Tag: elements of accounts

Questions Related to elements of accounts

Carriage outwards appearing in the Trial balance are shown________________.

elements of accounts trial balance develop the skill of preparing trial balance by balance method methods of preparing trial balance preparation of trial balance

  1. on the debit side of Profit and Loss Account

  2. on the debit side of Trading Account

  3. on the liabilities side of the Balance Sheet

  4. on the credit side of P&L A/c

Show answer
Correct Option: A
Explanation:

Carriage outwards is the seller's expense to transfer the goods to the customer. It is selling expense and therefore an indirect expense. Hence, carriage outwards appearing the trial balance will appear on the debit side of P & L A/c.

C's Trial Balance contains the following information: Bad debts Rs. 8,000, Provision for Doubtful debts Rs. 6,000, Sundry debtors Rs. 25,000.It is desired to create a provision for bad debts at 10% on Sundry debtors at the end of the year. Sundry debtors (after provision) will appear in Balance Sheet at a figure of :

elements of accounts trial balance develop the skill of preparing trial balance by balance method methods of preparing trial balance preparation of trial balance

  1. Rs.22,500

  2. Rs.21,000

  3. Rs.18,000

  4. Rs.15,500

Show answer
Correct Option: A
Explanation:
Sundry debtors after provision = Sundry debtors before provision - Provision
                                                    = 25,000 - 10% of 25,000
                                                    = RS-22,500.

Wages and salaries appearing in Trial Balance are shown_____________.

elements of accounts trial balance develop the skill of preparing trial balance by balance method methods of preparing trial balance preparation of trial balance

  1. on the debit side of Profit and Loss Account

  2. on the debit side of Trading Account

  3. on the liabilities side of the Balance Sheet

  4. None of these

Show answer
Correct Option: B
Explanation:

Wages and salaries appearing in trial balance are expenses made on wages and salaries by the company during the year. They are to be shown in the debit side of Trading account as all expenses and losses are debited.

 Wages and salaries is the remuneration paid to factory workers and hence, is to shown in Trading account. 

P's trial balance contains the following information:
Bad debts Rs.3,000
Provision for bad debts Rs.3,500
It is desired to make a provision of Rs. 4,000 at the end of the year. the amount to be debited to profit and loss a/c is_________.

elements of accounts trial balance develop the skill of preparing trial balance by balance method methods of preparing trial balance preparation of trial balance

  1. Rs.4,000

  2. Rs.5,000

  3. Rs. 6,500

  4. Rs. 3,500

Show answer
Correct Option: D
Explanation:
Amount to be debited to P & L A/c :-
= new provision + bad debts - old provision 
= Rs-4,000 + Rs-3,000 - Rs-3,500
= Rs-3,500. 

The companies globalize their operations through defficient means ________________.

elements of accounts company final accounts forms of statements of profit and loss operating profit (ebit) meaning, need and format of profit and loss account

  1. Exporting directly

  2. Licensing / Franchising

  3. Joint venture

  4. All of the above

Show answer
Correct Option: D

Which of the following statements is true in case of Joint Venture?

elements of accounts company final accounts forms of statements of profit and loss operating profit (ebit) meaning, need and format of profit and loss account

  1. The Joint Venture can be formed by a single person only.

  2. A legal deed should be drafted before forming Joint Venture.

  3. The profit is shared between the venturers in agreed ratio.

  4. Joint Venture follows going concern concept.

Show answer
Correct Option: C

___________ is the part of income statement, which is prepared to ascertain the profit/loss for a given accounting period.

elements of accounts company final accounts forms of statements of profit and loss operating profit (ebit) meaning, need and format of profit and loss account

  1. Manufacturing A/c

  2. Profit & Loss A/c

  3. Balance Sheet

  4. All of the above

Show answer
Correct Option: B

The ___________ measure net profit/loss by matching revenues and expenses according to the accounting principles.

elements of accounts company final accounts forms of statements of profit and loss operating profit (ebit) meaning, need and format of profit and loss account

  1. Trading A/c

  2. Manufacturing Account

  3. Profit & Loss A/c

  4. None of the above

Show answer
Correct Option: C
Explanation:

The P&L statement reveals the company's realized profits or losses for the specified period of time by comparing total revenues to the company's total costs and expenses. Over time, it can show a company's ability to increase its profit, either by reducing costs and expenses, or by increasing sales.

_______ profit is the profit earned through the normal operations and activities of the business.

elements of accounts company final accounts forms of statements of profit and loss operating profit (ebit) meaning, need and format of profit and loss account

  1. Net

  2. Gross

  3. Operating

  4. Super

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Correct Option: C

Operating profit is the _______ of operating revenue over operating expenses.

elements of accounts company final accounts forms of statements of profit and loss operating profit (ebit) meaning, need and format of profit and loss account

  1. excess

  2. deficit

  3. both a and b

  4. none of the above

Show answer
Correct Option: A