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Answers to Questions On Final Accounts |
True |
False |
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1.0 |
The income statement shows either net profit or net loss for a particular period |
X |
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2.0 |
Gains from the sale or exchange of assets are not considered as the revenue of the business |
|
X |
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3.0 |
The salary paid in advance is not an expense because it neither reduces assets or nor increase liabilities |
x |
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4.0. |
A loss is an expenditure which does not bring any benefit to the concern |
X |
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5.0 |
All liabilities which become due for payment in one year are classified as long term liabilities |
|
X |
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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 |
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7.0 |
An asset gives rise to expenditure when it is acquired and to an expense when it is consumed |
X |
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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 |
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9.0 |
Sales less cost of good sold = gross profit |
X |
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10.0 |
If the debit side of the trading account exceeds its credit side then the balance is termed as gross profit |
|
X |
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11.0 |
The provision for bad debts is debited to Sundry Debtors Account |
|
X |
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12.0 |
The provision for discount on creditors is often not provided in keeping with the principle of conservatism |
x |
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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 |
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14.0 |
The debts written off as bad, if recovered subsequently are credited to Debtors Account |
|
X |
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15.0 |
The adjustment entry in respect of income received in advance is debit Income received in advance account and credit income account |
|
X |
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16.0 |
Premium paid on the life policy of a partner is debited to profit and loss account |
X |
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17.0 |
Depreciation account appear in the trial balance is taken only to profit and loss account |
X |
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18.0 |
Private purchases included in the purchases day book are added to the sales account in the Trading account |
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X |
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19.0 |
Medicines given to the office staff by a manufacturer of medicines will be debited to salaries account |
X |
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20.0 |
The expression-depreciation at 5% and 5% per annum carry the same meaning |
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X |