A-AS Level (CIE) Accounting Paper-1: Specimen Questions with Answers 62 - 64 of 93

The following data relate to manufacture of standard product during the month of April, 2019. Units produced and sold during the month is units.

1. Cost of Production

2. Selling and distribution expenses per unit

Profit margin is uniformly made to yield a profit of of the selling price

Answer

a.

Explanation

Profit Margin is Uniformly Made to Yield a Profit of 20 % of the Selling Price

Cost of production	18,40, 000
Add: Selling and distribution overheads @ $ 4 per unit	80000
Cost of Sales	19,20, 000
Profit (20 % on selling price i.e.. , )	4,80, 000
Selling Price	24,00, 000

What will be the working capital ratio from the following data:

What Will be the Working Capital Ratio from the Following Data

Current Assets	470,000
Current Liabilities	120,000
Sales	4,200, 000

Answer

a.

Explanation

If Prepaid Wages՚ is given in Trial Balance, it will be shows as what on balance sheet side?

Answer

a.

Explanation

• Prepaid Expenses or Unexpired Expenses or Expenses paid in advance: These are the expenses which have been paid in advance for the next year during the current year itself. In other words, the benefit of such payments will be available in the next accounting year.
• Treatment in Final Accounts: Prepaid Expenses on the one hand, will be deducted from the concerned expenses on the debit side of Trading or Profit and Loss Account and on the other hand, will also be shown on the Assets side of the Balance Sheet. Prepaid Expenses is a Personal Account because it represents those persons to whom the payment has been made in advance.