CIE Accounting Paper-2: Specimen Questions 11 - 13 of 103

Passage

ABC & Co. started business on 1st January 2014 with a capital of £240000.

During the month, the following transactions took place:

2nd Bought goods from XYZ on credit £60000

5th Sold goods to MNO £75000

5th Cash Purchases £75000

8th Cash Sales £45000

9th Goods returned to XYZ £ 6000

15th Bought Furniture £45000

16th Cash paid to XYZ £36000

16th Loan taken from Mr. K £90000

17th Goods Returned by MNO £9000

20th ABC takes stock for personal use £9000

21st Cash received from MNO £36000

25th Salary paid £15000

28th Purchase of Stationery £ 3000

29th Amount paid to Mr. K on loan Account £ 54000

30th Interest received £12000

Question number: 11 (1 of 5 Based on Passage) Show Passage

Essay Question▾

Describe in Detail

From the above details prepare the cash ledger A/C

Explanation

Cash ledger A/C in the books of ABC & Co.

shows Cash ledger A/C in the books of ABC & Co.

DATE

PARTICUALRS

JF

AMOUNT

£

DATE

PARTICUALRS

JF

AMOUNT

£

01.01. 2014

To Capital A/C

240000

05.01. 2014

By goods A/c

75000

08.01. 2014

To stock A/C

45000

15.01. 2014

By furniture A/C

45000

16.01. 2014

To XYZ A/C

36000

21.01. 2014

By MNO A/C

36000

16.01. 2014

To loan from Mr. K A/C

90000

25.01. 2014

By Salaries A/C

15000

30.01. 2014

To Interest A/C

12000

28.01. 2014

By Stationeries A/C

3000

29.01. 2014

By loan from Mr. K A/C

54000

31.01. 2014

By Balance C/D

195000

423000

423000

01.02. 2014

To balance B/D

195000

Question number: 12 (2 of 5 Based on Passage) Show Passage

Essay Question▾

Describe in Detail

What is the purpose of preparing a trial balance?

Explanation

The first step required in the preparation of final accounts is the preparation of trial balance. The purpose of preparing trial balance is to check the arithmetical accuracy of the double entry system of book keeping. When the totals of the debits and credits of trial balance are equal, it is an indication that there are no errors in the ledger accounts.

Question number: 13 (3 of 5 Based on Passage) Show Passage

Essay Question▾

Describe in Detail

The following items will find their place on which side of the trial balance.

(i) Opening Stock: ————————

(ii) Closing Stock: ————————

(iii) Loan taken: ————————-

(iv) Goodwill: ————————

(v) Returns outwards: ————————-

Explanation

(i) Debit balance

(ii) Will not find place in trial balance

(iii) Credit balance

(iv) Debit balance

(v) Credit balance

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