Tag: elements of accounts

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Questions Related to elements of accounts

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

Carriage outwards appearing in the Trial balance are shown________________.

  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
Reveal answer Fill a bubble to check yourself
A Correct answer
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.

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

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 :

  1. Rs.22,500

  2. Rs.21,000

  3. Rs.18,000

  4. Rs.15,500
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
Sundry debtors after provision = Sundry debtors before provision - Provision
                                                    = 25,000 - 10% of 25,000
                                                    = RS-22,500.
Multiple choice elements of accounts trial balance develop the skill of preparing trial balance by balance method methods of preparing trial balance preparation of trial balance

Wages and salaries appearing in Trial Balance are shown_____________.

  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
Reveal answer Fill a bubble to check yourself
B Correct answer
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. 

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

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_________.

  1. Rs.4,000

  2. Rs.5,000

  3. Rs. 6,500

  4. Rs. 3,500
Reveal answer Fill a bubble to check yourself
D Correct answer
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. 
Multiple choice 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

The companies globalize their operations through defficient means ________________.

  1. Exporting directly

  2. Licensing / Franchising

  3. Joint venture

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Companies use various strategies to enter foreign markets, including direct exporting, licensing, franchising, and forming joint ventures, to expand their global footprint.

Multiple choice 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

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

  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.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A joint venture is a business arrangement where two or more parties agree to pool their resources for a specific task, and they share the profits and losses according to a pre-agreed ratio.

Multiple choice 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

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

  1. Manufacturing A/c

  2. Profit & Loss A/c

  3. Balance Sheet

  4. All of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The Profit and Loss Account is the specific financial statement used to summarize revenues and expenses over a period to determine the net profit or loss of a business.

Multiple choice 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

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

  1. Trading A/c

  2. Manufacturing Account

  3. Profit & Loss A/c

  4. None of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
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.

Multiple choice 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

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

  1. Net

  2. Gross

  3. Operating

  4. Super
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Operating profit specifically measures the profit derived from the primary, day-to-day operations of the business, excluding financial and non-operating income/expenses.

Multiple choice 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

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

  1. excess

  2. deficit

  3. both a and b

  4. none of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Operating profit is defined as the difference between operating revenue and operating expenses; if revenue exceeds expenses, it is a profit.