IGCSE Accounting Paper-1: Specimen Questions with Answers 162 - 164 of 338

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Question 162

Question

MCQ▾

A business records a transaction in its accounting records as follows.

Journal Entry of Sales Transaction
$
Debit Bank account

Credit sales account

100

100

Which accounting principle is being applied?

Choices

Choice (4)

a.

Realization

b.

Duality

c.

Prudence

d.

Matching

Answer

b.

Explanation

Double entry system is based on the principle of dual aspect. The business transactions have two aspects namely receiving benefit and giving benefit. Hence in the above transaction goods are sold for cash.

Question 163

Question

MCQ▾

A bill is drawn on 1 - 4-2015 for 2 months, its due date is ________

Choices

Choice (4)

a.

4 - 6-2015

b.

1 - 6-2015

c.

3 - 6-2015

d.

1 - 4-2015

Answer

a.

Explanation

The date of payment as specified in the bill is known as due date. The three extra days are added to the specified period of the bill. These three days are known as ‘Day of grace’ . Hence, the due date in above circumstances is 4 - 6-2015.

Question 164

Edit

Write in Short

Short Answer▾

Explain what is meant by the term ‘creditors for expenses’

Explanation

The creditors for expenses represents expenses which have been incurred during the year but the payment in respect of such expenses is yet to be made. In simple form the expenses due but not yet paid are termed as ‘creditors for expenses’ or ‘outstanding expenses’ .

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