CIE Accounting Paper-1: Specimen Questions 83 - 85 of 214

Passage

Aieno bought fixed asset at a cost of $50000 on 1st Aprils 2014. Calculate its net book value as on 31st March 2016 if it is depreciated:

Question number: 83 (4 of 4 Based on Passage) Show Passage

Short Answer Question▾

Write in Short

At 15 % per annum on the straight line basis.

Explanation

$35000

The depreciation is charged evenly every year till the effective life of an asset.

Depreciation=Costoffixedassets×Rateofdepreciation

Depreciation=50000×15%

Depreciation=50000×15100

Depreciation=$7500

Net Book Value as on 31st March 2016= 5000075007500

35000

Question number: 84

MCQ▾

Question

Which one of the following is also called Book of final entry or Book of secondary entry?

Choices

Choice (4) Response
a.

Journal

b.

Balance sheet

c.

Trial Balance

d.

Ledger

Answer

d.

Explanation

Ledger is also called as Book of final entry or Book of secondary entry. The ledger contains classified and permanent record of all transactions which are involved in the business. Thus ledger is collection of all transaction.

Passage

The following balances were taken from the books of Hason, a sole trader, at 30 April 2015. $

Revenue through rent 210 000

Purchases 75 000

Stock 1 May 2014 11 500

Bills receivables 2 300

Bills payables 2 900

Machinery 8 400

Office expenses 30 600

Bank (overdraft) 4 100

Capital 12 500

Drawings 6 600

Hason’s inventory at 30 April 2015 was $20 100.

Question number: 85 (1 of 2 Based on Passage) Show Passage

Short Answer Question▾

Write in Short

Write a short note on suspense account

Explanation

The suspense account is an imaginary and temporary account. It is created when difficult to locate the mistake before preparing the final account and the difference in the trial balance is transferred to the suspense account. This account is prepared to avoid delay in the preparation of final accounts.

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