IGCSE Accounting Paper-2: Specimen Questions with Answers 109 - 110 of 189
Question 109
Write in Short Short Answer▾
Indicate with a tick which type of expenditures are the followings- (Marks 3)
Revenue | Capital | |
(I) Expenditure of $ 4000 by a cinema theatre for additional features | ||
(II) Customs duty paid for import of raw material | ||
(III) Wages paid for the extension of building |
Explanation
Revenue | Capital | |
(I) Expenditure of $ 4000 by a cinema theatre for additional features | ||
(II) Customs duty paid for import of raw material | ||
(III) Wages paid for the extension of building |
- The expenditure is not increasing the earning capacity of the cinema. So, it is a revenue expenditure.
- Raw materials are current assets (not fixed assets) . All expenditures related to the purchase of current assets are revenue expenditures.
- Building is a fixed asset. Any expenditure related to the extension of a fixed asset is a capital expenditure.
Question 110
Write in Brief One Liner▾
Mr. Abhishek sells shoes. He purchased goods costing $ 400 on credit from Mr. Albert. He also borrowed a sum of $ 1000 from his friend Ms. Aishwarya. What would be the amount of trade creditors in the books of Mr. Abhishek? (Marks 2)
EditExplanation
$ 400
- Trade Creditors are those from whom the trader purchases GOODS on credit. Someone who lends money is a LENDER not a trade creditor.
- Mr. Albert is a trade creditor whereas Ms. Aishwarya is a Lender in the given question.