IGCSE Accounting Paper-1: Specimen Questions with Answers 117 - 118 of 214

Passage

Ryno has a business selling spare parts for cars. He lost many of his financial records in a flood but has been able to provide the following information.

1 November 2015 31 October 2015

$ $

Non-current (fixed) assets 10 000 12 000

Current assets 100 000 90 500

Current liabilities 25 000 23 000

Question number: 117 (3 of 4 Based on Passage) Show Passage

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Short Answer Question▾

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In the table below, place a tick (√) under the correct heading to show the effect which taking the loan will have on each of the following items. If Ryno has decided to take a 10-year business loan from the bank. The money will be paid in to his business bank account.

The changes in the accounting transaction of the firm

Finding a value of increase, decrease and no charge

Increase

Decrease

No change

Current Liability

Long term liabilities

Current Assets

Fixed Assets

Explanation

Calculate in table value of increase, decrease and nocharge.

calculate value of increase, decrease and no charge

Increase

Decrease

No change

Current Liability

Long term liabilities

Current Assets

Fixed Assets

The Long term liabilities and cash in current assets will increase while the loan is taken by the Ryno for a long period of 10 years. The short term loan will be affected in the Current liabilities and the value of fixed assets will be changes when purchase of fixed assets took place during the year.

Question number: 118 (4 of 4 Based on Passage) Show Passage

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Short Answer Question▾

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Prepare Ryno’s statement of affairs on 1 November 2015 showing his total capital at that date.

Ryno’s – Statement of Affairs at 1 November 2015

Explanation

Statement of affairs at 1 November 2015

Statement of affairs as on 1st November 2015

Calculate value in given table

Particulars

$

$

Fixed Assets

Current Assets

Less: Current Liabilities

100000

25000

10000

75000

———

85000

The statement of affairs shows the present value of assets in hand. It includes the both fixed and current assets of the firm. This type of system of book keeping comes under the ‘Single entry system’ of book keeping.