IGCSE Accounting Paper-2: Specimen Questions with Answers 130 - 131 of 189

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Question 130

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Write in Brief

One Liner▾

Obligations i.e.. amount owed by the organization are referred to as________ (Marks 1)

Explanation

Liabilities

  • Liabilities are company՚s financial debts or obligations that arise during the business operations. This is the amount a business owes others.
  • Liabilities include loans, mortgages, trade payables, unearned income, accrued expenses etc.

Question 131

Write in Short

Short Answer▾

Show with a tick mark where the following items would appear in the final accounts of a partnership. (Marks 4)

The Final Accounts of a Partnership
ItemsP & L A/cP & L Appropriation A/c
(I) Interest on Loan
(II) Interest on a Partner՚s Loan
(III) Interest on Partner՚s Drawings
(V) Partner՚s Salary

Explanation

Ans (c)

The Final Accounts of a Partnership
ItemsP & L A/cP & L Appropriation A/c
(I) Interest on Loan
Image Show of the Right
(II) Interest on a Partner՚s Loan
Image Show of the Right
(III) Interest on Partner՚s Drawings
Image Show of the Right
(V) Partner՚s Salary
Image Show of the Right
  • Profits & Loss A/c debits the expenses which are charge against the profits i.e.. that is they have to pay irrespective of whether the firm earns profits or bears a loss. Interest on any loan is a charge against profits.
  • Profits & Loss Appropriation A/c shows distributions of profits in the form of interest on partners capital, salary, reserves etc.

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