QUESTION AND ANSWER FOR JUNE 2019 CA …

QUESTION AND ANSWER FOR

JUNE 2019 CA ZAMBIA PROGRAMME

PAPERS

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CA ZAMBIA PROGRAMME EXAMINATIONS ___________________ KNOWLEDGE LEVEL ___________________

CA 1.1: FINANCIAL ACCOUNTING ___________________ MONDAY 10 JUNE 2019 ___________________

TOTAL MARKS ? 100; TIME ALLOWED: THREE (3) HOURS __________________

INSTRUCTIONS TO CANDIDATES

1. You have fifteen (15) minutes reading time. Use it to study the examination paper carefully so that you understand what to do in each question.

2. This paper is divided into TWO sections: Section A: Ten (10) compulsory multiple choice questions. Section B: One (1) compulsory scenario question. Plus Four (4) scenario questions. Attempt any Three (3) questions.

3. Enter your student number and your National Registration Card number on the front of the answer booklet. Your name must NOT appear anywhere on your answer booklet.

4.

Do NOT write in pencil (except for graphs and diagrams).

5. Cell Phones are NOT allowed in the Examination Room.

6. The marks shown against the requirement(s) for each question should be taken as an indication of the expected length and depth of the answer.

7. All workings must be done in the answer booklet.

8.

Present legible and tidy work.

9.

Graph paper (if required) is provided at the end of the answer booklet.

DO NOT OPEN THIS QUESTION PAPER UNTIL YOU ARE INSTRUCTED BY THE INVIGILATOR.

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SECTION A ? (COMPULSORY)

Attempt all Ten (10) multiple choice questions.

QUESTION ONE

Each of the following questions has only one correct answer. Write the letter of the correct answer you have chosen in your answer booklet. Marks allocated are indicated against each question.

1.1. The accounting process involves recording:

A. Quantifiable economic event B. Non quantifiable economic event C. All of them D. None of them

(2 marks)

1.2 Chimuka Banda started in business by opening a corner shop in Chimwemwe called Morning Rise (MR). On 1 January 2018 Chimuka opened a bank account for the corner shop and deposited K15,000. During the first month of operations the following transactions occurred: 1. Display shelves for the corner shop are purchased for K5,400 for cash. 2. Jigs are purchased from Mama Africa for K6,000. 3. Jigs costing K3,000 are sold for K4,500 cash. 4. Chimuka pays K600 out of the business to a taxi driver who takes his son to school. 5. Chimuka's friend Mapalo loans K1,500 to MR.

Write down the accounting equation after all of these transactions have taken place

Assets = Capital + Liabilities

A.

19,500

16,500

B.

21,000

15,000

C.

17,400

15,900

D.

19,500

15,000

3,000 6,000 1,500 4,500

(2 marks)

1.3 Which of the following statements describe transactions that would be recorded in the accounting system?

A. An exchange of a promise for another promise to pay B . An exchange of an asset for a promise to pay C. Both of the above D. None of the above

(2 marks)

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1.4 Which of the following statements would be considered true regarding debits and credits?

A. In any given transaction, the total Kwacha amount of the debit and the total Kwacha amount of the credit must be equal

B. Debits decrease certain accounts and credits decrease certain accounts C. Liabilities and shareholders' equity accounts usually end in credit balances while

assets usually end in debit balances D. All of the above

(2 marks) 1.5 In accounting, an Economic event is referred to as:

A. the movement of cash B. Monetary measurement C. Transaction D. Exchange of money

(2 marks)

1.6 After calculating Chuma Chalinkana's profit for the year, you have discovered two things:

1. A non-current asset costing K50,000 has been included in the purchases account;

2. Stationery costing K10,000 has been included as closing inventory of raw materials instead of inventory of stationery.

These two errors have had the effect of

A. Understating gross profit by K40,000 and understating net profit by K50,000 B. Understating both gross profit and net profit by K40,000 C. Understating gross profit by K60,000 and understating net profit by K50,000 D. Overstating both gross profit and net profit by K60,000

(2 marks)

1.7 A credit entry of K950,000 on Mwambazi's account in the receivables ledger of Sandikonda could have arisen by:

A. Mwambazi buying goods costing K950,000 on credit from Sandikonda B. Sandikonda paying Mwambazi K950,000 C. Sandikonda returning goods costing K950,000 to Mwambazi D. Mwambazi returning goods costing K950,000 to Sandikonda

(2 marks)

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1.8 Kangwa Lukusu trading as KL Motor Spares ends his financial year on 28 February each year. His telephone was installed on 1 April 2016 and he receives his telephone account quarterly at the end of each quarter. He pays it promptly as soon as it is received.

KL Telephone expenses for the three months ended

K

30 June 2016

235,000

30 September 2016

272,000

31 December 2016

334,000

31 March 2017

360,000

On the basis of the above data, you are required to calculate the telephone expense to be charged to the profit and loss account for the year ended 28 February 2017.

A. K1,201,000 B. K1,081,000 C. K961,000 D. K841,000

(2 marks)

1.9 After preparing the trial balance, a suspense account was opened. The following errors were discovered by Mabvuto Phirison the trainee accountant:

1.

The opening inventory costing K12,000 was omitted from the balances

recorded in the trial balance.

2.

A debt totaling K2,400 which was written off had finally been received and the

trainee accountant credited the bad debts expense account and the receivables

control account and debited the cash book with the cash received.

You are required to calculate the balance on the suspense account.

A. K9,600 debit B. K14,400 credit C. K9,600 credit D. K14,400 debit

(2 marks)

1.10 Blandina had a sales figure of K675,000, a gross profit of K275,500 and a net profit of K42,720. The following transactions were omitted in the calculation of profit.

1. Purchase of goods for year 2018 amounted to K4,260. 2. Closing inventory as at 31 December 2018 amounted to K1,560.

Blandina has asked you as a trainee accountant to recalculate the gross profit and the net profit for the year ending December 2018.

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