IGCSE Accounting Paper-2: Specimen Questions with Answers 121 - 123 of 189

Passage

Ananya, provides the following information about her business.

Information About Her Business
At 1 April 2018At 31 March 2020
$$
Fixed assets1000015000
Current assets40006000
Current liabilities30004000

Question 121 (2 of 3 Based on Passage)

Write in Short

Short Answer▾

Prepare a Balance Sheet for Ananya as at 1 April 2018. (Marks 4)

Balance Sheet as at 1 April 2018

Balance Sheet as at 1 April 2018
Capital & Liabilities$Assets$

Explanation

Balance Sheet as at 1 April 2018

Balance Sheet as at 1 April 2018
Capital & Liabilities$Assets$
Capital11000Fixed Assets10000
Current Assets4000
Current Liabilities3000
1400014000

The following additional information is also provided for the year ended 31 March 2019.

(1) Ananya՚s drawings for the year ended 31 March 2019 were $ 2000.

(2) Fixed assets at 31 March 2019 are to be depreciated by 10 % .

Question 122 (3 of 3 Based on Passage)

Edit

Write in Brief

One Liner▾

Calculate Ananya՚s Return on Assets (Marks 2)

Explanation

Question 123

Edit

Write in Brief

One Liner▾

State how the undervaluation of closing stock affects the net profit of a firm. (Marks 1)

Explanation

It will result into understatement of the net profits.

  • Undervaluation of closing stock will lead to increased cost of goods sold because closing stock is deducted while calculating the cost of goods sold.
  • Increased cost of goods sold will lead to understatement of gross profit and hence the net profits as well.

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