# IGCSE Accounting Paper-1: Specimen Questions with Answers 286 - 288 of 338

## Question number: 286

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MCQ▾

### Question

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

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 Cost\$ Accumulated Depreciation\$ At 31 Dec 2016 55000 11000 At 31 Dec 2017 55000 16500

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

## Question number: 287 (1 of 5 Based on Passage) Show Passage

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One Liner Question▾

### Write in Brief

State the necessary double entry to record the depreciation charge for the year ended 31 December 2018. (Marks 2)

### Explanation

 Date Dr\$ Cr\$ 2018Dec 31 Income Statement 7000 Provision for depreciation onFurniture A/c 7000

## Question number: 288 (2 of 5 Based on Passage) Show Passage

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### Write in Short

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-