IGCSE Accounting Paper-2: Specimen Questions with Answers 108 - 109 of 189

Question number: 108

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Short Answer Question▾

Write in Short

Compute the value of debtors from the following information-

Compute the value of debtors Compute the value of debtors

$

(I) Amount receivable until the last day of the year

2000

(II) Credit sales on the last day of the year

100

(III) Cash Sales on the last day of the year

500

Explanation

Computation of debtors-

Computation of debtorsComputation of debtors

$

Amount receivable until the last day of the year

2000

Add: Credit sales on the last day of the year

100

Debtors

2100

Note-

  • Cash sales do not increase debtors.

Question number: 109

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Short Answer Question▾

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Indicate with a tick which type of expenditures are the followings- (Marks 3)

Indicate with a tick which type of expenditures Indicate with a tick which type of expenditures

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

Indicate with a tick which type of expenditures Indicate with a tick which type of expenditures

Revenue

Capital

(I) Expenditure of $4000 by a cinema theatre for additional features

Image show of the Right

Image Show of the Right

(II) Customs duty paid for import of raw material

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Image Show of the Right

(III) Wages paid for the extension of building

Image show of the Right

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  • 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.

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