Accounting 1 (0705)

Accounting

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Level:

Year: 2020

Answers (100 )
CAMEROON GENERAL CERTIFICATE OF EDUCATION BOARD
General Certificate of Education Examination
0705 Accounting 1
JUNE 2020 ADVANCED LEVEL
Centre Number
Centre Name
Candidate Identification No.
Candidate Name
Mobile phones are NOT allowed in the examination room.
MULTIPLE CHOICE QUESTION PAPER
One and a half hours
INSTRUCTIONS TO CANDIDATES
Read the following instructions carefully before you start answering the questions in this paper. Make
sure you have a soft HB pencil and an eraser for this examination.
1. USE A SOFT HB PENCIL THROUGHOUT THE EXAMINATION.
2. DO NOT OPEN THIS BOOKLET UNTIL YOU ARE TOLD TO DO SO.
Before the examination begins:
3. Check that this question booklet is headed “Advanced Level – 0705 Accounting 1”
4. Fill in the information required in the spaces above.
5. Fill in the information required in the spaces provided on the answer sheet using your HB pencil:
Candidate Name, Exam Session, Subject Code and Candidate Identification Number.
Take care that you do not crease or fold the answer sheet or make any marks on it other than those
asked for in these instructions.
How to answer the questions in this examination
6. Answer ALL the 50 questions in this Examination. All questions carry equal marks.
7. Calculators are allowed.
8. Each question has FOUR suggested answers: A, B, C and D. Decide which answer is appropriate.
Find the number of the question on the Answer Sheet and draw a horizontal line across the letter to
join the square brackets for the answer you have chosen.
For example, if C is your correct answer, mark C as shown below:
9. Mark only one answer for each question. If you mark more than one answer, you will score a zero
for that question. If you change your mind about an answer, erase the first mark carefully, then
mark your new answer.
10. Avoid spending too much time on any one question. If you find a question difficult, move on to the
next question. You can come back to this question later.
11. Do all rough work in this booklet using the blank spaces in the question booklet.
12. At the end of the examination, the invigilator shall collect the answer sheet first and then the
question booklet. DO NOT ATTEMPT TO LEAVE THE EXAMINATION HALL WITH IT.
____________________________________________________________________________________ Turn Over
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2020 CGCEB
1. Which item below does not describe a
balance sheet equation?
A
Assets = Liabilities + Stockholders'
Equity.
B Financial position at a point in time.
C
Assets – Liabilities = Stockholders'
Equity.
D
Assets + Liabilities = Stockholders'
Equity
____________________________________________________________________
2. What ratio measures the ability of the firm to
satisfy its short term obligations as they come
due?
A Activity ratio
B Times interest earned ratio
C Current ratio
D Inventory turnover ratio
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3. An Equipment has an original value of
2000,000 FCFA and a life span of 5 years. Its
depreciates following the reducing balance
method. The depreciation expense for the first
year is:
A 800,000 FCFA
B 400,000 FCFA
C 750,000 FCFA
D 480,000 FCFA
____________________________________________________________________
4. Given the following data:
Acquisition cost 6,000,000 FCFA
Estimated residual value 1,000,000 FCFA
Estimated useful life 5 years
Depreciation method used: Straight-line
What is the depreciation expense of the asset
for the first year?
A 2,000,000 FCFA
B 1,500,000 FCFA
C 1,200,000 FCFA
D 1,000,000 FCFA
____________________________________________________________________
5. Base on IAS 7, the cash flow statement
consists of the following sections:
A Operating and non-operating
B Current and non-current
C Operating, investing, and financing
D Trading and financial
____________________________________________________________________
6. Under which condition should an accountant
record a transaction?
A If it is materialised by a concrete
document
B If it has a tax implication
C On managers’ demand
D When it occurs irrespective of source
documents
____________________________________________________________________
7. Which system of preparing financial
statements under OHADA is suitable for a
commercial enterprise with an annual
turnover of more than 100,000,000 FCFA?
A Standard system
B Simplified system
C Minimum cash system
D Centralised system
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8. KAN has cash of 316,000 FCFA, accounts
receivable of 687,000 FCFA, accounts
payable of 709,000 FCFA, and inventory of
2,108,000 FCFA. What is the value of the
quick ratio (acid test ratio)?
A 1.23 : 1
B 1.45 : 1
C 1.71 : 1
D 1.41 : 1
____________________________________________________________________
9. The following data concern rent for a
company:
- Rent paid in 2016 1,500,000 FCFA
- Rent owed on 01/01/2016 200,000 FCFA
- Rent owed on 31/12/2016 700,000 FCFA
What amount of rental expenses will
appear on the income statement for 2016?
A 2,000,000 FCFA
B 2,200,000 FCFA
C 1,000,000 FCFA
D 1,500,000 FCFA
____________________________________________________________________
10. Which of the following is classified as an
investing activity in the cash flow statement
under IAS 7?
A Purchase of equipment
B Payment of dividend
C Issue of ordinary share capital
D Payment of interest
____________________________________________________________________
11. In preparing bank reconciliation statement,
unpresented cheques are recorded on:
A Debit side of bank account in the bank
reconciliation statement
B Credit side of bank account in the bank
reconciliation statement
C Credit side of bank statement in the
bank reconciliation statement
D Debit side of bank statement in the bank
reconciliation statement
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12. The bank reconciliation statement of SAM
Plc as at 31
st
December 2017 is presented as
follows:
Description
Bank Account Bank Statement
Dr Cr Dr Cr
Bal to
reconcile
120,000 150,000
Cheque N
o
:
11
80,000
Cheque N
o
:
22
90,000
Cheque N
o
:
33
20,000
Cheque N
o
:
44
50,000
Bal c/d 110,000 110,000
The amount of uncredited cheques on the
bank reconciliation is:
A 80,000 FCFA
B 90,000 FCFA
C 20,000 FCFA
D 50,000 FCFA
____________________________________________________________________
13. Which accounting concepts states that
expenses should be recorded once anticipated
but revenues should not be recorded till they
are earned?
A Going concern concept
B Prudence concept
C Separate entity concept
D Business entity concept
____________________________________________________________________
14. Which of the following is not considered as
cash in-flow in the preparation of cash flow
statement?
A Increase in creditors
B Decrease in stocks
C Decrease in debtors
D Decrease in loans
____________________________________________________________________
15. A service is sold for 250,000 FCFA on
10 March. The service is carried out in
March; it is invoiced on 10 April and paid
for on 31 May. When is the transaction
recognised in accordance with accrual
basis?
A On 10 March
B On 10 April
C On 31 March
D On 31 May
____________________________________________________________________
16. Which one of the following is true about
prepaid expenses?
A Expenses that are shown in the balance
sheet as liabilities
B Expenses that cannot be carried forward
to the next accounting period
C Expenses that have been paid during the
accounting period but relate to the next
accounting period
D Expenses that are adjusted in the profit
and loss account by adding the amount
_______________________________________________________________________________
17. Legally, the duration of work per week
for a domestic servant is:
A 40 hours
B 54 hours
C 45 hours
D 56 hours
_______________________________________________________________________________
18. An enterprise delivered goods to a customer
worth 5,750,000 FCFA on 26/12/2017, but
the invoice was not issued up to the end of the
year. What adjustment entries are made on
31/12/2017 in the books of the enterprise?
A Dr Acc 418 and Cr Acc 701 with
5,750,000
B Dr Acc 411 and Cr Acc 701 with
5,750,000
C Dr Acc 601 and Cr Acc 408 with
5,750,000
D Dr Acc 6031 and Cr Acc 311 with
5,750,000
____________________________________________________________________
19. Which of the following is a compulsory
document that is prepared when sales takes
place among professionals?
A Cheque
B Invoice
C Receipt
D Cash voucher
_______________________________________________________________________________
20. Which of the following items appears in
both the income statement and the
statement of financial position in the same
year?
A Electricity bills paid
B Insurance paid
C Rents paid
D Accrued rents
_______________________________________________________________________________
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21. Bat & Bros LTD consumes annually 110,000
units of raw materials; the unit purchase price of
this raw material is 150 FCFA; the cost of
placing an order is 33,000 FCFA; the storing
cost is 10% of the average stock. The number of
orders to place is:
A 6
B 5
C 4
D 7
22. Using the information in question (21)
above, the economic order quantity (EOQ) is:
A 22,500 units.
B 22,000 units.
C 21,500 units.
D 21,000 units
____________________________________________________________________
23. XYZ Company realized an annual turnover
of 15,000,000 FCFA in 2016. The total
charges for the same period was 12,600,000
FCFA, of which 3,600,000 FCFA are fixed
charges.
What is the BEP of the Company?
A 8,000,000 FCFA
B 9,000,000 FCFA
C 9,090,000 FCFA
D 8,080,000 FCFA
_______________________________________________________________________________
24. All of the following are characteristics of
least squares technique in cost estimation,
EXCEPT:
A
There is a casual relationship between
data
B There is a good evidence of correlation
C
The line of best fit calculated is a good
prediction of the trend in data
D All data values are not necessarily used
____________________________________________________________________
25. In a process, the actual output is 8,750 units
and a normal loss of 10% is expected from
input of 10,000 units. Which ONE of the
following statements is correct?
A There is an abnormal loss of 250 units
B There is an abnormal gain of 250 units
C There is a normal loss of 250 units
D There is an abnormal loss of 1,000 units
____________________________________________________________________
26. The method of valuing stock of materials
where materials are issued out at the purchase
cost of the oldest stock in the warehouse is
known as:
A Weighted Average Cost (WAC)
B First In First Out (FIFO)
C Last In First Out (LIFO)
D Next In First Out (NIFO)
____________________________________________________________________
27. The trend of a company’s sale in units has
been found to be represented by:
Y = 1.8X + 250
Where Y = sale units
And X = Accounting period reference
In accounting period 35, the seasonal
variation will have an index value of 110. The
expected sale for period 35, to the nearest
units, is:
A 285 units
B 313 units
C 319 units
D 344 units
____________________________________________________________________
28. Which of the following assumption is true
about the relevant range in break-even
analysis?
A Total costs are unchanged
B Unit variable costs are unchanged
C Variable costs are non-linear
D Unit fixed costs are unchanged
____________________________________________________________________
29. The producon cost of Job Q2 is 500,000
FCFA and other overhead cost is 20% of the
producon cost. If the job has a 25% mark up
on total cost, then the selling price of Job Q2
is:
A 625,000 FCFA
B 725,000 FCFA
C 750,000 FCFA
D 650,000 FCFA
____________________________________________________________________
30. Which cost employs a similar approach to job
costing?
A Process costing
B Batch costing
C Contract costing
D Operation costing
____________________________________________________________________
31. The total of all direct expenses is known as:
A Total cost
B Overhead
C Prime cost
D Work cost
____________________________________________________________________
32. If a company chooses the FIFO method of
inventory pricing, which inventory will
appear as the ending inventory on the balance
sheet?
A The first inventory purchased.
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B Last inventory purchased.
C An average of all inventory purchased.
D The actual inventory which has not
been sold.
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33. Costing is a technique of:
A Inventory control
B Management control
C Ascertainment of cost
D Calculation of cost
____________________________________________________________________
34. Which costing method is suitable for a job
that takes several stages of production?
A Process
B Contract
C Batch
D Operation
____________________________________________________________________
35. When a job is very big and spread over long
periods of time the method of costing adopted
is:
A Process costing
B Job costing
C Contract costing
D Operation costing
____________________________________________________________________
36. The reduction of capital in a PLC Company is
decided by:
A The General Manager.
B The Share Person of the Board of
Directors.
C The Board of Directors.
D The General Assemble of Shareholders
____________________________________________________________________
37. The distributable profit does not include:
A Optional reserves.
B First Dividend.
C Statutory interest.
D Legal reserve
____________________________________________________________________
38. SAMAM PLC has an annual turnover of
298,125,000 FCFA. What is the limit of
deductibility of gifts allow by the company to
Elite One football teams in Cameroon with
respect to Cameroon tax code?
A 0.1% of turnover
B 5% of turnover
C 1% of turnover
D 0.5%. of turnover
____________________________________________________________________
39. According to 2016 finance law, the
principal rates of company income tax
and advanced company tax on turnover
under the actual earning system
respectively are:
A 35% and 1%
B 30% and 1%
C 30% and 2%
D 30% and 2.2%.
____________________________________________________________________
40. The fiscal profit of JON PLC for 2016
fiscal year is 1,000,000,000 FCFA; its
turnover tax exclusive is 10,000,000,000
FCFA. What is the amount of advanced
company tax?
A 110,000,000 FCFA
B 220,000,000 FCFA
C 330,000,000 FCFA
D 200,000,000 FCFA
____________________________________________________________________
41. Using the data in question (40) above, what
is the amount of the company tax for
2016?
A 220,000,000 FCFA
B 110,000,000 FCFA
C 330,000,000 FCFA
D 300,000,000 FCFA
____________________________________________________________________
42. Which of the following capital accounts has
right to statutory interest during profit
appropriation in a company?
A Account 1011 subscribed uncalled
capital
B Account 1012 subscribed called unpaid
capital
C Account 1013 subscribed called, paid
unredeemed capital
D Account 1014 subscribed called, paid
and redeemed capital
____________________________________________________________________
43. Person who bears the burden of VAT is:
A The enterprise.
B The tax collector.
C The final consumer.
D The Director of the enterprise
____________________________________________________________________
44. All of the following organisations are liable to
company income tax, EXCEPT:
A Joint stock company
B Cooperative society
C Public Cooperation
D Partnership
____________________________________________________________________
45. A household consumed 30 m
3
of water in the
month of December 2016 and is charged 360
FCFA per m
3
. The fixed monthly meter rent
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charged on the bill is 800 FCFA (VAT
exclusive). Any consumption above 10 m
3
is
liable to VAT as well as the meter rent. The
total amount of VAT included in the water
bill is:
A 1,386 FCFA
B 2,233 FCFA
C 1,540 FCFA
D 2,079 FCFA
____________________________________________________________________
46. The value of a share in a company based on
the patrimony is known as:
A Stock exchange value
B Financial value
C Profitability value
D Mathematical value
___________________________________________________________
47. The minimum number of shareholders in a
PLC is:
A 1
B 7
C 10
D 20
___________________________________________________________
48. Given the following
Account
number
Amount
FCFA
1011 13,500,000
109 18,900,000
2311 53,000,000
4011 18,900,000
1012 5,400,000
4616 7,200,000
1013 71,100,000
The total amount of capital is
A 18,900,000 FCFA
B 5,400,000 FCFA
C 90,000,000 FCFA
D 13,500,000 FCFA
____________________________________________________________________
49. The capital of X ltd is 45,000,000 FCFA
divided into shares of 10,000 FCFA.
Contribution in kind is 29,500,000 FCFA
(including provision for loss in value of stock
of goods of 500,000 FCFA). The total number
of shares in kind is:
A 4500 shares
B 2950 shares
C 2900 shares
D 1550 shares
____________________________________________________________________
50. The interest on shareholders current account
at the rate of 20% is 6,000,000 FCFA, BEAC
rate 13%. The excess interest to be reinstated
for tax purposes is:
A 300,000 FCFA
B 1,200,000 FCFA
C 4,500,000 FCFA
D 1,500,000 FCFA
____________________________________________________________________
STOP
GO BACK AND CHECK YOUR WORK
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