HGV 2022 Prelim P1

HILLGROVESECONDARYSCHOOLPRELIMINARYEXAMINATION2022SECONDARYFOUR(EXPRESS)/ FIVE(NORMALACADEMIC) CANDIDATENAME ( ) CLASS - CENTRENUMBER S INDEXNUMBER PRINCIPLESOFACCOUNTSPaper1 CandidatesanswerontheQuestionPaper.NoAdditionalMaterialsarerequired. 7087/0117Aug20221hour11.40AMto12.40PM READTHESEINSTRUCTIONSFIRSTWriteindarkblueorblackpen.YoumayuseanHBpencil foranyroughworking.Donotusestaples,paperclips,glueorcorrectionfluid. Answer allquestions. Thenumberofmarksisgiveninbrackets[ ]attheendofeachquestionorpartquestion. For Examiner’sUseMarks123Parent’s/Guardian’sSignature:___________________ 4TOTAL Thisdocumentconsistsof 11printedpages.

2 1 PraiseTradingrecordsitstransactionsbasedonsourcedocumentsinaccordancetotheobjectivitytheoryandthehistorical costtheory. REQUIRED (a) Explaintheobjectivitytheory. [1] (b) Explainthehistorical costtheory. [1] PraiseTradingissuedaninvoicewhenitsoldgoods. REQUIRED (c) Explainthepurposeoftheinvoice. [1] PraiseTradingrecordedthefollowingtransactions. REQUIRED (d) State the sourcedocument that PraiseTradingusedtorecordeachtransaction. Donotuse‘receipt’ and‘bankstatement’ inyouranswer. (i) Receivedchequefromcreditcustomer (ii) Paidcreditsupplierbycheque [1] HGVPRELIMINARYEXAMINATION20224E/5NAPRINCIPLESOFACCOUNTSPAPER1

3 PraiseTradingimplementstheaccountingcycleandtheaccountinginformationsystem. REQUIRED (e) Fill inmissingstages. [1] (i) Theaccountingcycle (ii) Theaccountinginformationsystem Praise Trading does not record high staff morale in its books in accordance with themonetarytheory. REQUIRED (f) Explainthemonetarytheory. [1] Praise Trading prepares its financial statements at the end of every 12 months inaccordancetotheaccountingperiodtheory. REQUIRED (g) Explaintheaccountingperiodtheory. [1] [Total: 7] HGVPRELIMINARYEXAMINATION20224E/5NAPRINCIPLESOFACCOUNTSPAPER1

4 2 GoodFit andQuickStepareinthebusinessof buyingandsellingsafetybootsusedbyworkersworkinginconstruction,manufacturingandlogisticsindustries. Thefollowinginformationregardingtherateofinventoryturnoverisavailable. GoodFit QuickStep31March2021 31March2022 31March2021 31March20224.06times 6.64times 8.11times ? ThefollowinginformationaboutQuickStepsisavailable. $Costofsalesfortheyearended31March2022 850000Inventoryasat31March2022 92120Inventoryasat31March2021 94150 REQUIRED (a) State onenon-accountinginformationthatbusinessesconsiderwhendecidingwhichtypeofinventorytopurchasefromsuppliers. [1] (b) Calculate QuickStep’srateof inventoryturnover for theyear ended31March2022(totwodecimal places).Showallworkings. [2] HGVPRELIMINARYEXAMINATION20224E/5NAPRINCIPLESOFACCOUNTSPAPER1

5 (c) Evaluateefficiencyininventorymanagementfor bothbusinessesfor bothyears. [4] (d) Suggest onereasonforthetrendin(c). [1] HGVPRELIMINARYEXAMINATION20224E/5NAPRINCIPLESOFACCOUNTSPAPER1

6 QuickStepreviewsitstradereceivablesattheendofeachfinancial period. REQUIRED (e) Using an accounting theory, explain why Quick Step records impairment loss ontradereceivablesafteritsreview. [2] Thebalancei