2022_Peirce_Sec_PRELIM_7087_4E_POA_P1_ANS.xlsx

Peirce Secondary School Principles of Accounts Secondary 4 (Express) Preliminary Examination Paper (1) 1a)A accountant should have integrity. This means that he or she has to be straightforward and ü honest in all professional relationships. ü Or An accountant must have objectivity. This means that he or she will not let bias, conflict of ü interest or the undue influence of others overide his or her professional judgement. ü Each ü = 1 mark Total: 2 marks 1b)According to the objectivity theory, source documents provides evidence to capture occurrenceü of a transaction. ü Each ü = 1 mark Total: 2 marks 1c)Assets = Equity + Liabilities ü Each ü = 1 mark Total: 1 mark 1d)The purpose of a trial balance is ensure arithmetic accuracy in recording and to facilitate the preparation ofü financial statements. ü Each ü = 1 mark Total: 2 marks 1e)Wear and tear/ usage/ obsolescence/ legal limits üü Each ü = 1 mark Total: 2 marks

2a) In accordance to the acrrual basis of accounting, expenses must be recognised in the period the services have been used, regardless of whether they have been paid or not. Or In accordance to the matching concept, other costs incurred during the operation of a business to generate revenue and other income must be matched against revenue and other income earned in the same accounting period to determine the profit for that period. Each ü = 1 mark 2b) General Journal Date Particulars Dr Cr 2021 ($) ($) Jul 1Utilities 1,080 Prepaid utilities 1,080 2022 Jun 30Utilities 500 Cash at bank 500 Utilities 50 Utilities payable 50 Each ü = 1 mark

ü ü ü ü Total: 2 marks ü ü ü ü ü ü Total: 6 marks

3a)Firstly, a bank reconciliation is used to reconcile differences between the cash at bank account and the√ bank statement. It is also used to identify any errors in recording made by the business or the bank.√ Each ü = 1 mark Total: 2 marks 3b)A cheque may be dishonoured because it has expired/ cheque is post-dated/ information on the cheque√ is not consistent/ information on the cheque is not complete/ payer's account is closed, frozen or does √ not have sufficient money. Each ü = 1 mark Total: 2 marks 3c) Cash at bank account Date Particulars Debit Credit Balance 2022 $ $ $ Apr 30Balance b/d - 7,850- Dr Insurance expense (standing instruction) - 1,500- - 6,350- Dr √ Trade receivables - Sarah - 1,000- - 5,350- Dr √ Trade receivables - Bee 1600 - 6,950- Dr √ Bank charges 200- 6,750- Dr √ May 1Balance b/d - 6,750- Dr √ Each ü = 1 mark Total: 5 marks 3d) Efficient Wheels Leasing Bank reconciliation statement as at 30 April 2022 $ $ Balance as per bank statement - 4,970- √ Add: Deposits in transit Trade receivables - Chris - 4,000- √

Add: Correction of error for cheque 104 - 180- √ Less: Cheques not yet presented Rent - 2,400- √ Adjusted balance as per cash at bank account - 6,750-