Pakistan International School Jeddah – English Section

Academic Year 2024 -25

Department of Commerce

Subject: Accounting (9706) Duration: 40 minutes

Student Name: Class AS:__________

Date: ____________

Test 2 (Variant 2)

For examiner use

Examiner Farrukh Saleem Question Total Marks
marks obtained
1 15
2 10
3 05
Maximum marks 30

Instructions:

• Write your name and ID number.

• Answer all questions.
• Write your answer to each question in the space provided.
• Use a black or dark blue pen.
• Do not use an erasable pen or correction fluid.
• You may use a calculator.

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1. XYZ plc prepares accounts to 30 November each year. The company's machinery are depreciated
on the straight-line basis at a rate of 15% of cost. Monthly calculation of depreciation was
adopted. As at 30 November 2024, the company owned the following vans:

Machinery Date Purchased Cost Net book value

$ $
A 1 December 2021 Needs to be 7 920
Calculated
B 1 April 2022 19 200 11 520
C 1 June 2023 14 800 11 470
D 1 August 2024 21 600 20 520

On 1 July 2025, Machinery A was part-exchanged for Machinery E. The company paid $11 200
to the supplier of Machinery E. This was net of a $6 000 part-exchange allowance.

Required:
(a) Calculate the original cost of Machine A at 1 December 2021.

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(b) For XYZ plc prepare ledger accounts for machinery, accumulated depreciation account
and machinery disposal account for the year ended 30 November 2025.

Machinery Cost Account

Date $ Date $

1 Dec Balance b/d

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Accumulated Depreciation Account

Date $ Date $

1 Dec Balance b/d

Machinery Disposal Account

Date $ Date $

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(c) Briefly explain why the company adopted the straight-line method for calculating depreciation

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2. The following balances appear in Alishba’s control accounts at 1 January 2024.

$
Total of amounts due to credit suppliers 54 900
Total of suppliers overpaid balances 600
Total of amounts due from credit customers 109 800
Total of customers overpaid balances 1 200

The accountant extracted the following information from the books of prime entry for the month
of January 2024.
$
Sales journal 129 920
Purchases journal 64 960
Sales returns journal 5 720
Purchase returns Journal 2 860
Cash book: payments to credit suppliers 53 960
Cash book: payments received from credit customers 107 920
Cash book: refunds from suppliers 500
Cash book: refunds to customers 1 000
Cash book: total of discount debit column 3 560
Cash book: total of discount credit column 2 120
Cash book: total of cheques issued dishonoured 5 390
Journal: Bad debts written off 2 500
Journal: Interest charged by suppliers on overdue accounts 940
Journal: Interest charged from customers on overdue accounts 1 880

Additional information:
(i) Included in the payments received from customers above $107 920 a cheque of $9 700
received from Abeeha a customer in full settlement of her debt of $10 000 was returned unpaid
by the bank due to insufficient funds.

(ii) Alishba both buys from and sell to Sana. At 31 January Sana owed $5 500 to Alishba and
Alishba owed $7 750 to Sana. It was agreed to set off these balances.

(iii) At 31 January 2024, credit balance in the sales ledger control account was $1 930 whereas
on the same date debit balance in the purchase ledger control account was $960.
Required:
(a) Prepare a purchase ledger control account at 31 January 2024.

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Purchase Ledger Control Account

Date $ Date $

1 Jan Balance b/d 600 1 Jan Balance b/d 54 900

31 Jan 31 Jan

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(b) State two reasons for preparing Purchase ledger control account.

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3. Multiple choice questions:

(i) At the financial year end of a business, the following information is available.

What is the current balance in the cash book?

A $400 credit B $550 debit C $550 credit D $400 debit

(ii) Amna is worried that her book-keeper may have been forgetting to record purchase returns.
What should she do to find out?

1 Check purchases ledger balances against statements of account

2 Extract a trial balance showing individual purchases ledger accounts
3 Prepare a purchases ledger control account

A 1 and 2 B 3 only C 2 and 3 only D 1 only

(iii) The draft profit for a business was $64 000 before the following information was taken into
account.

• An allowance for irrecoverable debts was maintained at 2% of trade receivables. The total
of trade receivables was $150 000 at the beginning of the period and $220 000 at the end
of the period.
• On the last day of the period $4000 was recovered from a trade receivable that had
been written off as irrecoverable.

What is the revised profit for the period?

A $62 600 B $58 600 C $66 600 D $63 600

(iv) A trade payable for $720 transferred from the purchase’s ledger has been entered on the
wrong side of the sales ledger control account. The sales ledger control account has a closing
balance of $92 460 before correcting the transfer. An allowance for irrecoverable debts of
$1000 is to be made.

What is the correct balance on the sales ledger control account?

A $91 020 B $90 020 C $92 180 D $91 740

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(v) Why does a business charge depreciation?

1 To charge the cost of an asset to each period that benefits from its use
2 To treat each asset according to the concept of consistency
3 To be able to replace an asset at the end of its useful life

A 1 and 2 B 2 only C 2 and 3 D 3 only

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