Accounting - Study Mode
[#801] Under cash basis of accounting, revenue is recognized when
Correct Answer
(B) Cash is received
Explanation
Solution: Under cash basis of accounting, revenue is recognized when Cash is received. Realizable means it is reasonable to expect that cash will be received in the future.
[#802] The trade discount on purchases is recorded
Correct Answer
(D) Not at all recorded in the books
Explanation
Solution: The trade discount on purchases are not all recorded in the books. Trade discount is not separately shown in the books of accounts, and all amounts recorded in a purchases or sales book are done in the net amount only.
[#803] Which of the following is a leverage ratio?
Correct Answer
(A) Debt equity ratio
Explanation
Solution: Debt equity ratio is a leverage ratio. The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets. Closely related to leveraging, the ratio is also known as risk, gearing or leverage.
[#804] The document inviting offers from public to subscribe for the debentures or shares of a body corporate is a
Correct Answer
(D) Prospectus
Explanation
Solution: The document inviting offers from public to subscribe for the debentures or shares of a body corporate is a Prospectus.
[#805] The portion of the acquisition cost of an asset yet to be allocated is known as
Correct Answer
(A) Written down value
Explanation
Solution: The portion of the acquisition cost of an asset yet to be allocated is known as Written down value. Written-down value is the value of an asset after accounting for depreciation or amortization.