# IGCSE Accounting Paper-1: Specimen Questions with Answers 206 - 210 of 214

## Question number: 206

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### Write in Short

Explain what is meant by “Petty Cash Book”?

### Explanation

The word Petty means ‘small’. The small recurring payments are maintained in the Petty cash book. Small recurring payments like carriage, postage and telegram, printing and stationery are recorded and maintained by the petty cashier. Petty cashier is a person other than main cashier.

## 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 number: 207 (1 of 2 Based on Passage) Show Passage

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Essay Question▾

### Describe in Detail

Find the four years average profit:

### Explanation

\$50000

The four years average profit is as follows:

Profit for four years:

 I year 40000 II Year 32000 III Year 15000 IV Year 13000 Total 100000

## Question number: 208 (2 of 2 Based on Passage) Show Passage

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Essay Question▾

### Describe in Detail

Calculate the goodwill for the above transaction:

\$50000

## Passage

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 number: 209 (1 of 2 Based on Passage) Show Passage

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Essay Question▾

### Describe in Detail

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 number: 210 (2 of 2 Based on Passage) Show Passage

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Essay Question▾

### Describe in Detail

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:

 Bought goods for cash from Charles \$22500 Met travelling expenses \$2000 Received \$40000 from Santosh as loan - Paid wages to workers \$3000

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