CIE Accounting Paper-1: Specimen Questions with Answers 128 - 130 of 214

Question number: 128

Short Answer Question▾

Write in Short

State the two types of shares issued by the limited company.

Explanation

Equity share capital and preference share capital

The capital of the company is divided into different units of fixed amount. These units are called as Shares. The share capitals can be further classified as equity shares and preference shares.

Question number: 129

MCQ▾

Question

The credit side of a business’s cash book includes the following payments.

Credit side of a businesss cash book

finding a doller columen values

$

cash paid for fuel for proprietor’s motor car for business purposes

600

cash taken by proprietor for personal use

6000

cash taken by proprietor to purchase private stationery

500

How much will be recorded as proprietor’s drawings?

Choices

Choice (4) Response

a.

$6600

b.

$500

c.

$6000

d.

$6500

Answer

d.

Explanation

Drawing is the account created when the proprietor used business money for the personal uses or private purposes. Hence

Question number: 130

Short Answer Question▾

Write in Short

Identify the nature of account for the following transactions:

Identify the nature of account

Finding nature of account

Transaction

Accounts Affected

Nature of Account

Purchased goods for cash

Purchases A/c

To Cash

………………………………

……………………………. .

Paid cash to Roser

Roser A/c

To Cash A/c

………………………………

……………………………. .

Paid rent to landlord

Rent A/c

To Cash A/c

………………………………

……………………………. .

Explanation

shows the nature of account

Finding nature of account in given table

Transaction

Accounts Affected

Nature of Account

Purchased goods for cash

Purchases A/c

To Cash

Real A/c

Real A/c

Paid cash to Roser

Roser A/c

To Cash A/c

Personal A/c

Real A/c

Paid rent to landlord

Rent A/c

To Cash A/c

Nominal A/c

Real A/c

The double entry system of book keeping show the scientific and complete system. Hence, the every transaction in the business should be recorded according to the specific rules. A transaction should be divided into two aspects:

  • Debit aspect
  • Credit aspect