IGCSE Accounting Paper-1: Specimen Questions with Answers 48 - 49 of 341
Question 48
Question MCQ▾
Gama Limited made a profit of $ 582 800 for the year. $ 54 000 was transferred to general reserve. A dividend on ordinary shares of $ 253 000 was paid. What was the retained profit for the year?
Choices
Choice (4) | |
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a. | $ 275 800 |
b. | $ 228 800 |
c. | $ 215 800 |
d. | $ 258 800 |
Answer
a.Explanation
Retained earnings are the profit kept with the company apart from dividend paid to the shareholders. Hence it is calculated as
Question 49
Question MCQ▾
A plant shop receives an invoice for 500 plants at $ 10 each, less 10% trade discount, from X. Field. The plants were bought on credit and for resale. Which entry records the transaction in the plant shop՚s books?
Choices
Choice (4) | |||||
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a. |
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b. |
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c. |
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d. |
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Answer
b.Explanation
Trade discount is provided on the credit purchase and cash discount is provided on the cash purchase.
Hence the discount is calculated as 5000 – [5000 X 10%] = 4500.
Plant shop purchased plant worth $ 5000 at trade discount of $ 500.