IGCSE Accounting Paper-1: Specimen Questions with Answers 328 - 330 of 338

Question 328

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Write in Brief

One Liner▾

Mention any two possible reasons of the dishonour of Zara’s cheque. (Marks 2)

Explanation

  • Insufficient Funds: Zara’s account may not have balance sufficient to make the payment of the aforesaid cheque.
  • Improper Signature: The signature on the cheque should match with the specimen submitted to the bank. Zara might not have signed the cheque properly.

Question 329

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Question

MCQ▾

Showing purchased office equipments in financial statements is the application of which accounting concept?

Choices

Choice (4)
a.Materiality
b.Matching Concept [
c.Historical Cost Convention
d.Prudence

Answer

a.

Explanation

  • Materiality concept says that only material or significant events should be disclosed in the books of accounts and not the immaterial ones. What is a material event should depend on whether or not it will influence the decision of users of financial statements.
  • Ex- A large business concern that has a closing stock of $200,000 in its Godown and if stock worth 10 cents is damaged on accounts closing date, this damage will not be recorded as it is very trivial.

Question 330

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Write in Brief

One Liner▾

Name one intangible asset.

________. (marks 1)

Explanation

Goodwill

  • Intangible Assets are those which do not have any physical existence. That is, they cannot be seen or touched.
  • Goodwill is the good name or reputation earned by a business through years of hard work, excellence, customer loyalty, brand recognition etc.

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