2024 HGV 4E Prelim Paper 1

HILLGROVE SECONDARY SCHOOL PRELIMINARY EXAMINATION 2024 SECONDARY FOUR (EXPRESS) / FIVE (NORMAL ACADEMIC) CANDIDATE NAME ( ) CLASS - CENTRE NUMBER S INDEX NUMBER PRINCIPLES OF ACCOUNTS Paper 1 Candidates answer on the Question Paper. No Additional Materials are required. 7087/01 21 Aug 2024 1 hour 10.45 AM to 11.45 AM READ THESE INSTRUCTIONS FIRST Write in dark blue or black pen. You may use an HB pencil for any rough working. 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. For Examiner’s Use Marks 1 2 3 Parent’s/ Guardian’s Signature: ___________________ 4 Setter: Mdm Grace Ang TOTAL This document consists of 10 printed pages.

2 HGV PRELIMINARY EXAMINATION 2024 4E/5NA PRINCIPLES OF ACCOUNTS PAPER 1 1 Aydyn Trading implements the accounting cycle and the accounting information system. REQUIRED (a) Fill in the blanks. [2] (i) The accounting cycle (ii) The accounting information system Aydyn Trading realised that a credit customer had been undercharged. REQUIRED (b) State the source document that Aydyn Trading should send to the credit customer to correct the undercharge. [1] Aydyn Trading records transactions based on source documents. REQUIRED (c) State and explain the accounting theory that the Aydyn Trading has been applying. Accounting theory: XX Explanation of accounting theory: XX [2] Identify and record Adjust Source document Close Financial statements Trial balance Ledger

3 HGV PRELIMINARY EXAMINATION 2024 4E/5NA PRINCIPLES OF ACCOUNTS PAPER 1 (d) Explain the extent of liability of shareholders of a private limited company. [2] (e) State the role of accounting. [1] [Total: 8] 2 Ming Yu’s business prepares bank reconciliation at the end of each month as a form of internal control over its bank account. REQUIRED (a) State one purpose of internal control. [1] (b) State one other internal control that a business can have over its bank account. [1] (c) Explain the purpose of preparing bank reconciliation. [1]

4 HGV PRELIMINARY EXAMINATION 2024 4E/5NA PRINCIPLES OF ACCOUNTS PAPER 1 Ming Yu provided the cash at bank account in his books and the bank statement received for the month of June 2024. Ming Yu’s accountant recorded cheque number 3053 wrongly in the books of the business. REQUIRED (d) State one possible reason for the transaction recorded in the bank statement on 30 June 2024. [1] Cash at Bank accout Date Particulars Cheque No. Dr ($) Cr ($) Bal ($) 2024 Jun 1 Bal b/d 6 000 Dr 5 Sales revenue 3 400 8 Leya 3053 8 000 14 Neil Trading 3054 4 280 17 Mindy 7 200 19 Inventory 3055 900 27 Insurance expense 3056 2 300 29 Josh 4 500 30 Keagen 3057 6 100 480 Cr Bank Statement for the month of Jun 2024 Date Transactions Dr ($) Cr ($) Bal ($) 2024 Jun 1 Balance b/d 6 150 Cr 1 Cheque no. 3052 150 5 Standing order – Rent 1 340 7 Cheque deposit 3 400 9 Cheque no. 3053 8 800 11 Direct deposit – Commission 3 650 16 Cheque no. 3054 4 280 19 Cheque deposit 7 200 21 Cheque no. 3055 900 29 Cheque no. 3056 2 300 30 Refer to drawer (Jun 19) 7 200 4 570 Dr

5 HGV PRELIMINARY EXAMINATION 2024 4E/5NA PRINCIPLES OF ACCOUNTS PAPER 1 (e) Prepare the adjusted cash at bank ledger account and bring down the balance to 1 July 2024. [5] (f) Prepare the bank reconciliation statement for the month ended 30 June 2024. [3] [Total: 12]

6 HGV PRELIMINARY EXAMINATION 2024 4E/5NA PRINCIPLES OF ACCOUNTS PAPER 1 3 Aina provided the information about her business. REQUIRED (a) Define ‘accumulated depreciation’. [1] (b) State the method that Aina is using to depreciate her motor vehicles. [1] (c) Calculate the rate of depreciation that Aina is using to depreciate her motor vehicles. [1] Motor Vehicles account Date Particulars Dr ($) Cr ($) Bal ($) 2022 Jan 1 Trade payable: Ives 60 000 60 000 Dr 2023 Jan 1 Bal b/d 60 000 Dr 2024 Jan 1 Bal b/d 60 000 Dr Accumulated Depreciation: Motor Vehicles account Date Particulars Dr ($) Cr ($) Bal ($) 2022 Dec 31 Depreciation expense: Motor vehicles 24 000 24 000 Cr 2023 Jan 1 Bal b/d 24 000 Cr Dec 31 Depreciation expense: Motor vehicles 14 400 38 400 Cr 2024 Jan 1 Bal b/d 38 400 Cr

7 HGV PRELIMINARY EXAMINATION 2024 4E/5NA PRINCIPLES OF ACCOUNTS PAPER 1 (d) State the effect on the following if Aina did not record depreciation expense for her motor vehicles in 2023. (i) Statement of financial performance [1] (ii) Statement of financial position [2] The business recently purchased a good quality hole puncher for $20. However, Aina recorded the amount paid as stationery expense instead of office equipment even though the hole puncher can be used for a few years. REQUIRED (e) State and explain the accounting theory that Aina applied. Accounting theory: XX Explanation of accounting theory: XX [2] The business spent $10 000 improving the interior of its shop to attract more customers. However, Aina recorded the amount spent as revenue expenditure instead of capital expenditure. (f) State the effect of this error on the following. (i) Profit for the year [1] (ii) Non-current assets [1] [Total: 10]

8 HGV PRELIMINARY EXAMINATION 2024 4E/5NA PRINCIPLES OF ACCOUNTS PAPER 1 4 Nice Home and Chic Living are in the business of buying and selling furniture imported from Europe. The following information regarding rate of inventory turnover is available. Nice Home Chic Living 31 July 2022 31 July 2023 31 July 2022 31 July 2023 4.06 times 6.64 times 8.11 times ? The following information about Chic Living is available. $ Cost of sales for the year ended 31 July 2023 860 000 Inventory as at 31 July 2023 97 000 Inventory as at 31 July 2022 90 500 REQUIRED (a) Calculate Chic Living’s rate of inventory turnover for the year ended 31 July 2023 (to two decimal places). Show all workings. [2]

9 HGV PRELIMINARY EXAMINATION 2024 4E/5NA PRINCIPLES OF ACCOUNTS PAPER 1 (b) Evaluate efficiency in inventory management for both businesses for both years. [4]

10 HGV PRELIMINARY EXAMINATION 2024 4E/5NA PRINCIPLES OF ACCOUNTS PAPER 1 (c) Suggest one reason for the trend in (b). [1] On 31 July 2024, a fire broke out in Chic Living’s warehouse and destroyed inventory costing $12 000. On the same date, it was agreed with the insurance company that 90% of the loss was covered by insurance and Chic Living would receive compensation on 10 August 2024. REQUIRED (d) State the double entry with which Chic Living recorded the destruction of inventory and insurance claim on 31 July 2024 [3] [Total: 10]