IGCSE Accounting Paper-2: Specimen Questions with Answers 78 - 80 of 189

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Passage

Susan Ltd was registered on April 1st 2011 with a capital of £ 10000000 divided into £ 1000000 shares of £ 10 each. The company offered 44000 shares of which 40000 shares were taken up by the public. £ 1 was received with application. On May 2nd these shares were allotted and by 31st may £ 2 per share was received as allotment money. First call of £ 3 per share was made on 30th June, and call money was received with an exception of 100 shares. Final call was made £ 4 per share and call money was received by 30th September with an exception of 400 shares.

Question 78 (5 of 5 Based on Passage)

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Describe in Detail

Essay▾

What does Susan Ltd mean by the term Share capital?

Explanation

In the given situation the term share capital refers to the amount which Susan Ltd wishes to raise for its business activities, through public financing. Share capital constitutes the main source of finance in large companies. Share capital is raised through the issue of shares to the public either at par, premium or discount.

Passage

Royal cosmetics have the following cash transactions during the month of January 2016.

Find Out Amount of Royal Cosmetics Have the Following Cash Transactions
DateParticularsAmountDateParticularsAmount
1Opening balance (imprest System)10009Cartage100
2Stamps12010travelling expenses250
3Wages for cleaner15011Courier sent150
4Taxi fare16012Entertainment of salesman200
5Office tea15013Repair of cycle100
6Repairs of cycle10014Printing50
7Advertisement30015Stationery30
8Drew imprest from head cashier16Drew imprest from head cashier

Question 79 (1 of 5 Based on Passage)

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Short Answer▾

What disadvantages do Royal cosmetics have to face while maintaining their records under this system?

Explanation

The disadvantages which Royal cosmetics faces under this system is as follows:

(i) The cashier has to have a check over the petty cash book apart from the main cash book.

(ii) The imprest amount is to be reimbursed on regular basis failing which; the petty cashier may not be able to meet the petty expenses.

Question 80 (2 of 5 Based on Passage)

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Write in Short

Short Answer▾

What do Royal cosmetics mean by the term imprest in their cash book?

Explanation

Imprest is a system of maintaining petty cash. Under this system the “imprest” amount also known as “float” amount, is the amount which the petty cashier gets as reimbursement from the head cashier at regular intervals of time. Hence the petty cashier under this system always has the same amount at regular intervals to carry out the company՚s expenses.

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