IGCSE Accounting Paper-2: Specimen Questions with Answers 168 - 170 of 189

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Question 168

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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.

Question 170

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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.

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