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Nov 22: Withdrawn cash, $250 for personal use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

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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 Examples- Cash deposited into bank or Cash withdrawn from bank.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

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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

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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

Prepare the Suspense A/c showing the opening balance Prepare the Suspense A/c showing the opening balance

Date

Details

$

Date

Details

$

Explanation

Avinash

Suspense A/c

Prepare the Suspense A/c showing the opening balance Prepare the Suspense A/c showing the opening balance

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.

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