IGCSE Accounting Paper-1: Specimen Questions with Answers 252 - 253 of 338

Question 252

Edit

Write in Short

Short Answer▾

Why is a bank reconciliation statement prepared? State any two reasons. (Marks-1)

Explanation

  • Bank Reconciliation Statement is prepared to reconcile the bank balances shown by cash book and pass book.
  • Two reasons for preparing a BRS may be-
    • To detect and prevent fraud and errors in accounting.
    • To identify any undue delay in clearance of cheque.

A comparison of the cash book and the bank statement revealed the following.

A Comparison of the Cash Book and the Bank Statement Revealed
$
(i) Interest Credited by the bank but not yet recorded in the cash book300
(ii) Bank Charges debited by the bank but not recorded in the cash book10
(iii) Cheque from Abhinandan deposited in the bank but not yet collected by the bank400
(iv) Cheque paid to Shaurya not yet presented for Payment300
(v) Cheque from Zara dishonoured550
(vi) Debit side of Cash book was undercast200

Question 253

Question

MCQ▾

Where should the interest on partner՚s loan be recorded in the final accounts of a partnership?

Choices

Choice (4)

a.

Manufacturing A/c

b.

P&L A/c

c.

P&L Appropriation A/c

d.

Trading A/c

Answer

b.

Explanation

  • Interest on any type of loan (whether advanced by a partner or any other party) is a charge on the profits of a business. So, it should be debited to profit & loss A/c.
  • P&L Appropriation A/c records appropriation of divisible profits (the profits left after deducting all charges against it including interest) .
  • Trading A/c records all direct expenses but interest on loan is an indirect expense.
  • Manufacturing A/c records the expenses incurred until the production or manufacturing process.

🎯 Select Paper

Developed by: