1. Mary buys goods on credit from Kim. Mary receives 14% trade discount on all purchases
and takes advantage of the 5% cash discount offered for payment within 14 days. The
following information is available:
2013
June 1 Mary owed Kim $680 for goods purchased on 29 May 2013.
June 4 Kim sold goods to Mary, list price $800.
June 5 Mary sent Kim a cheque for the balance owing on 1 June.
June 8 Mary returned goods purchased on 4 June, list price $100, to Kim.
June 28 Kim sold further goods to Mary, list price $300.
June 29 Kim received a cheque from Mary for goods purchased on 4 June.
June 30 Mary received details from Kim of her transactions during the month.
(a) (i) State two reasons why trade discount was given to Mary.
1 ...........................................................................................................................................................
................................................................................................................................................................
1 ...........................................................................................................................................................
................................................................................................................................................................ [2]
(b) State the purpose of the three documents in 1 to 3 above. Name the book of prime entry in
which Sam Stryder will enter each document.
(i) Invoice
Purpose ----------------------------------------------------------------------------------------------
(iii) Cheque
Purpose ----------------------------------------------------------------------------------------------
Page 1|6
REVISION TEST – P2 (Ch. 1-8 ) – PRINCIPLES OF ACCOUNTS (7110) Class: 9- Cambridge
Date: 17-04-2018
REQUIRED:
(c) Complete the table below for above transactions.
June 1
June 4
June 5
June 8
June 28
June 29
June 30
[14]
Question 2: Hannan is a sole trader who maintains a full set of accounting records
including a three-column cash book.
REQUIRED
(a) Explain why the cash book is both a book of prime (original) entry and also part of the
double entry system.
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------[2]
Page 2|6
REVISION TEST – P2 (Ch. 1-8 ) – PRINCIPLES OF ACCOUNTS (7110) Class: 9- Cambridge
Date: 17-04-2018
On 1 January 2012 Hannan had the following debit balances in his cash book:
$
Cash 100
Bank 1942
Hannan’s transactions for the month of January 2012 included the following:
Jan 3 Paid Pervaiz $398 by cheque in full settlement of his account of
$410
30 Paid all the remaining cash into the bank except $50
REQUIRED
(b) Enter the above transactions in Hannan’s cash book on the page opposite. [2]
Balance the cash book at 31 January 2012 and bring down the balances on 1
February 2012. [10]
Page 3|6
REVISION TEST – P2 (Ch. 1-8 ) – PRINCIPLES OF ACCOUNTS (7110) Class: 9- Cambridge
Date: 17-04-2018
Ban
$
k
Ca
sh
$
Discou
$
nt
Det
ails
Date
Hannan’s
Ban
$
k
Cashbook
Ca
sh
$
Discou
$
nt
Det
ails
Date
Page 4|6
REVISION TEST – P2 (Ch. 1-8 ) – PRINCIPLES OF ACCOUNTS (7110) Class: 9-
Cambridge
Date: 17-04-2018
(c) Hannan’s bank statement for January 2012 showed that his bank account was For
overdrawn for most of the month. Examin
er's
Use
--------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------- [2]
(e) On 20 March 2012 Hannan decided to write off $115 owed by Saud as a bad
debt.
Prepare the journal entry Hannan would make to record this. A narrative is
required.
Journal
Debit Credit
$ $
[2]
Page 5|6
MONTHLY CAT (MARCH, 2018) – PRINCIPLES OF ACCOUNTS Class: 9- Cambridge
Date: 16-03-2018
(f) On 14 May 2012 Hannan received a cheque for $115 from Saud.
(g) Suggest two ways in which Hannan could reduce the risk of bad debts in the future.
(i)
-------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
(ii)
--------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------- [2]
[Total: 25]