A-AS Level (CIE) Accounting Paper-1: Specimen Questions with Answers 56 - 57 of 93

Question 56

Question

MCQ▾

How much will be shown as gross profit of the trading concern?

How Much Will be Shown as Gross Profit of the Trading Concern?
Sales$ 3,464, 000
Return Inwards48,200
Opening stock103,800
Production cost2420000
Closing Stock111,900

Choices

Choice (4)

a.

2,411, 900

b.

2,411, 000

c.

2,41, 000

d.

2,400, 000

Answer

a.

Explanation

How Much Will be Shown as Gross Profit of the Trading Concern?
Sales$ 3,464, 000
Return Inwards48,200
Net Sales3,415, 800
Opening stock103,800
Production cost2420000
Cost of goods available for sale2,523, 800
Closing Stock111,900
Cost of goods Sold2,411, 900

Question 57

Question

MCQ▾

Salary payable to a partner is closed by transferring it to-

Choices

Choice (4)

a.

Profit & loss Appropriation A/c

To, Partner՚s Salary A/c

b.

Partner՚s salary commission A/c

To, Partner՚s capital A/c

c.

Profit & loss Appropriation A/c

To, Reserve A/c

d.

Partners՚ capital/c

To, Profit & loss A/c

Answer

a.

Explanation

Transactions of the partnership firm are recorded according to the principles of double-entry system, and as in the case of a sole proprietorship concern a partnership firm will also prepare Trading Account, Profit & Loss Account and Balance Sheet at the end of accounting year. The only difference between accounting of a sole trader and partnership firm is that the profits of the partnership firm are divided among the partners. Usually, for this purpose, the profits as per Profit and Loss Account is transferred to a newly-opened account, namely (Profit and Loss Appropriation Account and entries for interest on capital interest on drawing) salary to partners and division of profits among the partners will be passed only in that account.

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