Assets-Liabilities=____________?
Assets-Liabilities=____________?
A. Cash
B. Equity
C. Net income
D. Net expenses
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Which of the following accounting equation is correct?
Which of the following accounting equation is correct?
A. Cash+Other assets=Capital-Liabilities
B. Capital+ Liabilities=Assets+Income
C. Assets-Liabilities=Capital
D. Assets+Capital=LiabilitiesWhich of the following are/is a current asset?
Which of the following are/is a current asset?A. Sundry Debtors
B. Stock
C. Prepaid insurance
D. All of A. B. and C. aboveCapital increases if _________ increases?
Capital increases if _________ increases?
A. Expenses
B. Drawings
C. Interest on capital
D. RevenueBad debts recovered account will be transferred to______________?
Bad debts recovered account will be transferred to______________?
A. Debtor‘s Account
B. Profit and Loss Account
C. Provision for Doubtful Debt Account
D. Either (b )or C. aboveWhen Bad debts are recovered the entry is
Cash A/c …………………………………………………… Dr.
To Bad debts recovered A/c
This A/c can either be transferred to P& L A/c or Provisions for Doubtful Debts A/c.At the time of preparation of financial accounts, bad debt recovered account will be transferred to?
At the time of preparation of financial accounts, bad debt recovered account will be transferred to?
A. Debtors A/c
B. Profit & Loss A/c
C. Profit & Loss Adjustment A/c
D. Profit & Loss Appropriation A/cBad debt recovered is a windfall gain and it is transferred to Profit & Loss Account at the time of preparation of Final Accounts. If provisions account is there in the books it will be transferred to Provision A/c and the balance if any in the provision account will be transferred to Profit & Loss Account. It is recovery of bad debt written off and hence it is not transferred to Debtors Account. It is not transferred to Profit & Loss Adjustment Account. It is not an appropriation to be transferred to Profit & Loss Appropriation Account. Thus, the answer is B
The entry for creating a Provision for bad debts is_____________?
The entry for creating a Provision for bad debts is_____________?
A. Debit Provision for Bad Debts A/c and credit Debtors A/c
B. Debit Debtors A/c and credit Provision for Bad Debts A/c
C. Debit Provision for Bad Debts A/c and credit Profit & Loss A/c
D. Debit Profit and Loss A/c and credit Provision for Bad Debts A/c.Provision for bad debt is a charge against profit and therefore, the entry for creating
provision for bad debts is done by debiting P&L A/c and crediting provision for bad debts
account.