Accounting IGCSE 3.0

The following information is available at the end of the month.

bank statement balance $7000 credit

cash book balance $6000 debit

unpresented cheques $1200

What is the value of receipts in the cash book which have not yet appeared on the bank

statement?

• $200

• $1000

• $2200

• $4800

It is important to match a business’s expenses to the appropriate accounting period.

Why is this?

• The business needs to pay the correct amount of expenses.

• To calculate the correct profit or loss for the period.

• To calculate unpaid expenses for the period.

• Unpaid expenses cannot be carried forward to next year.

A business's financial year ends on 30 September. On 1 July 2003 $200 was paid for insurance for six months to 31 December.

What is the correct entry in the Balance Sheet on 30 September 2003?

• an accrual of $100

• a prepayment of $100

• an accrual of $200

• a prepayment of $200

Tara paid $35 to Zaki for rebuilding a damaged wall at her factory.

To which account will Tara post this?

• improvement to buildings

• land and buildings

• purchases

• repairs and maintenance

The following is a list of a builder’s expenditure for the year.

motor vehicle $10 000

purchases $25 000

wages $20 000

rent of offices $6 000

machinery $7 000

petrol $3 000

What is the amount of capital expenditure?

• $10 000

• $17 000

• $54 000

• $71 000

A sole trader has omitted depreciation from his final accounts.

What are the effects on the Balance Sheet?

• fixed assets : overstated

  net profit : overstated

• fixed assets : overstated

  net profit : understated

• fixed assets : understated

  net profit : overstated

• fixed assets : understated

  net profit : understated

An office machine cost $8500 and is estimated to have a useful life of four years. Its scrap value at the end of this time is estimated at $1000.

What is the annual charge for depreciation using the straight-line method?

• $1000

• $1875

• $2125

• $2375

What appears in both the Profit and Loss Account and the Balance Sheet of a sole trader?

• Bank balance

• Creditors

• Net profits

• Sales

A sole trader depreciates his motor vehicles at 25 % per annum on a reducing balance basis.

The vehicles cost $16 000 at 1 January Year 1.

What is the depreciation for Year 2?

• $3000

• $4000

• $7000

• $8000

The following information is extracted from the rent account of a business.

owing at 1 January 2003 : $400

rent paid in year ended 31 December 2003 : $1700

rent paid in advance at 31 December 2003 : $250

How much rent was payable for the year ended 31 December 2003?

• $1050

• $1550

• $1850

• $2350