A-AS Level (CIE) Accounting Paper-3: Specimen Questions with Answers 1 - 3 of 50

Question 1

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Question

MCQ▾

A company issued share capital amounting to 500,000 shares of 20p and $1,80000 preference shares. PAT is $320,000 for the given period and preference dividend is $8000. What is EPS for the period?

Choices

Choice (4)
a.58.2
b.62.4
c.67.8
d.55.2

Answer

b.

Explanation

Question 2

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Question

MCQ▾

Fictitious assets consist of

Choices

Choice (4)
a.Debit balance of profit and loss account
b.Training and development
c.Preliminary expenses
d.All a. , b. and c. are correct

Answer

d.

Explanation

Fictitious assets are those assets which do not have any realizable value, these are tangible/intangible in nature. The expenditure on these assets is incurred at the time of commencement of business and is written off from the earnings of the company as early as possible. Example-

  • Share issue expenses
  • Preliminary expenses
  • Underwriting commission
  • Deferred revenue expenditure
  • Advertisement expenditure
  • Discount on issue of securities
  • Accumulated loss
  • Miscellaneous expenses

Question 3

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Question

MCQ▾

If a partner takes the responsibility of $50,000. Which of the following account will be credited?

Choices

Choice (4)
a.Cash Account
b.Liability account
c.Capital Account of the partner
d.Realisation Account

Answer

c.

Explanation

Capital account of partners is an equity account which contains the capital contributed by each partner. The amount contributed is credited to his capital account. It contains transactions like-

  • Initial contributions by the partners
  • Profit and losses of the business
  • Distributions made to partners

The liquidating amount that a partner may receive may not be equal to the amount of capital contributed. There are two types of capital accounts- Fixed capital and fluctuating capital account.

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