IGCSE Accounting Paper-1: Specimen Questions with Answers 72 - 74 of 338

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Passage

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

Income Statement of the Paul Jackson as on 31st March 2015
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 Profit65100
Rent

Electricity

Insurance

Wages

6000

3600

5800

1370

29100
Net Profit36000

Question 72 (3 of 3 Based on Passage)

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Write in Short

Short Answer▾

Calculate Paul Jackson՚s percentage of gross profit to sales for the year ended 31st March 2015.

Explanation

40 %

Gross profit is calculated at the end of the trading accounts. The gross profit ratio always calculated on the total sales. Hence Gross Profit ratio is

Question 73

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Write in Short

Short Answer▾

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 74

Question

MCQ▾

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)

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.

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