Accounting IGCSE 5.0

Harpreet is a credit customer of Suzanna. Harpreet’s account in Suzanna’s books shows a credit balance.

How could the credit balance have arisen?

• A cheque from Harpreet was dishonoured.

• Harpreet has overpaid his account.

• Interest was charged by Suzanna.

• Suzanna offered a trade discount.

The following is the subscriptions account of a club.

Which statement is correct?

• Subscriptions in advance at 1 January 2018 were $50.

• Subscriptions in arrears at 1 January 2017 were $80.

• Subscription income for the year was $3060.

• Subscriptions received during the year were $3000.

Why is it necessary for a manufacturing business to make an adjustment for work in progress in its manufacturing account?

1 to calculate what is needed to complete production

2 to record all factory costs

3 to show only the cost of goods completed

• 1 and 2

• 1 only

• 2 and 3

• 3 only

Narinder made a short-term loan to Seema. Narinder’s draft statement of financial position showed this loan as a current liability.

What was the effect of this error?

• current assets understated

• current liabilities understated

• non-current liabilities overstated

• owner’s capital overstated

On 1 February 2017 Katya’s fixtures and fittings had a net book value of $12 950.

She purchased fixtures, $2250, during the year.

Depreciation for the year ended 31 January 2018 was $4900.

What was the net book value of fixtures and fittings on 31 January 2018?

• $5800

• $7150

• $10 300

• $15 600

For which accounts does the cash book act as a ledger account?

• bank ✓

  cash ✓

  discount allowed ✓

  discount received ✓

• bank -

  cash ✓

  discount allowed ✓

  discount received ✓

• bank -

  cash -

  discount allowed ✓

  discount received ✓

• bank ✓

  cash ✓

  discount allowed -

  discount received -

Which statement about the division of the ledger is not correct?

• Checking procedures can be introduced.

• Fewer entries are needed in the sales and purchases accounts.

• It is easier for reference and for locating accounts.

• Work can be shared between two or more book-keepers.

Which account may appear as a credit balance in a trial balance?

• carriage outwards

• discount received

• drawings

• inventory

Insurance prepaid, $120, was treated as an accrual in the income statement.

Which effect did this have on the profit for the year?

• overstated $120

• overstated $240

• understated $120

• understated $240

Goods, $250, sold on credit to Ahmed were credited to Aktar’s account.

What is the correcting journal entry?

• debit : Ahmed $250 , Aktar $250

  credit : suspense $500

• debit : Ahmed $250 , suspense $250

  credit : Aktar $500

• debit : Aktar $500

  credit : Ahmed $250 , suspense $250

• debit : suspense $500

  credit : Ahmed $250 , Aktar $250