IGCSE Accounting Paper-2: Specimen Questions with Answers 162 - 164 of 189

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Question 162

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Short Answer▾

Asim bought goods on credit from Siddharth. In Siddharth ledger, this transaction was entered on the credit side of Asim՚s account. (Marks 1)

(i) Name the type of error committed by Siddharth.

Explanation

Error of Commission

  • Error of Commission is made when a transaction is entered on the wrong side of an account or on the right side but with a wrong amount.
  • In the given example, Asim is Siddharth՚s debtor. So, under Siddharth ledger, the given transaction should be entered on the DEBIT side of Asim՚s account.

Passage

Ankita is a manufacturer. Her financial year ends on 31st March. She sells her output at 30 % mark up.

She provided the following information for the year ended 31st March 2019.

She Provided the Following Information for the Year Ended 31st March 2019
$
Prime Cost25000
Factory Overheads4200
Cost of production20800

Question 163 (1 of 5 Based on Passage)

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One Liner▾

State any two items which included under ‘Factory Overheads’ . (Marks 2)

Explanation

(i) Factory Electricity

(ii) Depreciation on Factory Fixed Assets

  • Factory Overheads are those indirect expenses which are related to the factory in which the product is manufactured. For an item to be categorized under factory overheads, should have two main things-
    • Firstly, it should be indirect expense, i.e.. . cannot be directly attributed to the product.
    • Secondly, it should be incurred until the production or manufacturing process.

Question 164 (2 of 5 Based on Passage)

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What is meant by ‘Prime Cost’ ? (Marks 1)

Explanation

Prime Cost is the sum total of all the direct expenses incurred to manufacture a product.

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