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

Doorsteptutor material for Bank-PO is prepared by world's top subject experts: get questions, notes, tests, video lectures and more- for all subjects of Bank-PO.

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

Short Answer▾

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

Statement of Profit or Loss for the Year Ended 31.12. 2015
PARTICULARSAMOUNT
Capital as on 31.12. 2015128000
Add: Drawings16600
144600
Less: Capital introduced20000
124600
Less: Capital as on 01.01. 201575760
Profit for the year 201548840

Question 85 (2 of 5 Based on Passage)

Edit

Write in Short

Short Answer▾

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

Statement of Affairs of Mr. Norway as on 1st Jan 2015
LIABILITIESAMOUNTAMOUNTASSETSAMOUNTAMOUNT
Loan from Mr. Rock2000Plant & Machinery60000
Bank Overdraft2200Stock10000
Creditors24240Cash in hand200
Debtors34000
CAPITAL (Bal Figure)75760
104200104200

Question 86 (3 of 5 Based on Passage)

Edit

Write in Short

Short Answer▾

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.

🎯 Select Paper 📂

🚀 Consider Exploring

Developed by: