CAPE Accounting Unit 1 · 2017 · Paper 2

21 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)(i)4 marksExplain the meaning of 'Verifiability' and 'Prudence' as defined in the IASB conceptual framework for the preparation and presentation of financial statements.
2. 1(a)(ii)4 marksAccording to the framework, explain TWO characteristics of relevant information that make the information in financial statements relevant to users.
3. 1(b)(i)2 marksList TWO other principles of internal controls concerning the management of cash, in addition to physical, mechanical and electronic controls, and segregation of duties.
4. 1(b)(ii)8 marksDescribe TWO procedures to be implemented for EACH of the FOUR principles given as well as recommended in (b)(i).
5. 1(b)(iii)6 marksOutline THREE differences between an 'internal auditor' and an 'external auditor'.
6. 1(c)11 marksPrepare the journal entries (without narratives) to record the transactions during 2016.
7. 2(a)(i)7 marksPrepare the Revaluation Account.
8. 2(a)(ii)9 marksPrepare the partners' Capital Accounts of the old and the new firm.
9. 2(b)(i)2 marksDistinguish between corporations and partnerships in terms of owners' liability for debts of the business.
10. 2(b)(ii)2 marksDistinguish between corporations and partnerships in terms of transferability of ownership interest.
11. 2(b)(iii)2 marksDistinguish between corporations and partnerships in terms of continuity of existence.
12. 2(b)(iv)13 marksPrepare the statement of comprehensive income for the year to 31 December 2016 for Audrey Cosmetics Ltd in accordance with International Financial Reporting Standards as far as the information permits.
13. 3(a)(i)2 marksCalculate the Net income percentage for 2015 and 2016.
14. 3(a)(ii)2 marksCalculate the Inventory turnover ratio for 2015 and 2016.
15. 3(a)(iii)2 marksCalculate the Quick ratio for 2015 and 2016.
16. 3(a)(iv)2 marksCalculate the Earnings per share for 2015 and 2016.
17. 3(a)(v)2 marksCalculate the Debt to equity ratio for 2015 and 2016.
18. 3(b)(i)6 marksDefine any TWO of the ratios in (a) AND use EACH ratio defined to comment on the performance of the company over the two-year period.
19. 3(b)(ii)2 marksList TWO limitations of using ratios to evaluate the performance of the company.
20. 3(c)13 marksCompute the missing figures for items A to I in the partially prepared Cash Flow Statement for Kingsland Ltd for the year ended 31 December 2016.
21. 3(d)4 marksDistinguish between the role of a 'liquidator' and that of a 'receiver'.