IGCSE Accounting Paper-1: Specimen Questions with Answers 17 - 19 of 338

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Question 17

Question

MCQ▾

Which one of the following is NOT a double side error?

Choices

Choice (4)

a.

Error of complete omission

b.

Error of principle

c.

Error of commission

d.

Posting to wrong account

Answer

c.

Explanation

In rectification of errors it is important to note that whether an error affects a single account or double account. Error of complete omission, error of principle and posting to wrong account were the double side errors.

Question 18

Question

MCQ▾

Maria՚s trial balance for 31 December 2009 includes the following balances.

Marias Trial Balance for Year Ended 31 December 2009
Particulars$
Sales

Inventory at 1 January 2009

Purchases

Expenses

4200

200

2800

800

What is Maria՚s net profit for the year?

Choices

Choice (4)

a.

$ 700

b.

$ 400

c.

$ 800

d.

$ 500

Answer

a.

Explanation

Trading account of Maria as on 31st December 2009

Trading Account of Maria for the Year 31st December 2009
Particulars$Particulars$
Opening inventory

Purchases

Expenses

Gross Profit (Balancing figure)

200

2800

800

700

Sales

Closing inventory

4200

300

45004500

Question 19

Question

MCQ▾

Identify the accounting objectives of the following statement:

“The information in financial statements must be free from error and bias”

Choices

Choice (4)

a.

Comparability

b.

Understandability

c.

Relevance

d.

Reliability

Answer

d.

Explanation

Properly verified transactions are recorded under the accounting principle of reliability. This verification may be carried out with supportive evidence like bank statements, purchases receipts, promissory notes and appraisal reports.

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