IGCSE Accounting Paper-1: Specimen Questions with Answers 60 - 61 of 338

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Question 60

Question

MCQ▾

On which side the deposits in Bank Account are recorded in passbook?

Choices

Choice (4)

a.

Left

b.

Debit

c.

Right

d.

Credit

Answer

d.

Explanation

The deposits in Bank Account are recorded in passbook on the credit side and on debit side in the cash book. Likewise the withdrawals from bank are recorded on credit side in the cash book and on debit side in the pass book.

Question 61

Question

MCQ▾

How assets, liabilities and capital are affected by each of the following transaction with an accounting equation:

Purchase of machinery for cash $ 300000

Choices

Choice (4)

a.

Accounting Equation for the Purchase of Assets
TransactionAssets = Capital + Liabilities
Machinery purchasedCash + Machinery = Capital + Liabilities

-300000 + 300000 = 0 + 0

b.

Accounting Equation for the Purchase of Assets (Choice B)
TransactionAssets = Capital + Liabilities
Machinery purchasedCash + Machinery = Capital + Liabilities

0 + 300000 = 0 + 300000

c.

Accounting Equation for the Purchase of Assets (Choice C)
TransactionAssets = Capital + Liabilities
Machinery purchasedCash + Machinery = Capital + Liabilities

300000 + 0 = 0 + 300000

d.

Accounting Equation for the Purchase of Assets (Choice D)
TransactionAssets = Capital + Liabilities
Machinery purchasedCash + Machinery = Capital + Liabilities

300000 - 300000 = 0 + 0

Answer

a.

Explanation

Accounting equation always has a two sided effects. If Machinery purchased during the year for cash then it will reflected as increase the value of assets and decrease the value of cash.

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