IGCSE Accounting Paper-1: Specimen Questions with Answers 310 - 312 of 338
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Question 310
Question
MCQ▾Annual Sales figure of a firm are-
| Goods | Trade Discount | Net |
| 125000 | 5000 | 120000 |
With which amount the sales A/c should be credited?
Choices
| Choice (4) | |
|---|---|
a. | 125000 |
b. | 130000 |
c. | 120000 |
d. | 5000 |
Answer
c.Explanation
Trade discount is not recorded in the books of accounts. So, the net amount actually paid for the goods will be entered in the sales a/c.
Passage
A, B and C are partners in a firm sharing profits in the ratio of 7: 4: 9. Their fixed capitals are A: $ 20000, B: 7500 and C: 35000. The partnership agreement provided for the following-
(I) Interest on Capital@10 % pa
(II) Salary of $ 600 pm to B
(III) Interest on drawings@6 % pa.
During the year ended 31 December 2019, the firm earned a profit of $ 17000. Interest on A՚s drawings was $ 75, on B՚s drawings $ 45 and on C՚s drawings 130.
Question 311 (1 of 2 Based on Passage)
Write in Short
Short Answer▾State the reason why the firm is preparing current account of partners instead of only capital accounts.
Explanation
- Here, the capitals of Partners are to be kept fixed. So, the firm is preparing current accounts to record all the appropriations of profits- Interest on Capital, Interest on Drawings, Salaries and share in Profits.
- If all these are recorded under the Capital Accounts itself, the capitals of partners would no longer be fixed or there would be fluctuations in the capitals.
Question 312 (2 of 2 Based on Passage)
Write in Short
Short Answer▾Prepare Profit & Loss Appropriation A/c for the year ended 31 December 2019 (Marks 14)
P & L Appropriation a/C
For the Year Ended 31 December 2019
| Details | Dollar $ | Details | Dollar $ |
Explanation
P & L Appropriation a/C
For the Year Ended 31 December 2019
| Details | Dollar $ | Details | Dollar $ |
| Interest on Capitals: | Net Profit | 17000 | |
| A: $ 2000 | Interest on Drawings: | ||
| B: $ 750 | A: $ 75 | ||
| C: $ 3500 | 6250 | B: $ 45 | |
| B՚s Salary | 7200 | C: $ 130 | 250 |
| Share in Profit - | |||
| A: $ 1330 | |||
| B: $ 760 | |||
| C: $ 1710 | 3800 | ||
| 17250 | 17250 |
Working Notes-
(I) When interest on drawings are given, there is no need to calculate it
(II) Interest on Capital
(III) B՚s Salary is given in pm. So Annual salary
(IV) Share in Profits-