IGCSE Accounting Paper-1: Specimen Questions with Answers 211 - 212 of 214

Question number: 211

Short Answer Question▾

Write in Short

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**
shows table in find out capital expenditure and revenue expenditure
Particular	Capital expenditure	Revenue 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**
finding values of Capital expenditure and Revenue expenditure
Particular	Capital expenditure	Revenue 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.

Passage

The following errors were found out after preparing the trial balance of the Mathew as on 31 - 03 - 2015

Purchases $5000 from Sheethal wrongly entered in the sales book.
Goods taken by the proprietor $1500 not recorded in the books at all.
$5200 paid for the purchase of furniture was charged to office account.

Question number: 212 (1 of 3 Based on Passage) Show Passage

Essay Question▾

Describe in Detail

Mention the errors what are not disclosed by trial balance.

Explanation

Error not disclosed by trial balance:

Errors of complete omission
Errors in the books of original entry
Errors of principle
Compensating errors
Errors of posting to wrong account in the right side with correct amount.

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