A-AS Level (CIE) Accounting Paper-1: Specimen Questions with Answers 46 - 47 of 93

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Question 46

Question

Matching-Pair▾

Find the pair which does not match:

Choices

Choice (4)

a.

Trading and Profit and Loss Account

Income statement

b.

Balance Sheet

Position statement

c.

Financial statements

Final Accounts

d.

Funds Flow Statement

Cash Flow Statement

Answer

d.

Explanation

The following pairs mentioned state the account and its nature. Whereas, Fund flow statement and Cash flow statement is a statement which records the cash inflows and outflows in an accounting year on the other hand fund flow statement shows the changes in the working capital of a firm in relation to a particular time period.

Purpose of cash flow statement is to provide information about cash receipts and payments and change in cash due to the resulting change in operating, investing, and financing activities. A fund flow statement is made to analyze the reasons for change in financial position of a company. It depicts the sources of funds and application of funds.

Question 47

Question

MCQ▾

Bills Receivable discounted but not due till the date of final accounts is shown in:

Choices

Choice (4)

a.

P & L A/C

b.

Liabilities

c.

Foot notes

d.

Assets

Answer

c.

Explanation

  • The firm will become liable to pay the amount of such a Bill only if an acceptor dishonors the bill accepted by him on the due date.
  • If a suit against the firm is pending in the court, the actual liability in this respect will arise only if the suit is decided against the firm.
  • If the firm has given a Guarantee for another person, the actual liability in this respect will arise only if the person for whom the guarantee is given fails to meet his obligation.

Treatment in Final Accounts: Contingent Liabilities are not recorded in books. These will be stated only outside the Balance Sheet as a footnote.

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