Accounting 0452 · IGCSE · Other payables and other receivables
Other payables and other receivables — practice question
The balances below were extracted from RB’s accounts, where RB is a trader.
1 April 2021 / 31 March 2022
Insurance: $2500 prepaid / $850 prepaid
Commission receivable: $700 owing / $630 owing
For the year ended 31 March 2022, the following transactions occurred. Every receipt and payment passed through the bank account.
Insurance paid $15300
Insurance refund $600
Commission receivable $7200
RB has agreed with suppliers to a 25% trade discount from list price and a 2% cash discount. The cash discount applies only when payment is made within 10 days.
On 5 March 2022 RB received an invoice from JP for the supply of goods with a list price of $3000. The invoice was settled on 13 March 2022.
(a)[8]
Set up the following ledger accounts for the year ended 31 March 2022. Balance them off and carry the balances down on 1 April 2022.
(b)[2]
Show insurance and commission receivable in RB’s statement of financial position at 31 March 2022.
(c)[3]
Explain why the matching principle matters when RB’s income statement is being prepared.
(d(i))[1]
Calculate the trade discount.
(d(ii))[1]
Calculate the cash discount.
(d(iii))[1]
Calculate the amount paid to the supplier JP.
(e)[4]
Complete the table below by placing a tick (✓) to show how each kind of discount affects gross profit and profit for the year.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Insurance account balanced correctly and transferred to the income statement” …