# IGCSE Accounting Paper-2: Specimen Questions with Answers 84 - 86 of 189

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### 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 84 (1 of 5 Based on Passage)

Edit

### Write in Short

Does Mr. Norway earn a profit or suffer a loss during the year?

### Explanation

Mr. Norway earned a profit during the year amounting to £ 48840

 PARTICULARS AMOUNT Capital as on 31.12. 2015 128000 Add: Drawings 16600 144600 Less: Capital introduced 20000 124600 Less: Capital as on 01.01. 2015 75760 Profit for the year 2015 48840

## Question 85 (2 of 5 Based on Passage)

Edit

### Write in Short

What is the initial capital Mr. Norway invests in starting the business on Jan 1st 2015?

### Explanation

The initial Capital invested by Mr. Norway on Jan 1st 2015 is £ 75760

 LIABILITIES AMOUNT AMOUNT ASSETS AMOUNT AMOUNT Loan from Mr. Rock 2000 Plant & Machinery 60000 Bank Overdraft 2200 Stock 10000 Creditors 24240 Cash in hand 200 Debtors 34000 CAPITAL (Bal Figure) 75760 104200 104200

## Question 86 (3 of 5 Based on Passage)

Edit

### Write in Short

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.

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