CIE Accounting Paper-1: Specimen Questions 12 - 14 of 214
Question number: 12
Anything owned by or owed to the business ________
|d.||None of the above|
Anything owned by or owed to the business are known as assets.
It shows the fixed as well as fluctuated assets of the company.
Capital is an amount introduced or invested by the shareholder of the company.
Question number: 13
When a claim against a debtor becomes irrecoverable it is called bad debt.
How is this recorded in the ledger?
Debit Creditors, credit Bad Debts
Debit Bad debts, credit Creditor’s
Debit Bad debts, credit Debtor’s
Debit Debtor’s, credit Bad debts
When a claim against a debtor becomes irrecoverable it is called bad debt. Bad debts is always shown on the debit side of Profit and Loss account and also deducted from the debtors in the balance sheet.
Question number: 14
How will partners’ interest on capital be shown in the partnership’s financial statements?
Credit appropriation account
Credit income statement
Debit income statement
Debit appropriation account
Interest on capital will be allowed to the partners when the partnership deed provides so. Profit and Loss appropriation account is simple extension of the profit and loss account. Interest on capital will be shown in the debit of the appropriation account.