CIE Accounting Paper-1: Specimen Questions 165 - 167 of 214
Question number: 165
Write in Short
Shusma has a shop which sells fashion ornament. She bought 50 ornaments for $13.00 each and paid total carriage inwards of $50.00. She sold 30 ornaments for $20.00 each. The price at which she can sell the ornaments has now fallen to $13.50 each. At what amount will Shusma value the remaining ornaments in her balance sheet?
The value of ornaments in balance sheet is $270
Number of ornaments brought is 50
The remaining ornaments as stock is
The value of ornaments in the balance sheet is
Question number: 166
What is shown as a liability in a Balance Sheet?
Discount on issue of shares
Current liabilities are those liabilities which are repayable within a year. It may take normal operating cycle of the business day by using of existing assets. Thus current liabilities includes
- Trade creditors
- Bills payable
- Proposed dividend
- Accrued expenses
- Bank overdraft
- Short term loans
Question number: 167
Write in Short
Mention the bases of accounting in common usage to finalize accounts.
There are three bases of accounting in common usage. Any one of the following method can be used to finalize the accounts:
- Cash basis
- Accrual or Mercantile basis
- Mixed or Hybrid basis.
Cash plays an important role in the Cash basis system. Accrual or Mercantile basis is followed by all the merchants, trade and industry. Mixed basis is combines of both ‘cash basis’ and ‘accrual basis’. This method is not used widely due to the inconsistency.