CIE Accounting Paper-1: Specimen Questions 160 - 161 of 214

Question number: 160

MCQ▾

Question

If the suspense account has debit balance.

Where is this shown in his final accounts?

Choices

Choice (4) Response
a.

List of final accounts (Choice A)

Shows table of List of final accounts

List of final accounts

Shows table of List of final accounts

Trading account

Profit and loss account

Balance sheet

Trading account

Profit and loss account

Balance sheet

b.

List of final accounts (Choice B)

Shows table of List of final accounts

Trading account

Profit and loss account

Balance sheet

c.

List of final accounts (Choice C)

Shows table of List of final accounts

Trading account

Profit and loss account

Balance sheet

d. None of the above

Answer

a.

Explanation

Suspense account is continued in the books until the errors are located and rectified in the accounting year. The balance in suspense account will be shown in the balance sheet. If suspense account shows a debit balance then it will be shown in the asset side only.

Question number: 161

Short Answer Question▾

Write in Short

Complete the following table by a tick () to mention if each item is an asset or a liability. The first has been completed as an example.

Items are appeared in the balance sheet of the business.

Table of Items are appeared in the balance sheet of the business.

Particulars

Asset

Liability

Machinery

Outstanding expenses

Outstanding income

Prepaid expenses

Prepaid income

Explanation

shows Items are appeared in the balance sheet of the business.

Table of Items are appeared in the balance sheet of the business.

Particulars

Asset

Liability

Machinery

Outstanding expenses

Outstanding income

Prepaid expenses

Prepaid income

The machinery is fixed asset of the business where as the outstanding income and prepaid expenses are current asset of the business. Outstanding expenses and prepaid income of the business are current liability. At the end of the period, the company is liable to pay toward the respective person or company.

Share