IGCSE Accounting Paper-1: Specimen Questions with Answers 40 - 41 of 338

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Question 40

Question

MCQ▾

Among the following for which reason government department shows their interest towards the financial statement of the company?

Choices

Choice (4)

a.

To verify whether the company is paying tax correctly.

b.

Repayment capacity of the company

c.

For granting the proposal

d.

To invest in the company projects.

Answer

a.

Explanation

The financial statement of company will always reflect the true position of the company. Hence the government department shows their interest towards the financial statement of the company.

Question 41

Question

MCQ▾

Which error will require a correcting entry in a suspense account?

Choices

Choice (4)

a.

$ 5000 paid for furniture purchased has been charged to purchases account.

b.

The Day Book is totaled $ 50 short.

c.

Repairs made were debited to Building Account for $ 250.

d.

Salary of $ 1000 paid to Xanthe due to him has been debited to his personal account.

Answer

b.

Explanation

The net effects of all the errors which will affect the trial balance were balanced with the help of suspense account. The “suspense account” helps in tallying the balance sheet and it involves when single side errors occurred during the journalizing or posting in ledger accounts.

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