A-AS Level (CIE) Accounting Paper-1: Specimen Questions with Answers 78 - 79 of 93

Doorsteptutor material for Bank-PO is prepared by world's top subject experts: get questions, notes, tests, video lectures and more- for all subjects of Bank-PO.

Question 78

Question

MCQ▾

Under the diminishing value method:

Choices

Choice (4)

a.

The amount on which depreciation is calculated falls year by year

b.

The rate percent as well as the amount on which it is calculated falls year by year.

c.

The rate per cent at which depreciation is charged falls year by year.

d.

All of the above

Answer

a.

Explanation

When cash is deposited into the bank, it increases the bank balance and reduces the cash balance. Hence, it affects the Cash Column as well as the Bank Column. As such the same amount is recorded on the debit side as well as on the credit side. On the Dr. side ‘To Cash A/c’ is written and the amount is recorded in the bank column. On the Cr. side ‘By Bank A/c’ is written and the amount is recorded in the Cash Column.

Debit Bank A/c (As bank is receiving the Cash i.e.. , Debit the receiver)

Credit Cash A/C (As Cash is going out)

Question 79

Question

MCQ▾

Income earned but not received is shown in:

Choices

Choice (4)

a.

Assets

b.

Liabilities

c.

Foot notes

d.

None of the above

Answer

a.

Explanation

Unearned Income or Income Received in Advance: It may also happen that a certain income is received in the current year but the whole amount of it does not belong to the current year. Such portion of this income which belongs to the next year is known as ‘Unearned Income’ or ‘Income received but not earned.’

Treatment in Final Accounts: Such incomes on the one hand, will be deducted from the concerned income on the Credit side of Profit & Loss Account and on the other hand, will also be shown on the Liabilities side of the Balance Sheet.

Developed by: