CAPE Accounting Unit 1 · 2021 · Paper 2

19 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 marksList FOUR main users of financial statements.
2. 1(a)(ii)4 marksState ONE purpose of financial statements for EACH of the users listed in (a)(i).
3. 1(b)4 marksDifferentiate between the terms 'accrual basis accounting' and 'cash basis accounting'.
4. 1(c)(i)2 marksOutline ONE benefit of a computerized accounting system to the process of independent internal verification.
5. 1(c)(ii)8 marksDiscuss the impact of the introduction of an integrated computerized accounting system on EACH of the following processes: • Recording of information • Access to records
6. 1(d)13 marksPrepare journal entries (without narratives) to record the transactions in 2019.
7. 2(a)(i)2 marksState TWO main characteristics of a Partnership that may be appropriate for Joe's new business.
8. 2(a)(ii)2 marksState TWO main characteristics of a Private company that may be appropriate for Joe's new business.
9. 2(a)(iii)2 marksState TWO main characteristics of a Public company that may be appropriate for Joe's new business.
10. 2(b)5 marksPrepare the journal entry to record the formation of the partnership.
11. 2(c)4 marksList FOUR additional terms, other than those mentioned in the case, which may be found in the formal partnership agreement.
12. 2(d)(i)11 marksPrepare the entries to record the incorporation, assuming that the new company issues all 30,000 of the ordinary shares.
13. 2(d)(ii)9 marksPrepare the opening balance sheet of the new company, Advanced Marketing Inc., as at 1 January 2021.
14. 3(a)(i)2 marksOutline the effects of inflation on financial statements, specifically relating to Closing inventory.
15. 3(a)(ii)2 marksOutline the effects of inflation on financial statements, specifically relating to Depreciation.
16. 3(a)(iii)3 marksDescribe the current cost accounting method which may be used as an alternative to historical cost accounting in areas of high inflation.
17. 3(b)(i)2 marksDefine the term 'adjusting events', according to Section 32 of the IFRS for SME (IAS 10) events after the reporting period.
18. 3(b)(ii)5 marksIdentify how EACH of the THREE bulleted post-balance sheet events above should be reflected in the financial statements of Tai Ltd for the year ended 31 December 2020.
19. 3(c)21 marksUsing the indirect method, prepare a statement of cash flows for the year ended 31 December 2020, in accordance with Section 7 IFRS for SMEs (IAS 7).