IGCSE Accounting Paper-1: Specimen Questions with Answers 222 - 224 of 338
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Nov 22: Withdrawn cash, $250 for personal use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 number: 222 (4 of 5 Based on Passage) Show Passage
Short Answer Question▾
Write in Short
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 Examples- Cash deposited into bank or Cash withdrawn from bank.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
Question number: 223 (5 of 5 Based on Passage) Show Passage
MCQ▾
Question
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
Passage
Avinash’ financial year ends on 31 December. On 31 December 2018, he prepared a trial balance and found an excess of $7600 on the debit side. The difference was credited to the Suspense A/c and later on the following errors were detected-
(I) Sale of Old furniture $1400 were credited to Sales A/c
(II) Purchases book was overcast by $600
(III) Goods returned to Anupam $3000 recorded in Sales Return Book, however Anupam’s A/c was correctly debited
(IV) Bought goods from Aviral $1000 was recorded in Sales book.
However, the same was correctly posted to the credit of Aviral’s A/c.
(V) Installation Cost of Plant $500 debited to Wages A/c
(VI) Capital introduced $1500 had been correctly entered in the cash book but debited in the drawings A/c
Question number: 224 (1 of 2 Based on Passage) Show Passage
Short Answer Question▾
Write in Short
Prepare the Suspense A/c showing the opening balance and the (Marks 8)
Rectification entries for the errors.
Avinash
Suspense A/c
Date | Details | $ | Date | Details | $ |
Explanation
Avinash
Suspense A/c
Date | Details | $ | Date | Details | $ |
2018 Dec 31 | Purchases | 600 | 2018 Dec 31 | Difference in Trial balance | 7600 |
Sales Returns | 3000 | Sales | 1000 | ||
Purchases Returns | 3000 | Purchases | 1000 | ||
Capital | 1500 | ||||
Drawings | 1500 | ||||
9600 | 9600 |
Error (II) To reduce excess debit of Purchases, Purchases A/c will be credited to the suspense A/c by the excess amount.
Error (III) Goods Returned to Anupam were recorded in Sales Return book, so Sales Return A/c will be credited by $3000 to nullify the previous debit entry. At the same time Purchases Return A/c will also be credited by the same amount to record the purchase return.
Error (IV) Purchases of $1000 was recorded in Sales book. So sales A/c will be debited by $1000 to nullify the previous credit entry. At the same time, Purchases A/c will also be debited by the same amount to record Purchases.
Error (VI) Capital A/c was to be debited by $1500 so, it will be debited. Drawings A/c was NOT to be debited but it was. So, drawings A/c will also be credited to set off the previous debit entry.