IGCSE Accounting Paper-2: Specimen Questions with Answers 144 - 149 of 189

Passage

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

Balance Sheet as at 31st December 2019

Balance Sheet as at 31st December 2019
LiabilitiesDollar $Dollar $AssetsDollar $Dollar $
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 144 (2 of 6 Based on Passage)

Write in Brief One Liner▾

Calculate, showing your workings, (Marks 2)

(I) Abdul՚s current ratio

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Explanation

Question 145 (3 of 6 Based on Passage)

Write in Brief One Liner▾

Calculate, showing your workings, (Marks 3)

Abdul՚s quick ratio

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Explanation

Question 146 (4 of 6 Based on Passage)

Write in Brief One Liner▾

Calculate, showing your workings, (Marks 2)

Abdul՚s Cash ratio

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Explanation

Question 147 (5 of 6 Based on Passage)

Write in Brief One Liner▾

Calculate Abdul՚s working capital. Show your workings. (Marks 2)

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Explanation

Question 148 (6 of 6 Based on Passage)

Write in Brief One Liner▾

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

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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.

Question 149

Write in Brief One Liner▾

The balance of the Carriage Inwards account is transferred to which account at the end of the financial year. (Marks 1)

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Explanation

Trading Account

  • All the direct expenses are transferred to trading account whereas the indirect expenses are transferred to Profit & Loss A/c.
  • Direct Expenses form part of Cost of Goods Sold and varies directly with the level of output. Carriage Inward is a direct expense.

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