CIE Accounting Paper-1: Specimen Questions 44 - 46 of 214

Question number: 44

MCQ▾

Question

M John owns a bakery shop. Which of the following are revenue expenditure in nature?

  1. Motor vehicle
  2. Petrol for motor vehicle
  3. Shop fixtures
  4. Wages of bakers

Choices

Choice (4) Response
a.

b and d

b.

c and d

c.

b and c

d.

a and b

Answer

a.

Explanation

The expenses which are occurred in the business may be capital and revenue in nature. Revenue expense generates revenue in the current accounting years. Petrol for motor Vehicle and wages of bakers are revenue in nature.

Question number: 45

MCQ▾

Question

A sum of $500 written off as depreciation on Machinery has not been credited to the Machinery Account. What type of error has been made?

Choices

Choice (4) Response
a.

Omission

b. Error of principle
c.

Compensating error

d.

Commission

Answer

a.

Explanation

The omission of the credit to the Machinery Account will be rectified by posting credit $500 in the Machinery account. The error of omission took place either in the journal or subsidiary books or in the ledger of the business transaction.

Question number: 46

MCQ▾

Question

In which side of balance sheet the value of closing stock will appear?

Choices

Choice (4) Response
a.

Credit

b.

Assets

c.

Debit

d.

Liabilities

Answer

b.

Explanation

The value of closing stock will appear on the assets side of balance sheet and on the credit side of the trading account. Usually the value of closing stock will be given in the adjustment of the transaction.

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