IGCSE Accounting Paper-2: Specimen Questions with Answers 174 - 175 of 189

Question 174

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One Liner▾

Abhay sold goods on credit to Vikram for $1000, offering a discount of 3 % for payment within 15 days. Vikram paid within 15 days. Calculate the amount paid by Vikram.

(Marks 2)

Explanation

Passage

The following balances were extracted from Alexa’s books on 31 December 2019.

Alexa’s books on 31 December 2019Alexa’s books on 31 December 2019
$
Opening Stock3500
Sales75000
Purchases50000
Debtors7000
Creditors10000
Administration Expenses8000
Cash at bank4000
Drawings6000
Machinery50000
Provision for depreciation on Machinery15000
Capital?

Question 175 (1 of 3 Based on Passage)

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Short Answer▾

Prepare Alexa’s Trial Balance as at 31 December 2019 showing her Capital A/c balance. (Marks 12)

31 December 2019 showing her Capital A/c balance. 31 December 2019 showing her Capital A/c balance.
Ledger AccountDebit$Credit$

Explanation

31 December 2019 showing her Capital A/c balance. 31 December 2019 showing her Capital A/c balance.
Ledger AccountDebit$Credit$
Opening Stock3500
Sales75000
Purchases50000
Debtors7000
Creditors9500
Administration Expenses8000
Cash at bank4000
Drawings6000
Machinery50000
Provision for depreciation on Machinery10000
Capital34000
Total128500128500

All expenses and assets have a debit balance whereas all the incomes and liabilities have a credit balance.

  • Machinery, Opening Stock, Debtors, Cash at bank are assets.
  • Purchases, Administration Expenses are expenses.
  • Provision for Depreciation is a Contra Asset A/c as it reduces assets. So, it has a credit balance.
  • Capital and Creditors are liabilities.
  • Sales is an Income.
  • Drawings are Contra Capital A/c as it reduces capital. So, it has a debit balance.

The balance of capital is calculated as follows-

(I) The closing stock was valued at $2500

(II) The depreciation for the current year is charged@20 % on reduced balance.

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