IGCSE Accounting Paper-2: Specimen Questions with Answers 170 - 172 of 189
Question 170
Write in Brief
One Liner▾Asim bought goods on credit from Siddharth. In Siddharth ledger, this transaction was entered on the credit side of Asim’s account. (Marks 1)
Asim returned some of the goods to Siddharth as faulty. Name the document which Asim sent to Siddharth.
Explanation
Debit note
Debit note is issued in case of Purchase Return.
Question 171
Write in Brief
One Liner▾Name the accounting principle explained in the below statement
‘In a given situation, an accountant should choose that accounting alternative that will report lesser profits, less asset amount or a greater liability amount. ’ (Marks 1)
Explanation
Principle of Prudence
- Principle of Prudence is a policy of playing safe. Principle of Prudence says that an accountant should not overestimate the amount of revenues or underestimate the amount of expenses.
Further, assets too shouldn’t be overstated and the liabilities should not be underestimated.
Question 172
Write in Short
Short Answer▾Kipla Ltd. is a Pharmaceutical Company. Following is the situation of its stock of medicines as on 31 March 2,020.
| $ | |
(I) Medicines in stock | 15,000 |
(II) Medicines whose expiry date is on 31 March 2,020 is included in the above value of $ 15,000 is of $ 1,000 | |
(III) Medicines in process of Manufacturing as on 31 March 2,020 | 2,000 |
(IV) Raw Material in Godown | 4,000 |
What shall be the value of stock on 31 March 2,020? (Marks 2)
Explanation
Computation of closing stock of Kipla Ltd. -
| $ | ||
Medicines in stock | 15,000 | |
Less: Expired Medicines | 1,000 | |
14,000 | ||
Add: Medicines in process of Manufacturing as on 31 March 2,020 | 2,000 | |
Raw Material in Godown | 4,000 | 6,000 |
Closing Stock | 20,000 |