CIE Accounting Paper-1: Specimen Questions with Answers 41 - 43 of 214

Question number: 41

MCQ▾

Question

Which error will require a correcting entry in a suspense account?

Choices

Choice (4) Response

a.

Salary of $1000 paid to Xanthe due to him has been debited to his personal account.

b.

$5000 paid for furniture purchased has been charged to purchases account.

c.

The Day Book is totaled $50 short.

d.

Repairs made were debited to Building Account for $250.

Answer

c.

Explanation

The net effects of all the errors which will affect the trial balance were balanced with the help of suspense account. The ‘suspense account’ helps in tallying the balance sheet and it involves when single side errors occurred during the journalizing or posting in ledger accounts.

Question number: 42

MCQ▾

Question

Which one of the following is the ‘Residual book’ under subsidiary book system?

Choices

Choice (4) Response

a.

Debit note

b.

Journal Proper

c.

Journal

d.

Statement

Answer

b.

Explanation

Journal proper is the ‘Residual book’ under subsidiary book system. Here residue means the left over. The transactions which are left over and which cannot be recorded in any of the other subsidiary books are reflected in the Journal proper.

Question number: 43

MCQ▾

Question

Why does the owner of a business need to measure revenue?

Choices

Choice (4) Response

a.

To know how much money is owned by debtors.

b.

To discover if his business is doing better than in previous years

c.

To calculate the total sale of the year.

d.

To identify the balance as per pass book

Answer

b.

Explanation

Revenue is one of the tools to measure the profit of the business during the year.

Hence, the owner has to measure revenue in order to discover if his/her business is doing better than in previous years.