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

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