Cambridge O Level ACCOUNTING ;Paper 2 Structured Written Paper

1 Leo maintains a petty cash book using the imprest system. The imprest amount, which is $200, is restored on the first day of each month. All payments of less than $100 are made from petty cash. All cash receipts of less than $100 are paid into petty cash. On 1 April 2021 Leo had $48 in his petty cash box. Leo provided the following information for April 2021. April 1 Restored petty cash imprest from the business bank account 5 Paid for office cleaning, $21 7 Paid for train ticket, $13 13 Paid $72 to Hunter, a trade payable 18 Paid taxi fare, $14 25 Received cash, $11, from Conrad, a trade receivable REQUIRED (a) Prepare Leo’s petty cash book for the month of April 2021, on page 3. Balance the petty cash book and bring down the balance on 1 May 2021.  (b) (i) Name the ledger to which each of the following would be posted. The total of the column for travel expenses ...................................................................... The payment to Hunter ..................................................................................................... [2] (ii) Name the accounting principle which is being applied when figures from the petty cash book are posted to the appropriate ledgers. ..................................................................................................................................... [1] Leo received a statement of account from Hunter. REQUIRED (c) State two purposes of issuing this statement to Leo. 1 ................................................................................................................................................ ................................................................................................................................................... 2 ................................................................................................................................................ ................................................................................................................................................... [2] Leo is considering making all payments over $50 to trade payables by credit transfer. REQUIRED (d) Advise Leo whether he should go ahead with this change. Justify your answer by providing two advantages and two disadvantages. ...................................................................................................................................................