Bachelor of Business – Examination

Module Leader Name: Anne Marie Cogan

Bachelor of Business Year 1

Module Title Introduction to Accounting

Learning Outcome(s)
1,2,4,5,6
Assessed

Exam Date 25th May 2022 Weight 60%

Semester 2 Year 2021/2022

15.15 2.5 hours +

(15 mins download time) (15mins download time)
Time Exam ends at 18.00 Duration Exam ends at 18.00
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upload

INSTRUCTIONS TO CANDIDATES

• Section A: Compulsory Question. Please answer all 12 multiple choice questions. Marks for Section A are 12
marks.

• Section B: Please answer any 2 questions.

• All questions have 24 marks. Total marks for Section B are 48 marks.

• Include your rough workings in your exam submission. All file types are acceptable (word, pdf, photo files, excel).

• This is an OPEN book examination.

• Learners are expected to maintain the Academic Integrity of the exam sitting.

• Turnitin will be activated for exam submissions (students do not need to wait for the Report to generate).

• Learners experiencing difficulties seeing the Exam Paper once the exam starts, or uploading their answers,

• must call the support numbers immediately on 091 529000.

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 Bachelor of Business – Examination

Section A: Multiple-Choice Questions (12 marks)

Please answer all 12 questions. There are no negative marks.

1. Trade Creditors are classified under which of the following headings?

a) Current assets
b) Current liabilities
c) Non-current assets
d) Equity

2. In a hand-written accounting system where would you record a decrease in a

asset?
a) On the credit side of the ledger account for the asset
b) On the debit side of the ledger account for the asset
c) On both sides of the ledger account for the asset
d) Nowhere in the ledger accounts

3. ‘Retained earnings’ are shown on the statement of financial position of a

company:
a) As part of current liabilities
b) As part of current assets
c) As part of equity
d) As part of non-current assets

4. A haulier pays diesel for its trucks by credit transfer from its bank account.
The entries in the Haulier’s accounts should be:
Debit Credit
a) Diesel Bank
b) Bank Wages
c) Rent Bank
d) Diesel Creditors

5. Which of the following is the correct terminology for the left hand side of a
hand-written ledger account?
a) Debit
b) Credit
c) Negative
d) Positive

6. Which branch of accounting is most concerned with the collection of detailed

financial data for use in planning and controlling an entity?
a) Financial accounting
b) Auditing
c) Management accounting
d) Taxation

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 Bachelor of Business – Examination

7. A piece of machinery held for continued use in the business would usually be
stated in the balance sheet at:
a) Its current replacement cost
b) Its net book value (historical cost less depreciation)
c) A realistic second-hand or scrap value
d) Its current value to the business

8. A business buys €4,000 of stock on credit. What is the dual effect of this
transaction?
a) Increase creditors and increase stocks
b) Decrease creditors and increase stocks
c) Increase debtors and increase stocks
d) Decrease cash and increase stocks

9. If a company has the word limited at the end of its name, this means that:
a) The number of shareholders has a fixed upper limit
b) There is a limit to the number of shares that can be issued
c) There is a limit to the amounts the company can borrow
d) The shareholders’ liability for the debts of the business is restricted

10. A business changes from depreciating its vehicles at 10% on a straight-line

basis to 5%. What will be the effect of this change on profit?
a) No effect
b) Increase profits
c) Decrease profits
d) Not able to quantify

11. A supermarket buys a motor van on credit from Western Motors Ltd. The
entries in the supermarket’s accounts should be:
Debit Credit
a) Purchases Park Motors Ltd
b) Western Motors Ltd Motor van
c) Purchases Bank
d) Motor van Western Motors Ltd

12. Which of the following is false?

a) Directors elect auditors
b) Shareholders elect directors
c) Shareholders elect auditors
d) Directors account to shareholders

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 Bachelor of Business – Examination

Section B: All questions are worth 24 marks (48 total marks available)

B1. The following balances have been extracted from Kate’s ledger accounts as
at 28 February 2021:

€’000
Bank 26
Cash 4
Capital 82
Creditors 8
Debtors 20
Drawings 10
Electricity 8
Furniture 14
Gas expenses 12
Office Expenses 6
Property 20
Purchases 100
Rent 20
Sales 200
Wages 50

Required:
i) Describe any three functions of a trial balance (9 marks)

ii) Extract Kate’s trial balance as at 28 February 2021. (15 marks)

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 Bachelor of Business – Examination

B2. Shannon is a sole trader. Her accountant has extracted the following trial
balance from her books of account as at 31 March 2021:

Debit Credit
€ €
Advertising expenses 2,500
Bank 5,000
Capital 7,500
Cash 2,000
Depreciation on PPE (1 April 2020) 15,000
Drawings 7,500
Electricity 3,000
Insurance expenses 5,000
Office expenses 4,500
Property, plant and equipment at cost 30,000
Purchases 42,500
Rent and Rates 6,000
Sales 90,000
Stock (at 1 April 2020) 4,000
Trade debtors 5,250
Trade creditors 4,750
_______ _________
117,250 117,250

Additional information:
1) Stock at 31 March 2021: €5,000.
2) Depreciation is to be charged on plant and equipment at a rate of 25% per
annum on cost.
3) Office expenses owing at the end of the year equal €250.
4) Electricity expense includes a prepayment of €500.

Required:

Prepare Shannon’s trading and profit and loss account for the year to 31
March 2021 and a balance sheet as at that date. (24 marks)

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 Bachelor of Business – Examination

B3.
(a) Define what is meant by management accounting. Describe four (4) ways
in which it is different from financial accounting. (8 marks)

(b) Explain clearly what is meant by budgetary control. Describe briefly the most
important features of budgetary control. (6 marks)

(c) Don Limited has one major product that requires two types of direct labour to
produce it.
Month Production units
June 8000
July 9000
August 10000

Direct labour hours required per unit:

Function Hours Budgeted rate per hour (€)
Production 3 10
Finishing 2 16
Required: Prepare the direct labour cost budget for each of the three
months to 31 August 2021. (10 marks)

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 Bachelor of Business – Examination

B4.

(i) Explain which accounting rule the accountant would most probably adopt in
dealing with the various problems.

(a) The proprietor who has supplied the business capital out of his own
private bank account.
(b) The sales manager who is always very optimistic about the
creditworthiness of prospective customers.
(c) The managing director who does not want annual accounts prepared
as the company operates a continuous 24-hour-a-day, 365-days-a-
year process.
(d) At the end of Period 1, it is difficult to be certain whether the
company will have to pay legal fees of €1000 or €3000.
(e) The proprietor who argues that the accountant has got a motor
vehicle entered twice in the books of account.
(f) Some goods were purchased and entered into stock at the end of
Period 1, but they were not paid for until Period 2. (12 marks)

(ii) Sharon Rodgers spends a lot of her time working for a large local charity.
The charity has grown enormously in recent years and the trustees have been
advised to overhaul their accounting procedures. This would involve its workers
(most of whom are voluntary) to do more book-keeping and there is a great deal
of resistance to this move. The staff have said that they are there to help the
needy and not to get involved in book-keeping.

Required: As the financial consultant to the charity, write a short memo to

explain to the voluntary workers why the charity would benefit from more
systematic book-keeping and preparation of accounts. (12 marks)