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    This document consists of 10  printed pages and 2  blank pages. IB14 06_7110_12/3RP © UCLES 2014 [Turn over          *                 6                 3                 6                 3                 0                 0                 3                 8                 9                 4                *              Cambridge International Examinations Cambridge Ordinary Level PRINCIPLES OF ACCOUNTS 7110/12  Paper 1 Multiple Choice  May/June 2014 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, 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. DO NOT  WRITE IN ANY BARCODES. 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 2014 7110/12/M/J/14 1  Which statement about a computerised accounting system is correct? A  The general ledger does not include non-current asset accounts. B  The income statement always shows a profit. C  The statement of financial position does not include non-current asset accounts. D  The trial balance always balances. 2  Which is a liability of a business? A amount owing by credit customers B amount owing to credit suppliers C long term loan to employee D property tax paid in advance 3  A business bought a computer for office use and paid by cheque. How will the business record the transaction? account to be debited account to be credited A bank office equipment B office equipment bank C bank purchases D purchases bank 4  A trader divides his ledger into sales, purchases and general ledgers. Which statement is not  correct? A  It is easier to locate and refer to ledger accounts. B  Maintaining the ledger can be divided between several people. C  The same type of accounts can be kept together. D  There are fewer entries in the sales and purchases accounts.  3   © UCLES 2014 7110/12/M/J/14 [Turn over    5  On 1 April Jane sold goods on credit to Martha subject to a trade discount of 25%. Martha returned goods, list price $200, to Jane on 7 April. How will Martha record the transaction of 7 April? book of prime (srcinal) entry account to be debited account to be credited $ $ A purchases returns journal Jane 150 purchases returns 150 B purchases returns journal Jane 200 purchases returns 200 C sales returns journal sales returns 150 Martha 150 D sales returns journal sales returns 200 Martha 200 6  The cash book has a credit balance of $1500. There are unpresented cheques of $350 and uncredited deposits of $150. What is the balance on the bank statement? A $1300 B $1300 overdrawn C $1700 D $1700 overdrawn 7  Melissa transferred $5000 from the bank deposit account to the bank current account on 1 May. On the same day she received a bank loan, $10   000, which she paid into the bank current account. How will Melissa record these transactions? bank loan account bank deposit account bank current account debit credit debit credit debit credit A          B          C          D           4   © UCLES 2014 7110/12/M/J/14 8  The following account appeared in Sue’s ledger. Tony account $ $ May 1 balance b   /   d 400 May 16 returns 21 12 sales 590 28 bank 284 discount 6 31 balance c   /   d 679 990 990 Which statement is correct? A  On 12 May Tony sold goods, $590, to Sue. B  On 16 May Sue returned goods, $21, to Tony. C  On 28 May Tony received discount, $6, from Sue. D  On 31 May Sue owed $679 to Tony. 9  Which error would cause the trial balance totals to disagree? A  Business stationery purchased by cheque had not been recorded. B  Goods purchased on credit had been debited to the supplier’s account. C  Goods sold on credit had been debited to the account of the wrong customer. D  The purchase of a new machine had been debited to the purchases account. 10  Wilmer rents property to a tenant at a monthly rent of $300. On 1 April 2013 the tenant owed one month’s rent. During the year ended 31 March 2014 the tenant paid $4800 for the period 1 March 2013 to 30 June 2014. How much rent will Wilmer transfer to the income statement for the year ended 31 March 2014? A  $3600 B  $3900 C  $4200 D  $4500 11  Amina is a wholesaler selling shoes to retailers. Which is a revenue receipt? A  capital introduced B  long-term bank loan C  proceeds of sale of shelving at book value D  proceeds of sale of shoes at list price
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