Devi Balika Vidyalaya, Colombo 08

1st Term Test -November

Online Evaluation 2018
Test- 2020 December

Grade 12
Accounting- Paper 01
Name: Duration: 1 hour

Answer all questions.

01. Which one of the following statements best describes role of accounting in a business,
I. It identifies, records, classify and summarise the transactions of a business
II. It provides information to the relevant parties to take decisions
III. It provides detailed information to the management
IV. It records all the transactions in a business and prepares financial statements
V. It provides information to the external parties (………...)
02. Which one of followings shows the accounting process in the correct order
A. Preparation of original documents
B. Preparation of trial balance
C. Transactions take place
D. Recording transactions in original day books
E. Posting to the ledger and balance the accounts
I. A,C,D,E,B IV. C, A,D,E,B
II. C,E,A,D,B V. B,E,D,A,C
III. A,D,C,B,E
(………...)

03. Which of the followings are characteristics of an asset according to conceptual

framework?
A. If brings future economic benefits to the business
B. Possibility of measuring the fair value
C. A resources that can be controlled by the business
I. A only IV. B and C only
II. A and C only V. A,B and C only
III. A and B only
(………)

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 04. Sarah started a business with Rs.400,000 using her personal savings on 01.05.2018.
on the same day she purchased a motor vehicle for Rs.2000,000 on credit. Purchases
during the month of May was Rs.200,000 and Rs. 25,000 worth goods were returned
due to faults in them. The source documents needed to record above transactions
respectively are,
I. Receipts , journal voucher, invoice, credit note
II. Receipts, payment voucher , invoice , debit note
III. Receipt, payment voucher , payment voucher ,debit note
IV. Journal voucher, journal voucher , invoice, credit note
V. Journal voucher , journal voucher, invoice, debit note
(………...)

Following information relates to question number 5 and 6.

The accounting equation of a business on 01.01.2018 was as follows.

Equity + Liabilities = Asset

400,000+ 100,000 = 500,000

Following transactions took place during the year.

1. Jan 2 A stock of Rs.60,000 was sold with a profit of Rs.20,000 on credit.

2. Jan 10 A debtor settled his account of Rs.50,000, allowed a discount of 10%
3. Jan 15 A stock with a selling price of Rs.60,000 was bought with a trade
discount of 10%
4. Jan 30 Bank loan instalment was paid 30,000 this includes interest of
Rs.5,000.
05. The new accounting equation after recording above transactions is (Rs,000)

Equity + Liabilities = Asset

I. 415 + 124 =539

II. 410 + 135 =545
III. 420 + 129 =549
IV. 410 + 129 =539
V. 415 + 129 =544
(………...)

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06. The impact on net asset after the transactions being recorded
I. An increase of Rs.10,000
II. A decrease of Rs.10,000
III. An increase of Rs.15,000
IV. An increase of Rs.20,000
V. A decrease of Rs.15,000
(………...)
07. Muthumali limited pays for her petty expenses using petty cash imprest system.
Following details are extracted from that business.
The balance of the petty cash control account as at 31/03/2018 was Rs.500,000. Petty
cash expenses paid for the month of March is Rs.3000. Petty cash expenses paid for
the month of April is Rs.1800. Petty cashier reimburses petty cash imprest on the first
day of the each month. The petty cash imprest and the balance of petty cash control
account as at 01/05/2018 respectively are?

Petty cash imprest (Rs.000) Balance at 01/05/2018(Rs.000)

I. 3500 1700
II. 3500 3500
III. 2300 1700
IV. 2300 1800
V. 4800 500

(………)

08. “ Sahodara” business is a VAT registered business and credit purchase and credit
sales of the business for the month of January 2018 are as follows.
 VAT excluded sales value of Rs.20,000 was sold to chathuli. VAT of 15% is
to be included.
 VAT excluded purchase price Rs.30,000 worth good were bought with a trade
discount of 10% and a VAT of 15% from Kosala.
 Goods were returned with a purchase value of Rs.4,000 after deducting a
trade discount of 10%
 The credit balance of the VAT control account at the beginning of January
was Rs.4000.

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The balance of the VAT account on 31st January is

I. Rs.5650 credit
II. Rs.450 credit
III. Rs.450 debit
IV. Rs.3550 debit
V. Rs.3550 credit
(………)

09. Minoli limited sold goods with a selling price of Rs.800,000 with a trade discount of
5% on credit. If the account is settled within a month from the date of sale, 5% cash
discount is allowed. According to the records of the business half of the debtors has
paid within a month and obtained the discount. The correct entry to record the
discount allowed is,
I. Discount allowed debit Rs.380.000 cash control acc credit 380,000
II. Debtors control account debit Rs.20000 discount allowed credit 20000
III. Discount allowed debit Rs.19.000 debtors control acc credit 19,000
IV. Debtors control account debit Rs.19000 discount allowed credit 19000
V. Discount allowed debit Rs.361,000 debtors control acc credit361,000
(………)

10. The debtors control account of Dishala’s business is having following details.
Balance as at 01/04/2017 Rs. 50,000
Credit sales Rs. 170,000
Receipts from debtors Rs. 130,000
Mistakenly debited the receipts from creditors Rs.30,000
Balance as at 31/03/2018 Rs.80,000
According to the above details value of return inwards for the year ended 31/03/2018
is,
I. Rs.40,000 IV. Rs.30,000
II. Rs.10,000 V. Rs.50,000
III. Rs.20,000
(………)

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 11. Which of the following statement is correct about the accounting process of a
business,
I. All the credit sales of a business is recorded in the sales journal
II. Trade discounts are allowed when the accounts are settled within the given
period of time
III. Cheques issued and dishonoured are recorded in cash receipts journal
IV. The totals of special journals are recorded in general journal and then posted
to ledger
V. All the original documents are prepared by the manager with his signature
(………)
12. Following information are relevant to the Virani’s company.
 Unrealised cheques on 01/08/2018 Rs.50,000
 Cheques deposited in the bank according to the cash control account for the
month of August Rs. 270,000
 Realised cheques according to the bank statement for the month of august
Rs.210,000

According to the bank statement , the value of the unrealised cheques as at

31/08/2018,
I. Rs.50,000 IV. Rs.260,000
II. Rs.60,000 V. Rs.100,000
III. Rs.110,000
(………)

Use following information to answer the question 13 and 14

Vihan’s business conducts all the cash transactions through a bank current account. The bank
statement for the month of January 2018 was received on 6th of February 2018.

The summary of the bank statement is as follows.

2018 Jan 01 Balance Rs.50,000 Direct debit by debtors Rs.100,000

Cheques paid Rs. 375000 Standing order -insurance Rs.25,000

Realised cheques Rs.500.000

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The summary of bank transactions in the books are as follows.

2018 Jan 01 Balance Rs.50,000

Total of cash receipts journal at 31st Jan Rs.600,000

Total of cash payment journal at 31st Jan Rs.450,000

There were no unrealised or unpresented cheques on 1st of January 2018

13. The adjusted cash book balance as at 31/01/2018 is

I. Rs.275,000 IV. Rs. 200,000
II. Rs.175,000 V. Rs.250,000
III. Rs.150,000
(………)
14. The correct statements about the cash transactions of the business for the month of
January
A. Unrealised cheques on 31/01/2018 is Rs. 100,000
B. Unpresented cheques on 31/01/2018 is Rs. 75,000
C. Total cash receipts for the month is Rs. 700,000
D. Total cash payment for the month is Rs.475,000
I. A and B only IV. D and E only
II. B and D only V. All of A , B, C and D
III. A and C only
(………)

15. Purchase of office equipment Rs.50,000 from Senuki on credit is recorded as cash
purchase. The double entry to correct this error is,
i. Office equipment debit 50000 Senuki Credit 50,000
ii. cash control a/c debit 50,000 Senuki credit 50,000
iii. Purchase debit 50,000 Senuki credit 50,000
iv. Senuki debit 50,000 cash credit 50,000
v. Senuki debit 50,000 office equipment credit 50,000
16. How do you define accounting using an accepted definition?
…………………………………………………………………………………………
…………………………………………………………………………………………

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17. State four stakeholders with the reasons who are interested about accounting process
of a business.
Stakeholder Reason
1. …………………………… …………………………………….
2. ……………………………… ……………………………………….
3. ……………………………… ………………….………………………
4. ……………………………… …………..…………………………….
18. State two differences between financial accounting and management accounting.
Financial Accounting Management accounting

19. State two accounting environmental factors with two variables for each one of them.

Environmental factors Variables

20. Niduka started a business with a capital of Rs.400,000 on 01/01/2018. During the
month of January goods worth of Rs.175,000 was bought on credit and sold them for
cash for Rs.200,000. Total expenses for the month is Rs.30,000 and Rs.10000 of them
are not paid yet. State the followings as at 31/01/2018.
i. Assets …………………………
ii. Liabilities …………………………
iii. Equity …………………………

21. State whether following statements are true or false.

True/False
i. When interest is paid on a loan, equity is reduced. …………………..
ii. If VAT paid on purchase and expenses are higher than
VAT collected on sales and income, the balance of the
VAT account will be a liability. …………………..

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 iii. Petty cash journal is a prime entry book and also a
Ledger account …………………..
iv. The original document relevant for sales return is debit not …………………

22. A cheque was received from a debtor to settle his account of Rs.500,000 and allowed
a discount of 10%. The cheque was dishonoured. State the journal entry to record the
dishonouring of the cheque
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
23. State the sources of information for followings when preparing creditors control
account .
i. Credit purchase ………………………………………………………
ii. Cash paid ………………………………………………………
iii. Purchase return ………………………………………………………
iv. Discount received ………………………………………………………
24. Migara prepared his financial statements with the balance of Rs.50,000 in the cash
control account as at 31/03/2018. This included standing order of Rs.5000, direct
remittance of Rs.6000 and bank charges of Rs.1000. A cheque of Rs.3000 is
dishonoured but there is no adjustment is done yet. Unrealised and unpresented
cheques Rs.8000 and Rs.3000 respectively. The balance in the bank account as per the
bank statement is,
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
25. Sales return by Lasni Rs.2500 is included in purchase return journal. The journal
entry to correct this error is.
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………