IGCSE Accounting Paper-1: Specimen Questions with Answers 8 - 10 of 338

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Question 8

Question

MCQ▾

Which current assets will appear first in order of liquidity?

Choices

Choice (4)

a.

Inventory

b.

Trade receivable

c.

Cash

d.

Bank

Answer

c.

Explanation

The presentation of current assets in order of the amount of time it will convert into cash. The orders of current assets in the balance sheet have to be considered in order to find the order of liquidity. Hence cash is the first current assets will appear first in order of liquidity.

Question 9

Question

MCQ▾

Which is not a current asset?

Choices

Choice (4)

a.

Bills receivables

b.

Accrued income

c.

Prepaid expenses

d.

Loose tools

Answer

d.

Explanation

Current assets are easily converted into cash within one year. The current asset includes Cash, Bank, Debtors, Bills Receivables, inventory, prepaid expenses, accrued income and marketable securities. Whereas loose tools is a fixed assets

Question 10

Question

MCQ▾

The following information is extracted from the salary account of a business.

Salary Transaction of the Accounting 1st January 2013 to 31st December 2013
$
Owing at 1 January 2013400
Salary paid in year ended 31 December 20132700
Salary paid in advance at 31 December 2013250

How much salary was payable for the year ended 31 December 2013?

Choices

Choice (4)

a.

2700

b.

2300

c.

2050

d.

2550

Answer

c.

Explanation

Salary Should be Payable as on 31st December 2013 or at the End of the Accounting Year
ParticularAmount

$

Salary

Less Paid for last years

Less Paid for next year

2700

400

________

2300

250

________

2050

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