CIE Accounting Paper-1: Specimen Questions with Answers 168 - 170 of 214

Question number: 168



Which is capital expenditure?


Choice (4) Response


Trademark of the business is registered at $50000


Creditors allowed discount of $30000


$2500 spent on purchasing a tyre for a car


$20000 worth of goods which is not insured destroyed due to fire.




The benefit of which is not enjoyed within one accounting period is known as capital expenditure. The capital expenditure is non-recurring in nature. In the above statements, expenses incurred in the acquisition of trademark, copyright, and patent rights are comes under the capital expenditure.

Question number: 169

Short Answer Question▾

Write in Short

State the errors which are not disclosed by the trial balance.


The following errors are not disclosed by Trial Balance:

  • Errors of complete omission
  • Errors of recording
  • Errors of principle
  • Errors of posting to wrong account in the right side with the correct amount.
  • Compensating errors.

The errors are occurred due to the negligence or violating the rules. The errors which have impact on trial balance is considered into two categories namely

  • Errors disclosed by trial balance
  • Errors not disclosed by trial balance.
  •  Errors and its two categories.

    Errors and Its Two Categories.

    Shows Errors and its two categories.

Question number: 170

Short Answer Question▾

Write in Short

State the mistakes occur due to improper application of principles of accounts.


Error of principle may relate to different aspects:

  • Capital and revenue items
  • Improper valuation
  • Erratic provisioning

Every transaction should be recorded as per generally accepted accounting principles. These mistakes may arise due to the violated or ignored, error from the above mistakes are known as errors of principle. A trial balance will not disclose errors of principle.