Accounting IGCSE 4.0

Where is interest on partners’ capital shown in the partnership final accounts?

• Appropriation Account

• Cash Book

• Profit and Loss Account

• Trading Account

Mary and Jane are in partnership sharing profits and losses in the proportions Mary : Jane, 2 : 1 .

They have agreed that Mary will receive an annual salary of $9000.

Net profit for the year was $24 000.

What is Jane’s share of the profit for the year?

• $5000

• $8000

• $10 000

• $16 000

A business provides the following information.

capital 1 January 2003 : $60 000

drawings during the year : $40 000

capital introduced during the year : $10 000

capital 31 December 2003 : $80 000

What is the profit for the year?

• $10 000

• $20 000

• $50 000

• $70 000

A business has not kept full accounting records.

Which formula is used to calculate the credit sales?

• amounts received + closing debtors + discounts allowed – opening debtors

• closing debtors – amounts received + opening debtors + discounts allowed

• amounts received + closing debtors – opening debtors

• closing debtors – amounts received + opening debtors

How is working capital calculated?

• current assets – current liabilities

• fixed assets – current liabilities

• owners capital – current liabilities

• total assets – current liabilities

Which is a measure of profitability?

• current ratio

• quick ratio

• rate of stock turnover

• return on capital employed

The balance sheet of a business includes the following.

debtors $10 000

creditors $14 000

bank overdraft $6 000

stock $15 000

What is the quick ratio?

• 0.50 : 1

• 0.71 : 1

• 1.14 : 1

• 1.25 : 1

Which shows how well a business controls its expenses?

• current ratio

• percentage of gross profit to sales

• percentage of net profit to sales

• rate of stock turnover

How is the profit as a percentage of the capital employed calculated?

• (gross profit / assets ) x 100%

• (net profit / assets ) x 100%

• (gross profit / capital ) x 100%

• (net profit / capital ) x 100%

The quick ratio of Eric is 1.3 : 1,

the quick ratio of Ken is 0.4 : 1.

What does a comparison of these ratios show?

• Eric controls his overhead expenses better than Ken

• Eric's cost of sales is lower then Ken's

• Ken has a lower return on capital employed than Eric

• Ken has less liquidity than Eric