Which of following best describes the increase in equity expands___________?

A. Business entity concept
B. Money measurement concept
C. Going concern concept
D. Matching concept
A. capital is the contribution made by the owner(s) and is regarded as a liability to the business in the nature of owner‘s equity. The underlying feature for this treatment is the distinction between the owner(s) and that of the business owned by them. According to business entry concept whenever an owner brings capital into the business, the business in turn is deemed to owe the capital to the owner. As such the capital account is treated as a liability to the business and shown under liabilities.
The other concepts are not correct because,
B. Money measurement concept explains that in financial accountancy, a record is made only of information that can be expressed in monetary terms and ignores other events, however significant they may be. It is silent about the treatment of capital account.
C. Going concern concept explains that the resources of the concern would continue to be used for the purposes for which they are meant to be used. The very categorization of assets into fixed and current presupposes the going concern concept. It does not deal about the treatment of capital account.
D. Conservatism concept: The theme behind this principle is that recognition of revenue requires better evidence than recognition of expenses. It deals with revenues and expenses and not the capital account.

i. Depreciation for 2011-2012- 7,000 understated
ii. Accrued expenses as at March 31, 2013 – 10,000 understated
The impact of this on the reported net income for the year ending March 31, 2013 is
A. 7,000 Overstated
B. 10,000 Overstated
C. 17,000 Understated
D. 17,000 Overstated

Net income will be overstated by 10,000 because the accrued expense are
understated. Under/ Overstatement of depreciation of the year 2011-2012 does not affect the net
income of current year i.e., 2012-13.]

Expenses of the following nature are treated as a Revenue expenses except__________?

A. Expenses for day to day running of the business
B. Putting the new asset in working condition
C. Depreciation
D. Purchase of raw material

Trial balance is commonly prepared?

A. Frequently during the year
B. At the end of an accounting period
C. At the end of a month
D. At the end of a year

Cost of goods sold excludes___________?

A. Opening Stock
B. Carriage inward
C. Wages & Salary
D. Postage & Stamps