IGCSE Accounting Paper-1: Specimen Questions with Answers 87 - 88 of 338

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Question 87

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Short Answer▾

In the table below, place a tick (√) under the correct heading to show how the monthly total in the purchase returns journal should be posted in the nominal (general) ledger.

General Ledger Posting for Purchase Returns Journal
Debit entryCredit entry
Purchase returns account

Explanation

General Ledger Posting for Purchase Returns Journal
Debit entryCredit entry
Purchase returns account

Goods returned by the customer to the supplier when goods are purchased on credit are entered in this book. The periodical totaling of this book will took place at the end of every month by the firm. Debit note is important source of document while recording purchase return to the supplier.

Question 88

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Short Answer▾

Which accounting convention states that understatement of assets and income and overstatement of provisions and liabilities?

Explanation

Convention of conservation

The policy behind the conservation is playing safe. According to this convention least favorable situation to the firm will materialize and necessary action should be taken on that basis of accounting treatments.

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