Questions On True Or False On Final Accounts

January 17th, 2009 Comments off
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QUESTIONS [ click here for ANSWERS]

True

False

1.0

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

2.0

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

3.0

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

4.0.

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

5.0

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

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

7.0

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

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

9.0

Sales less cost of good sold = gross profit

10.0

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

11.0

The provision for bad debts is debited to Sundry Debtors Account

12.0

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

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

14.0

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

15.0

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

16.0

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

17.0

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

18.0

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

19.0

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

20.0

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

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Financial Accounting

 
 

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