IGCSE Accounting Paper-1: Specimen Questions with Answers 119 - 120 of 338

Get unlimited access to the best preparation resource for Bank-PO : get questions, notes, tests, video lectures and more- for all subjects of Bank-PO.

Question 119

Question

MCQ▾

A trader recognizes that his machinery depreciate in value each year.

How does he record this in his final accounts?

Choices

Choice (4)

a.

Shows Given Table in Record in the Final Accounts
Profit and Loss AccountBalance Sheet
Increase expensesDecrease expenseIncrease fixed assetsDecrease fixed asset

b.

Shows a Record in the Final Accounts
Profit and Loss AccountBalance Sheet
Increase expensesDecrease expenseIncrease fixed assetsDecrease fixed asset

c.

Shows the Record in the Final Accounts
Profit and Loss AccountBalance Sheet
Increase expensesDecrease expenseIncrease fixed assetsDecrease fixed asset

d.

The Record in the Final Accounts
Profit and Loss AccountBalance Sheet
Increase expensesDecrease expenseIncrease fixedassetsDecrease fixed asset

Answer

d.

Explanation

The expenses incurred in relation to the fixed assets are shown in the profit and loss account in the debit side and the same amount is decreased from the fixed asset of the business. Hence the expenses will increase in profit and loss account and decrease the value of the assets.

Question 120

Question

MCQ▾

Stock in trades are to be recorded at cost or market price whichever is less.

Which accounting principle is being applied?

Choices

Choice (4)

a.

Consistency

b.

Money measurement

c.

Prudence

d.

Duality

Answer

c.

Explanation

All prospective losses are taken into consideration in the prudence principle. But in this principle all prospective profits are left in calculation. Hence Stock in trades are to be recorded at cost or market price whichever is less.

🎯 Select Paper 📂

🚀 Consider Exploring

Developed by: