IGCSE Accounting Paper-2: Specimen Questions with Answers 167 - 169 of 189

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 2,019.

She Provided the Following Information for the Year Ended 31st March 2,019
$

Prime Cost

25,000

Factory Overheads

4,200

Cost of production

20,800

Question 167 (5 of 5 Based on Passage)

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Short Answer▾

Calculate the estimated gross profit for the year if the new machine is purchased. (Marks 4)

Explanation

Calculate the Estimated Gross Profit for the Year if the New Machine is Purchased
$

Prime Cost

32,500

Factory Overheads

5,200

Cost of Production

37,700

Question 168

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One Liner▾

According to the conservatism principle, a business should value its closing stock a (Marks 1)

Explanation

the lower of cost or market value

  • Conservatism Principle is the policy of playing safe. It says that all the anticipated losses should be provided for and recorded in the books of accounts while the anticipated profits should not be recorded.
  • It also says that the closing stock should be recorded the lower of cost or market value so that the profits may not be overstated.

Question 169

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Short Answer▾

What are Limited Liability Companies?

Explanation

  • A Limited Liability Company is US specific form of private limited company. It combines the feature of both of a partnership and that of a limited liability company.
  • An LLC is eligible for the pass through taxation as well as the limiting the liability of the owners.

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