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 Similarly, any property of business withdrawn by the owner for personal use is treated as drawings.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.

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