IGCSE Accounting Paper-1: Specimen Questions with Answers 310 - 312 of 338

Question 310

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Question

MCQ▾

Annual Sales figure of a firm are-

Annual Sales figure of a firm are-Annual Sales figure of a firm are-
GoodsTrade DiscountNet
1250005000120000

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)

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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)

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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

Prepare Profit & Loss Appropriation A/c for the year ended 31 December 2019Prepare Profit & Loss Appropriation A/c for the year ended 31 December 2019
Details$Details$

Explanation

P&L Appropriation A/c

for the year ended 31 December 2019

Prepare Profit & Loss Appropriation A/c for the year ended 31 December 2019Prepare Profit & Loss Appropriation A/c for the year ended 31 December 2019
Details$Details$
Interest on Capitals:Net Profit17000
A: $2000Interest on Drawings:
B: $750A: $75
C: $ 35006250B: $45
B’s Salary7200C: $ 130250
Share in Profit -
A: $1330
B: $760
C: $ 17103800
1725017250

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-

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