IGCSE Accounting Paper-1: Specimen Questions with Answers 308 - 309 of 338

Passage

Iqbal is a trader whose financial year ends on 30 June. All the purchases and sales are on credit basis.

He provides the following information for the year ending 30 June 2,019.

Information for the Year Ending 30 June 2,019
1 July 2,018-

$

Inventory

4,600

Debtors

6,000

30 June 2,019-

5,600

Debtors

During the year-

Cheque received from debtors

54,300

Discount Allowed

2,400

Carriage Inward

1,300

Bad debts written off

250

Total Purchases

42,650

On 30 June, some goods were stolen from the warehouse of Iqbal and goods worth $ 1,300 were left. The profit mark up of Mr. Iqbal is 20% .

Question 308 (4 of 4 Based on Passage)

Edit

Write in Brief

One Liner▾

Calculate the sales for the year ended 30 June 2,019 (Marks 6)

Explanation

Calculate the Sales for the Year Ended 30 June 2,019
Sales

$

$

Cheque received from debtors

54,300

Add: Discount Allowed

2,400

Bad debts written off

250

Closing Debtors

5,600

8,250

62,550

Less: Opening Debtors

(6,000)

Sales

56,550

Question 309

Question

True-False▾

Statements

  1. Preparation of trial balance is the first step of recording in accounting process (Marks 3)

  2. In a double entry system the total amount debited should always equal the total amount credited.

  3. The normal balance of drawings A/c is credit.

Choices

Choice (4)

a.

Both statement Ⅰ & statement Ⅲ are true.

b.

Only statement Ⅱ is true.

c.

All the statements are correct.

d.

None of the statements is correct.

Answer

b.

Explanation

Write True or False Against Each of the Following Statements
True/False

(I) Preparation of trial balance is the first step of recording in accounting process

False

(II) In a double entry system the total amount debited should always equal the total amount credited.

True

(III) The normal balance of drawings A/c is credit.

False

Explanation:

  • The first step of recording in accounting process is journalizing. Journalizing means recording business transactions in journal for the first time using source documents. Preparation of trial balance is the first step of summarizing.
  • Double entry system is based on DUALITY concept which says that every transaction has two aspects: debits & credits and the total debits and total credits are equal.

  • Drawing is a contra Capital A/c because it reduces the balance of capital. Since, Capital A/c has a normal credit balance, the normal balance of drawings A/c has to be debit.

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