Accounting - Study Mode

[#2006] Recovery of bad debt is a
Correct Answer

(B) Revenue receipt

Explanation

Solution: Recovery of bad debt is a Revenue receipt. Revenue receipts are money received by a business as a result of its normal business operations.

[#2007] Bills receivable is a
Correct Answer

(C) Current asset

Explanation

Solution: Bills receivable is a Current asset. Bills receivable is often used as an alternative term for accounts receivable but more specifically relates to amounts due to a business under bills of exchange.

[#2008] The party who sends the goods for sales on fixed commission basis is known as
Correct Answer

(D) Consignor

Explanation

Solution: The party who sends the goods for sales on fixed commission basis is known as Consignor. Person or firm (usually the seller) who delivers a consignment to a carrier for transporting it to a consignee (usually the buyer) named in the transportation documents.

[#2009] Endorsement, discounting and collection of bills of exchange is made by
Correct Answer

(D) Drawer

Explanation

Solution: Endorsement, discounting and collection of bills of exchange is made by Drawer. The individual or firm that issues or signs a draft instructing the drawee to pay a specified sum of money to, or to the order of, a named person (payee), or to bearer.

[#2010] Assertion (A): The matching concept requires that costs should be recognised as expenses in the period in which revenue is realised Reason (R): There may not be a matching between expenditure and expense over a short period In the context given above, which one of the following is correct?
Correct Answer

(B) Both A and R are true, but R is not a correct explanation of A