IGCSE Accounting Paper-1: Specimen Questions with Answers 304 - 305 of 338

Question number: 304

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MCQ▾

Question

Ramzan isuues a cheque to shehnaz in payment for goods purchased from her previous month. How should this transaction be entered in the books of Ramzan?

Choices

Choice (4)Response

a.

Debit- Shehnaaz, Credit- Bank A/c

b.

Debit- Purchases A/c, Credit- Shehnaz

c.

Debit- Purchases A/c, Credit- Bank A/c

d.

Credit- Shehnaaz, Debit- Bank A/c

Answer

c.

Explanation

Shehnaz is Ramzan’s supplier. Suppliers are creditors and normally have a credit balance. When a supplier is paid off, its balance decreases by that amount. To record decrease Shehnaz would be debited.

Bank A/c normally has a debit balance. When a cheque is paid, the bank balance decreases, so to record the decrease, Bank A/c will be credited.

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 2019.

Information for the year ending 30 June 2019Information for the year ending 30 June 2019

1 July 2018-

$

Inventory

4600

Debtors

6000

30 June 2019-

5600

Debtors

During the year-

Cheque received from debtors

54300

Discount Allowed

2400

Carriage Inward

1300

Bad debts written off

250

Total Purchases

42650

On 30 June, some goods were stolen from the warehouse of Iqbal and goods worth $1300 were left. The profit mark up of Mr. Iqbal is 20%.

Question number: 305 (1 of 4 Based on Passage) Show Passage

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Short Answer Question▾

Write in Short

Prepare the Trading A/c of Iqbal for the year and find out the value of inventory stolen. (Marks 8)

Explanation

Ans

Iqbal

Trading A/c for the year ended 30 June 2019

Trading A/c for the year ended 30 June 2019Trading A/c for the year ended 30 June 2019

$

$

$

Sales

56550

Cost of Goods Sold:

Opening Inventory

4600

Purchases

42650

Carriage Inward

1300

48550

Closing Inventory Left in warehouse

(1300)

Stolen

(125)

(1425)

47125

Gross Profit

9425

Working Notes:

(I) Cost of Goods Sold - Since gross profit is 20 % of Cost of Goods Sold, Cost of Goods Sold will be equal to -

(II) Closing Inventory

(III) Closing Inventory Stolen (Loss by theft)

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