# IGCSE Accounting Paper-2: Specimen Questions with Answers 94 - 96 of 103

## 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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### Write in Short

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

### Explanation

 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)

## Question number: 95 (2 of 5 Based on Passage) Show Passage

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### Write in Short

What is meant by discounting the bill?

### Explanation

When the holder of a bill sells the bill to a bank or any other third party, before the maturity of the bill, it is called as discounting the bill. This is done b the holder when he needs the money on immediate basis. The bank or the third party usually charges a discount for the unexpired period of the bill.

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