Accounting - Study Mode
[#1041] Receipts and payments account is prepared by
Correct Answer
(B) Non-trading concerns
[#1042] If a share of Rs. 10, on which an amount of Rs. 6 has been paid, is forfeited. It can be reissued at minimum price of
Correct Answer
(C) Rs. 4
[#1043] If the sales and P/V ratio of a firm is Rs. 1000 and 80% respectively and the amount of interest paid is Rs. 400, then operating leverage of the firm is:
Correct Answer
(C) 2
[#1044] Following information is available: 1. 2,000 10% preference shares of Rs. 100 each Rs. 2,00,000 2. 10,000 Equity shares of Rs. 100 each Rs. 60 per share paid up Rs. 6,00,000 3. Expected profit per year before tax Rs. 3,20,000 4. Rate of Tax 50% 5. Transfer to general reserve every year 20% of net profit 6. Normal rate of earnings 15% The value of equity share as per yield value method would be:
Correct Answer
(C) 72
[#1045] A recovery of bad debt
Correct Answer
(A) increases net income
Explanation
Solution: A recovery of bad debt increases net income. Bad debt recovery is a payment received for a debt that was written off and considered uncollectible. The receivable may come in the form of a loan, credit line, or any other accounts receivable. Because it generally generates a loss when it is written off, bad debt recovery usually produces income.