IGCSE Accounting Paper-1: Specimen Questions with Answers 286 - 287 of 338

Question 286

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Question

MCQ▾

A second hand car was purchased on credit from Ahmad Brothers for $20,000 will be recorded in which of the following books or prime entry

Choices

Choice (4)
a.Cash Book
b.Purchase Day Book
c.Assets Book
d.Journal

Answer

d.

Explanation

  • Transactions which are not recorded in either of the other books of prime entry- (Cash book, sales day book, purchase day book, Sales returns day book, Purchase return day book, Bills Receivable book, Bills Payable Book) are recorded in Journal.
  • Purchase Day book records credit purchase of GOODS only & NOT OTHER ASSETS.
  • Cash Book records CASH purchases (of goods and other assets) only

Passage

Anand depreciates his furniture using the straight line method of depreciation. He provides a full year depreciation in the year of purchase and none in the year of disposal. He provided the following information:

furniture using the straight line method of depreciationfurniture using the straight line method of depreciation
Furniture
Cost$Accumulated Depreciation$
At 31 Dec 20165500011000
At 31 Dec 20175500016500

There were no new purchase or disposal during the year ended 31 Dec 2017.

Question 287 (1 of 5 Based on Passage)

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Write in Short

Short Answer▾

State one method of depreciation other than the straight line method, and explain with an example how the depreciation is calculated using that method. (Marks 3)

Explanation

Production Unit Method: Under this method, a fixed rate of depreciation per unit of production is calculated by the following formula-

For Ex- If a machinery was purchased for $5500 whose scrap value is $500. The physical units of product are 2500. The rate of depreciation would be calculated as follows-

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