IGCSE Accounting Paper-1: Specimen Questions with Answers 50 - 51 of 214

Question number: 50

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Question

Which is a current liability?

Choices

Choice (4) Response

a.

Unpaid call amount

b.

Bank Overdraft

c.

Equity share capital

d.

Long term loan

Answer

b.

Explanation

The liabilities which are repayable within one year or during the normal course of business is known as current liability. Some of the examples are Bills payable, accrued expenses, bank overdraft, provision for taxation, proposed dividend etc. ,

Question number: 51

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Question

A trader purchases a supply of office pen and pencil on credit.

How should this transaction be recorded?

Choices

Choice (4) Response

a.

Making transaction for the purchase of office pen and pencil

Value is given in table.

Account debited

Account credited

Supplier

Stationery

b.

Making transaction for the purchase of office pen and pencil

Value is given in table.

Account debited

Account credited

Stationery

Supplier

c.

Making transaction for the purchase of office pen and pencil

Value is given in table.

Account debited

Account credited

Office equipment

Supplier

d.

Making transaction for the purchase of office pen and pencil

Value is given in table.

Account debited

Account credited

Supplier

Office equipment

Answer

b.

Explanation

Stationery being purchased from the suppliers on credit. Hence the supplier is credited because he is the giver of stationery materials like pen and pencil. The stationery items are debited because pen and pencils are purchased by the trader during the year.