Tag: prepration of income and expenditure account and balance sheet

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Multiple choice book keeping and accountancy accounts of 'not for profit' concerns receipts and payments receipts and payments account prepration of income and expenditure account prepration of income and expenditure account and balance sheet

________is/are example(s) of capital receipts.

  1. Sale proceed of fixed asset

  2. Loan raised from financial institutions

  3. Capital raised through book building process

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

b'Option D is correct. Capital receipts refer to those receipts which either create a liability or cause a reduction in the assets of the firm. They are non-recurring or non-routine in nature. Sale proceeds of fixed assets leads to reduction in assets. Loan and Capital raised create liability for firm. All are capital receipts. '

Multiple choice book keeping and accountancy accounts of 'not for profit' concerns receipts and payments receipts and payments account prepration of income and expenditure account prepration of income and expenditure account and balance sheet

________ is/are a capital receipt.

  1. Money raised through issue of shares

  2. Bank loan

  3. Sale of investments

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

b'Option D is correct. Capital receipts refer to those receipts which either create a liability or cause a reduction in the assets of the firm. They are non-recurring or non-routine in nature. Sale of investments leads to reduction in assets. Bank loan and money raised through issue of shares create liability for firm. All are capital receipts. '

Multiple choice book keeping and accountancy accounts of 'not for profit' concerns receipts and payments receipts and payments account prepration of income and expenditure account prepration of income and expenditure account and balance sheet

Interest charged by the bank will be deducted, when the overdraft as per the Cash Book is made the starting point for making the Bank Reconciliation Statement. (True/False)

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

When starting with an overdraft as per the Cash Book, items that decrease the bank balance (like interest charged by the bank) are added, not deducted, to reconcile with the Pass Book.