IGCSE Accounting Paper-2: Specimen Questions with Answers 82 - 84 of 103

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

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

Date

Particulars

Amount

Date

Particulars

Amount

1

Opening balance (imprest System)

1000

9

Cartage

100

2

Stamps

120

10

travelling expenses

250

3

Wages for cleaner

150

11

Courier sent

150

4

Taxi fare

160

12

Entertainment of salesman

200

5

Office tea

150

13

Repair of cycle

100

6

Repairs of cycle

100

14

Printing

50

7

Advertisement

300

15

Stationery

30

8

Drew imprest from head cashier

16

Drew imprest from head cashier

Question number: 82 (4 of 5 Based on Passage) Show Passage

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Short Answer Question▾

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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.

Question number: 83 (5 of 5 Based on Passage) Show Passage

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What are the advantages that Royal cosmetics enjoy by maintaining their cash transactions under this system?

Explanation

Royal cosmetics can enjoy the following advantages by maintaining its book under the imprest system of petty cash:

(i) There exists a control over mistakes and frauds.

(ii) There exists a control over petty expenses.

Passage

Mr. Norway starts a small business & maintains his records under single entry system. Following information was obtained from his books: Plant & Machinery £60000; Stock £10000; Cash in hand £200; Debtors £34000; Loan from Mr. Rock £2000@4 % interest; Bank Overdraft £2200; Creditors £24240

On 31.12. 2015, he owed to his creditors £18340 and paid Mr. Rock £1000 on 1.07. 2015, however interest on loan was not paid. Additional machinery worth £26000 was brought in. Debtors were £46000 out of which £1800 are bad. Cash balance was £8200 and stock was £9000. Drawings for the year were £16600 and £20000 was introduced as additional capital during the year.

Question number: 84 (1 of 5 Based on Passage) Show Passage

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State any 2 differences between single entry and double entry system of book keeping?

Explanation

The differences between single entry and double entry system of book keeping are as follows:

(i) Single entry system is an incomplete system of book keeping, while double entry system is a complete system.

(ii) Single entry system of book keeping is not accepted for the assessment of taxation, while double entry system is accepted for ascertainment of tax.