IGCSE Accounting Paper-2: Specimen Questions with Answers 35 - 37 of 189

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Passage

Mr. Stanley had 2 accounts with HSBC Bank named A/c 1 and A/c 2. As on 31.12.2015, his cash book showed balances of £540 and £27040 in the two A/c’s respectively.

On examining the bank statements, the following were noticed:

(i) £ 2700 has been transferred from A/c 2 to A/c 1 by the bank without intimating Mr. Stanley.

(ii) £ 10 have been bank charges in both the accounts , which is not intimated to Mr. Stanley

(iii) Cheque for £ 542 issued on A/c 1 in November not yet presented in bank

(iv) A cheque of £ 427 deposited by Mr. Stanley in A/c 2 has been credited by bank in A/c 1

Question 35 (5 of 5 Based on Passage)

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One Liner▾

Is it important for Mr. Stanley to prepare this reconciliation statement?

Explanation

Yes it is important for Mr. Stanley to prepare the Bank reconciliation statement, as it is necessary to find the accuracy of the accounting records maintained by the accountant. The entries omitted by the accountant are brought into light with the help of such a reconciliation statement.

Passage

King and Queen commenced business as partners on April 1st 2006. King contributed £ 80000 and Queen contributed £ 50000 as capital. Their profit sharing ratio was decided as 2: 1. During the year King withdrew £ 8000 and Queen withdrew £ 16000. King was also entitled for salary amounting to £ 12000. Interest on capital was paid@6 % . The profit of the firm after providing for salary and interest on capital was £ 24000.

Question 36 (1 of 5 Based on Passage)

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Short Answer▾

What will be the capital of King and Queen on 31st March 2007, if fluctuating capital accounts were maintained by the firm?

Explanation

On 31st March 2007, capital of King is £ 104800 and capital of Queen is £ 45000 when the firm maintains fluctuating capital accounts.

Fluctuating Capital Accounts of King and Queen as on March 31st 2007
DATEPARTICULARSJFKINGQUEENDATEPARTICULARSJFKINGQUEEN
Drawings800016000Cash8000050000
Balance C/F10480045000Salary12000
Interest on capital@6 %48003000
Profit & Loss appropriation in the ratio 2: 1160008000
1128006100011280061000

Profit = King =

Profit = Queen =

Question 37 (2 of 5 Based on Passage)

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Short Answer▾

What will be the capital of King and Queen on 31st March 2007, if fixed capital accounts were maintained by the firm?

Explanation

On 31st March 2007, capital of King is £ 80000 and capital of Queen is £ 50000 when the firm maintains fixed capital accounts.

CURRENT ACCOUNT OF KING AND QUEEN

Fixed Capital Accounts and Current Capital Accounts of King and Queen
DATEPARTICULARSJFKINGQUEENDATEPARTICULARSJFKINGQUEEN
Drawings800016000Salary12000
Balance C/F24800Interest on capital@6 %48003000
Profit & Loss appropriation in the ratio 2: 1160008000
Balance C/F5000
32800160003280016000

FIXED ACCOUNT OF KING AND QUEEN

FIXED ACCOUNT of KING and QUEEN
DATEPARTICULARSJFKINGQUEENDATEPARTICULARSJFKINGQUEEN
Balance C/F8000050000Cash8000050000
80000500008000050000

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