IGCSE Accounting Paper-1: Specimen Questions with Answers 20 - 22 of 341
Question 20
Question MCQ▾
A business provided the following information.
year 1 | year 2 | year 3 | |
gross profit as a percentage of sales | 27% | 27% | 27% |
net profit as a percentage of sales | 7% | 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 |
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 |
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 |
Answer
c.Explanation
The amount was drawn at the beginning of the month. Hence, interest on drawings is