Practice Test 8
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If del-credere commission is allowed for bad debt, consignee will debit the bad debt amount to:

  • Solution

    If del-credere commission is allowed for bad debts, consignee will debit bad debts amount to Commission earned as he has to bear this amount.

As per Section 37 of the Indian Partnership Act, 1932, the executors would be entitled at their choice to the interest calculated from the date of death till the date of payment on the final amount due to the dead partner at ________ percent per annum.

  • Solution

    The rate is 6% as per Indian Partnership Act, 1932.

Sales for the year ended 31st March, 2010 amounted to Rs. 10,00,000. Sales included goods sold to Mr. A for Rs. 50,000 at a profit of 20% on cost. Such goods are still lying in the godown at the buyer’s risk. Therefore, such goods should be treated as part of

  • Solution

    Goods lying in the godown at buyer’s risk should be treated as sales.

The balance of the petty cash is _________

  • Solution

    Petty cash balance is an asset.

If a concern proposes to discontinue its business from March 2010 and decides to dispose off all its assets within a period of 4 months, the Balance Sheet as on March 31, 2010 should indicate the assets at their _________

  • Solution

    If decision to dispose of assets has taken place, assets should be indicated in the balance sheet at NRV.

The portion of the acquisition cost of the asset, yet to be allocated to Profit and Loss Account is known as ________

  • Solution

    The portion of acquisition cost of asset (to be allocated to P&L A/c) is called Book value.

In the case of downward revaluation of an asset, which is for the first time revalued, _______ account is debited.

  • Solution

    P&L A/c is debited in case of downward revaluation of assets in the given case.

Under inflationary conditions, ______ method will show highest value of closing inventory?

  • Solution

    FIFO will shown the highest value of closing inventory under inflationary conditions (rising prices).

When preparing a Bank Reconciliation Statement, if you start with a debit balance as per the Cash Book, then cheques issued but not presented within the period are __________

  • Solution

    Cheques issued but not presented will be added to the Debit balance of cash book in the given case.

Present liability of uncertain amount, which can be measured reliably by using a substantial degree of estimation, is termed as ________

  • Solution

    Present liability of uncertain amount which can be measured by using substantial degree of estimated is provision.

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FUNDAMENTALS OF ACCOUNTING
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