Building account is classified as _________ account?
ACapital
BReal
CCash
DNominal
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Correct answer
B. Real
Explanation
Real is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.
Correct answer
D. 7,000 (overstated.
Explanation
C. Overstatement of closing stock results in overstatement of profit and overstatement of opening stock results in understatement of profit. In the instant case, there will be overstatement of profit by 12,000 – 5,000 = 7,000.
Correct answer
B. Inventory system
Explanation
Inventory system is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.
Correct answer
A. Posting
Explanation
Posting is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.
Correct answer
A. Gross Profit + Opening Stock + Direct expenses + Purchases- Closing stock = Sales
Explanation
Gross Profit + Opening Stock + Direct expenses + Purchases- Closing stock = Sales is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.
Correct answer
A. Return inwards
Explanation
Return inwards is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.
Correct answer
A. Allocation of the cost of an asset to the periods in which services are received from the asset
Explanation
AS-6 defines depreciation as a measure of the wearing out, consumption or other loss of value of a depreciable asset arising from use, effluxion of time or obsolescence through technology and market changes. Depreciation is allocated so as to change a fair proportion of the depreciable amount in each accounting period during the expected useful life of the asset. Depreciation includes amortization of assets whose useful life is predetermined. The ultimate outcome of accounting for depreciation is cash available to replace the asset; however this cannot be the purpose of depreciation.
Correct answer
B. The events after Balance Sheet date but before its approval by the board
Explanation
Events occurring after the Balance Sheet date are those significant events, both favorable and unfavorable, that occur between the Balance Sheet date and the date on which the financial statements are approved by the Board of Directors in the case of a company, and by the corresponding approving authority in the case of any other entity.
Correct answer
C. Managers
Explanation
Managers is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.
Correct answer
B. At the time of closing the accounts
Explanation
At the time of closing the accounts is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.