IGCSE Accounting Paper-1: Specimen Questions with Answers 295 - 297 of 338
Question 295
Question
MCQ▾Which of the following is a liability?
Choices
Choice (4) | |
---|---|
a. | Cash |
b. | Loan from bank |
c. | Motor Vehicles |
d. | Machinery |
Answer
b.Explanation
- Liabilities are monetary obligations of a business. They are amounts owed to suppliers of goods, or lenders of money or outstanding expenses in the form of wages payable, salaries outstanding etc.
- Loan from bank is a liability as it is the money lent by the bank which a business is obliged to pay at a later date.
- Machinery, Motor Vehicles and Cash are assets not liabilities.
Question 296
Edit
Write in Short
Short Answer▾Have all the errors been discovered in Sudhanshu՚s books? (Marks 2)
Why? /Why not?
Explanation
All the errors are not yet discovered in Sudhanshu՚s books because the Suspense A/c still shows a credit balance of $ 495. When all the errors are discovered, there should be no balance in the suspense A/c. The suspense A/c is closed.
Suspense a/C
$ | $ | ||
Purchases A/c | 2000 | Balance b/d | 2225 |
Balance c/d | 495 | Sales A/c | 270 |
2495 | 2495 |
Question 297
Edit
Write in Short
Short Answer▾Name the final account in which ‘profits on sale of fixed assets’ appear. (Marks 1)
Explanation
P&L A/c
- When the fixed assets of a business are sold and if any profit is earned out of the excess of sales proceeds over its cost, it is booked under profit on sale of fixed assets a/c.
- This profit is in nature of indirect income because it is not earned from the main trading activity of the business. All the indirect incomes are credited to P&L A/c.