IGCSE Accounting Paper-1: Specimen Questions with Answers 218 - 220 of 338

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Question 218

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Question

Fill-Blanks▾

Expenditure on purchase of fixed assets is known as________. (Marks 2)

Answer

Explanation

Capital Expenditure is the expenditure on the purchase, upgradation, extension or improvement of fixed assets such as land & building, machinery, equipment etc. These expenditures are expected provide economic benefits to the business for more than one accounting period.

Passage

Kamran is a trader who maintains a three column cash book.

He had the following transactions for November 2019.

Nov 2: Purchased goods worth $ 500 for cash.

Nov 7: Received a cheque from Abrar, $ 400 in full settlement of his debt of $ 415

Nov 12: Issued a cheque to Rabia, $ 291 for settlement of her account less 3 % cash discount.

Nov 16: Deposited $ 300 into the bank

Nov 18: Sold an old furniture for cash in $ 800

Nov 22: Withdrawn cash, $ 250 for personal use

Nov 26: Cash sales, $ 320 of which $ 120 was paid directly into the bank

Nov 30. Cash in excess of $ 2000 was deposited into the bank

Question 219 (1 of 5 Based on Passage)

Question

MCQ▾

State the ledger under which each of the following accounts would appear (Marks 4)

Choices

Choice (4)

a.

Sales A/c

b.

Abrar (a credit customer)

c.

Discount Allowed A/c

d.

Rabia (a credit supplier)

Answer

b.

Explanation

  • Purchases and Trade Payables ledger
  • General Ledger
  • General Ledger
  • Sales and Trade Receivables Ledger

Question 220 (2 of 5 Based on Passage)

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Write in Short

Short Answer▾

Which type of entries are those on 16th and 30th November? (Marks 1)

Contra Entries

Explanation

  • A Contra Entry is an entry for a transaction that affects both cash and bank A/c. If one of the accounts is debited, the other will be credited and vice versa. Examples- Cash deposited into bank or Cash withdrawn from bank.
  • On 30 Nov, Kamran՚s bank statement showed a bank balance of $ 220. He compared the cash book with the bank statement found that transactions relating to 7,12 and 30 November had not been recorded by the bank

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