Incomplete records · AS Level Accounting

Zahir owns a service business, Airport Transfers, providing a taxi service for customers travelling to and from airports. He has not maintained full accounting records. Customers either pay by cash or they are allowed a 30‑day credit term. Credit customers who pay within 20 days are allowed a cash discount of 2.5%. The following are details of the revenue of the business for the year ended 31 December 2025.

One‑quarter of receipts from credit customers were received within 20 days. A debt of $145 was written off as irrecoverable during the year.

(a) Calculate the total revenue of the business for the year ended 31 December 2025. [7 marks]

(b) Calculate the amount of cash stolen. [3 marks]

Zahir has started to prepare a cash account as he is aware that some receipts from cash customers may have been stolen.

The balance of cash in hand has increased by $350 during the year. The amount of any cash stolen is not covered by insurance.

(c) Calculate the profit or loss made on the disposal of motor vehicle A. [3 marks]

The following information is available for motor vehicles. 1 The business owned two motor vehicles on 1 January 2025.

2 On 3 Motor vehicles are depreciated by 20% per annum using the straight‑line method on a month‑by‑month basis.

(d) Prepare the statement of profit or loss for the year ended 31 December 2025. [12 marks]

The business also owned some office equipment which should be depreciated by $380. The bank account of the business was used to pay the following expenses:

The following information is available about expenses:

(e) Advise Zahir whether or not he should introduce a computerised system of accounting. Justify your answer by considering the advantages and disadvantages of this proposal. [5 marks]

Zahir is concerned that some credit customers do not settle their accounts within the credit period of 30 days. He is proposing to introduce a computerised system of accounting.

Houssam owns a retail business. He does not maintain full accounting records. All sales are made on a cash basis. Purchases of goods for resale are made in cash and on credit. At 1 January 2025, the business’s assets and liabilities included the following:

The following information is available for the year ended 31 December 2025. 1 The summary of receipts and payments shown on bank statements is as follows:

3 Payments to trade payables were made after deducting cash discounts of $390. 4 Cash takings were banked after making the following payments:

6 At 31 December 2025:

• furniture and equipment was valued at $19 500
• rent of $510 was owing
• general expenses of $770 were prepaid
• the balance of trade payables was $5520
• inventory was valued at $11 434.

(a) Calculate the total purchases of goods for resale for the year ended 31 December 2025. [5 marks]

(b) Prepare the statement of profit or loss for the year ended 31 December 2025. Use the space provided to show your workings. [14 marks]

Workings: revenue cost of sales depreciation general expenses rent

(c) Explain, with reference to the relevant accounting concept, how drawings are treated in the financial statements of a business. [2 marks]

(d) State two reasons why Houssam may have chosen not to maintain full accounting records. [2 marks]

(e) Advise Houssam whether or not he should use a computerised accounting system. Justify your answer by considering the advantages and disadvantages of computerised accounting systems. [7 marks]

Houssam has now decided that he will need to maintain more detailed accounting records. He is considering using a computerised accounting system.

Zak has not maintained full accounting records for his retail business. He has provided the following details for the year ended 31 December 2024.

Inventory levels increased by $2730 during the year ended 31 December 2024. Zak’s policy is to sell all goods to achieve a gross profit margin of 40%.

(a) Calculate the revenue for the year ended 31 December 2024. [4 marks]

(b) Calculate the amount owed by credit customers at 31 December 2024. [4 marks]

Zak is not certain how much the business is owed by its credit customers at 31 December 2024. The following information is available. 1 At 1 January 2024, credit customers owed $11 880. 2 Credit sales are 75% of total sales. 3 Bank statements show that $96 900 was received from credit customers during the year ended 31 December 2024. 4 Some credit customers were given a 5% cash discount for prompt payment. Zak estimates that 20% of all receipts from credit customers were made after deducting the cash discount.

(c) Identify two ways, other than allowing a cash discount, in which credit control can be improved. [2 marks]

Zak would like to improve the credit control of his business.

(d) State two benefits of improving credit control. [2 marks]

(e) State three ways in which the security of data can be ensured within a computerised accounting system. [3 marks]

Zak has decided to prepare full accounting records in future, using a computerised accounting system. However, he is concerned about the security of data.