IGCSE Accounting Paper-1: Specimen Questions with Answers 207 - 211 of 338

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Passage

Terry and Candy are partners of a firm sharing profit and loss in the ratio of 7: 5.

The Goodwill is to be valued at 2 years purchases of four years average profit which were $ 40000, $ 32000, $ 15000 and $ 13000 respectively.

Question 207 (1 of 2 Based on Passage)

Edit

Describe in Detail

Essay▾

Calculate the goodwill for the above transaction:

Explanation

$ 50000

Question 208 (2 of 2 Based on Passage)

Edit

Describe in Detail

Essay▾

Find the four years average profit:

Explanation

$ 50000

The four years average profit is as follows:

Profit for four years:

Showing Profit for the Year
I year40000
II Year32000
III Year15000
IV Year13000
Total100000

Passage

The following transaction were took place in the book of Manisha:

The Following Transaction Were Took Place in the Book of Manisha
Sold goods to Angel on credit$ 17500
Bought goods for cash from Charles$ 22500
Met travelling expenses$ 2000
Received $ 40000 from Santosh as loan-
Paid wages to workers$ 3000

Question 209 (1 of 2 Based on Passage)

Edit

Describe in Detail

Essay▾

Mention any two sources of documents.

Explanation

The few examples of source documents are

  • Cash memo
  • Invoice or bill
  • Receipts
  • Debit note
  • Credit Note
  • Pay-in-slip
  • Cheque
  • Vouchers
  • Bills receivables
  • Bills payable
  • Wage sheet
  • Salary register
  • Correspondence

Question 210 (2 of 2 Based on Passage)

Edit

Describe in Detail

Essay▾

List out the items which will involve cash transaction

Explanation

  1. Purchases
  2. Travelling expenses
  3. Wages
  4. Santosh՚s loan

The following transactions were involved in cash treatment:

Transactions Were Involved in Cash Treatment
Bought goods for cash from Charles$ 22500
Met travelling expenses$ 2000
Received $ 40000 from Santosh as loan-
Paid wages to workers$ 3000

Question 211

Write in Short

Short Answer▾

Ramesh is a retailer. Complete the following table by using a (√) to specify how each item would be classified as capital expenditure or revenue expenditure:

Finding Capital Expenditure and Revenue Expenditure
ParticularCapital expenditureRevenue expenditure
Delivery costs
Repair costs
Installation costs
Renewal expenses
Replacement costs

Table Title: The list of capital and revenue expenditure

Explanation

Calculate Capital Expenditure and Revenue Expenditure
ParticularCapital expenditureRevenue expenditure
Delivery costs
Repair costs
Installation costs
Renewal expenses
Replacement costs

Capital expenditure includes the expenditure the benefit of which is not fully consumed in one accounting year and it is spread over to many years whereas revenue expenditure is intended to benefit the current year or during the accounting year.

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