A-AS Level (CIE) Accounting Paper-3: Specimen Questions with Answers 21 - 22 of 50

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Question 21

Question

MCQ▾

A and B are partners sharing profits in the ratio of 3: 2. They bring in C into the firm for of profit, from which he takes of share from A and of share from B. C brings total $ 6000 for his share of goodwill and $ 20,000 for his capital.

Choose the correct profit-sharing ratio.

Choices

Choice (4)

a.

A-9, B-11, C-15

b.

A-11, B-9, C-15

c.

A-2, B-3, C-3

d.

A-3, B-2, C-3

Answer

b.

Explanation

The new ratio of partners will be:

Question 22

Question

MCQ▾

Choose the correct statement

Choices

Choice (4)

a.

According to IAS 7, it sets standards for cash inflow reporting

b.

According to IAS 7, depreciation is to be provided on land.

c.

According to IAS 7, it sets standards for cash outflow reporting

d.

According to IAS 7, it sets standards for cash flow reporting

Answer

d.

Explanation

IAS 7 deals with cash flows of consolidated financial statements. IAS 7 prohibits separate disclosure of items as extraordinary items in cash flow statements. In case of entities whose principal activity is not financing, IAS 7 allows interest and dividends received to be classified either operating activities, investing activities. IAS 7 allows interest paid to be classifies either under operating activities or financing activities. IAS & requires further disclosure on cash and cash equivalents of acquired subsidiary and all other assets acquired.

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