Suggested Solutions & Answers to Oct 2010 GCE ‘N’ Level Principles of Accounts

The rough solutions and answers for this morning’s GCE N’ Level Principles of Accounts (Syllabus 7091/02) is out. Please click here to download the pdf file.

All the best, students! POA is the last paper for most of you. O’ Level Students, you’re next. =)

  • JiaQi

    I set 'Lighting and Air-conditioning' as a fixed assets in Question 1 for Paper 2. Although the amount is small , and air-conditioning is a expense. LIGHTINGS is fixture and fittings , it is clearly that both Fixed Assets and Expense can be accepted! Please take note of this.. or is there a reason why it is a fixed asset.

  • calebho

    Hi Jia Qi,
    Thank you for your comments!

    You are right in stating that lightings would have been a fixed asset under on its own and pointed out rightly the two clues which suggest the item is an expense:

    – Relatively small amount (Capital Expenditure such as Lights and Air-conditioners generally cost more than $1,200)

    – “Air-conditioning” was used instead of “air-conditioners” to describe this expenditure which describes an ongoing service instead of a fixed asset (noun) – although comparing “Lights “and “Lightings” tends to be more debatable.

    The contestable point would be that that since recognising it as either expense or asset will have no effect on balancing the Balance Sheet, both ways of recognition will be acceptable.

    However, the wrong classification will result in overstating both the net assets and the net profit in this case. Besides being an Error of Principle, it violates the Prudence and Conservatism concept.

    As a matter of no-other-reason-why-it-should-be-a-fixed-asset, I’m inclined to conclude that Lightings and Air-conditioning is an expense.

    I'm happy to hear contrary views. =)

  • sherry

    hey there, for question 1 paper 2, If my answer is Computers and mouse, that isn't correct right?

  • calebho

    Hi sherry,

    My view? Mouse is part of computers. you might get half the allocated marks for Computers. =)

  • sherry

    oh noo, what if its keyboards/mouse? In your view, will there be any marks?

  • calebho

    it really depends on the leniency of the marker. i wouldn't award any marks though.

  • jes

    Hi i have downloaded the Nlevel theory question, do you have the answer for it? Thanks