IGCSE Accounting Paper-1: Specimen Questions with Answers 115 - 116 of 338

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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 115 (1 of 4 Based on Passage)

Write in Short

Short Answer▾

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
IncreaseDecreaseNo change
Current Liability
Long term liabilities
Current Assets
Fixed Assets

Explanation

Calculate in Table Value of Increase, Decrease and Nocharge
IncreaseDecreaseNo 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 116 (2 of 4 Based on Passage)

Edit

Write in Short

Short Answer▾

Prepare Ryno՚s capital account for the year ended 31 October 2015. If he took drawings of $ 500 each month.

Explanation

Ryno՚s capital account

Find Out Amount in Date Wise
DateParticularsAmount

$

DateParticularsAmount

$

October 31Drawings6000November 1Balance85000
October 31Balance79500

The capital account of the Ryno՚s reflects his financial position towards the business and his capital value at the end of the October 31st 2015. The balance on each month is carried forward from the statement of affairs of respective months.

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