IGCSE Accounting Paper-2: Specimen Questions with Answers 21 - 24 of 103

Passage

RK Industries closes its books of accounts every year on June 30th. During the year it made purchases from various suppliers amounting to £ 640000. The books were opened with a stock of £890000. During the year RK Industries made payments to its creditors £576000. Purchases worth £124000 did not meet the standards required by RK industries and were hence returned back to the suppliers Discounts received during the year was £50000

Question number: 21 (1 of 5 Based on Passage) Show Passage

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Essay Question▾

Describe in Detail

Pass the journal entry in the books of RK Industries to record the total purchases in the creditors control A/C in the general ledger?

Explanation

Journal entry in the books of RK Industries

shows Journal entry in the books of RK Industries

Date

Particulars

L. F

Debit Amt

Credit Amt

30-Jun

Purchases A/C Dr

780000

To Creditor’s control A/C

780000

(Being total purchases transferred to the creditors control A/C in the general ledger)

Question number: 22 (2 of 5 Based on Passage) Show Passage

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Describe in Detail

Where does RK Industry record its cash purchases and sales when it maintains control system of accounting?

Explanation

RK Industries maintains a General ledger. All cash sales and cash purchases will find its place in this ledger. They are not accounted in the control ledgers.

Question number: 23 (3 of 5 Based on Passage) Show Passage

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Describe in Detail

In Control A/C ‘s, the following are named as:

(i) Creditor’s ledger: …………………………. .

(ii) Debtor’s ledger: ………………………………

Explanation

(i) Purchase Ledger Control A/C (ii) Sales Ledger Control A/C

Question number: 24 (4 of 5 Based on Passage) Show Passage

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Why should RK Industries maintain control A/C’s?

Explanation

RK Industries has a huge turnover of business, and has many suppliers and clients. In such a case it becomes difficult to open a separate account for each creditor and debtor. Hence in order to simplify the accounting process, a single ledger as the creditors or debtors ledger is maintained. All the credit purchases and sales are recorded in these ledgers respectively. In the general ledger a separate account as creditors control account and debtors control account where the total purchases and sales record is maintained.