Accounting - Study Mode
[#1431] The principle 'anticipate no profit and provide for all possible losses' emanates from:
Correct Answer
(D) The conservatism concept
[#1432] Which of the following errors will not affect the trial balance?
Correct Answer
(A) Goods for Rs. 300 purchased on cash, expenses account was debited instead of purchases account
[#1433] If a share of Rs. 100 issued at a discount of Rs. 5 of which full amount has been called up is forfeited for nonpayment of final call of Rs. 20, the share capital account will be debited by
Correct Answer
(B) Rs. 100
Explanation
Solution: When a share is forfeited, we need to reverse the entries made when the share was originally issued. Share Capital Account is originally credited when shares are issued. Therefore, on forfeiture, we need to debit the Share Capital Account. The amount to be debited is the called-up capital on the forfeited shares. In this case, the face value of the share is Rs. 100, and the full amount has been called up. Even though the share was issued at a discount, the called-up amount is still based on the face value. The non-payment of the final call of Rs. 20 doesn't change the fact that the full Rs. 100 has been called up. Therefore, the Share Capital Account will be debited by Rs. 100. So, the correct answer is Option B: Rs. 100
[#1434] That portion of the share capital which can be called up only on the winding-up of the company is the
Correct Answer
(A) reserve capital
[#1435] Consider the following items: i. Debentures ii. Prepaid rent iii. Interest accrued iv. Bank overdraft Which of them are current liabilities:
Correct Answer
(B) iv