CAPE Accounting Unit 1 · 2011 · Paper 2

18 questions and parts from this paper. Open one to see it in full, then practise it on Quelpr and get it marked against the mark scheme.

1. 1(a)15 marksPrepare the journal entries to record EACH of the given situations (i) to (v).
2. 1(b)(i)3 marksExplain THREE purposes of accounting standards in the commercial activity of a country.
3. 1(b)(ii)4 marksIdentify TWO groups of persons who are represented on the International Accounting Standards Board and give ONE reason for EACH group to show why it needs accounting standards.
4. 1(b)(iii)8 marksDefine EACH of the following accounting concepts: Relevance, Reliability, Comparability, Consistency.
5. 1(c)5 marksOutline FIVE ways in which accounting information in an Electronic Data Processing (EDP) environment can be controlled.
6. 2(a)15 marksUse the available information to adjust the account balances as appropriate and prepare a corrected classified balance sheet for Manuel Congo Company as at July 31, 2010, in good form.
7. 2(b)4 marksIdentify ONE benefit that will arise when operating a business under EACH type of entity: Proprietorship, Partnership, Company / Corporation, Non-Governmental Organizations (NGOs).
8. 2(c)16 marksPrepare a multiple-step Income Statement, in good form, for the year ended December 31, 2010.
9. 3(a)(i)2 marksCompute the current ratio for both companies.
10. 3(a)(ii)2 marksCompute the acid-test (quick) ratio for both companies.
11. 3(a)(iii)4 marksCompute the accounts receivable collection period for both companies.
12. 3(a)(iv)2 marksCompute the inventory turnover ratio for both companies.
13. 3(a)(v)2 marksCompute the debt to total assets ratio for both companies.
14. 3(a)(vi)2 marksCompute the debt to equity ratio for both companies.
15. 3(a)(vii)3 marksCompute the times interest earned ratio for both companies.
16. 3(b)6 marksPrepare a report for the bank outlining the performance of EACH company in terms of liquidity and solvency.
17. 3(c)2 marksIndicate which of the two companies should receive the loan AND give ONE reason why it should.
18. 3(d)10 marksDiscuss the proper accounting treatment, including any required note disclosures, for EACH situation in the financial statements / accounting records of Montego Company.