IGCSE Accounting Paper-2: Specimen Questions with Answers 172 - 173 of 189
Question number: 172
Short Answer Question▾
Write in Short
Kipla Ltd. is a Pharmaceutical Company. Following is the situation of its stock of medicines as on 31 March 2020.
$ | |
(I) Medicines in stock | 15000 |
(II) Medicines whose expiry date is on 31 March 2020 is included in the above value of $15000 is of $1000 | |
(III) Medicines in process of Manufacturing as on 31 March 2020 | 2000 |
(IV) Raw Material in Godown | 4000 |
What shall be the value of stock on 31 March 2020? (Marks 2)
Explanation
Computation of closing stock of Kipla Ltd. -
$ | ||
Medicines in stock | 15000 | |
Less: Expired Medicines | 1000 | |
14000 | ||
Add: Medicines in process of Manufacturing as on 31 March 2020 | 2000 | |
Raw Material in Godown | 4000 | 6000 |
Closing Stock | 20000 |
Question number: 173
Short Answer Question▾
Write in Short
Name the accounting concept stated in the below sentence.
“Everything a firm owns, it also owes out to someone”.
(Marks 1)
Explanation
Dual Aspect Concept
Dual Aspect recognizes that every transaction has two aspects defined in accounting terms as debits and credits. Debit records the increase in assets & expenses and decrease in liabilities & income. Credit records increase in liabilities & income and decrease in assets & expenses.
A single transaction results into equal debits and credits such that the accounting equation always holds true. i. e.
The things owned by a firm are ASSETS while things which are owed by the firm are LIABILITIES. So, for every asset, there is a corresponding liability of an equal amount and that keeps the accounting equation intact.