IGCSE Accounting Paper-1: Specimen Questions with Answers 252 - 253 of 338
Question 252
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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.
| $ | |
| (i) Interest Credited by the bank but not yet recorded in the cash book | 300 |
| (ii) Bank Charges debited by the bank but not recorded in the cash book | 10 |
| (iii) Cheque from Abhinandan deposited in the bank but not yet collected by the bank | 400 |
| (iv) Cheque paid to Shaurya not yet presented for Payment | 300 |
| (v) Cheque from Zara dishonoured | 550 |
| (vi) Debit side of Cash book was undercast | 200 |
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.