Accounting - Study Mode
[#576] Profit & Loss account is prepared for a period of one year by following
Correct Answer
(A) Periodicity concept
Explanation
Solution: Profit & Loss account is prepared for a period of one year by following Periodicity concept. It is the concept that each accounting period has an economic activity associated with it, and that the activity can be measured, accounted for, and reported upon.
[#577] Which of the following enhances the earning capacity of an asset?
Correct Answer
(D) Both 'b' and 'c'
Explanation
Solution: Increase in working capacity of an asset and Replacing damage parts of an asset enhances the earning capacity of an asset.
[#578] Gross profit is equal to
Correct Answer
(D) Sales - Cost of goods sold
(F) Sales - Cost of goods sold
Explanation
Solution: Gross profit is equal to Sales - Cost of goods sold.
[#579] The following is the position of current assets and current liabilities: 31 st December, 94 31 st December, 95 Debtors Rs. 30,000 Rs. 24,000 Creditors Rs. 20,000 Rs. 30,000 Stock Rs. 16,000 Rs. 20,000 Prepaid expenses Rs. 8,000 Rs. 12,000 Profit made during the year Rs. 5,00,000 after considering the following items: Depreciation on plant Rs. 20,000 Preliminary expenses written off Rs. 10,000 Transfer to general reserve Rs. 14,000 Profit on sale of land Rs. 6,000 The cash from operations is:
Correct Answer
(B) Rs. 5,38,000
[#580] The balance in share forfeiture account, after the reissue of all forfeited shares, should be
Correct Answer
(B) transferred to Capital Reserve A/c