Edexcel IGCSE Accounting: Business documentation and books of original entry (4AC1) – Practice Questions

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs – examination boards hold copyright in their own papers. Use these alongside the official past papers from your board or school.

These questions cover sections 2.1 Business documentation and 2.2 Books of original entry of Topic 2, Introduction to bookkeeping, in the Pearson Edexcel International GCSE in Accounting (4AC1) specification, Issue 1, October 2016. Paper 1 draws on topics 1 to 3. Businesses and figures are invented; amounts are in dollars ($).

Links: Accounting course hub, printable checklist, free 10-minute diagnostics.

Questions

1. Identify the document that fits each description. [4]

(a) Sent by a buyer to a supplier to request goods at an agreed price. (b) Issued by a supplier when a customer sends goods back, lowering the sum the customer must pay. (c) Sent by a buyer with a cheque, listing the invoices being paid. (d) Completed and authorised before a small amount is taken from the office float.

2. Duncraig Cycles keeps documents for every transaction and records them in books of original entry.

(a) Explain one purpose of business documents. [2] (b) Explain the purpose of books of original entry. [3]

3. On 9 September 2027 Duncraig Cycles sold 8 helmets at 22.50 each and 15 bike locks at 14.00 each to Fyldeside Garage on credit. Trade discount of 20% is allowed. Prepare the sales invoice, number 0631, for Duncraig Cycles to send. [5]

4. Thwaite Components supplies Duncraig Cycles. On 1 September Duncraig owed 845.00. During September: 4 September, invoice 2310 for 560.00; 12 September, credit note 204 for 75.00; 18 September, Duncraig paid 845.00 by cheque; 25 September, invoice 2377 for 318.40. Prepare the statement of account sent by Thwaite at 30 September, with a running balance. [6]

5. On 10 October Duncraig Cycles pays the amount shown as due on the statement in question 4. Prepare the remittance advice. [4]

6. Duncraig’s purchase documents for September 2027 are: 4 September, Thwaite Components, list 700.00 less 20% trade discount (invoice 2310); 14 September, Pencarrow Tools, list 260.00 less 10% trade discount; 25 September, Thwaite Components, list 398.00 less 20% trade discount (invoice 2377); credit notes received: 12 September, Thwaite Components, 75.00 (credit note 204); 27 September, Pencarrow Tools, list 17.00 less 10% trade discount.

(a) Prepare the purchases day book, with a total. [3] (b) Prepare the purchases returns book, with a total. [3]

7. Duncraig’s sales for September 2027, all on credit: 9 September, Fyldeside Garage, 312.00; 16 September, Ingram Row Cafe, list 150.00 less 10% trade discount; 23 September, Fyldeside Garage, 88.60. On 20 September Ingram Row Cafe returned goods listed at 30.00, with the same 10% discount.

(a) Prepare the sales day book, with a total. [3] (b) Prepare the sales returns book. [1] (c) Explain why a cash sale of 75.00 on 22 September does not appear in the sales day book. [2]

8. Prepare Duncraig Cycles’ three-column cash book for October 2027, balance it and bring down the balances. [12]

1 October: balances b/d, cash 85.00, bank 1,460.00. Cash sale 140.00. 3 October: Fyldeside Garage pays its 312.00 invoice by cheque, taking 2.5% cash discount. 6 October: Duncraig pays Pencarrow Tools 234.00 by cheque, taking 2% cash discount. 9 October: cash of 120.00 paid into the bank. 12 October: rent of 450.00 paid by cheque. 15 October: 100.00 withdrawn from the bank for office use. 19 October: repairs of 38.50 paid in cash. 24 October: Ingram Row Cafe pays 108.00 by cheque, in full settlement.

9. Duncraig keeps a petty cash book on the imprest method (a fixed float restored by reimbursement), with a float of 120.00 received on 1 November 2027. Analysis columns are Travel, Stationery and Refreshments. Payments: 2 November, taxi, voucher 41, 14.50; 5 November, printer paper, voucher 42, 22.80; 8 November, coffee and biscuits, voucher 43, 9.65; 12 November, courier fare, voucher 44, 18.00; 16 November, envelopes, voucher 45, 11.40; 20 November, tea and milk, voucher 46, 7.35; 26 November, bus fares, voucher 47, 6.30. Prepare the petty cash book to 30 November, including the reimbursement on 30 November and the balance brought down. [9]

10. Prepare journal entries, with narratives, for these items at Duncraig Cycles. [6]

(a) 6 November: a display stand costing 640.00 was bought on credit from Garstang Fittings. (b) 20 November: Mr Hatherley, who owes 85.00, cannot pay and the debt is written off. (c) 28 November: stationery of 36.00 was wrongly debited to the motor expenses account.

11. State the book of original entry in which each transaction is first recorded. [6]

(a) Goods bought on credit from a supplier. (b) A customer returns faulty goods that were sold on credit. (c) A computer is bought on credit. (d) Goods are sent back to a supplier. (e) 8.00 is paid for postage from the office float. (f) Goods are sold on credit.

Answers

1. (a) Purchase order [1]. (b) Credit note [1]. (c) Remittance advice [1]. (d) Petty cash voucher [1]. [4] Examiner insight: Learn who issues each document as well as its name. Read the sender and the purpose together.

2. (a) Documents give evidence that a transaction took place [1], so amounts can be checked or a dispute settled [1]. [2] (b) They are where each transaction is first recorded, in date order, from its source document [1]. Similar items are grouped, so only totals need posting to the ledger [1], and the records are easier to check and trace [1]. [3] Examiner insight: “Explain” asks for a point and its consequence. A bare label such as “keeps records” is thin for two marks.

3.

SALES INVOICE No. 0631                 9 September 2027
Duncraig Cycles to Fyldeside Garage      [1]
8 helmets      @ 22.50     180.00   [1]
15 bike locks  @ 14.00     210.00   [1]
Goods at list price        390.00   [1]
Less trade discount 20%     78.00
Amount due                 312.00   [1]

[5] Examiner insight: Show both line totals before the discount, so a slip on one line can still be seen.

4.

STATEMENT OF ACCOUNT, Thwaite Components to Duncraig Cycles, 30 September 2027    [1]
                          Debit    Credit    Balance
1 Sep  Balance b/d                           845.00    [1]
4 Sep  Invoice 2310       560.00           1,405.00    [1]
12 Sep Credit note 204             75.00   1,330.00    [1]
18 Sep Cheque                     845.00     485.00    [1]
25 Sep Invoice 2377       318.40             803.40    [1]
Amount now due                               803.40

[6] Examiner insight: A running balance lets you check each step. Label each line with its document number.

5.

REMITTANCE ADVICE, Duncraig Cycles to Thwaite Components, 10 October 2027   [1]
Invoice 2310                560.00
Invoice 2377                318.40   [1]
Less credit note 204         75.00   [1]
Cheque enclosed             803.40   [1]

[4] Examiner insight: The total should agree with the statement’s closing balance. Name each invoice and credit note.

6. (a) Net amounts: 700.00 x 0.80 = 560.00; 260.00 x 0.90 = 234.00; 398.00 x 0.80 = 318.40.

PURCHASES DAY BOOK
4 Sep   Thwaite Components  2310   560.00  [1]
14 Sep  Pencarrow Tools                234.00  [1]
25 Sep  Thwaite Components  2377   318.40
Total                                1,112.40  [1]

[3] (b) 17.00 x 0.90 = 15.30.

PURCHASES RETURNS BOOK
12 Sep  Thwaite Components  204     75.00  [1]
27 Sep  Pencarrow Tools                 15.30  [1]
Total                                   90.30  [1]

[3] Examiner insight: Day books use the amount after trade discount. Entering list price loses the amount marks, and the total repeats the error.

7. (a) Ingram Row Cafe: 150.00 x 0.90 = 135.00.

SALES DAY BOOK
 9 Sep  Fyldeside Garage    312.00  [1]
16 Sep  Ingram Row Cafe    135.00  [1]
23 Sep  Fyldeside Garage     88.60
Total                      535.60  [1]

[3] (b) 20 Sep, Ingram Row Cafe, 30.00 x 0.90 = 27.00 [1] (c) A cash sale is not on credit [1], so it is recorded in the cash book, and the sales day book is only for credit sales [1]. [2] Examiner insight: Match the book to the transaction type, and name the book the cash sale does go in.

8.

DEBIT                      Disc    Cash     Bank
1 Oct   Balance b/d               85.00 1,460.00  [1]
1 Oct   Sales                    140.00           [1]
3 Oct   Fyldeside Garage    7.80          304.20   [2]
9 Oct   Cash (C)                         120.00   [1]
15 Oct  Bank (C)                 100.00           [1]
24 Oct  Ingram Row Cafe                  108.00   [1]
                           7.80  325.00 1,992.20
1 Nov   Balance b/d              166.50 1,212.88  [1]

CREDIT                     Disc    Cash     Bank
6 Oct   Pencarrow Tools    4.68          229.32   [2]
9 Oct   Bank (C)                 120.00
12 Oct  Rent                             450.00   [1]
15 Oct  Cash (C)                         100.00
19 Oct  Repairs                   38.50           [1]
31 Oct  Balance c/d              166.50 1,212.88
                           4.68  325.00 1,992.20

Working: cheques 312.00 - 7.80 = 304.20 and 234.00 - 4.68 = 229.32. Cash 325.00 - 158.50; bank 1,992.20 - 779.32. [12] Examiner insight: A contra entry belongs on both sides of the book, so an answer showing one side only is incomplete. Balance cash and bank separately and leave the discount columns out.

9.

Receipts Date   Details        Vch  Total  Travel Stationery Refreshments
120.00   1 Nov  Cash book
         2 Nov  Taxi           41   14.50  14.50
         5 Nov  Printer paper  42   22.80         22.80
         8 Nov  Coffee, biscuits 43   9.65                     9.65
        12 Nov  Courier fare   44   18.00  18.00
        16 Nov  Envelopes      45   11.40         11.40
        20 Nov  Tea and milk   46    7.35                     7.35
        26 Nov  Bus fares      47    6.30   6.30
                                     90.00  38.80  34.20     17.00
 90.00  30 Nov  Cash book
                Balance c/d          120.00
210.00                               210.00
120.00   1 Dec  Balance b/d

Layout with columns and the float received [1]; payments in date order with voucher numbers [2]; each payment in the correct analysis column [1]; total 90.00 [1]; analysis totals 38.80, 34.20 and 17.00 [2]; reimbursement of 90.00 [1]; balance c/d and b/d of 120.00 [1]. [9] Examiner insight: Check the analysis columns add to the total before reimbursing. Reimburse the amount spent, not the amount left.

10.

                                   Debit   Credit
(a) Display stand (or Shop fittings)  640.00   [1]
      Garstang Fittings                         640.00
    Display stand bought on credit            [1]
(b) Irrecoverable debts                85.00   [1]
      Mr Hatherley                                  85.00
    Debt written off as irrecoverable         [1]
(c) Stationery                         36.00   [1]
      Motor expenses                            36.00
    Correction of wrongly charged item        [1]

[6] Examiner insight: Each entry has accounts, amounts and a narrative saying why it is made. Name the debit account first.

11. (a) Purchases day book [1]. (b) Sales returns book [1]. (c) Journal [1]. (d) Purchases returns book [1]. (e) Petty cash book [1]. (f) Sales day book [1]. [6] Examiner insight: Name the book itself, not the ledger. Item (c) is easy to misplace: a computer is not goods for resale.

Where marks are usually lost

• Entering list price in a day book when trade discount applies.
• Omitting the opening or running balance on a statement.
• Showing a contra entry on one side only, or adding discount into the balances.
• Reimbursing the wrong sum in the petty cash book, or putting an item in the wrong analysis column.
• Leaving the narrative out of a journal entry.

Next steps

• Revision notes
• Study guide
• Accounting course hub
• Printable checklist
• All free 10-minute diagnostics
• Book a free trial class

Frequently asked questions

How much is reimbursed to the petty cashier under the imprest system? The petty cashier is reimbursed exactly the amount spent in the period, which restores the float to its fixed starting level. Reimbursing a different sum is a common error in 4AC1 questions.

How is a contra entry shown in the cash book? A contra entry, such as cash paid into the bank, is recorded on both sides of the cash book: in one column on the debit side and the other column on the credit side. Showing it on one side only loses marks.

Is the discount column included in the cash book balance? No. The discount columns record discount allowed and discount received but are not part of the cash or bank balance. Each of the cash and bank columns is balanced separately.

What do examiners look for in a journal entry? Each journal entry should show the date, the account debited, the account credited, equal amounts and a narrative explaining the transaction. Leaving out the narrative is a common way to lose marks.

Official syllabus

Pearson Edexcel International GCSE in Accounting (4AC1) specification, Issue 1, October 2016, published by Pearson Education Limited – Topic 2 Introduction to bookkeeping, sections 2.1 Business documentation and 2.2 Books of original entry.