IGCSE Accounting Paper-1: Specimen Questions with Answers 72 - 74 of 214

Passage

Income statement of the Paul Jackson as on 31st march 2015.

Income statement of the Paul Jackson as on 31st march 2015

Calculate value of Income statement of the Paul Jackson

Particulars

$

$

Revenue – Credit Sales

Cash sales

135300

26800

162100

Less Cost Sales

Opening stock

Purchases

Carriage inwards

Closing stock

17800

95600

2800

116200

19200

________

97000

Gross Profit

65100

Rent

Electricity

Insurance

Wages

6000

3600

5800

1370

29100

Net Profit

36000

Question number: 72 (3 of 3 Based on Passage) Show Passage

Edit
Short Answer Question▾

Write in Short

Calculate Paul Jackson’s percentage of net profit to sales for the year ended 31st March 2015. Show your calculation with exact percentage.

Explanation

22%

Net profit is calculated after deducting the operation expenses and adding the operating income with the gross profit of the business.

Question number: 73

Edit
Short Answer Question▾

Write in Short

Classify the following items under capital or revenue:

(i) Purchase of furniture - ………………………………. .

(ii) Purchase of second hand machinery ………………………. .

(iii) Carriage on goods purchased ……………………. .

(iv) Wages paid for installation of plant………………

Explanation

(i) Purchase of furniture – Capital

(ii) Purchase of second hand machinery – Capital

(iii) Carriage on goods purchased - Revenue

(iv) Wages paid for installation of plant – Capital

Purchase of furniture and Purchase of second hand machinery are the acquisition of fixed assets. Hence it is capital expenditure. The carriage on goods purchased is incurred on purchase of goods for sale. Hence, it is revenue in nature.

Question number: 74

Edit
MCQ▾

Question

The assets of a business on 31 - 12 - 2014 were worth $50000 and its capital was $35000. Its liabilities on that date were ________

Choices

Choice (4) Response

a.

$35000

b.

$50000

c.

$15000

d.

$25000

Answer

c.

Explanation

Accounting equation is based on dual aspect. Every transaction has a two sided effect on the assets and claim on assets.