# IGCSE Accounting Paper-2: Specimen Questions with Answers 93 - 95 of 189

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### Passage

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

 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 93 (5 of 5 Based on Passage)

Edit

### 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 94 (1 of 5 Based on Passage)

Edit

### 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.

## Question 95 (2 of 5 Based on Passage)

Edit

### Write in Short

State any two differences between a bill of exchange and a promissory note?

### Explanation

The differences between a bills of exchange and promissory note are as follows:

(i) There are 3 parties involved in a bill of exchange namely drawer, drawee and payee while only 2 parties maker and payee are involved in a promissory note.

(ii) The liability of the drawer is secondary in the bill of exchange while the liability of the maker is primary in a promissory note.

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