IGCSE Accounting Paper-2: Specimen Questions with Answers 109 - 110 of 189

Question 109

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Short Answer▾

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

Indicate with a Tick Which Type of Expenditures
RevenueCapital
(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
RevenueCapital
(I) Expenditure of $ 4000 by a cinema theatre for additional features
Image Show of the Right
(II) Customs duty paid for import of raw material
Image Show of the Right
(III) Wages paid for the extension of building
Image Show of the Right
  • 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

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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)

Explanation

$ 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.

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