IGCSE Accounting Paper-2: Specimen Questions with Answers 128 - 129 of 189

Question 128

Edit

Write in Short

Short Answer▾

Name the final account to which the total of the Carriage Outward Account is transferred at the end of the financial year. (Marks 1)

Explanation

P&L A/c

  • Carriage Outward is an indirect expense and indirect expenses are debited to P&L A/c.
  • Expenses which are not directly related to production or which do not form part of cost of goods sold are Indirect Expenses. Carriage Outward is the cost of transporting the goods to the buyer՚s place. It is related to sale not production. So it is an indirect expense.

Question 129

Describe in Detail

Essay▾

The financial year of Suman՚s business ends on 30 June. On 1 July 2019 balances in Suman՚s ledger included the following. (Marks 10)

The Financial Year of Suman՚S Business Ends on 30 June
$
Machinery60000
Provision for depreciation on machinery15000

The following additional information is also provided.

1. Suman depreciates his machinery at the rate of 15 % per annum on cost. Depreciation on new machinery is calculated from the date of purchase.

2. Additional machinery purchases during the year ended 30th June 2020 were:

Additional Machinery Purchases During the Year Ended th June 2020
$
1st October 201940000
31st March 202020000

Purchase on 1st October 2019 was paid for by cheque and that on 1st July 2020 was paid in cash.

3. There were no sales of equipment during the year.

(b) Enter the above transactions in Suman՚s ledger accounts below.

Machinery A/c

Provision for Depreciation A/c

Explanation

Machinery a/C

Machinery a/C
DateDetails$DateDetails$
2019

July 1

Balance b/d600002019

June 30

Balance c/d120000
Oct 1Bank A/c40000
March

31

Bank A/c20000
120000120000
2020

July 1

Balance b/d120000

Provision for Depreciation a/C

Provision for Depreciation a/C
DateDetails$DateDetails$
2019

June 30

Balance c/d301502019

July 1

Balance b/d15000
June 30P&L A/c15150
3015030150

Provision for Depreciation-

Provision for Depreciation
On 60000@15 % for 12 months$ 9000
On 40000@15 % for 9 months$ 5400
On 20000@15 % for 3 months$ 750
$ 15150

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