IGCSE Accounting Paper-2: Specimen Questions with Answers 92 - 94 of 103

Passage

For the year ended 31st March 2014, the receipts and payments account of Enjoyment Club was as follows:

Find out payment account details

calculate amout detalis in this table.

RECEIPTS

AMOUNT

AMOUNT

PAYMENTS

AMOUNT

AMOUNT

To balance b/d

5125

By salaries

10400

To subscriptions

By stationery

2000

2013 - 2014

225

By rent

3000

2014 - 2015

10500

By telephone

500

2015 - 2016

375

11150

By investment

6250

To profit on sports meet

7750

By sundry expenses

4625

To income from investments

5000

By balance c/d

2250

29025

29025

The club provided additional information such as

(i) There are 450 members paying subscription of £25, £250 were in arrears for 2013 - 2014 as on 1st April 2014

(ii) As on 31st march 2015, the rents were prepaid till June 30th2015, the amount paid every year being £3000

(iii) Outstanding telephone bill £175 on march 31st 2015

(iv) Outstanding sundry expenses on 31st march 2015 amounted to £350

(v) Stock of stationery on 31st march 2014 was £250 and on 31st march 2015 is £450

(vi) As on 31st march 2014 - 2015 building was valued at £50000, subject to depreciation at a rate of 5 % per annum

(vii) Investments on 31st march 2014 was £100000

(viii) On 31st march 2015 income accrued on investments purchased during the year amounted to £187

Question number: 92 (4 of 5 Based on Passage) Show Passage

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Essay Question▾

Describe in Detail

Why does Enjoyment club prepare an Income and Expenditure account and not a Profit and loss account?

Explanation

Non - profit organizations such as clubs, societies, associations, do not have profit as their motto. Their main objective is to provide service to the society, unlike commercial organizations who have profit as their main objective. Enjoyment club being a non-profit organization, prepares income and expenditure account unlike commercial organizations who prepare the profit and loss account

Question number: 93 (5 of 5 Based on Passage) Show Passage

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Short Answer Question▾

Write in Short

State any 2 differences between the receipts & payments account and the Income & Expenditure account?

Explanation

The two difference between Receipts & Payments A/c and Income & Expenditure A/c is as follows:

(i) The former is a real account while the latter is a nominal account

(ii) The former’s object is to present a summary of cash transactions during an accounting period, while the object of the latter is to ascertain the net results (Surplus or deficit) of the transactions during the accounting period.

Passage

Mrs. Anthony sold goods worth £10000 to Mrs. Barker on Jan 1st 2016. Mrs. Anthony drew a bill on Mrs. Barker at three months for the full amount. Mrs. Barker accepted the bill and returned to Mrs. Anthony, who discounted the bill with a bank on 5th Feb 2016.@15 %. The bill was duly honored on maturity.

Question number: 94 (1 of 5 Based on Passage) Show Passage

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Short Answer Question▾

Write in Short

How will Mrs. Barker journalize the above transactions in her books of accounts?

Explanation

Journal entries in the books of Mrs. Barker

Table of Journal entries in the books of Mrs. Barker

DATE

PARTICULARS

LF

DEBIT AMT

CREDIT AMT

Jan 1st

Purchases A/c Dr

10000

To Mrs. Anthony A/c

10000

(Being goods purchased on credit)

Jan 1st

Mrs. Anthony A/c Dr

10000

To Bills Payable A/c

10000

(Being acceptance of bill received)

April 4th

Bills Payable A/c Dr

10000

To bank A/c

10000

(Being bill discharged)