Accounting - Study Mode

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[#2166] On what value the depreciation is charged in the books of the buyer in case of hire purchase method?

(A) Hire purchase price

(B) Cash price

(C) Hire purchase price or cash price whichever is more

(D) Assumed price

Correct Answer

(B) Cash price

[#2167] Which one of the following statements is false:

(A) Accounting is commonly treated as language of business

(B) There are many views about accounting principles

(C) There is no application of conservatism principle in accounting

(D) Accounting is based on accounting equation

(E) Realisation A/c is credited when the assets are realised

(F) Realisation A/c is directly credited when unrecorded asset is realised

(G) When goodwill is given in the books of a firm, then on dissolution of the firm goodwill A/c is also transferred to realisation A/c

(H) In case of gradual realisation of assets, the cash will be distributed amongst the partners in their profit-sharing ratio though their capitals are not in their profit-sharing ratio

Correct Answer

(C) There is no application of conservatism principle in accounting
(H) In case of gradual realisation of assets, the cash will be distributed amongst the partners in their profit-sharing ratio though their capitals are not in their profit-sharing ratio

[#2168] While preparing Funds Flow Statement an increase in working capital is regarded as:

(A) Application of funds

(B) Source of funds

(C) Neither application nor source of funds

(D) Both application as well as source of funds

Correct Answer

(A) Application of funds

[#2169] For which purpose the profits before incorporation can not be used?

(A) To write off capital loss

(B) To write off goodwill

(C) To create capital accumulation

(D) To distribute dividend

Correct Answer

(D) To distribute dividend

[#2170] According to Garner Vs Murray rule, loss on account of a partner becoming insolvent should be distributed to remaining partners in

(A) Capital ratio

(B) Profit and loss ratio

(C) Average ratio

(D) None of the above

Correct Answer

(A) Capital ratio