HIHS 2022 4E5N Paper 1 Solutions.xlsx

4 Express / 5 Normal Academic Paper 1 Solutions 1a Journal Date Particulars Debit Credit 2021 $ $ 1 Motor vehicle repairs 580 (1) Motor vehicle 580 (1) Correction of error - Motor vehicle repairs of $580 was recorded into the motor vehicle account. 2 Interest income $(310 - 130) 180 (1) Cash at bank 180 (1) Correction of error - Interest income of $130 received by cheque was recorded as $310 in the books. 3 Drawings 300 (1) Cash in hand 300 (1) Correction of error - Cash of $300 withdrawn by the owner for personal use was omitted from the books. *1 mark deducted from total marks of this part if students never write narrations[6] b > To check for arithematic accuracy in recording (1) > To facilitate the preparation of the financial statements. (1) [2] c According to the accounting entity theory (1) Percilla should record the $300 she took from the business because the business is a separate entity from its owner. (1) [2] d Percilla's business Statement to show adjusted profit for the year ended 31 December 2021 $ Unadjusted profit 7 350 Less: Motor vehicle repairs understated (580) (1) Less: Interest income overstated $(310 - 130) (180) (1) Adjusted profit for the year 6 590(1) [3] [Total: 13]

2a Vivian's account Date Particulars Debit Credit Balance 2021 $ $ $ May 1 Balance b/d 2 500 Cr 7 Inventory $(900 x 80%) 720 (1) 3 220 Cr 10 Inventory $(100 x 80%) 80 (1) 3 140 Cr 24 Cash at bank 3 000 (1) 140 Cr 24 Discount received 140 (1) - [4] b 7 May: Invoice (1) 10 May: Credit note (1) [2] c A cash transaction occurs when payment is made at the same time when the goods is purchased or sold. (1) Whereas a credit transaction occurs when the goods or services are received first and payment is made at a later date. (1) [2] d Accept any one of the following reasons > The business has received a cheque from a customer and updated it into the business cash at bank account but the bank has yet to update the cheque in the bank statement. (1) > The business has issued a cheque to its supplier and has updated the business cash at bank account but the supplier has yet to present the cheque to the bank.(1) > The business could have created standing order instructions with the bank for certain frequent transactions such as rent payments so the bank automatically deducts or receives amounts before they are made known to the business.(1) > There could be errors in recording made by the business or the bank.(1) [1] e Accept any two of the following > Safeguard assets of the business (1) > Ensure business transactions are recorded accurately (1) > Comply with laws and regulations (1) > Prevent fraud (1) [2] f Accept any two of the following answers > Segregation of duties (1) > Custody of cash (1) > Authorisation (1) > Bank reconciliation (1) [2] [Total: 13]

3a Journal Date Particulars Debit Credit 2020 Nov 19Allowance for impairment of trade receivables1 200 (1)Cash at bank $(