International Association of Book-keepers

LEVEL 2 Certificate in Computerised Book-keeping

JANUARY 2008

Qualification Accreditation Number 100/5314/1

Unit Accreditation Number Y/103/2527

Candidates Instructions:

Time allowed: 10 minutes reading time plus 2 hours

Candidates should answer all Tasks.

All written answers should be in pen or word processed.

Level 2 Cert.CB January2008v4

 Level 2 Certificate in Computerised Book-keeping
JANUARY 2008

Time allowed: 10 minutes reading time plus 2 hours.

Scenario

A new business, Rob’s Wholesale, is being set up by Rob Smith. The

business will be registered for VAT (Standard Accounting) and will be trading
on both a credit and cash basis.

Sales will be divided into 2 categories – sales of toys and sales of books. The
latter is VAT zero rated.

Purchases will be divided into 2 categories – purchases of toys and purchases

of books. The latter is VAT zero rated.

Required

1. You are to assume the role of Accounts Clerk and carry out the
instructions in the order that they are given using a commercial
Accounting software package. Rob is relying on you to input the
data accurately. You should ensure that every transaction has a
unique reference.

2. Print the following at the end of the month:

a. Trial Balance
b. Summary Audit Trail
c. Address Lists for customer and suppliers
d. Detailed Aged Debtors and Aged Creditors Analyses
e. Nominal activity reports for each category of sales and
purchases
f. Nominal activity report of the bank and petty cash transactions
g. Reconciled and unreconciled bank transactions

3. a) Rob is concerned about the accuracy of his data. Explain three

ways in which data can be verified for its accuracy after it has been
input. (6 Marks)
b) Rob also wants to use the computer to its maximum advantage.
Identify two other reports you could provide which will help him
manage his business more effectively. (4 Marks)

The business was started on 1st January 2008.

Set this as your Financial Year Start Date.

Level 2 Cert.CB Page 1 January 2008/4

The name and address of Rob’s Wholesale is as follows:

Rob’s Wholesale
Unit 4
Priory Road Industrial Estate
Paignton
TQ4 7EV

Enter this information onto your Accounting program and, after the
name Rob’s Wholesale, add your Examination Entry number.

Set up the following Nominal Accounts, using an account reference relevant

to the package you are using:

Nominal Code Name

Capital
Drawings
Sales – Toys
Sales – Books
Purchases – Toys
Purchases – Books

Set up the following Customer Accounts, using an appropriate account

reference:

Torbay Books CI Shipping Lines Seaside Kiosks Ltd.

12 Hyde Road Harbour Road 7 Polters Lane
Torquay Weymouth Bournemouth
TQ1 4VC DC16 2MP BH1 9HN

Set up the following Supplier Accounts, using an appropriate account

reference:

Book Importers Ltd. Northern News Alan Bennett & Co

276 Old Kent Road 5 Grange Road 3 Elm Close
London Liverpool Worcester
SE1 5AW L1 4CR WC3 7DH

King’s Wholesale
3 First Drive
Dorchester
DC3 9HR

Level 2 Cert.CB Page 2 January 2008/4

 Rob put in place the finance for the new business.

Date Details
1 Jan Rob paid £15,000 of his own money into the Business Bank current
account

1 Jan Received Bank Loan of £20,000 paid into the current account.
Arranged loan repayment to be paid on 23rd of each month by
Standing Order. This amounts to £500 per month, £400 being
capital repayment and £100 being loan interest. Set this up and
post the payment at the appropriate time.

A book was set up (extract below) in which a list of all cheques paid out
would be recorded. From this Cheque Log, enter these details onto the
system:

Cheque Log
Date Cheque Payee Details Net VAT Gross
no. £ £ £ √
2 Jan 30001 Cash Petty 200.00
Cash
3 Jan 30002 Torbay Rates 1,000.00 Outside 1,000.00
Council Scope
5 Jan 30003 AB First
Properties Payment 5,000.00 Zero 5,000.00
for Rated
Purchase
of
Business
Unit
10 Jan 30004 Jones Hire of 1,000.00 175.00 1,175.00
Motors Delivery
Van

Level 2 Cert.CB Page 3 January 2008/4

During the month, the following invoices were sent out to customers. Enter
these transactions:

Rob’s Wholesale
Unit 4
Priory Road Industrial Estate
Paignton
TQ4 7EV
Telephone: 01803 588330

Invoice To: Invoice No. RW 001

Torbay Books Invoice Date 01.01.2008
12 Hyde Road
Torquay
TQ1 4VC
VAT Rate Net
Toys - per delivery note 12 17.5% 1,826.29

1,826.29
VAT 313.20
Invoice Total £2,139.49

Terms: 2% discount if paid within 14 days

VAT Reg. No. 386 4103 25

Rob’s Wholesale
Unit 4
Priory Road Industrial Estate
Paignton
TQ4 7EV
Telephone: 01803 588330

Invoice To: Invoice No. RW 002

CI Shipping Lines Invoice Date 02.01.2008
Harbour Road
Weymouth
DC16 2MP
VAT Rate Net
Assorted toys 17.5% 840.68
Assorted paperback books Zero 630.20
1,470.88
VAT 147.11
Invoice Total £1,617.99

Terms: Nett monthly account

VAT Reg. No. 386 4103 25
Level 2 Cert.CB Page 4 January 2008/4
 Rob’s Wholesale
Unit 4
Priory Road Industrial Estate
Paignton
TQ4 7EV
Telephone: 01803 588330

Invoice To: Invoice No. RW 003

Seaside Kiosks Ltd. Invoice Date 07.01.2008
7 Polters Lane
Bournemouth
BH1 9HN
VAT Rate Net
Sundry toys 17.5% 380.95

380.95
VAT 66.66
Invoice Total £447.61

Terms: Nett monthly account

VAT Reg. No. 386 4103 25

Rob’s Wholesale
Unit 4
Priory Road Industrial Estate
Paignton
TQ4 7EV
Telephone: 01803 588330

Invoice To: Invoice No. RW 004

CI Shipping Lines Invoice Date 10.01.2008
Harbour Road
Weymouth
DC16 2MP
VAT Rate Net
Toys per delivery note 27 17.5% 1,200.00
Assorted paperback books Zero 225.00
1,425.00
VAT 210.00
Invoice Total £1,635.00

Terms: Nett monthly account

VAT Reg. No. 386 4103 25

Level 2 Cert.CB Page 5 January 2008/4

 Rob’s Wholesale
Unit 4
Priory Road Industrial Estate
Paignton
TQ4 7EV
Telephone: 01803 588330

Invoice To: Invoice No. RW 005

Torbay Books Invoice Date 14.01.2008
12 Hyde Road
Torquay
TQ1 4VC
VAT Rate Net

New issue books Zero 2,750.00

2,750.00
VAT 0.00
Invoice Total £2,750.00

Terms: 2% discount if paid within 14 days

VAT Reg. No. 386 4103 25

Rob’s Wholesale
Unit 4
Priory Road Industrial Estate
Paignton
TQ4 7EV
Telephone: 01803 588330

Invoice To: Invoice No. RW 006

Seaside Kiosks Ltd. Invoice Date 20.01.2008
7 Polters Lane
Bournemouth
BH1 9HN
VAT Rate Net
Sundry toys supplied 17.5% 341.00
Assorted paperback books Zero 80.60
421.60
VAT 59.67
Invoice Total £481.27

Terms: Nett monthly account

VAT Reg. No. 386 4103 25

Level 2 Cert.CB Page 6 January 2008/4

During the month, the following credit note was sent out. Enter this
transaction:

Rob’s Wholesale
Unit 4
Priory Road Industrial Estate
Paignton
TQ4 7EV
Telephone: 01803 588330
Credit Note: Credit Note No. RWC 001
CI Shipping Lines Credit Note Date 15.01.2008
Harbour Road
Weymouth
DC16 2MP
VAT Rate Net
Spoiled toys – water damaged 17.5% 30.00
Spoiled books – water damaged Zero 40.00

70.00
VAT 5.25
Credit Total £75.25

VAT Reg. No. 386 4103 25

Level 2 Cert.CB Page 7 January 2008/4

During the month, the following invoices were received from Suppliers. Enter
these transactions:

Book Importers Ltd.

276 Old Kent Road
London
SE1 5AW

Invoice To: Invoice No. BI 966

Rob’s Wholesale Invoice Date 03.01.2008
Unit 4
Priory Road Industrial Estate
Paignton
TQ4 7EV

VAT Rate Net

Selection of books Zero 3,150.00

3,150.00
VAT 0.00
Invoice Total £3,150.00

Terms: 30 days
VAT Reg. No. 312 4145 78

Alan Bennett & Co

3 Elm Close
Worcester
WC3 7DH
Invoice To: Invoice No. AB 856
Rob’s Wholesale Invoice Date 4.01.2008
Unit 4
Priory Road Industrial Estate
Paignton
TQ4 7EV
VAT Rate Net
Assorted toys 17.5% 1,420.00
Assorted paperback books Zero 425.00

1,845.00
VAT 241.04
Invoice Total £2,086.04

Terms: 3% discount if paid within 21 days

VAT Reg. No. 349 5541 44

Level 2 Cert.CB Page 8 January 2008/4

 Northern News
5 Grange Road
Liverpool
L1 4CR
Invoice To: Invoice No. NN 1826
Rob’s Wholesale Invoice Date 9.01.2008
Unit 4
Priory Road Industrial Estate
Paignton
TQ4 7EV
VAT Rate Net
Books per delivery note 329 Zero 315.00

315.00
VAT 0.00
Invoice Total
£315.00

Terms: Nett monthly account

VAT Reg. No. 510 4728 21

King’s Wholesale
3 First Drive
Dorchester
DC3 9HR
Invoice To: Invoice No. 3169
Rob’s Wholesale Invoice Date 18.01.2008
Unit 4
Priory Road Industrial Estate
Paignton
TQ4 7EV
VAT Rate Net
Wholesale toys 17.5% 750.20
Wholesale paperback books Zero 460.00

1,210.20
VAT 131.28
Invoice Total £1,341.48

Terms: 30 days nett

VAT Reg. No. 312 4168 75

Level 2 Cert.CB Page 9 January 2008/4

During the month the following credit note was received:

King’s Wholesale
3 First Drive
Dorchester
DC3 9HR
Credit To: Credit Note KWC 991
Rob’s Wholesale Credit Note Date 23.01.2008
Unit 4
Priory Road Industrial Estate
Paignton
TQ4 7EV
VAT Rate Net
Damaged paperback books Zero 40.00

40.00
VAT 0.00
Total £40.00

Terms: To be deducted from payment of next invoice.

VAT Reg. No. 312 4168 75

Level 2 Cert.CB Page 10 January 2008/4

During the month, Petty Cash has been spent and the Vouchers below written
out. Enter this expenditure.

Petty Cash Voucher

No. PCV 1
Date 1.1.2008 VAT Rate: 17.5%

Expense Details Amount including VAT (where applicable)

Diesel for delivery van £30.00

Signed ……………….. Total £30.00

Petty Cash Voucher

No. PCV 2
Date 4.1.2008 VAT Rate: 17.5%

Expense Details Amount including VAT (where applicable)

Carriage on deliveries from

suppliers. £20.00
(This is to be treated as
part of the cost of
purchases, but must be
shown separately)

Signed ……………….. Total £20.00

Petty Cash Voucher

No. PCV 3
Date 10.1.2008 VAT Rate: Exempt

Expense Details Amount including VAT (where applicable)

Postages £15.00

Signed ……………….. Total £15.00

Level 2 Cert.CB Page 11 January 2008/4

 Petty Cash Voucher
No. PCV 4
Date 14.1.2008 VAT 17.5%

Expense Details Amount including VAT (where applicable)

Carriage on deliveries to £18.00

customers

Signed ……………….. Total £18.00

Petty Cash Voucher

No. PCV 5
Date 18.1.2008 VAT Rate Zero

Expense Details Amount including VAT (where applicable)

Minor repairs to building £25.00

roof

Signed ……………….. Total £25.00

Petty Cash Voucher

No. PCV 6
Date 22.1.2008 VAT Rate Zero

Expense Details Amount including VAT (where applicable)

Tea, coffee, etc £8.00

Signed ……………….. Total £8.00

Level 2 Cert.CB Page 12 January 2008/4

 During the month, the following moneys have been received from Customers:
Cheque
amount
£
12 Jan Cheque (no. 486) received from Torbay Books in full 2,102.96
settlement of our invoice RW 001, having taken the
discount offered.
28 Jan Cheque (no. 3160) received from CI Shipping Lines in full 1,617.99
settlement of our invoice RW 002.
29 Jan Cheque (no. 21) received from Seaside Kiosks Ltd. This 445.00
was in respect of our invoice RW 003. It was decided to
write off the difference as discount.

In addition, on 19 January, Rob undertook a trade fair and made cash sales of
books £280.00. Of this, £100.00 was retained as petty cash. The balance was
paid into the bank.

You have already entered some cheques (ticked) from the Cheque Log –
enter the remaining cheque payments.
Cheque Log
Date Cheque Payee Details Net VAT Gross
no. £ £ £ √
2 Jan 30001 Cash Petty 200.00 √
Cash
3 Jan 30002 Torbay Rates 1,000.00 Outside 1,000.00 √
Council Scope
5 Jan 30003 AB First
Properties Payment 5,000.00 Zero 5,000.00 √
for Rated
Purchase
of
Business
Unit
10 Jan 30004 Jones Hire of 1,000.00 175.00 1,175.00 √
Motors Delivery
Van
15 Jan 30005 Trade Hire of stand for trade fair, 117.50
Shows £100.00 plus VAT £17.50.
Limited
24 Jan 30006 Alan Full settlement of their invoice 2,030.69
Bennett & AB 856, taking advantage of
Co. the discount offered.
27 Jan 30007 Book Payment on account. 2,000.00
Importers
31 Jan 30008 AB Balance of purchase price of 15,000.00
Properties business unit. (Zero rated)
31 Jan 30009 Cash Reimburse Petty Cash box to 16.00
bring float back to £200.00.

Level 2 Cert.CB Page 13 January 2008/4

The wages for January have been calculated. Enter these transactions.

31 January - Net Wages paid from the Bank Current Account by BACS
£986.90 (this included £500.00 in respect of Rob’s personal drawings)

The Income Tax and National Insurance have been calculated as

follows:

Income Tax deducted £56.09

Employee’s NIC deducted £18.65
Employer’s NIC £21.42

These will not be sent off to HM Revenue & Customs until 15th
February; therefore, enter these figures into the system by Journal
Entries.

29th January
Rob took some paperback books for his own use. These had a selling
price of £15.00 (Zero rated for VAT).

Make the journal entry to reflect this.

Level 2 Cert.CB Page 14 January 2008/4

 The Bank Statement below has been received; reconcile it to your
computer records.

SEASIDE BANK PLC

Account Number: 2819045 STATEMENT OF ACCOUNT
Sheet No. 1
Rob’s Wholesale Sort Code: 14-40-00
Unit 4
Priory Road Industrial Estate Telephone: 01803 123000
Paignton Facsimile: 01803 123001
TQ4 7EV

Date Particulars Payments Receipts Balance

1 Jan Counter Credit 15,000.00 15,000.00

Trf – Business Loan 20,000.00 35,000.00
3 Jan 30001 200.00 34,800.00
6 Jan 30002 1,000.00 33,800.00
8 Jan 30003 5,000.00 28,800.00
14 Jan 30004 1,175.00 27,625.00
15 Jan Counter Credit 2,102.96 29,727.96
18 Jan 30005 117.50 29,610.46
19 Jan Counter Credit 180.00 29,790.46
23 Jan Business Loan Account DD 500.00 29,290.46
30 Jan 30007 2,000.00 27,290.46

When you have finished, return to page 1. Print out as instructed and write
your answer to question 3.

Level 2 Cert.CB Page 15 January 2008/4