IGCSE Accounting Paper-1: Specimen Questions with Answers 111 - 114 of 214

Question number: 111

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Short Answer Question▾

Write in Short

Explain the modifying principles.

Explanation

To make the accounting information useful to various interested parties, the basic assumptions and concepts of accounting principles are modified. These modified principles are as:

  • Cost Benefit Principle
  • Materiality Principle
  • Consistency Principle

Passage

Roshan had the following transaction:

a. Roshan started business with $25000

b. Purchased goods on credit from Sohan $10000

c. Solds goods to Sam costing $1500 for $1800 on credit.

Question number: 112 (1 of 2 Based on Passage) Show Passage

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Short Answer Question▾

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Show your calculation regarding the accounting equation.

Explanation

Assets = $35300 Liabilities $10000; Capital $25300

Solution: The accounting equation includes:

Accounting equation of Roshan

Table of Accounting equation of Roshan

Sl No

Equities

Assets

Capital

creditors

Cash

Stock

Debtors

a.

25000

25000

b.

10000

10000

c.

300

10000 - 1500

35300

35300

Question number: 113 (2 of 2 Based on Passage) Show Passage

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Short Answer Question▾

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Calculate assets on the basis of accounting equation:

Explanation

$35300

Assets includes cash from capital, stock on credit purchase, deduct cost stock amount sold and add credit sale amount. Thus assets includes

Question number: 114

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MCQ▾

Question

When a bill is accepted, it will be entered by the acceptor in ________

Choices

Choice (4) Response

a.

Bills Receivable book

b.

Bills Payable book

c.

Bills book

d.

Bills accepted book

Answer

b.

Explanation

Bills receivable book records the receipts of bill from the customers and bills payable book records the bills accepted by the trader. If the holder of bill is in need of money he can convert into cash through the bank.