CHIJ STC POA 4E5N Prelim 2023 Paper 1 (7087)

CANDIDATE NAME CLASS INDEX NUMBER ___________________________________________________________________ PRINCIPLES OF ACCOUNTS 7087/01 Paper 1 29 August 2023 1 hour Candidates answer on the Question Paper. No Additional Materials are required. READ THESE INSTRUCTIONS FIRST Write your class, index number and name in the spaces at the top of this page. Write in dark blue or black ink. Do not use staples, paper clips, glue or correction fluid. Answer all questions. The number of marks is given in brackets [ ] at the end of each question or part question. _________________________________________________________________________ This document consists of 10 printed pages. CHIJ ST. THERESA’S CONVENT PRELIMINARY EXAMINATION 2023 SECONDARY 4 EXPRESS / 5 NORMAL ACADEMIC

2 CHIJ ST. THERESA’S CONVENT SECONDARY FOUR EXPRESS / FIVE NORMAL ACADEMIC 2023 PRELIMINARY EXAMINATION PRINCIPLES OF ACCOUNTS PAPER 1 Answer all questions. 1 The following cash at bank account was extracted from the books of Ashley Trading. Cash at bank Debit Credit Balance 2023 $ $ $ June 1 Balance b/d 5 280 Dr 4 Trade payable – Belle 900 4 380 Dr July 10 Sales revenue 650 5 030 Dr 17 Inventory 650 4 380 Dr 19 Trade receivable – Calista 1 900 6 280 Dr 25 Cash in hand 500 5 780 Dr 30 Trade receivable – Calista 1 900 3 880 Dr July 1 Balance b/d 3 880 Dr REQUIRED (a) Interpret the entries on the following dates: (i) 4 June ...…………………………………………………………………………………………… …………….…………………………………………………………………………… [1] (ii) 10 June ...…………………………………………………………………………………………… …………….…………………………………………………………………………… [1] (iii) 19 June ...…………………………………………………………………………………………… …………….…………………………………………………………………………… [1] (iv) 25 June ...…………………………………………………………………………………………… …………….…………………………………………………………………………… [1]

3 CHIJ ST. THERESA’S CONVENT SECONDARY FOUR EXPRESS / FIVE NORMAL ACADEMIC 2023 PRELIMINARY EXAMINATION PRINCIPLES OF ACCOUNTS PAPER 1 (v) 30 June ...…………………………………………………………………………………………… …………….…………………………………………………………………………… [1] (b) State two reasons why cheques might be dishonoured. 1. ...…………………………………………………………………………………… ……………………………………………………………………………………… ...…………………………………………………………………………………… 2. ……………………………………………………………………………………… ……………………………………………………………………………………… ………………………………………………………………………………….. [2] (b) Explain two types of internal control over cash. ...…………………………………………………………………………………………… ……………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ……………………………………………………………………………………………… ………………………………………………………………………………………….. [2] [Total: 9]

4 CHIJ ST. THERESA’S CONVENT SECONDARY FOUR EXPRESS / FIVE NORMAL ACADEMIC 2023 PRELIMINARY EXAMINATION PRINCIPLES OF ACCOUNTS PAPER 1 2 On 1 April 2021, Dolley took a $ 80 000 bank loan from Eastern Bank . The loan is repayable equally over 8 years and the interest rate on the outstanding amount is 5% per annum. Both the repayment of the loan and the payment of interest are to be made on every 31 March starting from 2022. The financial year of Dolley’s business ends on 31 December. REQUIRED (a) Prepare the journal entries to record the borrowing on 1 April 2021 and the interest expense for the year ended 31 December 2021, including the closing entry . Narratives are not required. ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… …………….………………………………………………………..……..…………… [4] (b) Prepare an extract of the statement of financial performance for the year ended 31 December 2021, showing only the expense section. ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… …………….………………………………………………………..……..…………… [2]

5 CHIJ ST. THERESA’S CONVENT SECONDARY FOUR EXPRESS / FIVE NORMAL ACADEMIC 2023 PRELIMINARY EXAMINATION PRINCIPLES OF ACCOUNTS PAPER 1 (c) Prepare an extract of the statement of financial position as at 31 December 2021, showing only the liabilities section. ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… …………….………………………………………………………..……..…………… [3] [Total: 9]

6 CHIJ ST. THERESA’S CONVENT SECONDARY FOUR EXPRESS / FIVE NORMAL ACADEMIC 2023 PRELIMINARY EXAMINATION PRINCIPLES OF ACCOUNTS PAPER 1 3 Flora prepared her financial statements on 31 March 2023 and the profit for the year was $16 230. After she had prepared her financial statements, she found the following errors. 1 Flora had paid $2500 for a computer, $580 for a printer and $18 for printing papers. She had debited $3098 to office equipment account. 2 $798 paid for insurance had been recorded as $789 in both the insurance account and cash at bank account. 3 $455 received for commission income had been debited to commission income and credited to cash at bank account. REQUIRED (a) Prepare journal entries to correct the errors. Narrations are not required. ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… …………….………………………………………………………..……..…………… [6]

7 CHIJ ST. THERESA’S CONVENT SECONDARY FOUR EXPRESS / FIVE NORMAL ACADEMIC 2023 PRELIMINARY EXAMINATION PRINCIPLES OF ACCOUNTS PAPER 1 (b) Prepare a statement of adjusted profit after the correction of errors. ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… …………….………………………………………………………..……..…………… [4] [Total: 10]

8 CHIJ ST. THERESA’S CONVENT SECONDARY FOUR EXPRESS / FIVE NORMAL ACADEMIC 2023 PRELIMINARY EXAMINATION PRINCIPLES OF ACCOUNTS PAPER 1 4 The following information was extracted from Ismail’s accounting records for the year ended 30 April 2023: $ Net sales revenue 370 470 Cost of sales 222 295 Gross profit ? Operating expenses 52 629 Profit for the year ? REQUIRED (a) Explain the importance of being profitable. ....…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...…………………………………………………………………………………………… ...………………………………………………………………..……………………… [2] (b) Calculate the following, rounding off your answers to one decimal place where necessary: (i) Gross profit margin ....……………...………………………………………………………………… ....……………...…