IGCSE Accounting Paper-2: Specimen Questions with Answers 142 - 144 of 189

Question 142

Write in Short

Short Answer▾

For the financial year ended 31st March 2019, Insurance A/c of ABC Ltd. showed the following-

For the Financial Year Ended st March 2019, Insurance a/C of ABC Ltd
$
1st April 2018Balance b/d5000
4th July 2019Paid premium for 12 months20,000

Calculate the amount of the charge for insurance shown in the Profit and Loss Account for the year ended 31st March 2019. Show your workings

Explanation

For the Financial Year Ended st March 2019, Insurance a/C of ABC Ltd
$
Opening Balance of Insurance A/c5000
Add: Premium paid on th July 2019 for 12 months20000

25000

Less: Prepaid Insurance 5000
Premium charged to P&L A/c20000

Passage

The Balance Sheet of Abdul is given below with some figures missing.

Balance Sheet as at 31st December 2019

Balance Sheet as at st December 2019
Liabilities$$Assets$$
Capital as at

1 Jan 2019

30000Fixed Assets

at cost (I)

________
Add: Profit (II)________40000Less: Dep.300015000
Current Liabilities-Current Assets- (III)
Sundry Creditors (IV)________Stock15000
Bills Payables4000Debtors10000
Outstanding Exp300010000Prepaid Insurance (V)________
Cash7000________
5000050000

Question 143 (1 of 6 Based on Passage)

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Write in Brief

One Liner▾

Calculate, showing your workings, (Marks 3)

Abdul՚s quick ratio

Explanation

Question 144 (2 of 6 Based on Passage)

Edit

Write in Brief

One Liner▾

State any two uses of working capital. (Marks 2)

Explanation

Two uses of working capital are-

  • Meeting day to day expenses: Working Capital is used for paying off routine expenses like purchase of raw materials, payment of wages, salaries and other day to day operating expenses.
  • Short term Investment: Excess working capital can also be used for purchasing short term profitable securities.

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