2024 CTSS Prelim 4E5N P1 Qn

Name : _________________________ Index Number : ___________ Class: _________ Clementi Town Secondary SchoolPreliminary Examination 2024Secondary 4 & 5PRINCIPLES OF ACCOUNTS7087/01Paper 1 11 September 20241 hourCandidates answer on the Question Paper.No Additional Materials are required.CLEMENTI TOWN SECONDARY SCHOOL CLEMENTI TOWN SECONDARY SCHOOL CLEMENTI TOWN SECONDARY SCHOOL CLEMENTI TOWN SECONDARY SCHOOLCLEMENTI TOWN SECONDARY SCHOOL CLEMENTI TOWN SECONDARY SCHOOL CLEMENTI TOWN SECONDARY SCHOOL CLEMENTI TOWN SECONDARY SCHOOLCLEMENTI TOWN SECONDARY SCHOOL CLEMENTI TOWN SECONDARY SCHOOL CLEMENTI TOWN SECONDARY SCHOOL CLEMENTI TOWN SECONDARY SCHOOLCLEMENTI TOWN SECONDARY SCHOOL CLEMENTI TOWN SECONDARY SCHOOL CLEMENTI TOWN SECONDARY SCHOOL CLEMENTI TOWN SECONDARY SCHOOLCLEMENTI TOWN SECONDARY SCHOOL CLEMENTI TOWN SECONDARY SCHOOL CLEMENTI TOWN SECONDARY SCHOOL CLEMENTI TOWN SECONDARY SCHOOLREAD THESE INSTRUCTIONS FIRSTDo not open the booklet until you are told to do so. Write your name, index number and class on all the work you hand in.Write in dark blue or black pen. The use of an approved calculator is allowed. Do not use staples, paper clips, glue, or correction fluid. Answer all questions.The businesses described in this question paper are entirely fictitious.The number of marks is given in brackets [ ] at the end of each question or part question.The total number of marks for this paper is 40. ______________________________________________________________________________________This question paper consists of 11 printed pages including this cover page, and 5 blank pages.For Examiner’s Use 40 O

2 Principles of Accounts / Paper 1Secondary 4 & 5Preliminary Examination 2024 1Rachel started a new business selling electronic products.She purchased supplies on credit from Harly Norman Wholesale Electrical.The following transactions took place during the month of June 2024. 6 JuneRachel purchased electrical goods, list price $3 000 and received a trade discount of 10%.9 JuneRachel returned some damaged electrical goods, list price $600 bought on 6 June, to Harly Norman Wholesale Electrical.15 JuneRachel paid $1 836 by cheque, as full settlement for the amount owing.REQUIRED(a)State the type of business Rachel had started.………………..……………………………………………………………………………………………………………………………………………………………………………........ [1](b)Complete the following table to name the source document that Rachel would use to record each of the transactions on the following dates.Source document6 June9 June15 June[3](c)State the purpose of a trade discount.………………..……………………………………………………………………………………………………………………………………………………………………………........ [1](d)Calculate the percentage of the cash discount on 15 June 2024.………………..…………………………………………………………………………………………………..…………………………………………………………………………………………………..……………………………………………………………………………………………………………………………………………………………………………........ [2]

5 CTSS 20227087/Prelim/01/4E5N/22 [Turn Over On 20 June 2024, Rachel received a call from Harly Norman Wholesale Electrical, informing her that the cheque of $1 836 has been dishonoured. REQUIRED(e)State two reasons why a cheque may be dishonoured.………………..…………………………………………………………………………………………………..…………………………………………………………………………………………………..…………………………………………………………………………………………………..……………………………………………………………………………………………………………………………………………………………………………........ [2][Total: 9]

4 Principles of Accounts / Paper 1Secondary 4 & 5Preliminary Examination 2024 2John runs a business provides plumbing services. The business has a financial year end of 30 June 2024. The plumbing fee income received during the year was $86 400. John provided plumbing services, which amounted to $1 760, which had not been received by the business at the end of the financial year.REQUIRED(a)Name and explain the accounting theory applied when accounting for the provision of services.Name: ...……..…………………………………………………………………………………Explanation: ...…………………………………………………………………………………………………..……………………………………………………………………………………………………………………………………………………………………………........ [2](b)State the double entry required to record the transfer of the plumbing fee income to the income summary for the year ended 30 June 2024. Narration is not required.JournalDate2024Debit$Credit$Jun 30[2]

5 Principles of Accounts / Paper 1Secondary 4 & 5Preliminary Examination 2024[Turn Over (c)Prepare an extract of the statement of financial position as at 30 June 2024 to show the $1 760 of plumbing fees income that had not been received. Extract of Statement of Financial Position as at 30 June 2024………………..…………………………………………………………………………………………………..…………………………………………………………………………………………………..…………………………………………………………………………………………………..…………………………………………………………………………………………………..…………………………………………………………………………………………………..………………………………………………………………………………[2]John also provided the following ledger account.Rent expense accountDateParticularsDebitCreditBalance2023$$$Jul 1Rent expense payable30003000Cr2024Mar 23Cash at bank23 00020 000 DrJun 30Rent expense payable5 00025 000DrREQUIRED(d)Interpret the entries in the rent expense account on:(i)1 July 2023 ……………………………………………………………………………….. ………………………………………………………………………………………………………………………………………………………………………………………….. [1](ii)23 March 2024 ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….. [1](iii)30 June 2024 ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….. [1]

6 Principles of Accounts / Paper 1Secondary 4 & 5Preliminary Examination 2024 (e)Analyse the effect of not making an adjustment for rent expense payable on 30 June 2024 on: (i)Profit for the year………………………………………………………………………………………………………………………………………………………………………………………….. [1](ii)Statement of financial position………………………………………………………………………………………………………………………………………………………………………………………….. [1][Total: 11]

9 Principles of Accounts / Paper 1Secondary 4 & 5Preliminary Examination 2024[Turn Over BLANK PAGE

8 Principles of Accounts / Paper 1Secondary 4 & 5Preliminary Examination 2024 3Sofia runs a business selling flowers. The business has a financial year end of 31 July. The following balances were extracted from the books of the business as at 31 July 2024.$Inventory14 200Trade receivables25 000Allowance for impairment of trade receivables1 700Office equipment 5 000Cash at bank 800Prepaid rent1 500Trade payables2 300Wages payable9 100Bank loan30 000Current portion of long term borrowings10 000REQUIRED(a)Calculate the following for the year ended 31 July 2024. Show your answers to two decimal places.(i)Current ratio ………………………………………………………………………………………………………………………………………………………………………………………….. [2](ii)Quick ratio………………………………………………………………………………………………………………………………………………………………………………………….. [2]

9 Principles of Accounts / Paper 1Secondary 4 & 5Preliminary Examination 2024[Turn Over Sofia has provided the following information about her business for the two years ended 31 July 2022 and 31 July 2023.31 July 202231 July 2023Current ratio2.131.92Quick ratio0.720.98(b)Evaluate the change in liquidity of Sofia’s business between 31 July 2022 to 31 July 2024.………………..…………………………………………………………………………………………………..…………………………………………………………………………………………………..…………………………………………………………………………………………………..…………………………………………………………………………………………………..…………………………………………………………………………………………………..…………………………………………………………………………………………………..…………………………………………………………………………………………………..…………………………………………………………………………………………………..…………………………………………………………………………………………………..…………………………………………………………………………………………………..…………………………………………………………………………………………………..…………………………………………………………………………………………………..…………………………………………………………………………………………………..…………………………………………………………………………………………………..…………………………………………………………………………………………………..…………………………………………………………………………………………………..……………………………………………………………………………………………………………………………………………………………………………........ [5]

10 Principles of Accounts / Paper 1Secondary 4 & 5Preliminary Examination 2024 (c)Explain two ways in which Sofia could further improve the liquidity of the business.………………..……………………………………………………………………………………