YCSS POA 2026 4E5N Prelim Paper1

[Turn over YUAN CHING SECONDARY SCHOOL Secondary Four Express / Five Normal Academic Course Preliminary Examination 2026 CANDIDATE NAME CLASS INDEX NUMBER PRINCIPLES OF ACCOUNTS Paper 1 Candidates answer on the Question Paper. No Additional Materials are required 7087/01 31 August 2026 1 hour READ THESE INSTRUCTIONS FIRST Write your name, class and index number in the spaces at the top of this page. Write in dark blue or black ink. Do not use staples, paper clips, glue or correction fluid. The use of an approved calculator is allowed. Answer all questions. The businesses described in this question paper are 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. MARKS Total /40 This paper consists of 11 printed pages.

2 Answer all questions. 1 Matthew started Touristy Luxe, a trading business which imports luggage from Europe and sells them to retail stores. Touristy Luxe issues and receives various documents during its operation. REQUIRED (a) For each of the transactions below, identify the source document used to record the information. Transaction Source document Purchased motor vehicle on credit Informed credit customer, Winnie, that her account was undercharged Received rental income via bank transfer [3] (b) Explain, with the use of an accounting theory, why Touristy Luxe needs to record their transactions based on the use of the source documents. ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. ………………………………...…………………………………………………..…………… [2]

3 [Turn over Touristy Luxe recently purchased a good quality hole puncher for $50. However, Matthew observed that the accountant recorded the amount paid as stationery expense instead of office equipment even though the hole puncher can be used for a few years. REQUIRED (c) Explain the role of accounting. ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. ………………………………...…………………………………………………..…………… [1] (d) State and explain the accounting theory that the accountant has applied. ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. ………………………………...…………………………………………………..…………… [2] [Total: 8]

4 2 Mike runs a trading business. He has extracted the following information for the year ended 31 March 2026: 1 April 2025 $ 31 March 2026 $ Capital 75 000 ? Additional information 1 On 13 January 2026, Mike withdrew goods costing $8 400 from the business for his personal use. 2 Mike’s business made a $62 000 profit for the year ended 31 March 2026. REQUIRED (a) State one reason why Mike formed a sole proprietorship. ……………………………………….…………………………………………………………….. ………………………………...…………………………………………………..…………… [1] (b) Prepare journal entr y to record the transaction on 13 January 2026 . A narration is required. Journal Dr $ Cr $ [3]

5 [Turn over (c) Prepare the capital account for the year ended 31 March 2026. Capital account ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. ………………..………………...…………………………………………………..…………… [3] Mike is considering switching the form of business ownership to a private limited company instead. REQUIRED (d) State one advantage of forming a private limited company. ……………………………………….…………………………………………………………….. ………………………………...…………………………………………………..…………… [1] [Total: 8]

6 3 Kenny Co is a trading business. The following balances were extracted from the books of the business on 1 April 2026. $ Capital 25 000 Trade receivables 2 240 Trade payables 3 800 Sales revenue 41 950 Sales returns 1 860 Cost of sales 27 100 Discount received 250 Motor vehicles 25 000 Inventory 6 350 Cash at bank 7 960 Utilities expense 490 During the month of April 2026, the following transactions took place in Kenny Co: 1 Sold goods worth $6 000 on credit. The cost price of the goods sold were $3 300. 2 Sent a cheque of $1 800 to a credit supplier in full settlement of the amount owing of $2 000. REQUIRED (a) State the limitation of a trial balance. ……………………………………….…………………………………………………………….. …………………………….………………………………………………………..…………… [1]

7 [Turn over (b) Prepare the adjusted trial balance of Kenny Co as at 30 April 2026. Kenny Co Trial Balance as at 30 April 2026 ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. …………………………….………………………………………………………..…………… [8]

8 Kenny Co provided the following trade payable account for the month of May 2026: Trade payable: William account Dr Cr Balance 2026 $ $ $ May 1 Balance b/d 6 200 Cr 7 Inventory 2 430 8 630 Cr 10 Inventory 590 8 040 Cr 21 Cash at bank 5 700 2 340 Cr 21 Discount received 300 2 040 Cr Jun 1 Balance b/d 2 040 Cr REQUIRED (c) State one example of non -accounting information which a business might consider when deciding which credit supplier to purchase inventory from. ……………………………………….…………………………………………………………….. …………………………….………………………………………………………..…………… [1] (d) Explain the transaction on 10 May 2026. ……………………………………….…………………………………………………………….. …………………………….………………………………………………………..…………… [1] (e) Calculate the rate of the discount received on 21 May 2026. ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. ……………………………………….…………………………………………………………….. …………………………….………………………………………………………..…………… [1] [Total: 12]

9 [Turn over 4 The following shows Acai Trading’s cash at bank account and bank statement for the month of June 2026. The ending balances did not tally. Cash at bank account Cheque Debit Credit Balance 2026 No. $ $ $ Jun 1 Balance b/d 4 020 Dr 3 Trade payable: Mango 122 2 300 1 720 Dr 5 Sales revenue 1 600 3 320 Dr 9 Advertising 123 1 850 1 470 Dr 12 Trade receivable: SPK 3 900 5 370 Dr 17 Sales revenue 5 820 11 190 Dr 24 Inventory 124 3 000 8 190 Dr 27 Utilities 125 2 540 5 650 Dr 30 Sales revenue 4 700 10 350 Dr Jul 1 Balance b/d 10 350 Dr Bank statement Payments Receipts Balance 2026 $ $ $ Jun 1 Balance b/f 4 770 Cr 2 Cheque no. 120 750 4 020 Cr 3 Cheque no. 122 2 300 1 720 Cr 5 Cash deposit 1 600 3 320 Cr 14 Cheque deposit 3 900 7 220 Cr 20 Cheque deposit 5 820 13 040 Cr 25 Cheque no. 124 3 000 10 040 Cr 28 Cheque no. 125 2 540 7 500 Cr 30 Bank charges 490 7 010 Cr REQUIRED (a) Explain why