Just a selection of questions I have put together you can test yourself on. Feel free to submit your answers to the message board. Perhaps rather than "reply" to this and submit your answer just copy a question and add your answer to it. This way it keeps the post shorter rather than this message being copied several times.
Narrative Exam Style Questions - Revision Questions
Final Accounts
1. Discuss the reasons for accounting for accruals and prepayments in the final accounts. [8]
2. Explain how the creation of a provision for doubtful debts is an application of the prudence concept. [6]
3. Distinguish between ‘purchases’ and ‘cost of sales’ [8]
4. Why is the distinction important when calculating the gross profit of a business? [2] (linked to question above)
5. Evaluate the usefulness of a double entry book system to a business. [8]
6. Evaluate the problems of inadequate record keeping for a sole trader. [10]
Depreciation
1. Explain the purpose of providing for depreciation in the accounts of a business. [6]
2. ‘Provision for depreciation is made to provide for the replacement of a fixed asset’. Discuss this statement. [8]
3. Discuss the problems involved in accounting for depreciation. [8]
4. Advise the business on why the correct treatment of capital and revenue expenditure is important. [6]
5. “Depreciation is a movement of cash from the business. Discuss why this statement is a misunderstanding of the depreciation process.” [6]
6. ‘Depreciation is to provide funds for the replacement of a fixed asset.’ Discuss this statement. [6]
7. Discuss two causes of depreciation [6]
Discounts
1. Differentiate between cash discount and trade discount. [6]
2. Explain why a business might use a three column cash book rather than a two column cash book. [2]
3. Outline the full accounting entries for cash discount for:
a. purchases; [4]
b. sales [4]
Bad and Doubtful Debts
1. What is the difference between a bad debt and a provision for doubtful debts? [2]
2. Explain why a business would create a provision for doubtful debts. [4]
3. Discuss three factors which should be used in determining provision for doubtful debts. [9]
4. How would a bad debt and a provision for doubtful debts be treated in the final accounts? [4]
5. Identify two ways in which a business could reduce bad debts. [2]
6. Explain two reasons why it is important to monitor and control debtors. [4]
7. Discuss the application of the prudence concept when creating a provision for doubtful debts and the effect this may have on the final accounts. [6]
Errors
1. Using an appropriate example, explain what is meant by an error of principle. [2]
2. Identify and explain three types of error which would not affect the balancing of a trial balance. [9]
ICT
1. Assess the advantages a computerised system for sales and purchases could bring. [6]
2. Advise a business as to the benefits of changing from a manual book-keeping system to a computerised system. [6]
3. Considering both advantages and disadvantages, evaluate the usefulness of ICT in accounting to a business. [10]
Control Accounts
1. Evaluate how control accounts would assist in each of the following:
(i) detection of errors; [3]
(ii) prevention of fraud. [3]
2. Discuss three advantages of using control accounts. [9]
3. Explain why books of prime (original) entry are important in the production of control accounts. [4]
Try them - see how you all get on. Hope you find useful.