IGCSE Accounting Paper-1: Specimen Questions with Answers 58 - 59 of 338

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Question 58

Question

MCQ▾

Which statement is correct?

Choices

Choice (4)

a.

Accounting can help to monitor liquidity.

b.

Accounting can help to control costs.

c.

Accounting can help to identify profit trends.

d.

All a., b. and c. are correct

Answer

d.

Explanation

The accounting is a process in which financial activities are recorded according to the standard principles of accounting.

Thus accounting helps in controlling costs, identify profit trends and monitor liquidity.

Question 59

Question

MCQ▾

A business has a suspense account. It is found that the amount in the suspense account is in respect of a cash purchase to Tom, which was omitted from the purchase account.

Choices

Choice (4)

a.

Rectification of Error in Respect of Goods Purchased
Account debitedAccount credited
SuspenseTom

b.

Rectification of Error in Respect of Goods Purchased
Account debitedAccount credited
SuspensePurchase

c.

Rectification of Error in Respect of Goods Purchased
Account debitedAccount credited
TomSuspense

d.

Rectification of Error in Respect of Goods Purchased
Account debitedAccount credited
PurchaseSuspense

Answer

d.

Explanation

The suspense account are created when transaction are recorded in the single side error. Hence purchase was omitted, it should be debited and suspense account should be credited because the purchase in made on cash basis.

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