IGCSE Accounting Paper-1: Specimen Questions with Answers 277 - 279 of 338
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Passage
Bhargav Traders provides the following information for the year ended 31 March 2020-
| $ | |
| Closing Stock | 42000 |
| Carriage Inwards | 15000 |
| Selling Expenses | 3600 |
| Wages | 37000 |
| Opening Stock | 30000 |
| Income Tax | 10000 |
| Purchases | 140000 |
| Sales | 240000 |
| Administrative Expenses | 8400 |
| Profit on Sale of Machinery | 4000 |
Question 277 (5 of 5 Based on Passage)
Explanation
Question 278
Question
MCQ▾Purchases book was overcast by $ 300. Which of the following journal entry would correct this error? (Marks 1)
Choices
| Choice (4) | |
|---|---|
a. | Debit- Purchases $ 300, Credit- Purchases Returns $ 300, |
b. | Debit- Suspense $ 300, Credit- Purchases $ 300, |
c. | Debit- Purchases $ 300, Credit- Trial Balance $ 300, |
d. | Debit- Purchases $ 300, Credit- Suspense $ 300, |
Answer
b.Explanation
Purchases A/c has a normal debit balance. So, when purchases is overcast, Purchases A/c will be credited to reduce the overcast. Since, overcasting or under casting is one sided error, for the other side we use suspense A/c. Suspense A/c will be debited.
Question 279
Question
MCQ▾Which among the following is an external user of accounting information? (Marks 1)
Choices
| Choice (4) | |
|---|---|
a. | Director of Research & Development |
b. | Customer |
c. | Purchasing Officer |
d. | Inventory Clerk |
Answer
b.Explanation
- External Users are the parties which are present outside the business organization whereas the internal users are the parties present inside the business organization.
- Customer is an external user. Purchasing Officer, Director of Research & Development are part of internal management of the business and inventory clerk is an employee. These are internal users.
