A debt from accounts receivable that is recovered either in whole or in part after it has been written off or classified as a bad debt is known as bad debt recovery . Because it generally generates a loss when it is written off, a bad debt recovery usually produces income.

In accounting, the bad debt recovery would credit the “bad debts recovered” account and the net amount of the account is transferred to profit and loss account.Here Mohan paid Rs. 500 towards a debit of Rs. 2,500, which was written off as bad debt in the previous year which is the case of bad debt recovery. This bad debt recovery would credit the “bad debts recovered” account by Rs.500 and the net amount of the account is transferred to profit and loss account.So the bad debt recovered from Mohan will not effect his account and the correct option is (d).

Closing inventory means the value and quantity of inventory on hand at the end of an accounting period.
Here goods purchased = Rs. 1,00,000
Sales = Rs. 90,000
Gross profit margin = 20% on sales = 20% of 90,000 = Rs. 18,000
Closing inventory = opening in ventory + purchases + gross profit – sales = nil + 1,00,000 + 18,000 – 90,000 = Rs. 28,000

Omission of posting of discount columns will affect the profits. It is not complete omission.

A trial balance is a list of all the General ledger accounts (both revenue and capital) contained in the ledger of a business. This list will contain the name of the nominal ledger account and the value of that nominal ledger account. The value of the nominal ledger will hold either a debit balance value or a credit balance value. The debit balance values will be listed in the debit column of the trial balance and the credit value balance will be listed in the credit column. The profit and loss statement and balance sheet and other financial reports can then be produced using the ledger accounts listed on the trial balance

In accounting, net profit is equal to the gross profit minus overheads minus interest payable for a given time period (usually: accounting period). Net profit is gross profit minus all operating costs not included in the calculation of gross profit, esp wages, overheads, and depreciation.
Here Net profit = gross profit – rent paid – salaries + provision for bad debt + apprentice premium =
50,000 – 6,000 – 5,800 + 2,000 + 4,000 = Rs. 4,4200

The cheques paid by bank recorded twice in Pass Book will be added while preparing Bank Reconciliation Statement in the given case

Straight line method depreciates cost evenly throughout the useful life of the fixed asset.
Straight line depreciation is calculated as follows:
Depreciation per annum = (Cost – Residual Value) / Useful Life
Where:
Cost includes the initial and any subsequent capital expenditure.
Residual Value is the estimated scrap value at the end of the useful life of the asset. As the residual value is expected to be recovered at the end of an asset’s useful life, there is no need to charge the portion of cost equaling the residual value.

Useful Life is the estimated time period an asset is expected to be used from the time it is available for use to the time of its disposal or termination of use.
Here Cost of the asset = Rs. 25,000
Salvage value = Rs. 1,000
Depreciation = (25,000 – 1,000)/10 = Rs. 2,400

The direct costs attributable to the production of the goods sold by a company. This amount includes the cost of the materials used in creating the good along with the direct labor costs used to produce the good.

It excludes indirect expenses such as distribution costs and sales force costs. COGS appears on the income statement and can be deducted from revenue to calculate a company’s gross margin.

Cost of goods sold (COGS) = Cost of goods manufactured + Opening finished goods inventory – Ending finished goods inventory

Or opening inventory + purchases – closing inventory

Here cost of goods sold = 3,700 + 20,800 – 2,500 = Rs. 22,000

The given case is of over-subscription, pro-rate allotment and forfeiture of shares.

The valuation has been done as per conservation in the given case.