CIE Accounting Paper-1: Specimen Questions with Answers 105 - 108 of 214

Question number: 105

Short Answer Question▾

Write in Short

In which final account will carriage outwards be shown?

Explanation

Profit and loss account.

Final accounts took place in the last step of the accounting cycle. A trader prepares final accounts when the errors are rectified in the extracted trial balance. The final accounts include a number of accounts such as

  • Trading accounts
  • Profit and loss account

Passage

Susan’s statement was as follows:

WESTERN COMMERCIAL COMPANY

STATEMENT OF ACCOUNT

Western Commercial Company.

Shows given table is Western Commercial Company statement of account.

Date

Particular

Dr

$

Cr

$

Balance

$

September 1

Balance b/f

4000.00

4000.00

September 7

Sales – invoice 401

66.50

4066.50

September 10

Sales – invoice 402

117.00

4183.5

September 15

Sales return – credit note 39

17.50

4166

September 19

Bank –Susan

3920.00

246

September 30

Balance c/f

246

Terms: 2 % discount for settlement within 20 days.

Question number: 106 (1 of 5 Based on Passage) Show Passage

Short Answer Question▾

Write in Short

Justify with your answer whether this payment made by Susan is correct amount.

Explanation

The amount paid by her is correct because she paid it within the time limit

Provided by the supplier.

The discount will be allowed to the customer when they paid their due amount within the credit period. Susan also paid the amount within the credit period of twenty days.

Question number: 107 (2 of 5 Based on Passage) Show Passage

Short Answer Question▾

Write in Short

State why Susan paid $3920 on 20 September when the balance brought forward on 1 September was $4000.

Explanation

She received discount of 2 % on her opening balance $4000.

Solution: Discount on sales will allowed when they pay the amount within the time limit given by the seller. Hence, Susan paid the amount $3920 within the time limit of 20 days. Hence,

Question number: 108 (3 of 5 Based on Passage) Show Passage

Short Answer Question▾

Write in Short

Give the entries in the Western Commercial Company’s accounts for the month of September to record the sales account transaction.

Explanation

Sales account

Sales account in the book of Western Commercial Company.

Shows in table Sales account in the book of Western Commercial Company.

Date

Particular

Amount

$

Date

Particular

Amount

$

September 7

Susan

66.50

September 10

Susan

117.00

Sales accounts are created in order to show the current year sales of the business. Normally it involves both cash and credit sales of the business. The transaction are entered when actual sales took place in the business.