1. Abnormal gains in process are accounted for by:

1. A debit to the Process a/c and a credit to the Trading a/c
2. A debit to the Trading a/c and a credit to the Process a/c
3. A debit to the Sales a/c and a credit to the Purchases a/c
4. A debit to the Abnormal a/c and a credit to the Receivables (working capital) a/c

2. The value of resources (i.e. 600 kilos of direct materials, direct labour and production overhead) input to a process was 9,000. Normal losses, estimated at 6% of total inputs, can be sold for 5.60 per kilo. The total cost per kilo of the process good output, therefore, is:

1. 13.50
2. 15.60
3. 36.00
4. 201.60

3. A business has produced the following working capital data:

Working capital as at end:	Period 1	Period 2
Average stock turnover	28 days	24 days
Average debtors repayment period	32 days	30 days
Average creditors repayment period	38 days	36 days

The business cash operating cycle has improved / worsened (from period 1 to period 2) by:

1. 4 days (improvement)
2. No change
3. 4 days (worsened)
4. 8 days (improvement)

4. A business has current assets valued at 125,000 and current liabilities valued at 80,000. Working capital is aggressively financed using short-term bank debt with an annual interest rate of 16%. The annual cost of working capital asset financing, therefore, is:

1. 12,800
2. 14,400
3. 20,000
4. 7,200

5. At production levels above current capacity:

1. The selling price will be increased in-line with diminishing demand
2. The value for fixed costs values and the rates for variable costs can no longer be relied upon
3. The fixed costs will increase by step at a rate in excess of 15%
4. The variable cost per unit will fall by 5% because of the bulk discounts available on materials

6. Which ONE of the following describes financial planning?

1. A strategic plan clearly identifying the business long-term production objectives and the approaches to their achievement (i.e. executive decision-making and tactical positioning.)
2. The application of computer resources (i.e. software and hardware) to design an overall forecast for discussion and implementation through the business interlocking operating functions.
3. The preparation of a forecast describing future business objectives (expectation) expressed in financial terms e.g. profits and cash flows.
4. The extracted cost of production resources from the previous periods budget plans and on-going management negotiations with customers, suppliers and employees.