IGCSE Accounting Paper-1: Specimen Questions with Answers 135 - 137 of 214

Question number: 135

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Short Answer Question▾

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Explain ordinary shares:

Explanation

The share capitals of the limited company are classified as ordinary shares and preference share capital. The main features of ordinary share capital are:

  • No fixed rate of dividend on profit or loss.
  • The ordinary shareholders have voting rights while taking decision.
  • Ordinary shares also known as equity shares.
shows image is type of shares

Shows Image is Type of Shares

image of type of shares

Question number: 136

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MCQ▾

Question

Which one of the following is revenue expenditure in nature?

Choices

Choice (4) Response

a.

Second hand car purchased

b.

Paid for repairs on second hand machinery

c.

Debentures are issued for raising loan.

d.

Paid carriage on goods purchased

Answer

d.

Explanation

The capital expenditures are those expenditures on which the benefits are carried over to several accounting periods. The revenue expenditure is those expenditures which occurred in the normal course of the business.

Question number: 137

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Short Answer Question▾

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Calculate the preference dividend when limited company issued 2000 number of Preference Shares with a cost of $2 per each share. The dividend rate is fixed at 5 % per year.

Explanation

Dividend is usually calculated on the total value of preference share of the limited company. Hence, preference dividend is