IGCSE Accounting Paper-1: Specimen Questions with Answers 170 - 172 of 338
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Question 170
Write in Short
Short Answer▾State the mistakes occur due to improper application of principles of accounts.
Explanation
Error of principle may relate to different aspects:
- Capital and revenue items
- Improper valuation
- Erratic provisioning
Every transaction should be recorded as per generally accepted accounting principles. These mistakes may arise due to the violated or ignored, error from the above mistakes are known as errors of principle. A trial balance will not disclose errors of principle.
Question 171
Question
MCQ▾From the following which document is prepared by a trader when he sells goods on credit?
Choices
| Choice (4) | |
|---|---|
a. | Receipt |
b. | Invoice |
c. | Debit note |
d. | Voucher |
Answer
b.Explanation
Invoice is issued when a trader sells goods on credit. The trader prepares a sale invoice which contain full details of the credit sales like name of the customer, the term of payment and address of the seller and buyer etc. ,
Question 172
Question
MCQ▾Sale of old furniture for $ 2000 treated as sale of goods.
How is this error corrected?
Choices
| Choice (4) | |||||
|---|---|---|---|---|---|
a. |
| ||||
b. |
| ||||
c. |
| ||||
d. |
| ||||
Answer
a.Explanation
The following is recorded:
| account to be debited | account to be credited |
| Cash | Sales |
| account to be debited | account to be credited |
| Cash | Furniture |
| account to be debited | account to be credited |
| Sales | Furniture |