Financial Statements 2 Test 19

Question 1
1 / -0

If prepaid rent appears in trial balance, while preparing the final accounts it will be shown in ____________.

A
Profit & Loss A/c and Assets side of Balance Sheet

B
Profit & Loss A/c and Liabilities side of Balance Sheet

C
Assets side of Balance Sheet

D
Liabilities side of Balance Sheet

Question 2
1 / -0

A prepayment of insurance premium will appear in the Balance Sheet and in the Insurance Account respectively as.

A
A liability and a debit balance

B
An asset and a debit balance

C
An asset and a credit balance

D
None of the above

Question 3
1 / -0

Advance received from customers is___________.

A
an item of current liability

B
an item of non-current asset

C
an item of contingent liability

D
an item of non-cash cost

Question 4
1 / -0

Prepaid expenses are valued on the Balance Sheet at.

A
Replacement cost

B
Current cost

C
Cost to acquire less accumulated amortization

D
Cost less expired portion

Question 5
1 / -0

The adjustment to be made for prepaid expenses is ___________.

A
Add prepaid expenses to respective expenses and show it as an asset.

B
Deduct prepaid expenses from respective expenses and show it as an asset.

C
Add prepaid expenses to respective expenses and show it is a liability.

D
Deduct prepaid expenses from respective expenses and show it as a liability.

Question 6
1 / -0

Which of the following statements is/are NOT correct?

A
Provision for bad debts appears as a liability on the balance sheet

B
The provision for bad debts is owed to the proprietor

C
Bad debts could be less than the provision for bad debts

D
Bad debts could exceed the provision for bad debts

Question 7
1 / -0

In case of final accounts of manufacturing concerns closing stock of finished goods appears in __________ & ____________.

A
Manufacturing Account, Balance Sheet

B
Trading Account, Balance Sheet

C
Profit & Loss Account, Balance Sheet

D
Manufacturing Account, Trading Account

Question 8
1 / -0

Following are the extracts from the Trial Balance of a firm:
Particulars Dr. (Rs) Cr. (Rs)
Sundry debtors $$5,00,000$$ -
Provision for doubtful debts - $$50,000$$
Bad debts $$30,000$$ -
Additional information:
(I) Additional bad debts $$Rs. 30,000$$
(II) Keep the provision for bad debts @ $$10$$% on debtors.
The net amount of provision for bad debts that will appear in the Profit and Loss Account will be ________.

A
$$Rs. 80,000$$

B
$$Rs. 75,000$$

C
$$Rs. 57,000$$

D
$$Rs. 45,000$$

Question 9
1 / -0

In a Trial balance, debtors appear at $$Rs. 4,50,000$$. Provision for doubtful debts at $$5$$% is to be made after considering the following adjustments:
1. An amount of $$Rs. 10,000$$ is included in debtor who is bankrupt and his estate is expected to realize $$50$$ (fifty) paise in the rupee.
2. Debtors include an amount of $$Rs. 20,000$$ for goods supplied to proprietor
3. Bills receivable include a dishonoured bill for $$Rs. 10,000$$
4. Goods sold on 'Sales or Return' basis not approved by the customer for $$Rs. 50,000$$ recorded as sale
5. Debtors include an amount of $$Rs. 5,000$$ from a customer whose financial position is very doubtful
The total provisions to be made for doubtful debts is ________.

A
$$Rs. 28,750$$

B
$$Rs. 22,500$$

C
$$Rs. 24,250$$

D
None of these

Question 10
1 / -0

If actual bad debts are more than the provision for bad debts, then there will be a.

A
Credit balance of provision for bad debts account

B
Debit balance of provision for bad debts account

C
Debit balance of bad debts account

D
Debit balance of discount on debtors account

Submit Test

Particulars	Dr. (Rs)	Cr. (Rs)
Sundry debtors	$$5,00,000$$	-
Provision for doubtful debts	-	$$50,000$$
Bad debts	$$30,000$$	-

Financial State...

Question 1

Profit & Loss A/c and Assets side of Balance Sheet

Profit & Loss A/c and Liabilities side of Balance Sheet

Assets side of Balance Sheet

Liabilities side of Balance Sheet

Question 2

A liability and a debit balance

An asset and a debit balance

An asset and a credit balance

None of the above

Question 3

an item of current liability

an item of non-current asset

an item of contingent liability

an item of non-cash cost

Question 4

Replacement cost

Current cost

Cost to acquire less accumulated amortization

Cost less expired portion

Question 5

Add prepaid expenses to respective expenses and show it as an asset.

Deduct prepaid expenses from respective expenses and show it as an asset.

Add prepaid expenses to respective expenses and show it is a liability.

Deduct prepaid expenses from respective expenses and show it as a liability.

Question 6

Provision for bad debts appears as a liability on the balance sheet

The provision for bad debts is owed to the proprietor

Bad debts could be less than the provision for bad debts

Bad debts could exceed the provision for bad debts

Question 7

Manufacturing Account, Balance Sheet

Trading Account, Balance Sheet

Profit & Loss Account, Balance Sheet

Manufacturing Account, Trading Account

Question 8

$$Rs. 80,000$$

$$Rs. 75,000$$

$$Rs. 57,000$$

$$Rs. 45,000$$

Question 9

$$Rs. 28,750$$

$$Rs. 22,500$$

$$Rs. 24,250$$

None of these

Question 10

Credit balance of provision for bad debts account

Debit balance of provision for bad debts account

Debit balance of bad debts account

Debit balance of discount on debtors account

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