MJR 4E5N PRE POA P1 2023

Name Register Number Class Calculator Model ANSWER MANJUSRI SECONDARY SCHOOL PRELIMINARY EXAMINATION 2023 Subject: Principles of Accounts Paper: 7087 / 01 Level: Secondary 4 Express / 5 Normal (Academic) Date: 28 August 2023 Duration: 1 hour Setter: Ms Tan Ai Hua Candidates answer on the Question Paper. No Additional Materials are required. READ THESE INSTRUCTIONS FIRST Write your Name, Register Number and Class in the spaces at the top of this page. Write in dark blue or black pen. You may use an HB pencil for any rough working. Do not use staples, paper clips, glue or correction fluid. The use of an approved calculator is allowed. Answer all questions. The businesses described in this question paper are entirely fictitious. The number of marks is given in brackets [ ] at the end of each question or part question. This document consists of 9 printed pages and 3 blank pages. [Turn over For Examiner’s Use Q1 /10 Q2 /9 Q3 /10 Q4 /11 Total /40

2 4E5NA/7087/01/PRE/2023[Turn over Answer all questions. 1 Scott is a sole trader. After preparing the accounts f or the year ended 3 0 June 2023, he discovered the following errors. 1 A payment received, $280, from Jen, a credit customer, had been credited to the sales revenue account. 2 A cheque payment, $39, for office expenses, had been recorded as $93. 3 A cheque payment of $826 to Kai Xiang, a credit supplier, had been incorrectly debited to the account of Kai Yu. 4 A credit note of $250 issued to Ian, a credit customer, for defective goods returned, had been omitted from the books. REQUIRED (a) Complete the following table to calculate the adjusted profit after correcting errors 1 to 4. If there is no effect, place a tick (√) in the “No effect” column. Do not write on the shaded boxes. No effect Increase Decrease $ Profit for the year before correction of errors 26 970 Error 1 280 [1] Error 2 54 [1] Error 3 √ [1] Error 4 250 [1] Adjusted profit for the year 26 494 [1] [5] (b) Explain two reasons why a tr ial balance is prep ared at the end of every f inancial year. 1 ……...…………………………………………………………………………………….... ……………………………………………………………………………………………... 2 ……………………………………………………………………………………………… ……………………………………………………………………………………………… …………………………………………………………………………………………….... [2]

3 4E5NA/7087/01/PRE/2023[Turn over (c) Explain the limitation of a balanced trial balance. ……………………………………………………………………………………………….. ……………………………………………………………………………………………….. …………………………………………………………………………………………… [1] (d) State the two principles of professional ethics that accountants are required to adopt. 1 ……...…………………………………………………………………………………….... 2 ……………………………………………………………………………………………… [2] trial balance when a transaction is not recorded [Total: 10]

4 4E5NA/7087/01/PRE/2023[Turn over [Turn over 2 Jovan Sports Trading is a business that buys and sells sportswear and equipment. Jovan Sports Tradin g wants to borrow money to buy computers and upgrade it s accounting computing software. REQUIRED (a) Describe one way in which a bank loan differs from a bank overdraft. ……………………………………………………………………………………………….. ……………………………………………………………………………………………….. ……………………………………………………………………………………………….. ……………………………………………………………………………………………….. …………………………………………………………………………………………… [2] bank loan is a fixed amount borrowed from the bank for a fixed period and On 1 April 2021, Jovan Spor ts Trading took a bank loan of $ 60 000 at 4% interest per annum. The loan is to be paid equa lly over five years . The partial principal sum of th e loan and the interest, is payable every year on 31 March. The first repayment of the loan and interest was mad e on 31 March 2022. The financial year of Jovan Sports Trading ends on 31 December. REQUIRED (b) Prepare an extract of the statement of financial performance for the year ended 31 December 2021, showing only the expense section. Statement of financial performance for the year ended 31 December 2021 ……………………………………………………………………………………………….. …………………………………………………………………………………………… [1] (c) Prepare an extract of the statement of financial position as at 31 D ecember 2021, showing only the liabilities section. Statement of financial position as at 31 December 2021 ……………………………………………………………………………………………….. ……………………………………………………………………………………………….. ……………………………………………………………………………………………….. ……………………………………………………………………………………………….. ……………………………………………………………………………………………….. ……………………………………………………………………………………………….. …………………………………………………………………………………………… [3]

5 4E5NA/7087/01/PRE/2023[Turn over (d) Prepare a statement of financial performance for the year ended 31 Decem ber 2022. Statement of financial performance for the year ended 31 December 2022 ……………………………………………………………………………………………….. ……………………………………………………………………………………………….. …………………………………………………………………………………………… [1] (e) Name and explain the accounting theo ry underlying the accounting for interest expense incurred but not yet paid. ……………………………………………………………………………………………….. ……………………………………………………………………………………………….. ……………………………………………………………………………………………….. …………………………………………………………………………………………… [2] Accrual basis of accounting [1]. It states that when the business [Total: 9] [Turn over

6 4E5NA/7087/01/PRE/2023[Turn over 3 The following information relates to Joshua Trading for the year ended 30 June 2023. $ Credit sales revenue 260 000 Credit sales returns 9 500 Cash sales 12 000 The net trade receivables balances were provided. 1 July 2022 30 June 2023 $ $ Net trade receivables 22 000 27 000 REQUIRED (a) Calculate the following for the year ended 30 June 2023. Show your answers to two decimal places. (i) Rate of trade receivables turnover = …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… ………………………………………………………………………………………. [1] Net credit sales revenue / Average net trade receivables (ii) Trade receivables collection period …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… ………………………………………………………………………………………. [1] = Average net trade receivables / Net credit 365 days

7 4E5NA/7087/01/PRE/2023[Turn over The following trade receivables efficiency ratios are extracted from the books of Isaac Co., a direct competitor of Joshua Trading. Rate of trade receivables turnover 14.23 times Trade receivables collection period 25.61 days REQUIRED (b) Evaluate Joshua Trading’s efficiency in trade receivables management against its competitor, Isaac Co.. ……………………………………………………………………………………………….. ……………………………………………………………………………………………….. ……………………………………………………………………………………………….. ……………………………………………………………………………………………….. ……………………………………………………………………………………………….. ……………………………………………………………………………………………….. ……………………………………………………………………………………………….. …………………………………………………………………………………………… [4] (c) Suggest one way to improve J oshua Trading ’s efficiency in trade receivables management. ……………………………………………………………………………………………….. …………………………………………………………………………………………… [1] (d) State two types of non -accounting information that a business might use when deciding whether to grant credit to a customer. 1 ……...…………………………………………………………………………………….... 2 ……………………………………………………………………………………….…….. [2] (e) Explain the accounting of impairment loss o