ADNI Accounting IGCSE 2020 P1 - Set A

What is the purpose of book-keeping?

• to interpret the double entry records

• to prepare financial statements at regular intervals

• to record all the financial transactions of the business

• to summarise the financial position of the business

What are assets?

• items that are bought for long-term use by a business

• items that are expected to be turned into cash in the near future

• items that are owned by or owed by a business

• items that are owned by or owed to a business

Sami returns goods bought on credit from Javed.

How does Javed record this in his books?

• account debited : purchases returns

  account credited : Sami

• account debited : sales returns

  account credited : Sami

• account debited : Sami

  account credited : purchases returns

• account debited : Sami

  account credited : sales returns

At the end of the financial year there was a debit balance brought down on the office expenses account.

In which section of the statement of financial position will this be recorded?

• capital

• current assets

• current liabilities

• non-current assets

The following ledger account appeared in the books of a trader.

What does the balance on 31 December represent?

• rent payable outstanding

• rent payable prepaid

• rent receivable outstanding

• rent receivable prepaid

Faraz buys and sells new and used motor vehicles. He purchased a used motor vehicle from Tahir for $7000 which he paid for by cheque.

How would Faraz record this transaction?

• account debited : motor vehicles

  account credited : bank

• account debited : motor vehicles

  account credited : Tahir

• account debited : purchases

  account credited : bank

• account debited : purchases

  account credited : Tahir

Kala had the following assets and liabilities on 1 February 2019.

On 2 February she paid Suki, a credit supplier, $1950 by cheque, after deducting a cash discount of $50.

What was Kala’s capital after this transaction?

• $50 400

• $50 450

• $52 350

• $52 450

Which tasks would be carried out by a book-keeper?

1 analysing business results

2 maintaining a cash book

3 preparing financial statements

4 writing up ledger accounts

• 1 and 2

• 1 and 3

• 2 and 4

• 3 and 4

Zara provided the following information for the year ended 31 December 2018.

Amount owing by credit customers :

1 January 2018 $2 250

31 December 2018 $1 500

Cheques paid by credit customers $14 220

Discount allowed to credit customers $80

Goods returned by credit customers $2 150

How much were the credit sales for the year?

• $11 400

• $12 900

• $15 700

• $17 200

Which statement about a bank reconciliation statement is correct?

• It includes items recorded by the trader not yet recorded by the bank.

• It is a copy of the trader’s account as it appears in the books of the bank.

• It is sent by the bank to the trader at regular intervals.

• It summarises the bank columns in a trader’s cash book.