Answers to Questions On True Or False On Final Accounts

January 17th, 2009 Comments off
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Answers  to Questions On Final Accounts

True

False

1.0

The income statement shows either net profit or net loss for a particular period

X

2.0

Gains from the sale or exchange of assets are not considered as the revenue of the business

X

3.0

The salary paid in advance is not an expense because it neither reduces assets or nor increase liabilities

x

4.0.

A loss is an expenditure which does not bring any benefit to the concern

X

5.0

All liabilities which become due for payment in one year are classified as long term liabilities

X

6.0

The term current asset is used to designate cash and other assets or resources which are reasonably expected to be realized or sold or consumed within one year

X

7.0

An asset gives rise to expenditure when it is acquired and to an expense when it is consumed

X

8.0

If the balance of an account on the debit side of the trial balance where the benefit has already expired then it is treated as an expense

x

9.0

Sales less cost of good sold = gross profit

X

10.0

If the debit side of the trading account exceeds its credit side then the balance is termed as gross profit

X

11.0

The provision for bad debts is debited to Sundry Debtors Account

X

12.0

The provision for discount on creditors is often not provided in keeping with the principle of conservatism

x

13.0

Stock at the end does not appear in the Trial balance. In case it appears in the Trial balance, the amount of purchases in the Trial balance is reduced

X

14.0

The debts written off as bad, if recovered subsequently are credited to Debtors Account

X

15.0

The adjustment entry in respect of income received in advance is debit Income received in advance account and credit income account

X

16.0

Premium paid on the life policy of a partner is debited to profit and loss account

X

17.0

Depreciation account appear in the trial balance is taken only to profit and loss account

X

18.0

Private purchases included in the purchases day book are added to the sales account in the Trading account

X

19.0

Medicines given to the office staff by a manufacturer of medicines will be debited to salaries account

X

20.0

The expression-depreciation at 5% and 5% per annum carry the same meaning

X

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Financial Accounting

 
 

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