IGCSE Accounting Paper-1: Specimen Questions with Answers 319 - 320 of 338
Question 319
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Question
MCQ▾Keeping the records of the business separate from the personal records of the owner of the business is said to be the adherence to which accounting concept?
Choices
| Choice (4) | |
|---|---|
| a. | Double Entry Concept |
| b. | Business Entity Concept |
| c. | Going Concern Concept |
| d. | Realization Concept |
Answer
b.Explanation
- Business Entity concept says that a business is separate and different entity from its owner/s. So, while doing accounting one has to keep in mind that the transactions are recorded from business’ perspective and not from that of its owner.
- That is why the capital contributed by the owner in business is treated as a liability. Similarly, any property of business withdrawn by the owner for personal use is treated as drawings.
Question 320
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Question
MCQ▾Business paid rent amounting to $1000. Which of the following journals shall record this transaction? (Marks 1)
Choices
| Choice (4) | |
|---|---|
| a. | Purchases Returns Day Book |
| b. | Purchases Day Book |
| c. | Sales Day Book |
| d. | Cash Book |
Answer
d.Explanation
As cash book records all cash receipts and cash payments, rent paid will be recorded in the cash book.
- Purchases Day book records CREDIT PURCHASES of GOODS.
- Sales Day book records CREDIT SALES of GOODS.
- Purchases Returns Day Book records RETURNS of PURCHASED GOODS.