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    This document consists of 9  printed pages and 3  blank pages. IB13 06_7110_12/2RP © UCLES 2013 [Turn over          *                 1                 8                 4                 2                 4                 4                 2                 6                 2                 5                *             UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS General Certificate of Education Ordinary Level PRINCIPLES OF ACCOUNTS 7110/12  Paper 1 Multiple Choice  May/June 2013 1 hour Additional Materials: Multiple Choice Answer Sheet Soft clean eraser Soft pencil (type B or HB is recommended) READ THESE INSTRUCTIONS FIRST Write in soft pencil. Do not use staples, paper clips, highlighters, glue or correction fluid. Write your name, Centre number and candidate number on the Answer Sheet in the spaces provided unless this has been done for you. There are thirty  questions on this paper. Answer all  questions. For each question there are four possible answers A , B , C  and D . Choose the one  you consider correct and record your choice in soft pencil  on the separate Answer Sheet. Read the instructions on the Answer Sheet very carefully. Each correct answer will score one mark. A mark will not be deducted for a wrong answer. Any rough working should be done in this booklet. Calculators may be used.  2   © UCLES 2013 7110/12/M/J/13 1  A trader prepares financial statements each year. What do these assist the trader to do? A calculate the amount owing to creditors B calculate the cash drawings C check the bank statement balance D make decisions about the future 2  What is the accounting equation? A  assets = capital – liabilities B  capital = assets + liabilities C  capital = assets – liabilities D  liabilities = capital + assets 3  Which is recorded in the sales ledger? A  cash sales B  cheque paid to a creditor C  cheque received from a debtor D  sale of non-current assets 4  A customer received an invoice for $98 for goods priced at $88. Which document will the customer use to inform the supplier of this error? A  credit note B  debit note C  receipt D  statement of account 5  Where is the total of the purchases journal posted? A  credit income statement B  debit income statement C  credit purchases account D  debit purchases account  3   © UCLES 2013 7110/12/M/J/13 [Turn over    6  Sue allowed Jane a discount for prompt payment. How would this be recorded in Jane’s books? account to be debited account to be credited A discount allowed Sue B discount received Sue C Sue discount allowed D Sue discount received 7  A business’s bank statement showed an overdraft of $8500. A cheque, $400, paid to a supplier has not been presented for payment. What will be the balance on the bank statement after this cheque has been paid by the bank? A  $8100 credit B  $8100 debit C  $8900 credit D  $8900 debit 8  The following partly-completed account appeared in Edward’s sales ledger.  Ann account 2013 debit credit balance $ $ $ Jan 4 sales 21   500 11 sales returns 500 On 30 January, Ann paid $10   000 by cheque and was given a cash discount of $200. Which is correct on 31 January? A  Ann owes Edward $10   800. B  Ann owes Edward $11   200. C  Edward owes Ann $10   800. D  Edward owes Ann $11   200.  4   © UCLES 2013 7110/12/M/J/13 9  A business discovers that cash received from Abdul, a credit customer, has been recorded as a cash sale. How can this be corrected? account to be debited account to be credited A  Abdul cash B  Abdul sales C cash Abdul D sales Abdul 10  What is a trial balance? A  a list of balances on a business’s books on a certain date B  a list of the assets, liabilities and capital of a business on a certain date C  a summary of all a business’s transactions for the year D  a summary of the financial position of a business at the year end 11  On 1 January 2012 Ahmed’s rent receivable account had a credit balance of $160. On 31 December 2012 he transferred $1800 from the rent receivable account to the income statement. On 1 January 2013 the rent receivable account had a credit balance of $90. How much rent did Ahmed receive in 2012? A  $1550 B  $1730 C  $1870 D  $2050 12  Bashir maintains a provision for doubtful debts of 3% of the trade receivables at the end of the year. On 31 December 2011 trade receivables amounted to $70   000. On 31 December 2012 trade receivables amounted to $73   000. Which double entry should Bashir make on 31 December 2012? debit $ credit $ A income statement 90 provision for doubtful debts account 90 B income statement 2100 provision for doubtful debts account 2100 C provision for doubtful debts account 90 income statement 90 D provision for doubtful debts account 2100 income statement 2100
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