2022 SMSS 4E5N PRELIM P1 with ANS

ST. MARGARET’S SECONDARY SCHOOL Preliminary Examinations 2022 CANDIDATE NAME CLASS REGISTER NUMBER PRINCIPLES OF ACCOUNTS Paper 1 Secondary 4 Express / 5 Normal (Academic) 7087/01 25 August 2022 1 hour Additional Materials: Nil READ THESE INSTRUCTIONS FIRST Do not turn over the pages until you are told to do so. Write your name, class and index number on all the work you hand in, including the cover page. Write in dark blue or black pen. Do not use staples, paper clips, highlighters, glue or correction fluid. The use of an approved calculator is allowed. Answer all questions in the spaces provided in the Question Paper. Where the columnar format is used, the running balance column should be updated for the first and last entries. Where applicable, the balance should be brought down to the next financial year. All calculations must be shown adjacent to the answer. The businesses described in this question paper are entirely fictitious. At the end of the examination, fasten all your work securely together. 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 a blank page. For Examiner’s Use 40

2 Answer all questions. 1 The following information was extracted from the books of Amazing Food Pte Ltd. Advertising expense account Date Particulars Debit ($) Credit ($) Balance ($) 2021 Aug 1 Advertising expense payable (i) 4 000 4 000 CR Oct 8 Cash at bank (ii) 20 000 16 000 DR 2022 May 3 Cash at bank 15 000 31 000 DR Jul 31 Prepaid advertising expense (iii) 2 000 29 000 DR Income summary 29 000 - REQUIRED (a) Explain the following transactions. (i) 1 August 2021 ……………………………………………………………………………………………... ……………………………………………………………………………………………... ……………………………………………………………………………………………... ……………………………………………………………………………………………... [2] (ii) 8 October 2021 ……………………………………………………………………………………………... ……………………………………………………………………………………………... ……………………………………………………………………………………………... ……………………………………………………………………………………………... [1] (iii) 31 July 2022 ……………………………………………………………………………………………... ……………………………………………………………………………………………... ……………………………………………………………………………………………...

3 ……………………………………………………………………………………………... [2] (b) Explain, using an appropriate accounting theory, the need to adjust for prepaid advertising expense for the year ended 31 July 2022. ………………………………………………………………………………………………….... ………………………………………………………………………………………………….... ………………………………………………………………………………………………….... ………………………………………………………………………………………………….... ………………………………………………………………………………………………….... [2] The accounting year of Amazing Pte Ltd ends on 31 July. On 31 July 2021, a machine which was bought on 1 January 2019 for $180 000, was sold on credit for $120 000. Machinery is depreciated using the reducing -balance method, at 20% per