IGCSE Accounting Paper-1: Specimen Questions with Answers 284 - 285 of 338

Question 284

Question

MCQ▾

Which of the following item would appear on the debit column of Trial Balance? (Marks 1)

Choices

Choice (4)

a.

Purchases Returns

b.

Bad debts

c.

Provision for Bad debts

d.

Trade Payables

Answer

b.

Explanation

  • Bad debts are that part of receivables which become irrecoverable because of bankruptcy of debtors etc. Bad debts is in nature of a loss/expense. So, it has a debit balance.
  • Purchases Returns reduces purchases. It is a contra purchases A/c so it has a credit balance.
  • Provision for bad debts is contra asset (receivables) a/c so it has a credit balance.
  • Trade Payable represents amount owed by the business to its credit suppliers of goods or services. It is a liability so it has a credit balance.

Question 285

Question

MCQ▾

ABC Ltd. provides the following information: (Marks 1)

ABC Ltd. Provides the Following Information
$
Machinery80000
Patent30000
Stock15000
Furniture20000
Equipment30000
Prepaid Expenses2000

What is the total tangible fixed assets?

Choices

Choice (4)

a.

$ 167000

b.

$ 130000

c.

$ 197000

d.

$ 160000

Answer

b.

Explanation

Note-

Patent is an intangible fixed asset.

Stock and Prepaid Expenses are current assets.

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