IGCSE Accounting Paper-2: Specimen Questions with Answers 132 - 135 of 189
Question number: 132
One Liner Question▾
Write in Brief
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
One Liner Question▾
Write in Brief
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
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-
$ | |
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
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.