CIE Accounting Paper-1: Specimen Questions 147 - 148 of 214

Passage

Kiran has a trading business and pays the repair expenses of running a motor van. At 1st May 2015 he had accrued repair expenses of $300. For the year ended 30st April 2015 he paid repair expenses of $3400 by cheque and at 30 April 2015 he had an unpaid bill for repair of $500.

Question number: 147 (2 of 2 Based on Passage) Show Passage

Short Answer Question▾

Write in Short

In the below table, put a tick (√) mark under the heading to show the right category of each asset shown on Kiran’s balance sheet

Findout asset value in the table

calculate number of assets columns

Assets

Non-current intangible asset

Non-current tangible asset

Current asset

Goodwill

Patent

Furniture and fixtures

Pre-paid Insurance Premium

Table Title: List of assets shown on Kiran’s balance sheet

Explanation

Finding a table in assets values of the table.

Calculate asset table value.

Assets

Non-current intangible asset

Non-current tangible asset

Current asset

Goodwill

Patent

Furniture and fixtures

Pre-paid Insurance Premium

Goodwill and patent are non-current intangible assets and Furniture and fixtures are comes under the non-current tangible asset. This is also known as fixed assets. The current assets includes pre-paid insurance premium.

Question number: 148

MCQ▾

Question

Zenith owed Ali $600. Zenith was only able to pay Ali $200. Ahmed wrote the balance off as a bad debt.

Which entries record this in Ahmed’s ledger?

Choices

Choice (4) Response
a.

showing in Journal entry in the Ahmeds ledger

shows given table in bas debts is 400

Account to be debited $

Account to be credited $

Bad debts 400

Bank 200

Zenith 600

b.

showing Account to debited in a given table.

Calculate the zenith and Bank

Account to be debited $

Account to be credited $

Zenith 400

Bank 200

Bad debts 600

c.

Account to debited in a given table.

Calculate the bad debts and zenith

Account to be debited $

Account to be credited $

Bad debts 400

Zenith 200

Bank 600

d.

Journal entry in the Ahmeds ledger

shows given table in bas debts is 600

Account to be debited $

Account to be credited $

Bad debts 600

Bank 200

Zenith 400

Answer

a.

Explanation

The bad debt refers to the trade accounts which are not receivable during the year. The trade account receivable is also known as accounts receivable. The amount receivable debts which became bad are known as bad debts.

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