|
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 |