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16 marksRecording Financial Information

CAPE Accounting Unit 1 · 2009 · Paper 2 · Question 1(d)(i)

Caribbean Biscuits draft financial statements for the year ended June 30, 2008 showed a profit of 172,800. A suspense account with a credit balance of 6,620 was included in the balance sheet. Four errors were subsequently revealed involving opening accrual of motor repairs, unposted cash discounts, incorrect depreciation method for motor vehicles, and unrecorded irrecoverable debts.

Prepare journal entries with narratives to correct the four errors described.

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Other parts of this question

  1. 1(a)List the FIVE characteristics and match EACH with the appropriate definition by selecting the correct letter from the table.[5 marks]
  2. 1(b)Define the term 'due process' as it relates to the development of accounting standards.[2 marks]
  3. 1(c)(i)What is the meaning of the term 'internal control'?[2 marks]
  4. 1(c)(ii)What is the role of internal control in a business organization?[3 marks]
  5. 1(c)(iii)Why are internal controls important for inventory (stock)?[3 marks]
  6. 1(c)(iv)Identify TWO internal controls that should be put in place for accounts receivable (debtors).[2 marks]
  7. 1(d)(ii)Prepare a statement showing the necessary adjustments to the profit.[2 marks]

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