IGCSE Accounting

James has the following assets and liabilities.

Non-current assets $29 500

Current assets $18 100

Current liabilities $11 300

Non-current liabilities $15 000

What is his capital?

• $21 300

• $7700

• $37 700

• $51 300

A cash book shows a debit balance on the bank account of $1200.

There are unpresented cheques totalling $420.

Which balance appears on the bank statement?

• $780 debit

• $1620 debit

• $1620 credit

• $780 credit

Ahmed paid $750 on 1 October 2014 for 15 months’ insurance.

Which amount for insurance appeared in his statement of financial position on 31 January 2015?

• $550

• $500

• $250

• $200

An item of inventory, cost $80, has been damaged. It can be repaired for $22. The item can then be sold for $78. Packing and shipping costs will amount to $6.

At which value will it be included in the statement of financial position?

• $56

• $78

• $50

• $80

Why is depreciation provided?

• to set aside funds for future repairs to the asset

• to spread the cost of an asset over its useful life

• to estimate the cost to the business of wear and tear

• to show market values in the statement of financial position

Where do interest on capital and interest on partners’ loans appear?

• A

• B

• C

• D

Which action would improve working capital?

• organising an overdraft facility at the bank

• offering cash discount to debtors

• taking a longer credit period from suppliers

• selling a surplus delivery vehicle

Joy is considering selling raw materials on credit to Koma. Why does Joy look at Koma’s financial statements?

• to find out how much Koma has spent on non-current assets

• to know how much capital Koma had invested in his business

• to calculate Koma’s trade payables payment period

• to see if Koma experiences a high level of bad debts

What are retained earnings in a limited company?

• profits after dividends but before transfers to general reserve

• profits before dividends and before transfers to general reserve

• profits before dividends but after transfers to general reserve

• profits after dividends and after transfers to general reserve

A successful grocery prepares a trading account and an income and expenditure account.

Which statement is true?

• The trading account shows an opening and closing balance and the income and expenditure account shows a profit.

• The trading account shows a profit and the income and expenditure account shows a surplus

• The trading account shows a profit and the income and expenditure account shows an opening and closing balance.

• The trading account shows a surplus and the income and expenditure account shows a profit.