Cambridge IGCSE and O Level Accounting
Coursebook answers
Chapter 9
Answers to test yourself questions
Test yourself 9.1
1 A statement of financial position is a statement of the assets and liabilities of a business on a
certain date.
2 a An asset is something which is owned by or owed to a business.
b A liability is an amount owed by a business.
Test yourself 9.2
1 Non-current assets are assets which are obtained for use and not for resale, which help the
business to earn revenue.
Any two suitable examples could be provided, such as premises, machinery fixtures and motor
vehicles.
2 Current assets are arranged in increasing order or liquidity (the ones furthest away from cash
being shown first).
3 A non-current liability is an amount owed by a business which is not due for repayment within
the next 12 months. A current liability is a short term liability which is due for repayment within
the next 12 months.
1
© Cambridge University Press 2018
Cambridge IGCSE and O Level Accounting
Answers to exam-style questions
1
Lydia
Corrected statement of financial position at 31 July 20–5
$
$
Assets
Non-current assets
Premises
Fixtures and fittings
Motor vehicle
Current assets
Inventory
Trade receivables
Cash at bank
Cash
Total assets
Capital and liabilities
Capital
Opening balance
Plus Profit for the year
Less Drawings
$
82 500
11 980
116 500
110 980
2 480
2 140
4 360
1 250
9 230
120 210
100 000
114 350
114 350
16 120
198 230
Non-current liabilities
Loan
20 000
Current liabilities
Trade payables
1 980
Total capital and liabilities
2
C
3
B
4
B
© Cambridge University Press 2018
120 210
2
Cambridge IGCSE and O Level Accounting
5
Ayesha
Income statement for the year ended 30 September 20–3
$
$
$
Fees received
65 950
Add Rent receivable
16 000
71 950
Less Insurance
3 110
Printing and stationery
2 480
Wages
59 650
Office expenses
13 120
68 360
13 590
Profit for the year
Ayesha
Statement of financial position at 30 September 20–3
$
$
$
Assets
Non-current assets
Premises
95 000
Office equipment
21 600
116 600
Current assets
Trade receivables
6 150
Cash
1 150
6 300
Total assets
122 900
Capital and liabilities
Capital
Opening balance
125 000
Plus Profit for the year
13 590
128 590
Less Drawings
15 200
113 390
Current liabilities
Bank overdraft
Total capital and liabilities
© Cambridge University Press 2018
9 510
122 900
3
Cambridge IGCSE and O Level Accounting
6
a
Abhinav
Trial Balance at 30 June 20–8
Debit
$
Capital
Drawings
Premises
Fixtures
Revenue
Purchases
Inventory 1 July 20–7
Carriage inwards
Carriage outwards
Trade receivables
Trade payables
Discount received
Insurance
Sundry expenses
Wages
Rates
Long-term loan from ABC Loans
Loan interest
Cash at bank
Credit
$
54 400
1 300
30 000
4 000
82 000
70 100
18 600
400
1 500
14 000
8 000
210
390
340
10 300
1 200
10 000
500
551 980
154 610
154 610
154 610
4
b
Abhinav
Income statement for the year ended 30 June 20–8
$
$
Revenue
$
82 000
Less Cost of sales
Opening inventory
18 600
Purchases
70 100
Carriage inwards
11 400
70 500
89 100
Less Closing inventory
20 100
69 000
Gross profit
13 000
Add Discount received
11 210
13 210
Less Carriage outwards
1 500
Insurance
390
Sundry expenses
340
Wages
10 300
Rates
11 200
13 730
Loss from operations
520
Less Loan interest
1 500
Loss for the year
1 020
© Cambridge University Press 2018
Cambridge IGCSE and O Level Accounting
c
Abhinav
Statement of financial position at 30 June 20–8
$
$
Assets
Non-current assets
Premises
Fixtures
Current assets
Inventory
Trade receivables
Bank
Total assets
Capital and liabilities
Capital
Opening balance
Less Loss for the year
Less Drawings
Non-current liabilities
Loan
Current liabilities
Trade payables
Total capital and liabilities
© Cambridge University Press 2018
$
30 000
34 000
34 000
20 100
14 000
51 980
36 080
70 080
54 400
51 020
53 380
51 300
52 080
10 000
58 000
70 080
5