A-AS Level (CIE) Accounting Paper-1: Specimen Questions with Answers 60 - 61 of 93

Question 60

Question

MCQ▾

Following is the list of assets of a company:

i. Fixed assets

ii. Miscellaneous expenditure

iii. Loans and advances

iv. Investments

v. Current assets

What is the correct sequential order?

i, ii, iii, iv, and v

Choices

Choice (4)

a.

i, ii, iv, iii, and v

b.

i, ii, iv, iii

c.

i, iv, v, iii, and ii

d.

None of the above

Answer

c.

Explanation

The order of assets in a balance sheet is decided as per the time taken to convert them into cash. Thus, cash is always listed on the top and then the other assets follow.

List of assets:

  • Fixed assets
  • Investments
  • Current assets
  • Loans and advances
  • Miscellaneous expenditure.

Goodwill is listed at the last as it takes a greater amount of time to convert them into cash.

Question 61

Question

MCQ▾

A, B and C are partners in a firm. You are informed that A draws from the firm in the middle of every month. Interest on drawings is to be charged How much will be interest on partner՚s drawings?

Choices

Choice (4)

a.

1700

b.

1800

c.

1200

d.

1100

Answer

b.

Explanation

If drawings are made in the middle or at any time during the month interest on the whole amount will be calculated. The formula to calculate interest on drawings is:

Interest on the whole amount will be calculated for 6 months:

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