IGCSE Accounting Paper-2: Specimen Questions with Answers 132 - 135 of 189

Question number: 132

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One Liner Question▾

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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 number: 133

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One Liner Question▾

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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 number: 134

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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:

Fiza

10000

Sara

6000

Current Accounts:

Fiza

3000

Sara

1000 (Dr)

Fixed assets at cost

17000

Provision for depreciation of fixed assets

2000

Inventory

1400

Receivables

2800

Bank balance

1000 (Dr)

Payables

2400

Cash

?

Question number: 135 (1 of 3 Based on Passage) Show Passage

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One Liner Question▾

Write in Brief

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.

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