IGCSE Accounting Paper-1: Specimen Questions with Answers 170 - 172 of 338

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Question 170

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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.

Passing Rectified Entry in Respect of Sale of Sales
account to be debitedaccount to be credited
SalesFurniture

b.

Passing Rectified Entry in Respect of Sale of Old Furniture
account to be debitedaccount to be credited
FurnitureSales

c.

Passing Rectified Entry in Respect of Sale of Cash
account to be debitedaccount to be credited
CashSales

d.

Passing Rectified Entry in Respect of Sale of Furniture and Cash
account to be debitedaccount to be credited
FurnitureCash

Answer

a.

Explanation

The following is recorded:

Wrong Entry Recorded
account to be debitedaccount to be credited
CashSales
In Given Table of Correct Entry
account to be debitedaccount to be credited
CashFurniture
In Given Table of Rectified Entry
account to be debitedaccount to be credited
SalesFurniture

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