A-AS Level (CIE) Accounting Paper-3: Specimen Questions with Answers 4 - 6 of 50

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Question 4

Question

MCQ▾

Find out operating profit from the following data:

Find Out Operating Profit from the Following Data
Sales$ 50,000
Variable Cost60 %
Fixed costs$ 12,000

Choices

Choice (4)

a.

5000

b.

8000

c.

4000

d.

2000

Answer

b.

Explanation

Find Out Operating Profit from the Following Data
Sales$ 50,000
Less: Variable Cost@60 %30,000
Contribution20,000
Less: Fixed costs$ 12,000
Operating Profit$ 8,000

Question 5

Question

MCQ▾

A and B are partners sharing Profits in the ratio of 3: 2. From 1st January 1988, they admit C into Partnership giving him share of Profits with a guarantee ₹ 6.000 minimum. A and B continue to share Profits as before. Profits of the firm for 1988 were $ 24,000. How much amount finally due to each partner?

Choices

Choice (4)

a.

11520,4800, 7680

b.

7680,11520, 4800

c.

11520,7680, 400

d.

4800,7680, 11520

Answer

c.

Explanation

New profit-sharing ratio has been calculated as under:

Thus, r

Because of admission of new partner, the old partners are entitled to only four-fifth of the firms profits which shall be divided in their old profit-sharing ratio.

Hence,

Therefore, new ratio will be

Share of profit will be

Question 6

Question

MCQ▾

The following is the position of current assets and current liabilities of Z ltd:

The Following is the Position of Current Assets and Current Liabilities of Z Ltd
19951996
Provision for doubtful debts$ 1,000-
Short-term loans10,00019,000
Creditors15,00010,000
Bills payable20,00040,000

The company incurred a loss of $ 45,000 during the year. What will be the cash flow from operating activities?

Choices

Choice (4)

a.

-32000

b.

-22000

c.

+ 22000

d.

-24000

Answer

b.

Explanation

The Following is the Position of Current Assets and Current Liabilities of Z Ltd
Net loss for the year

Adjustments for:

Less decrease in provision for doubtful debt

Operating loss before working capital changes

Add: Increase in current liabilities:

Short-term loans

Bills payable

Less: Decrease in current liabilities:

Creditors

Cash used or lost in operating activities

$

9,000

20,000

$

- (45000)

- (1000)

- (46000)

+ 29000

- (17000)

-5000

- (22000)

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