Index

Number:

MINISTRY OF EDUCATION

FIJI YEAR 12 CERTIFICATE EXAMINATION 2022

ACCOUNTING

DETAILED SOLUTION

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COPYRIGHT: MINISTRY OF EDUCATION, FIJI, 2022, ACCOUNTING.

 2.

QUESTION 1 PERSONAL FINANCE [10 marks]

PART A PERSONAL FINANCIAL RECORD KEEPING [4 marks]

1 A B C D
(1 mark)

2. Debit Card
Is a plastic payment card that provides the cardholder electronic access to their bank account(s).
(1 mark)

3. Electronic financial services:

 Online banking
 Online payment
 Mobile banking
 ATM Services
 Debit Card
 Credit Card
 Mastercard
 Visa Card
 Mpaisa, My Cash
(any correct answer for 1 mark)
(1 mark)
4. Importance of keeping personal finance records:
 To prepare monthly budget
 To check balances
 To make sure the monthly account is paid
 To prepare statements of assets and liabilities
 To make insurance claims
 To ensure correct tax is deducted
 To keep track of income and expenditure
(any correct answer for 1 mark)
(1 mark)

PART B PERSONAL INCOME TAX [2 marks]

1. Capital gains tax

= $450 000- $380 000

= $70 000 * 10%
= $7 000
 Correct working =1 mark
 Correct answer = 2 marks
(2 marks)

© MINISTRY OF EDUCATION, FY12CE 2022: ACCOUNTING.

 3.

PART C STATEMENT OF AFFAIRS [4 marks]

Statement of Affairs for Rozian as at 31st January

2020
Assets $ $
Savings Account Balance  14 800
Household Contents  28 800
Motor Vehicle  112 000
Total Assets $155 600
Less Liabilities
Mortgage  32 000
Hire Purchase installment  6 900
Land Lease due  2 000
Loan from a Friend  5 800
Total Liabilities $46 700
Net worth/Savings  $108 900
1/2 mark x 8 = (4 marks)

Turn Over

© MINISTRY OF EDUCATION, FY12CE 2022: ACCOUNTING.

 4.
QUESTION 2 NATURE OF ACCOUNTING [10 marks]

PART A NATURE AND ENVIRONMENT OF ACCOUNTING [4 marks]

1 A B C DD
(1 mark)

2. Financial Accounting is concerned with communicating relevant and useful information to

external parties/outsiders/ interested parties to help them in decision making. (1 mark)

3. The general purpose financial statements are used by the users to make decisions regarding the
allocation of resources.
 decision making only = 1 mark
 decision making with reason = 2 marks

PART B CONCEPTUAL BASIS OF ACCOUNTING [6 marks]

1. Enhancing qualitative characteristics of accounting information:

 Comparability
 Verifiability
 Timeliness
 Understandability
One correct answer = 1 mark
Two correct answers = 2marks

2. Relevance – It help users to form predictions about the outcomes of past, present and future events
Form predictions only = 1 mark
Full answer = 2marks

3. Drawback of Historical Cost concept

 Does not reflect the current market value of the asset because it uses its original cost, cost when it
was first bought.
 It has a negative impact on the decision making if the asset is of large value because of the big
difference between the original cost and the current cost.
 It does not take into account inflation because it only recognize original cost.
Drawback without description = 1 mark
Drawback with description = 2 marks

© MINISTRY OF EDUCATION, FY12CE 2022 ACCOUNTING.

 5.

QUESTION 3 FINANCIAL ACCOUNTING AND [20 marks]

THE ACCOUNTING PROCESS

PART A VALUE ADDED TAX AND SOURCE DOCUMENTS [7 marks]

1 A B C D
(1 mark)

2. Source Documents
(i) Internal Memorandum, Management Letter. One correct answer = 1 mark
(ii) Bank Statement Dr, Cheque Butt, Petty Cash Voucher. One correct answer = 1 mark

3. Characteristics of VAT
 It a tax on spending, expenditure borne and paid by consumers on the final goods and services
 VAT is paid indirectly by the consumers
 VAT is paid by those people who spend on goods and services regardless of whether they are
employed or unemployed
 VAT id indirect tax
 VAT is a source of income for the government
One correct answer = 1 mark

4. (i) Drawer- Vaciseva Batiri (1 mark)

(ii) Cheque Number (1 mark)
(iii) $3 500 + $650.00= $4 150 (1 mark)

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© MINISTRY OF EDUCATION, FY12CE 2022 ACCOUNTING.

 6.

PART B JOURNALS [7 marks]

1. Specialised Journal
It provides record of transactions of a particular type with common characteristics
1 mark

2. General Journal
Date Particulars Debit ($) Credit ($)

Feb 8 Bad Debts  58

Jim/ Debtor/ Accounts Receivable  58

Feb 13 Drawings  40
Purchases  40

Feb 15 New Computer  3 600

Computer Dealers  3 600

Feb 21 Peter/ Debtor/ Accounts Receivable  120

Interest  120

 ½ x 8 = 4 marks

Sales Journal
Date Particulars Debit ($) Credit ($)
Feb 2 Chaundry  400
18 Shamil  88
24 Koroi  79
Sales A/c Cr  567

 ½ x 4 = 2 marks

© MINISTRY OF EDUCATION, FY12CE 2022 ACCOUNTING.

 7.

PART C LEDGER ACCOUNTS [6 marks]

2.
(i) Cash at Bank Account
Date Particulars $ Date Particulars $
July 1 Opening Balance  10 200 July 31 Total Payments  8 050

31 Total Receipts  4 500 Balance c/d  6650

$14 700 $14 700
Aug 1 Balance b/f $6 650

½ mark x 4 = 2 marks

(ii) Purchases Account

Date Particulars $ Dat Particulars $
e
July 31 Cash  450 July Balance c/d $ 5 546
31
Creditors/ Accounts Payable  5 006
$5 546 $5 546
Aug 1 Balance b/f $5 546

 ½ mark x 2 = 1 mark

(iii) Tuidalis Account

Date Particulars $ Dat Particulars $
e
July 31 Cash  1 450 July Balance  $4 200
31
Purchase Return  40 Purchases  720
Balance c/d 3 430
$4 920 $4 920
Aug 1 Balance b/f $3 430

½ mark x 4 = 2 marks

© MINISTRY OF EDUCATION, FY12CE 2022: ACCOUNTING.

 8.

(iii) Loan Account

Date Particulars $ Dat Particulars $
e
July 31 Cash  800 July Balance  $5 300
31
Balance c/d $ 4 500
$5 300 $5 300
Aug 1 Balance b/f 4 500
½ mark x 2 = 1 mark

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© MINISTRY OF EDUCATION, FY12CE 2022: ACCOUNTING.

 9.

QUESTION 4 ACCOUNTING REPORTS [20 marks]

PART A FINAL ACCOUNTS [13 marks]

1 A B C D
(1 mark)

2.

 It is the income that is earned during the accounting period but not received on balance day.
 1 mark

 Doubtful debts- are those debts which are business is unlikely to be able to collect from accounts
receivable. That is the estimated amount of current revenue that will be uncollected.
 1 mark

3. Methods of presenting accounting reports:

 Written Report
 Report with Figures
 Graphs and Diagrams
 Combination of written, figures, graphs and diagrams
 One correct answer = 1 mark
 Two correct answers = 2marks

© MINISTRY OF EDUCATION, FY12CE 2022: ACCOUNTING.

 10.

3.
Simon Wilson
Statement of Financial Position as at 30th June 2020
Current Assets $ $ $
Inventories  10 000
Insurance Prepaid  40
Accounts Receivable  8 600
Less Provision for Doubtful Debts  500 8 100
Rent due  150
Petty Cash Advance  40 $18 330
Add Non-Current Assets
Investments
Shares in AC Limited  50 000

Fixed Assets
Delivery Vehicle  8 000
Less Provision for Depreciation  3 200 4 800
Office Furniture  4 000
Less Provision for Depreciation  1 800 2 200 7 000
Total Assets 75 330

Less Liabilities
Current Liabilities
Bank Overdraft  16 550
Salaries due  85
Accounts payable  540 17 175

Long Term Liabilities

Mortgage  28 000 45 175

Net Assets 30 155

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© MINISTRY OF EDUCATION, FY12CE 2022: ACCOUNTING.

 11.

Proprietorship $ $ $
Capital 25 420
Add Net Profit 5 235
30 655
Less Drawings 500
30 155

½ mark x 16 = 8 marks

PART B ACCOUNTING FOR CLUBS AND SOCIETIES [7 marks]

1 A B C D
(1 mark)

2. Reasons for auditing financial reports of registered clubs:

 To get a true and fair picture of the day to day running of the club

 To check the accuracy of the financial reports for decision making process

 To meet the objective of accountability and transparency as the donors and other stakeholders
would want to know how their resources have been utilized
Any correct answer for 1 mark

3. Unincorporated clubs
 an association of 2 or more people who come together for a common
purpose, which is not incorporated (not legally registered).
 Are organizations that are not registered under the Charitable Trust Act
 Are organization that are legally registered

Any 1 for (1 mark)

© MINISTRY OF EDUCATION, FY12CE 2022: ACCOUNTING.

 12.

(4) Income and Expenditure Statement of Nadruku Youth Club

for the year ended 30th September, 2021
Income $ $
Profit from sale of refreshment  1 567
Subscription  2 390
Total Income $3 957
Less Expenditure
Electricity  310
Wages  1 730
Depreciation on furniture  45
Insurance  115
Postage and Stationeries  70
Total expenditure 2 270
Excess of income over expenditure (Surplus)  $1 687

 =1/2 mark x 8=4 marks

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© MINISTRY OF EDUCATION, FY12CE 2022: ACCOUNTING.

 13.

QUESTION 5 ANALYSIS AND INTERPRETATION [20 marks]

OF PERIODIC FINANCIAL STATEMENTS

PART A ANALYSING ACCOUNTING REPORTS [14 marks]

1 A B C D

2 A B C D
(2 marks)

3.

Ratios/percentages Formula Working Answer (two

decimal places)
(i) Net Profit  Net Profit/ Net Sales  $50 280 x100
percentage x100 77200
(2021)

 65.13%

(ii) Current Ratio  Current Assets  $21 300

(2020) Current Liabilities 2400

or CA : CL

 8.88:1

(iii) Debt to Equity  Total Liabilities  $19 600

ratio Total Proprietorship 22 800
(2021)

 0.86: 1

© MINISTRY OF EDUCATION, FY12CE 2019: ACCOUNTING.

 14.

Ratios/percentages Formula Working Answer

(two decimal
places)
(iv) Administrative  $4 100 x100
Expense  Administrative Expense x 55 000
percentage 100 Net Sales
(2020)

 7.45%

(v) Liquid Capital  (Current Assets- Closing  ($12 400- 6 000-

in dollars Stock Prepayments) – 400) –(7 600-2
(2021) (Current Liabilities – Bank 000)
Overdraft (secured/limit)
$6 000 - $5 600
or QA - QL

 $400

(vi) Equityratio  Total Proprietorship  $22 800

(2021) Total Assets 42 400

 0.54: 1

(vii) Inventory  Cost of Goods Sold  $17 800

Turnover in Average Stock (5 000 + 6000) x ½
times (2021)
= $17 800
5 500

 3.24
times
(viii) Accounts  Average Debtors x12 ($3 400 + 4 000)/2 x 12
Receivable Net Credit sales 22 000
Turnover in
months = 37 000/22 000 x 12
(2020)

 2.02
months
 =1/2 mark x 24 = 12 marks
Turn Over

© MINISTRY OF EDUCATION, FY12CE 2022 ACCOUNTING.

 15.
PART B INTERPRETION OF ACCOUNTING REPORTS [6 marks]

1. (i) Increased in gross profit percentage due to:

 Increase in selling price, without corresponding increase in costs
 Buying from cheap suppliers
 Changes in economic conditions. For example, during natural disasters the price of certain
goods may increase due to increase in demand for that goods
 Decrease in cost of goods sold and increase in sales
Any correct answer for 1 mark

(ii) (a) Current ratio

 It has increased by 1.01.
 It is satisfactory/ favourable
 The firm is in the position to meet its current debts
Any correct answer for 1 mark

(b) Debt ratio

 It has increased by 0.12
 It means the amount assets contributed by outsiders or external parties has increased
 It is unsatisfactory/unfavorable
Any correct answer for 1 mark

(iii) Purpose
 It measures the ratio of expenses in relation to sales in dollars
 It indicates whether individual expense is being maintained at satisfactory
level compared to net sales.
 To reflect the profit earning capacity of the business
Any correct answer for 1 mark

2. (i) Decrease Working Capital 1 mark

(ii) No effect 1 mark

© MINISTRY OF EDUCATION, FY12CE 2022 ACCOUNTING.

 16.

QUESTION 6 SYSTEMS FOR IMPLEMENTING [20 marks]

ACCOUNTING PROCESS

PART A ACCOUNTING FOR CREDIT TRANSACTIONS [5 marks]

1. Internal control procedures for Accounts Payables:

 Employees who handle accounts payable record should not handle payment of cash
 Procedures should employ which ensures that payment are made on time to take
advantage of any discount
 Proper authorization should be obtained before payment is made to suppliers
 Use of control account and subsidiary ledgers allow greater control through
separation and rotation of duties
any correct answer for 1 mark

2. Accounts Receivable Control Account

Date Particulars $ Date Particulars $

Nov 1 Opening balance  5 678 Nov 30 Cash Received  1 790

30 Dishonoured Cheque  79 Discount Allowed  98

Credit Sales  2 811 Sales Return/ Return  67

Inwards
Bad debts  25

Balance c/d  6 588

$8 568 $8 568

Dec 1 Balance b/f $ 6 588

 = ½ mark x 8 =4 marks

PART B ACCOUNTING FOR PAYROLL [5 marks]

1 A B C D
(1 mark)

2. Role of Wages Clerk:

 Verifying work hours
 Issuing deduction for wages or other earning statements
 Updating records regularly to keep things within the business
 Overseeing the preparation of wages  any one for 1 mark

3. (i) Normal pay

Normal rate x hours worked
9.50 x 40
$380 1 mark
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© MINISTRY OF EDUCATION, FY12CE 2022 ACCOUNTING.

 17.

(ii) Gross pay

Normal Pay + Overtime
Normal Pay + Time and half + Double Time
$380 + 114+ 76
$570
 (2 marks)

PART C ACCOUNTING FOR INCOMPLETE RECORDS [5 marks]

1. Statement to show Cost of Inventory d e st ro ye d by fl o od .

$
Opening Inventory 268 400 
Add Net Purchases 72 470 
340,870

Less Cost of Goods Sold (100%) 220,000 

Cost of goods at the date of flood 120,870

Less salvage 71 080 
Value of stock destroyed by flood $49 790 
½ x 6 = 3 mark

© MINISTRY OF EDUCATION, FY12CE 2022 ACCOUNTING.

 18.

2. Statement showing the amount of Additional Cash Investment

$
58 360
Capital (31/12/17)

Less Capital (01/01/17) 51 240

7 120 

Add Drawings 2 400 
9 520

Less Net Profit 6 730 

Additional Cash Investment  2 790

 = ½ x 4 marks = 2 marks


PART D ACCOUNTING FOR DATA PROCESSING [5 marks]

1 A B C D
(1 mark)

2. Manual accounting system

 It is where the collection and processing of data is done by hand with the aid of some
equipment.

 It usually involves paper-based record keeping system. It is suitable for small business

Any 1 for (1 mark)

3. Disadvantages of Computerised Accounting Systems

 Cost- considerable cost required in terms of purchases and installation of

computerized system

 Cost of Training- requires specialized staff personnel which leads to huge cost of
training about the hardware and software or the system in place

 Power Failure- Loss of power supply may lead to disruption in work and loss of data.

 System Failure- the danger of crashing due to hardware failure and the subsequent
loss of work

 Computer Virus- software damage and failure may result in loss of data if backups
are not done

 Uneconomical- in case of very small business with few turnovers, it is uneconomical

to use computerized system

 Breaches of Security- Computer related crimes are difficult to detect as any

alterations to data may go unnoticed. Hacking of passwords or user rights may change
the accounting records.
1 correct answer = 1 mark and 2 correct answers = 2 marks
 19.

4. Features of Accounting Software Packages:

 Ready to use- software which is suited to small firms where the frequency or volume of
transactions is very low
 Customised- accounting software that is modified to meet the special requirements of the user.
It is suitable for large and medium business and can be linked to other information systems
 Tailored- generally made for large business with multiple users and geographically scattered
locations. It requires specialized training for users. The secrecy and validity checks are
vigorous in such software and they offer high flexibility.
1 correct answer = 1 mark

THE END

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COPYRIGHT: MINISTRY OF EDUCATION, FIJI, 2022.
INDEX NUMBER

ACCOUNTING

FOR MARKER’S USE

Ques. Mark Check
No. Gained Mark

Total