IGCSE Accounting Paper-1: Specimen Questions with Answers 331 - 333 of 338

Passage

Gulzar opened a toy car factory on 1 May 2019. He provided the following information at the end of his first accounting year.

Gulzar opened a toy car factory on 1 May 2019Gulzar opened a toy car factory on 1 May 2019

$

Purchases of raw materials

14000

Direct factory wages

9800

Indirect factory wages

7500

Factory insurance

300

General factory expenses

200

Carriage inwards

650

Factory Electricity

900

Stock at 30 April 2020:

Raw materials

1000

Work in progress

1550

Finished goods

2850

Factory machinery, $20000, was purchased on 1 May 2019 and is to be depreciated by 10 % per annum.

Question number: 331 (1 of 8 Based on Passage) Show Passage

Edit
One Liner Question▾

Write in Brief

Define and give one example of each of the following types of inventory. (Marks 2)

Work in progress

Explanation

Work in progress is a semi-finished good. It is good in intermediate stage between raw material and finished goods. It needs some further processing to become finished goods.

In the manufacturing plastic toy car, moulded toy parts (unassembled) are Work in Progress.

Question number: 332 (2 of 8 Based on Passage) Show Passage

Edit
Short Answer Question▾

Write in Short

Suggest two ways in which the above two ratios can be improved. (Marks 2)

Explanation

  • Selling Price per unit can be increased to increase sales revenue so as to improve both Gross Profit Ratio as well as Net Profit Ratio.

  • Further, Net Profit Ratio is much lesser than the Gross Profit Ratio because of high administration and selling expenses.

  • Administration and selling expenses can be controlled to improve the Net Profit Ratio.

Question number: 333 (3 of 8 Based on Passage) Show Passage

Edit
One Liner Question▾

Write in Brief

Define and give one example of each of the following types of inventory. (Marks 2)

(I) Raw materials

Explanation

Raw Materials are inputs which are used to manufacture other things by further processing them. These form part of finished goods

In the manufacturing plastic toy car, plastic granules is a raw material.

Developed by: