CIE Accounting Paper-1: Specimen Questions 110 - 113 of 214

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: 110 (5 of 5 Based on Passage) Show Passage

Short Answer Question▾

Write in Short

State for what purpose of sending a statement of account to a customer.

Explanation

The main purpose of sending a statement of account to a customer:

  • The statement will provide information about the amount due to the supplier.
  • The customer will be reminded through the statements.

The total record of statement was provided to the Susan in order to show that there is no error have been made by customer or by the supplier with amount payable or receivable by them.

Question number: 111

Short Answer Question▾

Write in Short

Explain the modifying principles.

Explanation

To make the accounting information useful to various interested parties, the basic assumptions and concepts of accounting principles are modified. These modified principles are as:

  • Cost Benefit Principle
  • Materiality Principle
  • Consistency Principle

Passage

Roshan had the following transaction:

a. Roshan started business with $25000

b. Purchased goods on credit from Sohan $10000

c. Solds goods to Sam costing $1500 for $1800 on credit.

Question number: 112 (1 of 2 Based on Passage) Show Passage

Short Answer Question▾

Write in Short

Show your calculation regarding the accounting equation.

Explanation

Assets = $35300 Liabilities $10000; Capital $25300

Solution: The accounting equation includes:

Accounting equation of Roshan

Table of Accounting equation of Roshan

Sl No

Equities

Assets

Capital

creditors

Cash

Stock

Debtors

a.

25000

25000

b.

10000

10000

c.

300

10000 - 1500

35300

35300

Question number: 113 (2 of 2 Based on Passage) Show Passage

Short Answer Question▾

Write in Short

Calculate assets on the basis of accounting equation:

Explanation

$35300

Assets includes cash from capital, stock on credit purchase, deduct cost stock amount sold and add credit sale amount. Thus assets includes

Assets=25000+10000+300

=$35300

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