IGCSE Accounting Paper-2: Specimen Questions with Answers 104 - 106 of 189

Question number: 104

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Short Answer Question▾

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In which section of the balance sheet would ‘Outstanding Salaries’ appear? (Marks 1)

Explanation

‘Outstanding Salaries’ would appear under Current Liabilities of the ‘Liabilities’ section of the balance sheet.

  • Salaries incurred and due for payment in an accounting year but not yet paid are ‘Outstanding Salaries’.

  • Since this is an expense which has become payable but the payment is postponed, so this becomes the liability of the business.

  • Further, the payment outstanding salary is to be made within a year, so it is a current liability.

Passage

Arpita is a sole trader who made the following cash transactions during the month of August 2019.

2019

Aug 3. Further Capital introduced $2000 out of which $1600 deposited in the bank

Aug 5. Goods purchased for cash $400, trade discount received $25.

Aug 7. Received a Cheque of $200 from Siddharth, a credit customer for settlement of his account of $220.

Aug 10. Cash Sales $700 out of which $420 paid directly into the bank

Aug 14. Settled the account of Superstar Printers $750 by paying Cheque of $680.

Aug 17. An amount of $500 due from Pathan Brothers written off as Bad debts previous year, now recovered in cash.

Aug 23. Sale of an old furniture, payment received in cheque of $720.

Aug 31. Deposited with the bank the entire balance of cash after retaining $1500 at office.

Question number: 105 (1 of 3 Based on Passage) Show Passage

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Short Answer Question▾

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Make the entries in the following ledger accounts of Arpita (Marks 2)

Discount Allowed A/c

Discount Receved A/cDiscount Receved A/c

Date

Details

Dr

$

Date

Details

Cr

$

Discount Received A/c

Discount Receved A/cDiscount Receved A/c

Date

Details

Dr

$

Date

Details

Cr

$

Explanation

Discount Allowed A/c

Discount Allowed A/cDiscount Allowed A/c

Date

Details

Dr

$

Date

Details

Cr

$

2019

Aug 7

Siddharth

20

Discount Received A/c

Discount Allowed A/cDiscount Allowed A/c

Date

Details

Dr

$

Date

Details

Cr

$

2019

Aug 14

Superstar Printers

70

Question number: 106 (2 of 3 Based on Passage) Show Passage

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Short Answer Question▾

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What are bad debts recovered? How are they recorded in final accounts? (Marks 3)

Explanation

  • Bad debts recovered is the payment received from a debtor after the same has been recognized as uncollectible and was therefore debited to Bad debts a/c as a loss.

  • Since, bad debts recovery produces a kind of indirect income, bad debts recovered a/c is credited to the Profit & Loss A/c

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