CIE Accounting Paper-1: Specimen Questions with Answers 134 - 136 of 214

Question number: 134

Short Answer Question▾

Write in Short

Give brief meaning of the following terms.

Drawings:

Explanation

When the owner withdraws money from the business for their personal use is known as drawings. It is almost amounts to temporary loan by the business to the owner. This should be treated on par with the loan to an outsider and interest is charged on the amount drawn by the owner. It will reflect in the capital account of the individuals.

Question number: 135

Short Answer Question▾

Write in Short

Explain ordinary shares:

Explanation

The share capitals of the limited company are classified as ordinary shares and preference share capital. The main features of ordinary share capital are:

  • No fixed rate of dividend on profit or loss.
  • The ordinary shareholders have voting rights while taking decision.
  • Ordinary shares also known as equity shares.
shows image is type of shares

Shows Image is Type of Shares

image of type of shares

Question number: 136

MCQ▾

Question

Which one of the following is revenue expenditure in nature?

Choices

Choice (4) Response

a.

Paid for repairs on second hand machinery

b.

Second hand car purchased

c.

Debentures are issued for raising loan.

d.

Paid carriage on goods purchased

Answer

d.

Explanation

The capital expenditures are those expenditures on which the benefits are carried over to several accounting periods. The revenue expenditure is those expenditures which occurred in the normal course of the business.