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QUESTION 1 James’s Business Loweoms [ s Comomios |0 Following the completion of all closing entries the owner’s equity would increase by (A) $31300. (B) $38100. (©) $39200. (D) $42 600.
QUESTION 2 Which of the following processes will happen when closing entries are prepared? (A) (B) ©) (D) Drawings will be closed to the Profit or Loss Summary Account. Asset accounts will be closed to the Profit or Loss Summary Account. The Profit or Loss Summary Account will be closed to the Cash Account. All relevant expense accounts will be closed to the Profit or Loss Summary Account.
QUESTION 6 A motor vehicle was purchased on 1 July 2018 for $50 000 and sold on 31 October 2020 for $18 000. The depreciation method used is straight line. The useful life is five years and there is no residual value. As at 30 June 2020 the accumulated depreciation for the motor vehicle was recorded as $20 000. Based on this data and rounding to the nearest whole number the general journal entry to record the disposal would be (A) Loss on disposal of motor vehicle Disposal of motor vehicle (B) Loss on disposal of motor vehicle Disposal of motor vehicle Dr $28667 Cr $28 667 Dr $12000 Cr $12.000 ©) Loss on disposal of motor vehicle Disposal of motor vehicle (D) Loss on disposal of motor vehicle Disposal of motor vehicle Dr $8 667 Cr $8 667 Dr $2000 Cr $2000
QUESTION 7 General Journal (extract) 30 June Inventory adjustment 2 500 This inventory adjustment was made because (A) astocktake revealed that the physical count was less than the stock register. (B) 1inventory was damaged on arrival and an adjustment note was issued. (C) apurchase order of inventory was received but not recorded. (D) asales return was processed but not recorded.
QUESTION 11 (10 marks) Read Case study 1 (Stimulus 1) in the stimulus book. a) Explain why Thomas has used the accrued revenue and prepaid expenses accounts in the ledger. How does this decision impact the next accounting period? [7 marks] b) Record the opening entries for the month of September in the general journal. [3 marks] General Journal --
QUESTION 12 (22 marks) Read Case study 2 (Stimulus 2-3) in the stimulus book. a) Prepare a fully classified Statement of Profit or Loss to project the profitability of Business 1 at 30 June 2021 after implementing the proposed changes. Round to the nearest dollar. [12 marks] Business 1 Statement of Projected Profit or Loss for the year ended 30 June 2021 b) List all underlying assumptions you have made in 12a). [2 marks] c¢) Use Stimulus 2 and 3 to propose and justify two strategies to fund the purchase of the second delivery vehicle. [8 marks]
QUESTION 1 On 1 June 2021 a small business paid $13 200 (GST inclusive) for 3 months rent (in advance) for their warehouse storage facility. On 30 June 2021 the balance of the Prepaid rent account will be (A) $8800 (B) $8000 (C) $4400 (D) $4 000
QUESTION 5 Petra is having her home painted. She gives the painters three 10-litre cans of paint from the hardware store she owns. Each can was originally purchased for $165. This would be recorded by the hardware store as ” - (B) | Operating expenses $495 - © ] Operating expenses - $450
QUESTION 7 The following company data has been collected. Trial Balance as at 30 June 2021 (extract) _ Accounts recelvable control 45000 - Provision for doubtful debts - 5000 Bad and doubtful debts 8 000 - The balance of the provision for doubtful debts is to be set as 20% of accounts receivable. The entry to record the provision for doubtful debts is (A) | Bad and doubtful debts $3 000 - Provision for doubtful debts - $3 000 (B) | Bad and doubtful debts $4000| | Provision for doubtful debts - $4 000 (©) | Bad and doubtful debts $9000 | Provision for doubtful debts - $9 000 Bad and doubtful debts $12 000 - Provision for doubtful debts - $12 000
QUESTION 11 (22 marks) Read Case study 1 (Stimulus 1-4) in the stimulus book. a) Record the additional balance day adjustments in the general journal. Narrations are not required. [7 marks] Business 1 General Journal (extract) b) Calculate the adjusted net profit as at 30 June 2021. [4 marks]
QUESTION 12 (16 marks) Read Case study 2 (Stimulus 5-6) in the stimulus book. a) Identify and explain the errors in Stimulus 6. [4 marks] b) Use your answer for Question 12a) to record the general ledger accounts as they should have been presented. [12 marks] Business 2 General Ledger (extract) $ $ $ Machinery
QUESTION 1 The following company data has been collected. s Electricity Interest expense Inventory adjustment (for lower NRV) The gross profit figure is (A) $180500. (B) $185000. (C) $189500. (D) $195000.
QUESTION 3 The following information has been provided by Business A as at 31 March 2022. Sales 146 000 Cost of goods sold 102 000 Gross profit 31000 The missing $13 000 can be attributed to the (A) GST payable account. (B) cartage on sales account. (C) commission revenue account. (D) sales returns and allowances account.
QUESTION 5 This General Ledger has been provided. General Ledger (extract) $ $ $ Inventories Account Cgsh at hak 2400 _ 14900 Cost of goods sold 4600 10300 Cash at bank _ 11500 _ Cost of goods sold 2200 9300 19 | Cashatbank 32000 12500 Cost of goods sold 3800 8700 These transactions were not entered in the General Ledger (GST not included). June 30 Purchased goods from supplier: $3 500 Return of goods sold on June 22: $1 200 (cost price was $400) Stocktake sale confirmed inventory short by $250. Calculate the closing balance for Inventories at the end of June using the data provided. (A) $10750 (B) $11250 (C) $12050 (D) $12350
QUESTION 11 (13 marks) Read Case study 1 (Stimulus 1-5) in the stimulus book. a) Prepare the General Journal entries to reflect all transactions for June 2020 (narrations not required). [2 marks] General Journal m“ $ $ b) Prepare a fully classified Statement of Financial Position (T format) for the business as at 30 June 2020. [11 marks] Statement of Financial Position as at 30 June 2020
QUESTION 12 (17 marks) a) Read Case study 1 (Stimulus 6-8) in the stimulus book. Prepare a fully classified Statement of Profit or Loss for the years ended 30 June 2021 and 2022. [8 marks] Statement of Profit or Loss for year ended 30 June b) Stimulus 6 identifies a goal-oriented problem for Kurt’s Kovers. Using Stimulus 6—8 and your response to Q12a) justify your advice to Kurt. [9 marks]
QUESTION 1 On 30 June 2023 a business conducted a stocktake that revealed a shortage of $6 600 (including GST) between its actual inventories and the book value of inventories. Completing the required balance day adjustment would result in the business’s net profit figure (A) increasing by $6000. (B) decreasing by $6000. (C) increasing by $6 600. (D) decreasing by $6 600.
QUESTION 3 Financial information for a business is provided. Partial list of balances for the year ended 30 June 2023 Account $ Loss from theft 520 Cash at bank (8 000) Loan to Business Y 12 000 (due to be repaid 30 September 2023) Unearned revenue Accounts payable Shares in Company A 6 800 Accounts receivable (net) 2 600 GST clearing (receivable) Cost of goods sold Credit/debit card fees Provision for doubtful debts a) Loan from bank 15 000 (due to be repaid 01 January 2025) Gain on disposal of equipment The working capital calculated from the information provided is (A) $15093 (B) $15293 (C) $15393 (D) $15 493
QUESTION 4 A business purchased furniture for $16 500 (including GST) on 30 September 2020. The furniture was to be depreciated at 10% using the straight-line method over 10 years. The owner decided to sell the furniture on 30 June 2023 for $12 500 cash. Calculate the accumulated depreciation balance to be transferred to the disposal account. (A) $3000 (B) $4125 (C) $4500 (D) $4538
QUESTION 6 Business A is a suburban hairdressing salon that recetves 25% commission paid at the end of each quarter for sales of a shampoo. To 31 March commission of $560 has been recorded by Business A. Sales A/C (extract) for quarter ended 30 June 2023 April May June $40.00 $45.00 $52.00 Determine the entry for the Commission account to close off to the Profit or Loss Summary Account. Commission revenue Profit or Loss Summary Profit or Loss Summary 594.25 Commission revenue 594.25 (C) Commission revenue 590.00 Profit or Loss Summary 590.00 (D) Profit or Loss Summary 697.00 Commission revenue | 697.00
QUESTION 11 (10 marks) Read Case study 1 (Stimulus 1) in the stimulus book. a) Record the balance day adjustments in the worksheet for the two issues identified. Add the further accounts required and complete the Adjusted Balance column for the affected accounts. [8 marks] Worksheet (extract) for Whitegoods Retailer as at 30 June 2023 Unadjusted Balance of Accounts CR CR OT Depreciation on retail fittings Cost of goods sold Sales $ Sales returns and allowances Repairs and maintenance of delivery vehicle Cash at bank Depreciation on delivery vehicle b) Explain one limitation and one benefit of recording inventories at net realisable value. [2 marks]
QUESTION 12 (29 marks) Read Case study 2 (Stimulus 2-3) in the stimulus book. a) Prepare a fully classified Statement of Profit or Loss for the years ended 30 June 2022 and 30 June 2023. [12 marks] Camilla’s Coffee Van Statement of Profit or Loss for year ended 30 June 2023 b) Prepare a fully classified Statement of Financial Position for the years ended 30 June 2022 and 30 June 2023. [10 marks] Camilla’s Coffee Van Statement of Financial Position for year ended 30 June pd 2023 | 2022 a ee se ee) ee ee SH c) Advise Camilla of the business’s potential to reach its goal. Refer to the bank’s requirements and two other ratios in your response. Calculations should be rounded to two decimal points. [7 marks]
QUESTION 1 The disclosure of the 2019 and 2020 account balances for ‘Discontinued operations’ enables (A) a vertical analysis revealing that $828.50 m was spent to acquire the subsidiary business/es. (B) a cost-benefit analysis revealing that the loss of $828.50 m in 2020 was included in the ‘Total expenses’ account of —$33 101 m. (C) evidence revealing that the loss of $828.50 m from South East Grocer Ltd helped to return an overall profit after tax for the 2020 reporting period. (D) ahorizontal analysis revealing an increase in loss after tax for South East Grocer Ltd of $778 m indicating the company sold off or ceased specific operations within that company.
QUESTION 5 Salaries and wages expense is disclosed in the Statement of Profit or Loss for South East Grocer Ltd as (A) other expenses. (B) 1impairment expenses. (C) employee benefits expense. (D) occupancy related expenses.
QUESTION 6 If the website was operational from 1 July 2020 what would have been the expected sales that the website shopping cart would have attracted in the year ended 30 June 20217 (A) $8377.80 (B) $8913.40 (C) $10053.36 (D) $10 696.08
QUESTION 7 How will the additional cost of repairing the website affect the balance day adjustment for this non-current asset account in 20217 (A) There would be no balance day adjustment process for this account in 2021 as the item would be recorded as a normal expense item. (B) Since this would be recorded as a capital expenditure the value would be added to the historical asset and therefore no balance day adjustment would be generated. (C) The upgrade of the firewall and virus protection would be treated as a prepaid expense in 2020 and one month’s value of this subscription would be an expense for the 2021 reporting period. (D) The straight-line depreciation method would be used to determine the depreciation for the year and this would then be added to the accumulated depreciation amount to offset the historical cost value.
QUESTION 10 Why would the ‘Inventory adjustment’ account be recorded as $0.00 as at 30 June 2020? (A) The records have been developed based on the cash basis and not the accrual basis of accounting. (B) Stocktake differences over the years were subtracted from the ‘Inventories’ account. (C) There was no shrinkage or spoilage of inventory items for that reporting period. (D) No returns of inventory were recorded in the reporting period.
QUESTION 14 (6 marks) Using Case study 2 Stimulus 9-12 in the stimulus book apply accounting principles and processes to disclose how these source documents would have been recorded in the general journal on the relevant dates. Date Particulars o Dr Cr 2020 Ref
QUESTION 15 (23 marks) Using Stimulus 13 from Case study 2 in the stimulus book apply accounting principles and processes to prepare the fully classified Statement of Profit or Loss and Statement of Financial Position for the year ended 30 June 2020. Note: If you make a mistake in these statements cancel it by ruling a single diagonal line through your work and use the statements on pages 14—15 of this question and response book. Little Fruit Shop Statement of Profit or Loss for year ended 30 June 2020 Little Fruit Shop Statement of Financial Position as at 30 June 2020
QUESTION 16 (8 marks) Construct the most feasible solution to the accounting problem in Case study 2 using the financial data and other information available from Stimulus 8-14 in the stimulus book. ADDITIONAL PAGE FOR STUDENT RESPONSES Write the question number you are responding to. ADDITIONAL PAGE FOR STUDENT RESPONSES Write the question number you are responding to. ADDITIONAL RESPONSE SPACE FOR QUESTION 14 If you want this general journal to be marked rule a diagonal line through the general journal on page 6. Date Particulars S Dr Cr 2020 Ref
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