CIE Accounting Paper-1: Specimen Questions 162 - 164 of 214
Question number: 162
A business records a transaction in its accounting records as follows.
Debit Bank account
Credit sales account
Which accounting principle is being applied?
Double entry system is based on the principle of dual aspect. The business transactions have two aspects namely receiving benefit and giving benefit. Hence in the above transaction goods are sold for cash.
Question number: 163
A bill is drawn on 1 - 4-2015 for 2 months, its due date is ________
3 - 6-2015
1 - 6-2015
4 - 6-2015
1 - 4-2015
The date of payment as specified in the bill is known as due date. The three extra days are added to the specified period of the bill. These three days are known as ‘Day of grace’. Hence, the due date in above circumstances is 4 - 6-2015.
Question number: 164
Write in Short
Explain what is meant by the term ‘creditors for expenses’
The creditors for expenses represents expenses which have been incurred during the year but the payment in respect of such expenses is yet to be made. In simple form the expenses due but not yet paid are termed as ‘creditors for expenses’ or ‘outstanding expenses’.