ZIMSEC O-Level Principles of Accounts Paper 1 June 2025 Question Paper

About this question paper

This is the ZIMSEC O-Level Principles of Accounts question paper for Paper 1 from June 2025. Use it for exam practice under timed conditions, then check your work against the marking scheme. See the marking scheme.

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Extracted text

# BUSINESS STUDIES / ACCOUNTING

## Question 1
Which of the following business organisations has an advantage of raising more capital?

A Partnership

B Private limited company

C Public limited company

D Sole proprietor

## Question 2
Which of the following is an advantage of using manual method of processing data?

A Cheap to use

B Faster to process data

C Minimises errors

D Stores more information

## Question 3
A trader bought goods on credit.

Which source document was used?

A Cheque

B Purchases invoice

C Receipt

D Sales invoice

## Question 4
What is the source document for the sales returns journal?

A Credit note

B Debit note

C Invoice

D Receipt

## Question 5
Office equipment sold on credit is recorded in the

A cash book.

B general journal.

C sales journal.

D purchases journal.

## Question 6
Which of the following accounts is found in the private ledger?

A Bank account

B Capital account

C Trade receivables account

D Wages and salaries account

## Question 7
Goods bought by cheque were recorded in the purchases account and omitted in the bank account.

To correct the error

|  | **debit** | **credit** |
| :--- | :--- | :--- |
| A | bank account | suspense account. |
| B | purchases account | suspense account. |
| C | suspense account | bank account. |
| D | suspense account | purchases account. |

## Question 8
A trader decides to create a provision for bad debts.

This is in accordance to the

A consistency concept.

B double entry concept.

C matching concept.

D prudence concept.

## Question 9
In a statement of financial position of a sole trader, what makes up owner's equity?

A Opening capital - net loss - drawings

B Opening capital + net loss + drawings

C Opening capital - net profit - drawings

D Opening capital + net profit + drawings

## Question 10
In the preparation of statement of financial position which items are classified as current liabilities?

A Income owing and inventory of stationery

B Income owing and rates accrued

C Income prepaid and inventory of stationery

D Income prepaid and rates accrued

## Question 11
The following transactions appeared in the books of a trader.

(i) Bought a delivery van

(ii) Paid for rent and rates

(iii) Paid for carriage on purchases

(iv) Paid for carriage on delivery van

Which transactions fall under capital expenditure?

A (i) and (ii)

B (i) and (iv)

C (ii) and (iii)

D (iii) and (iv)

## Question 12
Items entered on the debit side of a trade payables control account include

A credit purchases and discount received.

B returns outwards and credit purchases.

C returns outwards and discount received.

D set off and cash refund.

## Question 13
Information entered in control accounts is extracted from the

A ledger accounts.

B source documents.

C subsidiary books.

D trial balance.

## Question 14
Which of the following is used on the preparation of a bank reconciliation statement?

A Bank charges

B Cash book error

C Credit transfer

D Unpresented cheques

## Question 15
Which of the following items are used to update the cash book?

A Bank charges and standing order

B Deposits not yet credited and standing order

C Unpresented cheques and bank charges

D Unpresented cheques and standing order

## Question 16
Margin is

A gross profit expressed as a percentage of cost of sales.

B gross profit expressed as a percentage of turnover.

C net profit expressed as a percentage of cost of sales.

D net profit expressed as a percentage of turnover.

## Question 17
Which of the following can be used to calculate purchases?

A Cost of sales - opening inventory - closing inventory

B Cost of sales - opening inventory + closing inventory

C Cost of sales + opening inventory - closing inventory

D Cost of sales + opening inventory + closing inventory

## Question 18
Which of the following items is shown in the receipts and payments account?

A Cash at end of period

B Inventory of stationery

C Subscriptions owing at end of period

D Surplus at end of period

## Question 19
Which of the following items is credited in an income and expenditure account?

A Depreciation of office furniture

B Motor vehicles repairs

C Stationery

D Subscriptions

## Question 20
Which of the following inventories is part of total cost of production?

A Closing inventory for raw materials

B Closing inventory for work in progress

C Opening inventory for finished goods

D Opening inventory for work in progress

## Question 21
Which of the following is part of prime cost for a furniture manufacturing company?

A Carriage on furniture

B Carriage on timber

C Wages of factory supervisor

D Wages of office supervisor

## Question 22
Cost of unfinished goods at the end of a given period is

A cost of raw materials consumed.

B inventory of raw materials.

C inventory of work in progress.

D prime cost of production.

## Question 23
Which of the following items is shown on the credit side of a partnership appropriation account?

A Interest on capital

B Interest on drawings

C Salaries to partners

D Share of profits

## Question 24
One of the advantages of forming partnerships is that

A business risks are shared.

B decision making takes long.

C partners have unlimited liability.

D profits are shared.

## Question 25
Which of the following set of items are shown in the statement of changes in equity?

A Dividends paid and interest on debentures

B Dividends proposed and interest on debentures

C Transfer to reserves and dividends paid

D Transfer to reserves and dividends proposed

## Question 26
Which business ethic will a company apply if it requires its employees to keep company information to themselves?

A Competence

B Compliance

C Confidentiality

D Objectivity

## Question 27
A trader's trial balance failed to agree. It was discovered that sales returns were overcast by \($ 800\).

The effect of this error on the trial balance was to

A increase the credit side by \($ 800\).

B increase the debit side by \($ 800\).

C …