Final Accounts (True /False) A. The income statement shows either net profit or net loss for a particular period. T B. Gains from the sale or exchange of assets are not considered as the revenue of the business. F C. The salary paid in advance is not an expense because it neither reduces assets or nor increase liabilities. T D. A loss is an expenditure which does not bring any benefit to the concern. T E. All liabilities which become due for payment in one year are classified as long term liabilities. F F. 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. T G. An asset gives rise to expenditure when it is acquired and to an expense when it is consumed. T H. 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. T I. Sales less cost of good sold = gross profit. T J.If the debit side of the trading account exceeds its credit side then the balance is termed as gross profit. F K. The provision for bad debts is debited to Sundry Debtors Account. F L. The provision for discount on creditors is often not provided in keeping with the principle of conservatism. T M. 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. T N. The debts written off as bad, if recovered subsequently are credited to Debtors Account. F O. The adjustment entry in respect of income received in advance is debit Income received in advance account and credit income account. F P. Premium paid on the life policy of a partner is debited to profit and loss account. T Q. Depreciation account appear in the trial balance is taken only to profit and loss account. T R. Private purchases included in the purchases day book are added to the sales account in the Trading account. F S. Medicines given to the office staff by a manufacturer of medicines will be debited to salaries account. T T. The expression-depreciation at 5% and 5% per annum carry the same meaning. F
Posted on: Wed, 04 Sep 2013 09:07:59 +0000
Trending Topics
Recently Viewed Topics
© 2015