IGCSE Accounting Paper-1: Specimen Questions with Answers 301 - 302 of 338

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Question 301

Question

MCQ▾

Manishq jewelers received an order to supply diamond ornaments worth $ 20000 for which the customer had paid in advance. Manishq jewelers supplied the ornaments worth $ 15000 upto the year ending 31 March 2019 and rest of the ornaments were supplied in April 2019. What amount shall be constituted as sales of Manishq jewelers for the year ended 31 March 2019? (Marks 1)

Choices

Choice (4)

a.

$ 15000

b.

$ 35000

c.

$ 5000

d.

$ 20000

Answer

a.

Explanation

  • As per the Realization principle, revenue is said to be realized when they are earned irrespective of when the money is received. Revenue from a sale is realized when the sale is completed i.e.. when the goods are actually delivered to the customer or when the service is rendered and not when cash is received.
  • Merely getting an order is not considered as revenue until the goods are delivered. Since, Manishq jewelers supplied the ornaments worth $ 15000 only up to 31 March 2019, their sales revenue for the year ended 31 March 2019 will be $ 15000.

Question 302

Write in Brief

One Liner▾

Name any three internal users of financial statements and state the type of information they require from financial statements to take their decisions. (Marks 6)

User What They Analyse?
UserWhat they analyse?

Explanation

User & What They Analyse?
UserWhat they analyse?
(I) OwnersThey are interested to know about the profit earned or loss suffered by the business besides the safety of their capital.
(II) ManagementThey require information on cost of production, marginal cost etc. to take decisions such as setting the selling price of product, cost control and investment etc.
(III) Employees & WorkersThe employees and workers are interested in knowing about the profit earned by an enterprise so that they can demand bonus or wage hike from the management.

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