Accounting - Study Mode

[#1536] Which of the following is time spann into which the total life of a business is divided for the purpose of preparing financial statements?
Correct Answer

(C) Accounting period

Explanation

Solution: Accounting period is time spann into which the total life of a business is divided for the purpose of preparing financial statements. This period defines the time range over which business transactions are accumulated into financial statements, and is needed by investors so that they can compare the results of successive time periods.

[#1537] Information about an item is _______ if its ommission or misstatement might influence the financial decision of the users taken on the basis of that information
Correct Answer

(D) Material

Explanation

Solution: Materiality is a concept in financial accounting and reporting that firms may disregard trivial matters, but they must disclose everything that is important to the report audience. Items that are important enough to matter are material items.

[#1538] Legal expenses in respect of claims of an insurance company is shown in . . . . . . . .
Correct Answer

(B) Revenue a/c

[#1539] Where separate set of books are maintained, the ledger accounts required are . . . . . . . .
Correct Answer

(C) Joint bank account, co-venturer capital accounts and joint bank account

[#1540] . . . . . . . . represents that part of discount received during the year by a bank which relates to the next accounting year.
Correct Answer

(C) Unexpired discount