IGCSE Accounting Paper-1: Specimen Questions with Answers 253 - 254 of 338

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Question 253



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


Choice (4)


Manufacturing A/c


P&L A/c


P&L Appropriation A/c


Trading A/c




  • 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.

Question 254


Write in Brief

One Liner▾

(a) What is an imp rest system?

________. (1)

(b) State one advantage of triple column cash book

________. (1)


  • Imp rest system is a system of setting aside some fixed amount of cash for paying small, routine expenses and maintaining a petty cash book for the same. This amount is restored to the same level at the beginning of a new period.
  • The triple column cash book contains both- the cash A/c as well as the bank A/c. So, the contra entry (the double entry involving both the cash A/c the bank A/c at the same time) is recorded in the cash book itself. These contra entry can easily be cross checked in the triple column cash book.

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