IGCSE Accounting Paper-2: Specimen Questions with Answers 131 - 135 of 189

Question 131

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One Liner▾

State the effect on net profit when opening stock is undervalued. (Marks 1)

Explanation

Net profit will be overstated

When opening stock is undervalued, cost of goods would be lesser than actual, gross profit would be overstated and so the net profit.

Question 132

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One Liner▾

Give one example of a current asset. ________ (Marks 1)

Explanation

Bills Receivables

  • Current Assets are those which can be sold, encashed, consumed or utilized within a year.
  • Bills Receivables are current assets as they can be converted into cash within 30 to 90 days.

Question 133

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Question

Fill-Blanks▾

A________ and an ________ always have a credit balance

Answer

Explanation

Liability; Income

  • The normal balance of a liability A/c and an income a/c is credit.
  • On the contrary, an asset A/c and an expense A/c normally have a debit balance.

Passage

Fiza and Sara are in partnership. Their financial year ends on 30 September. The following balances remained on the books After the preparation of their Trading and Profit and Loss Account for the year ended 30 September 2019-

Trading and Profit and Loss Account for the year ended 30 September 2019-Trading and Profit and Loss Account for the year ended 30 September 2019-
$
Capital Accounts:
Fiza10000
Sara6000
Current Accounts:
Fiza3000
Sara1000 (Dr)
Fixed assets at cost17000
Provision for depreciation of fixed assets2000
Inventory1400
Receivables2800
Bank balance1000 (Dr)
Payables2400
Cash?

Question 134 (1 of 3 Based on Passage)

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One Liner▾

State the possible reason as to why Sara’s Current A/c has a debit balance (Marks 1)

Explanation

Sara’s drawings and interest on drawings for the year might be more than her interest on capital, salaries, share of profits for the year.

Question 135 (2 of 3 Based on Passage)

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Short Answer▾

Prepare the Balance Sheet of the partnership as at 30 September 2019 and find out the balance of cash. (Marks 12)

Fiza and Sara

Balance Sheet as at 30 September 2019.

Balance Sheet as at 30 September 2019. Balance Sheet as at 30 September 2019.
Liabilities$Assets$

Explanation

Fiza and Sara

Balance Sheet as at 30 September 2019.

Balance Sheet as at 30 September 2019. Balance Sheet as at 30 September 2019.
Liabilities$Assets$
Capital Accounts- $Sara’s Current A/c1000
Fiza 10000Fixed Assets $17000
Sara 600016000Less: Pro. for dep. 200015000
Fiza’s Current A/c3000Inventory1400
Payables2400Receivables2800
Bank balance (overdraft)1000Cash2200
2240022400

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