CIE Accounting Paper-1: Specimen Questions 104 - 106 of 214

Question number: 104

MCQ▾

Question

It was discovered that a credit customer had been charged $47 for a purchase instead of $74.

Which document will be issued by the seller to correct the error?

Choices

Choice (4) Response
a.

Invoice

b.

Balance Sheet

c.

Debit note

d.

Credit note

Answer

d.

Explanation

Credit note is prepared by the seller in order to show the details of the goods and the value of the goods retained with them. On the basis of credit note the customer’s account is credited in the books.

Question number: 105

Short Answer Question▾

Write in Short

In which final account will carriage outwards be shown?

Explanation

Profit and loss account.

Final accounts took place in the last step of the accounting cycle. A trader prepares final accounts when the errors are rectified in the extracted trial balance. The final accounts include a number of accounts such as

  • Trading accounts
  • Profit and loss account

Passage

Susan’s statement was as follows:

Western Commercial Company.

Shows given table is Western Commercial Company statement of account.

Western Commercial Company.

Shows given table is Western Commercial Company statement of account.

Western Commercial Company statement of account.

Shows given table is Western Commercial Company statement of account.

WESTERN COMMERCIAL COMPANY

STATEMENT OF ACCOUNT

Western Commercial Company.

Shows given table is Western Commercial Company statement of account.

Date

Particular

Dr

$

Cr

$

Balance

$

September 1

Balance b/f

4000.00

4000.00

September 7

Sales – invoice 401

66.50

4066.50

September 10

Sales – invoice 402

117.00

4183.5

September 15

Sales return – credit note 39

17.50

4166

September 19

Bank –Susan

3920.00

246

September 30

Balance c/f

246

Terms: 2 % discount for settlement within 20 days.

Question number: 106 (1 of 5 Based on Passage) Show Passage

Short Answer Question▾

Write in Short

State why Susan paid $3920 on 20 September when the balance brought forward on 1 September was $4000.

Explanation

She received discount of 2 % on her opening balance $4000.

Solution: Discount on sales will allowed when they pay the amount within the time limit given by the seller. Hence, Susan paid the amount $3920 within the time limit of 20 days. Hence,

Payment=AmountpayableDiscount

=40004000×2100

=400080

=$3920

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