 0452/11 May/June 2023

33 Ramiz works as a sales manager in a car showroom. He is paid on the basis of the number of cars sold. Which accounting ratio will be relevant to Ramiz? A gross margin B profit margin C rate of inventory turnover D trade receivables turnover

1 marks

Answer: C

This question in 0452/11 May/June 2023

32 T Limited provided the following information. $ net profit before interest 29 200 profit for the year 28 000 equity at the year-end 192 000 6% debentures 20 000 What was T Limited’s return on capital employed? A 13.21% B 13.77% C 14.58% D 15.21%

1 marks

Answer: B

This question in 0452/12 May/June 2023

33 Sabelo’s liquid (acid test) ratio was higher on 1 January 2022 than it was on 31 December 2022. What could have caused this? A bank overdraft decreased B inventory decreased C other payables decreased D trade receivables decreased

1 marks

Answer: D

This question in 0452/12 May/June 2023

32 T Limited provided the following information. $ net profit before interest 29 200 profit for the year 28 000 equity at the year-end 192 000 6% debentures 20 000 What was T Limited’s return on capital employed? A 13.21% B 13.77% C 14.58% D 15.21%

1 marks

Answer: B

This question in 0452/13 May/June 2023

33 Sabelo’s liquid (acid test) ratio was higher on 1 January 2022 than it was on 31 December 2022. What could have caused this? A bank overdraft decreased B inventory decreased C other payables decreased D trade receivables decreased

1 marks

Answer: D

This question in 0452/13 May/June 2023

34 The following ratios relate to the businesses of Ewa and Max. Ewa Max current ratio 2.2 : 1 2.4 : 1 liquid (acid test) ratio 1.4 : 1 1.0 : 1 An accounting student made the following statements. 1 Ewa can meet her current liabilities from her current assets more easily than Max. 2 Ewa can meet her current liabilities from her liquid assets more easily than Max. 3 Max has insufficient current assets to meet his current liabilities. 4 Max has sufficient liquid assets to meet his current liabilities. Which statements are correct? A 1 and 3 B 1 and 4 C 2 and 3 D 2 and 4

1 marks

Answer: D

This question in 0452/13 May/June 2023

32 Toby’s purchases for the year were $13 000. His closing inventory was $1000 more than his opening inventory. Toby’s gross margin is 20%. What was Toby’s revenue for the year? A $14 400 B $15 000 C $16 800 D $17 500

1 marks

Answer: B

This question in 0452/11 Oct/Nov 2023

34 Jimmy made credit sales of $98 550 in each of the years 2021 and 2022. In 2022, his trade receivables turnover was exactly two days shorter than it had been in 2021. What was the change in his total trade receivables in 2022? A $135 decrease B $135 increase C $540 decrease D $540 increase

1 marks

Answer: C

This question in 0452/11 Oct/Nov 2023

31 A business provided the following information. revenue $20 000 gross margin 25% profit margin 10% There was no other income. How much were expenses? A $2000 B $2250 C $3000 D $5000

1 marks

Answer: C

This question in 0452/12 Oct/Nov 2023

32 A business has the following assets and liabilities. $ inventory 2000 trade receivables 4000 trade payables 1100 bank overdraft 3100 The owner plans to pay some of his own funds into the business bank account to increase the current ratio to 2 : 1. How much does he need to pay into the business bank account to achieve this? A $900 B $1200 C $1900 D $2200

1 marks

Answer: B

This question in 0452/12 Oct/Nov 2023

33 Lynne provided the following information about her trading business. $ for the year ended 31 August 2023 revenue: cash sales 250 000 credit sales 230 000 at 31 August 2023 trade receivables 19 530 other receivables 2 100 What was Lynne’s trade receivables turnover? A 15 days B 17 days C 31 days D 35 days

1 marks

Answer: C

This question in 0452/12 Oct/Nov 2023

32 Toby’s purchases for the year were $13 000. His closing inventory was $1000 more than his opening inventory. Toby’s gross margin is 20%. What was Toby’s revenue for the year? A $14 400 B $15 000 C $16 800 D $17 500

1 marks

Answer: B

This question in 0452/13 Oct/Nov 2023

34 Jimmy made credit sales of $98 550 in each of the years 2021 and 2022. In 2022, his trade receivables turnover was exactly two days shorter than it had been in 2021. What was the change in his total trade receivables in 2022? A $135 decrease B $135 increase C $540 decrease D $540 increase

1 marks

Answer: C

This question in 0452/13 Oct/Nov 2023

32 A trader provided the following information. $ opening inventory 8 000 purchases 108 000 closing inventory 16 000 What was the rate of inventory turnover? A 4.17 times B 4.83 times C 8.33 times D 9.67 times

1 marks

Answer: C

This question in 0452/12 Feb/March 2024

30 A business uses 20% mark up to arrive at its selling prices. During the year it made purchases of $35000 and the inventory decreased from $7000 to $2000. What was the revenue for the year? A $36000 B $40000 C $42000 D $48000

1 marks

Answer: D

This question in 0452/11 May/June 2024

32 A trader provided the following information. $ cash purchases for the year 146000 credit purchases for the year 108000 trade payables at the year end 14000 What was the trader’s trade payables turnover? A 6 days B 13 days C 21 days D 48 days

1 marks

Answer: D

This question in 0452/11 May/June 2024

33 George provided the following information. $ non-current assets 15000 inventory 12000 trade receivables 18000 trade payables 8000 His liquid (acid test) ratio was 1.2:1. What was his bank overdraft? A $7000 B $15000 C $17000 D $29500

1 marks

Answer: A

This question in 0452/11 May/June 2024

34 The following ratios have been calculated for a trader. year 1 year 2 profit margin 15% 20% return on capital employed (ROCE) 9% 6% What explains these changes? A Drawings have increased by more than profit for the year. B Gross profit has increased but profit for the year has decreased. C Profit for the year has increased and capital has been introduced. D Profit for the year has increased and a long-term loan has been repaid.

1 marks

Answer: C

This question in 0452/11 May/June 2024

30 Roshan’s sales for his first year of trading were $55 000. His gross profit margin was 20%. The closing inventory was $3200. What were the purchases for the year? A $41 250 B $44 000 C $44 450 D $47 200

1 marks

Answer: D

This question in 0452/12 May/June 2024

32 Abhinav provided the following information. year ended year ended 31 December 2019 31 December 2020 $ $ purchases 112 500 124 000 cost of sales 115 500 120 000 inventory $ 1 January 2019 7000 31 December 2019 4000 31 December 2020 8000 What was the rate of inventory turnover for the year ended 31 December 2020? A 15 times B 20 times C 21 times D 30 times

1 marks

Answer: B

This question in 0452/12 May/June 2024

33 Miranda’s gross margin fell from 25% in year 1 to 15% in year 2. What may have caused this? A Miranda paid less for her purchases in year 2. B Miranda purchased fewer goods in year 2. C Miranda reduced her selling prices in year 2. D Miranda sold fewer goods in year 2.

1 marks

Answer: C

This question in 0452/12 May/June 2024

30 Roshan’s sales for his first year of trading were $55 000. His gross profit margin was 20%. The closing inventory was $3200. What were the purchases for the year? A $41 250 B $44 000 C $44 450 D $47 200

1 marks

Answer: D

This question in 0452/13 May/June 2024

32 Abhinav provided the following information. year ended year ended 31 December 2019 31 December 2020 $ $ purchases 112 500 124 000 cost of sales 115 500 120 000 inventory $ 1 January 2019 7000 31 December 2019 4000 31 December 2020 8000 What was the rate of inventory turnover for the year ended 31 December 2020? A 15 times B 20 times C 21 times D 30 times

1 marks

Answer: B

This question in 0452/13 May/June 2024

29 The average inventory of a business was $40000. The rate of inventory turnover was 5 times a year. Mark-up was 20%. What was the revenue for the year? A $160000 B $200000 C $240000 D $250000

1 marks

Answer: C

This question in 0452/11 Oct/Nov 2024

31 Wayne provided the following information. $ non-current assets 110000 current assets 25000 current liabilities 15000 profit for the year 23000 What was the return on capital employed? A 15.33% B 19.17% C 23.00% D 32.86%

1 marks

Answer: B

This question in 0452/11 Oct/Nov 2024

32 The trade payables turnover of a business is 36 days. What do these 36 days represent? A the average number of days before the business purchases further goods on credit B the average number of days taken by the business to pay its credit suppliers C the average number of days the business is allowed by credit suppliers to pay for goods D the average number of days the business takes to sell goods purchased on credit

1 marks

Answer: B

This question in 0452/11 Oct/Nov 2024

32 Omar had an increase in his gross profit margin. What could have caused this? A a decrease in the selling price of his goods B an increase in the quantity of goods purchased C a decrease in the purchase price of his goods D an increase in the quantity of goods sold

1 marks

Answer: C

This question in 0452/12 Oct/Nov 2024

29 The average inventory of a business was $40000. The rate of inventory turnover was 5 times a year. Mark-up was 20%. What was the revenue for the year? A $160000 B $200000 C $240000 D $250000

1 marks

Answer: C

This question in 0452/13 Oct/Nov 2024

31 Wayne provided the following information. $ non-current assets 110000 current assets 25000 current liabilities 15000 profit for the year 23000 What was the return on capital employed? A 15.33% B 19.17% C 23.00% D 32.86%

1 marks

Answer: B

This question in 0452/13 Oct/Nov 2024

31 A business provided the following information. $ revenue 100000 gross profit 20000 What was the percentage mark-up? A 20% B 25% C 75% D 80%

1 marks

Answer: B

This question in 0452/12 Feb/March 2025

33 Uzoma provided the following information about her first year of trading. $ sales 46000 gross profit 21850 advertising 2700 other expenses 11350 profit for the year 7800 Uzoma wants to improve her profit in the future and is considering four options. Which option would provide the biggest increase in her profit for the year? A earning commission, which would increase profit for the year by 20% B increasing advertising by $1000, which would increase gross profit by $2500 C increasing the sales price, which would increase gross profit by $2000 D reducing other expenses by $1500 and earning commission of $1000

1 marks

Answer: D

This question in 0452/12 Feb/March 2025

34 Sally’s business has reached its bank overdraft limit of $1500. Sally is considering the following actions. 1 asking the bank to increase the bank overdraft limit to $2000 2 borrowing $2000 from a relative and paying the money back in six months 3 obtaining a loan of $2000 from the bank, repayable in two years 4 paying $2000 from Sally’s personal bank account into the business bank account Which actions will improve the working capital of the business? A 1 and 2 B 1 and 4 C 2 and 3 D 3 and 4

1 marks

Answer: D

This question in 0452/12 Feb/March 2025

30 A trader provided the following information. $ revenue 120000 inventory at the start of the year 9600 inventory at the end of the year 10200 A mark-up of 25% is applied. What were the purchases for the year? A $89400 B $90600 C $95400 D $96600

1 marks

Answer: D

This question in 0452/11 May/June 2025

31 A trader provided the following information for the year ended 31 December. $ total cash and credit purchases of goods for resale 150000 cash purchases of goods for resale 17000 credit purchases of non-current assets 25000 His trade payables at that date were $8000. What was the trade payables turnover? A 17 days B 20 days C 22 days D 24 days

1 marks

Answer: C

This question in 0452/11 May/June 2025

32 The following information is taken from an income statement. $ cost of sales 15000 gross profit 10000 motor expenses 4000 general expenses 1000 What is the profit margin for the year? A 20% B 24% C 36% D 40%

1 marks

Answer: A

This question in 0452/11 May/June 2025

31 The following information is available at the end of Savid’s first year of trading. $ Amount owed by credit customers 9600 Amount owed to credit suppliers 12800 Total sales for the year are $220000, of which cash sales are $24000. What is the trade receivables turnover in days? A 16 days B 18 days C 21 days D 22 days

1 marks

Answer: B

This question in 0452/12 May/June 2025

30 A trader provided the following information. $ revenue 120000 inventory at the start of the year 9600 inventory at the end of the year 10200 A mark-up of 25% is applied. What were the purchases for the year? A $89400 B $90600 C $95400 D $96600

1 marks

Answer: D

This question in 0452/13 May/June 2025

31 A trader provided the following information for the year ended 31 December. $ total cash and credit purchases of goods for resale 150000 cash purchases of goods for resale 17000 credit purchases of non-current assets 25000 His trade payables at that date were $8000. What was the trade payables turnover? A 17 days B 20 days C 22 days D 24 days

1 marks

Answer: C

This question in 0452/13 May/June 2025

32 The following information is taken from an income statement. $ cost of sales 15000 gross profit 10000 motor expenses 4000 general expenses 1000 What is the profit margin for the year? A 20% B 24% C 36% D 40%

1 marks

Answer: A

This question in 0452/13 May/June 2025

32 Jonny provided the following information. $ inventory 3500 cash 100 bank overdraft 1900 trade receivables 2400 trade payables 2100 What was Jonny’s current ratio? A 1.33 : 1 B 1.50 : 1 C 1.58:1 D 1.95:1

1 marks

Answer: B

This question in 0452/12 Oct/Nov 2025

33 Jose runs a business providing accounting and book-keeping services. What is not relevant in analysing his business financial statements? A current ratio B profit margin C rate of inventory turnover D return on capital employed

1 marks

Answer: C

This question in 0452/12 Oct/Nov 2025

34 Jamila’s business sells one type of product only. She provided the following information. year 1 year 2 number of units sold 1000 1000 sales revenue $8000 $10800 rate of inventory turnover 28 days 31 days What happened in year 2? A The sales price decreased, and goods were sold faster. B The sales price decreased, and goods were sold more slowly. C The sales price increased, and goods were sold faster. D The sales price increased, and goods were sold more slowly.

1 marks

Answer: D

This question in 0452/12 Oct/Nov 2025