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

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 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

State the necessary double entry to record the depreciation charge State the necessary double entry to record the depreciation charge

Date

Dr

$

Cr

$

2018

Dec 31

Income Statement

7000

Provision for depreciation on

Furniture A/c

7000

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

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Short Answer Question▾

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-

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