IGCSE Accounting Paper-2: Specimen Questions with Answers 136 - 139 of 189

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 136 (3 of 3 Based on Passage)

Edit

Write in Short

Short Answer▾

Calculate the current ratio of Fiza and Sara on the given date and state whether it is below or above the ideal ratio. (Marks 4)

Explanation

The ideal current ratio is 2: 1, but the current ratio of Fiza and Sara is 1.88: 1. Thus, it is below the ideal standard.

Question 137

Edit

Write in Short

Short Answer▾

A fixed asset was purchased for $25000 on 1st April 2019. Depreciation was charged on the machine at the rate of 20 % using the diminishing balance method.

Calculate the machine’s net book value on 31 March 2021. (Marks 3)

Explanation

Question 138

Edit

Write in Short

Short Answer▾

State any two differences between equity shares and preference shares.

Explanation

The two differences between equity shares and preference shares are-

  • Equity shares don’t carry a fixed rate of dividend whereas preference shares carry a fixed rate of dividend.
  • The holders of preference shares have a preferential rights regarding the payment of dividend as well as repayment of the principle amount in the event of winding up. On the other hand, equity shareholders do not have such rights.

Question 139

Edit

Write in Brief

One Liner▾

In which final account would furniture purchased by a furniture seller for his office use appear? (Marks 1)

Explanation

Balance Sheet

  • Furniture purchased by the furniture seller is a capital expenditure as it is for his office use not for resale. So, this furniture will be treated as a fixed assets and not as goods.
  • Being a fixed asset, it would appear in the balance sheet.
  • Depreciation on this furniture would be debited to P&L A/c.

Choose Paper