IGCSE Accounting Paper-1: Specimen Questions with Answers 20 - 22 of 341

Question 20

Question MCQ▾

A business provided the following information.

Percentage of Profit on Sales for Three Years
year 1year 2year 3
gross profit as a percentage of sales27%27%27%
net profit as a percentage of sales7%10%12%

What does this show?

Choices

Choice (4)

a.

control over expenses is getting better

b.

sales have increased

c.

sales have reduced

d.

control over expenses is getting worse

Edit

Answer

a.

Explanation

Gross profits on sales were continuously constant over a period of three years and the net profits of the three years were in progress from 7% to 12% . This shows that the business were able to control over expenses is getting better.

Question 21

Question MCQ▾

Choose the accounting equation:

Choices

Choice (4)

a.

b.

c.

d.

Question does not provide sufficient data or is vague

Edit

Answer

c.

Explanation

Accounting equation shows a true reflection of the financial position of the company.

This is one of the easiest ways to calculate assets or liabilities or capital of the company.

Thus accounting equation is .

Question 22

Question MCQ▾

Joe makes drawing of $ 2000 p. m. under the partnership deed. Interest is to be charged at 12% p. a. What is the interest that should be charged to the partner if the amount was drawn in the beginning of the month?

Choices

Choice (4)

a.

$ 1140

b.

$ 1320

c.

$ 1560

d.

$ 240

Edit

Answer

c.

Explanation

The amount was drawn at the beginning of the month. Hence, interest on drawings is

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