Yuan Ching 2024 Prelim P1 and P2

1 N’Level Self-Revision Set 05 – Yuan Ching N’Level Prelim 2024 -PAPER 1- Answer all questions. 1 Aces Trading incurs utilities expense as part of its operations. As at 1 May 2023 As at 30 April 2024 $ $ Utilities expense payable 260 170 The business had paid a total of $2 780 for utilities expense during the year. REQUIRED (a) Calculate the utilities expense for the year ended 30 April 2024. [3] (b) Prepare the journal entry required to record the year-end adjustment to utilities expense on 30 April 2024. A narration is required. Journal [3] (c) State the effect on profit for the year if the utilities expense payable on 30 April 2024 was not adjusted. [2]

2 The following ledger account is extracted from Aces Trading’s books: Trade receivable, David Date Particulars Debit Credit Balance 2024 $ $ $ May 1 Balance b/d 4 830 Dr 15 Cash at bank 4 500 330 Dr 15 Discount allowed 330 0 22 Sales revenue 2 700 2 700 Dr Jun 1 Balance b/d 2 700 Dr REQUIRED (d) Interpret the entries on the following dates: (i) 15 May 2024 [2] (ii) 22 May 2024 [1] On 11 June 2024, David declared bankrupt and Aces Trading decided to write off the amount owing. REQUIRED (e) Prepare the journal entry to write off David’s account on 11 June 2024. A narration is not required. Journal [2] [Total:13]

3 2 Anthony is the new accountant at Sims Trading. He just graduated from university and is hired to replace the previous accountant. The previous accountant was asked to leave because he wrote off the amount owing by a major customer in return for a cash gift from that customer. REQUIRED (a) State and e xplain which principle of professional ethics is violated by the previous accountant’s behaviour. [2] Anthony knows that the financial statements he prepares are important for stakeholders to make informed decisions. REQUIRED (b) Name and explain how another stakeholder, other than the owner, would be interested in the financial statements of the business. [2] (c) State the effect of the following transaction on the accounting equation. Include the account name, direction and amount in your answer. Part (i) is done as an example. Effect of transaction on: Assets Liabilities Equity (i) Sims Trading bought $600 of goods for resale on credit. Inventory + $600 Trade payable + $600 (ii) Sims Trading repaid $10 000 of bank loan with the owner’s personal cheque. [2]

4 Anthony was informed that there were a few errors after he prepared a trial balance for Sims Trading as at 31 May 2024. 1 A cheque of $450 received from credit customer Susan was recorded in credit customer Su Shan’s account. 2 Faulty goods worth $90 returned to credit supplier Beng was debited to Inventory account and credited to Trade paya