A-AS Level (CIE) Accounting Paper-1: Specimen Questions with Answers 80 - 81 of 93
Question 80
Question
MCQ▾The loss on the sale of an asset is debited to:
Choices
| Choice (4) | |
|---|---|
a. | Cash A/c |
b. | A/c |
c. | Profit & Loss A/c |
d. | Asset A/c |
Answer
c.Explanation
When part of asset is sold or disposed of, it is appropriate to open a new account called ‘Asset disposal account.’ Method of recording the entries in asset disposal account depends on the fact that whether a provision for depreciation is maintained or not.
In case of loss the sale of an asset is debited to profit and loss account. Following entries will be passed:
Profit and loss a/c Dr.
To Asset disposal a/c.
Question 81
Question
MCQ▾An amount of $ 375 has been posted on the debit side of commission account instead of $ 275. Choose the correct accounting entry for rectification:
Choices
| Choice (4) | |
|---|---|
a. | Commission a/c To, Suspense a/c |
b. | Suspense a/c To, Commission a/c |
c. | Suspense A/c To, Sales return a/c |
d. | Sales return A/c To, Suspense a/c |
Answer
b.Explanation
Suspense a/c 100
To, Commission a/c 100
(Excess amount on the debit side of commission a/c now rectified)
The account which is to be rectified is credited in the rectifying entry, suspense a/c will be debited to complete the double entry