IGCSE Accounting Paper-1: Specimen Questions with Answers 52 - 54 of 338

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Question 52

Question

MCQ▾

Which method is suitable in case of those assets whose repair charges increase as they become old?

Choices

Choice (4)

a.

Annuity Method

b.

Diminishing balance method

c.

Sinking Fund method.

d.

Original cost method

Answer

b.

Explanation

Under diminishing balance method the depreciation are charged at fixed rate on the reducing balance of the assets at every year. Diminishing balance method is suitable in case of those assets whose repair charges increase as they become old.

Question 53

Question

MCQ▾

A business provided the following information.

Business Information of a as on End of the Accounting Year
$
Revenue (sales)10000
Purchases12000
Opening inventory2000
Closing inventory3000
Sales returns200
Purchases returns3000

What was the cost of sales?

Choices

Choice (4)

a.

7000

b.

9000

c.

10000

d.

8000

Answer

d.

Explanation

Gross profit of the particular year will be calculated with the help of the cost of sales. The following formula is used in the calculation of cost of sales:

Question 54

Question

MCQ▾

Neena bought goods on credit from Richard for $ 1000. Ruth offers % discount for payment within fifteen days. Neenai paid her account within this period. Choose the amount discount received by the Neena.

Choices

Choice (4)

a.

$ 35

b.

$ 45

c.

$ 55

d.

$ 65

Answer

b.

Explanation

Discount will be provided to the customer when they paid the due amount with in the credit limit period. Hence Neena receives $ 45 as a discount for her purchase of goods from Richard.

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