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951.

Provision for Doubtful debts is made on the debts that are

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DOUBTFUL of RECOVERY.
Not doubtful of recovery
On both (a) and (B)
NONE of these.

SOLUTION :Doubtful of recovery.
Discussion
952.

Provision is a

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SPECIFIC Reserve.
General Reserve.
Capital Reserve.
None of these.

Answer :D
Discussion
953.

Provisionfor doubtful debts is debited to the Bad Debts Account.

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SOLUTION : FALSE
Discussion
954.

Provision for Doubtful Debts is made following the

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REVENUE Recognition Concept .
Accrual Concept
Accounting PERIOD Concept
Prudence Concept

SOLUTION :NA
Discussion
955.

Provision for Doubtful Debts, in excess of the required provision is credited to

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DEBTORS ACCOUNT.
Trading Account
Profit and Loss account
NONE of these

Solution :NA
Discussion
956.

Provision for Discount on Debtors is shown in the Balance Sheet as deducted from Debtors.

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SOLUTION : TRUE
Discussion
957.

Provision for Discount on Debtors is provided on

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DEBTORS that are DOUBTFUL of recovery.
Debtors that are not doubtful of recovery.
On both (a) and (B)
NONE of these.

Solution :Debtors that are not doubtful of recovery.
Discussion
958.

Provethat theAccountingEquation is satisfiedin allthe followingtransactionsof Suresh. Also prepare aBalance sheet. (i) Commenced business withcash ₹60,000. (ii) Paid rent in advance₹500. (iii) Pruchased goods for cash ₹20,000. (iv)Sold goodsfor cash ₹30,000 costing ₹20,000. (v) Paid salary ₹500and salaryoutstandingbeing ₹100. (vi) Bought motorcycle for personaluse ₹5,000.

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ANSWER :Assets : Cash ₹ 54,000 + PREPAID Rent ₹ 500 + Stock ₹ 30,000 = Liabilities : Creditors ₹ 20,000 + OUTSTANDING Salary₹ 100 + CAPITAL: ₹ 64,400.
Discussion
959.

Provided services for 65,000 on credit. The account to be debited is ...........

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SOLUTION :DEBTOR
Discussion
960.

Provision for Discount on Debtors in calculated before deducting Provision for Doubtful debts from debtors. Comment.

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SOLUTION :No, PROVISION for DISCOUNT on DEBTORS is calculated after deducing Provision for doubtful debts. It is so because discount is not ALLOWED on debtors which are doutful of recovery.
Discussion
961.

Provethat theAccountingEquation is satisfiedin allthe followingtransactionsof Suresh. Also prepare aBalance sheet. (i) Commenced business withcash ₹60,000. (ii) Paid rent in advance₹500. (iii) Pruchased goods for cash ₹20,000. (iv)Sold goodsfor cash ₹30,000 costing ₹20,000. (v) Paid salary ₹500and salaryoutstandingbeing ₹100. (vi) Bought motorcycle for personaluse ₹5,000.

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ANSWER :Assets : Cash ₹ 54,000 + Prepaid Rent ₹ 500 + Stock ₹ 30,000 = LIABILITIES : CREDITORS ₹ 20,000 + Outstanding Salary₹ 100 + CAPITAL: ₹ 64,400.
Discussion
962.

Prove that the Accounting Equation is satified in all the followingtransactions of Sameer Goel : (i) Started business with cash ₹1,000. (ii)Paidrentin advance ₹300. (iii) Purchased goodsfor cash₹5,000 and credit ₹2000. (iv) Soldgoodsfor cash ₹8,000 costing ₹4000. (v) Paid salary₹450 and salary outstanding being ₹ 100. (vi) Boughtmotorcyclefor personaluse₹3000.

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Answer :ASSETS : Cash ₹9,250 + Perparid Rent₹ 300 + Stock= 3,000 = Liabilities: SalaryOutstanding ₹ 100 + Creditors ₹ 2,000 + CAPITAL;₹10,450.
Discussion
963.

Providing depreciation on fixed asset is in accordancewith which of the following principles/concepts.

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(i) & (II)
(ii) & (III)
(i) & (iii)
All the THREE

ANSWER :A
Discussion
964.

Prove that the Accounting Equation is satified in all the followingtransactions of Sameer Goel : (i) Started business with cash ₹1,000. (ii)Paidrentin advance ₹300. (iii) Purchased goodsfor cash₹5,000 and credit ₹2000. (iv) Soldgoodsfor cash ₹8,000 costing ₹4000. (v) Paid salary₹450 and salary outstanding being ₹ 100. (vi) Boughtmotorcyclefor personaluse₹3000.

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ANSWER :Assets : CASH ₹9,250 + Perparid Rent₹ 300 + Stock= 3,000 = Liabilities: SalaryOutstanding ₹ 100 + CREDITORS ₹ 2,000 + Capital;₹10,450.
Discussion
965.

Prove that the accounting equation is satisfied in all the following transactions of Sita Ram house by preparing the analysis table.

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SOLUTION :
Discussion
966.

Propritor of the firm has taken goods for his personal use. The accountatn has accounted it as sale in the books of account .Is he correct in his accounting?

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Solution :No he is not correct in his accounting .The goods TAKEN by the proprietor should be DEBITED to DRAWINGS account for the reason that the goods taken for PERSONAL use do not have an element of PROFIT
Discussion
967.

Proprietor of the business withdrew goods from business for private use. It will be posted to the :

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CREDIT of DRAWINGS A/C
Debit of PURCHASES A/c
Credit of Purchases A/c
None of the above

Answer :C
Discussion
968.

Propreitor of the business is treated as creditor to the extent of his capital under which Concept?

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SOLUTION :BUSINESS ENTITY CONCEPT.
Discussion
969.

Promissory Note is prepared by the debtor .Do you agree?

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SOLUTION :YES
Discussion
970.

Profit is earned on sale of Fixed Asset. What should be theaccounting treatment of this profit?

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SOLUTION :It is a capital PROFIT. HENCE, it should be TRANSFERRED to capital RESERVE.
Discussion
971.

Profit on sale of fixed asset is used to create

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SPECIFIC Reserve.
General Reserve.
Capital Reserve.
None of these.

Answer :C
Discussion
972.

Profit is earned on sale of fixed asset, what should be the accouting treatment of it ?

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Solution :PROFIT on SALE of fixed asset is a capital profit and THEREFORE , should be transferred to capital RESERVE.
Discussion
973.

Profit earned by the business means an increase in the proprietor's capital . Is it correct ?

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Solution :Yes, it is correct because the NET PROFIT earned by the PROPRIETOR's business is added to the capital .
Discussion
974.

Profit = Capital at the end + ? - Capital in the beginning.

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Sales.
DRAWINGS.
Net Purchases.
None of these.

Solution :Drawings.
Discussion
975.

Profit= Capital at the end + ? - Additional capital introduced - Capital in the beginning .

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Sales
DRAWING
NET PURCHASES
EXPENSES.

SOLUTION :Drawing
Discussion
976.

Production a factory had to stop for a week due to a labour strike . The owner estimated the loss of production and the likely loss of profit arising out of the situation . He directed the accountant to record the loss in the books of accoount . Is the owner correct in recording the likely loss ? Give reasons.

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SOLUTION :No , the owner is not CORRECT beecause transaction and EVENTS are recorded in the books of account if they can be measured in money terms and on the BASIS of evidences . In the PRESENT case, evidence to the effect of loss or profit does not exist on the basis of which the owner can measure the loss in money terms
Discussion
977.

Profit and Loss Account is prepared to know

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Gross PROFIT
NET Profit.
Both (a) and (b)
NONE of these.

SOLUTION :Net Profit.
Discussion
978.

Presentthe followingtransactions in theAccountingEquation:

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SOLUTION :
Note:
1. Rentpaidwill REDUCE cashby ₹200 Rentbeingan expense will reduce profitby ₹200.THUS ,capital will be reduced bu ₹200.
2. Interestrecived formBankwill increase Bank Blance . It being an income will increase profitby ₹100. Thus, capital will be increased.
3. STOCK will bereduced by ₹500 and Debtors will beincreased by ₹700. Capital will be increased by ₹200 (i.e., ₹700- ₹500)being profit.
4. As expalined in Note 1.
Discussion
979.

Prepare Trading and Profit and Loss Account and Balance Sheet of Jagat Shan as at 31st March, 2019 from the following balance: The Closing Stock was valued at Rs 2,00,000

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ANSWER :GROSS PROFIT - RS 4,10,000; Net Profit - Rs 2,40,000; Balance Sheet Total - Rs 6,10,000
Discussion
980.

Presentthe followingtransactions in theAccountingEquation:

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Solution :
Note:
1. Rentpaidwill reduce cashby ₹200 Rentbeingan expense will reduce profitby ₹200.Thus ,capital will be reduced bu ₹200.
2. Interestrecived formBankwill INCREASE Bank Blance . It being an INCOME will increase profitby ₹100. Thus, capital will be increased.
3. Stock will bereduced by ₹500 and Debtors will beincreased by ₹700. Capital will be increased by ₹200 (i.e., ₹700- ₹500)being PROFIT.
4. As expalined in Note 1.
Discussion
981.

Prepare Trading and Profit and Loss Account and Balance Sheet from the following balances, relating to the year ending 31st March, 2019: Additional Information : 1. Closing Stock was valued at Rs 14,500. 2. Depreciate Plant and Machinery by Rs 4,000. 3. Allow 5% interest on capital. 4. Rs 400 is due for repairs.

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SOLUTION :
Discussion
982.

Prepare Trading and Profit and Loss account and Balance sheet form the following Balances, relating to the year ended 31st March, 2019: Additiona Information : (i) Closing Stock was valued at Rs 14,500. (ii) Depreciate Plant and Machinery by 4,000. (iii) Rs 400 is due for repairs.

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SOLUTION :NA
Discussion
983.

Prepare Trading Account for the year ended 31st March, 2019 from the following balances: {:(,Rs,|,,Rs),("Stock" (1st " April, 2018"),"1,00,000",,"Purchases","10,00,000"),("Wages","50,000",,"Carriage Inwards","10,000"),("Sales","15,50,000",,"Returns Inward","50,000"),("Returns Outward","80,000",,,),("Freight Inwards","5,000",,,):} Closing Stock as on 31st March, 2019 was valued at Rs 2,00,000. Also, pass the Closing Entries.

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SOLUTION :
Discussion
984.

Prepare Trading Account as on 31st March, 2019 from the following balances: {:(,Rs,),("Stock on 1st April, 2018"...............,"10,000",),("Sales Return"................,"5,000",),("Sales"............,"2,00,000",),("Wages"............,"11,000",),("Purchases".........,"2,00,000",),("Purchaes Return"........,"2,500",),("Carriage Inwards"........,"1,500",),("Carriage Outwards"........,"3,000",),("Freight Inwards"........,"2,500",):} The Closing Stock of goods as on 31st March, 2019 is Rs 20,000

Answer»

SOLUTION :
Discussion
985.

Prepare the trading profit and loss account of M/s Mohit Traders as on 31 March 2017 and draw necessary Journal entries and balance sheet as on that date : Adjustments

Answer»

SOLUTION :BOOKS of Mohit TRADERS
Journal

Books of Mohit Traders
Trading and PROFIT and Loss Account
for the year ENDED March 31, 2017
Discussion
986.

Prepare the Trial Balance of Ankit as on 31st March, 2019. He has omitted to open a Capital Account:

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ANSWER :CAPITAL - RS. 1,58,750
Discussion
987.

Prepare the Credit Vouchers from the source vouchers of M/s Ram Lal & Co., New Delhi based on the following transactions:

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SOLUTION :
Discussion
988.

Prepare the Accounting Voucher from the following supporting voucher.

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SOLUTION :
Discussion
989.

Prepare the Accounting Equationon thebasis of the followning: 1. Startedbusiness with cash ₹70,000 2. Credit pruchasesof good ₹18,00. 3. Paymentmade to creaditors in full settlement ₹17,500. 4. Purchase ofmachineryfor cash ₹20,000.

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SOLUTION :
Discussion
990.

Preparethe Accounting Equationon the basis of the followoing:

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SOLUTION :
Discussion
991.

Prepare the Accounting Equationon thebasis of the followning: 1. Startedbusiness with cash ₹70,000 2. Credit pruchasesof good ₹18,00. 3. Paymentmade to creaditors in full settlement ₹17,500. 4. Purchase ofmachineryfor cash ₹20,000.

Answer»

SOLUTION :
Discussion
992.

Preparethe Accounting Equationon the basis of the followoing:

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SOLUTION :
Discussion
993.

Prepare the Accounting Equation from the followingtransactios :1. Sachinstarted business and introducedcapital ₹70,000. 2. Purchased goods in cash ₹50,000. 3. Purcahsed funiture form M/s SamratFurniture ₹20,000. 5. Paid M/s Samrat Furniturein cash.

Answer»

Solution :
NOTE : 1 The transactionwithM/sSamart FURNITURE (₹ 20,000)is a credittransaction since it is notstated to becash payment.
2. Sale of goods have resultedin a profitof ₹10,000. It has been added to capitalbecausenet profitat theyear endis transferredto CAPITALACCOUNT.
Discussion
994.

Prepare the Accounting Equation from the followingtransactios :1. Sachinstarted business and introducedcapital ₹70,000. 2. Purchased goods in cash ₹50,000. 3. Purcahsed funiture form M/s SamratFurniture ₹20,000. 5. Paid M/s Samrat Furniturein cash.

Answer»

Solution :
Note : 1 The transactionwithM/sSamart Furniture (₹ 20,000)is a credittransaction SINCE it is notstated to becash payment.
2. Sale of goods have resultedin a PROFITOF ₹10,000. It has been ADDED to capitalbecausenet profitat theyear endis transferredto CAPITALACCOUNT.
Discussion
995.

Prepare Credit Vouchers from the following information, collected from supporting vouchers of M/s Gupta Leather Stores, Agra (U.P):

Answer»

SOLUTION :
Discussion
996.

Prepare correct Trial Balance from the following Trial Balance is which there are certain mistakes:

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ANSWER :Total of CORRECT Trial Balance - RS. 3,20,000.
Discussion
997.

Prepare an Accounting Equation from the following:Started business with cash ₹1,00,000. (ii) Purchased goods for cash 20,000 and on credit ? ₹30,000. (iii) Sold goods for cash costing 10,000 and on credit costingt ₹15,000 both at a of 20%.

Answer»


Answer :Assets : CASH ₹92,000 + STOCK ₹ 25,000 + DEBTORS ₹ 18,000 =Liabilities Creditors ₹ 30,000 + CAPITAL ₹ 1,05,000.
Discussion
998.

Prepare an Accounting Equation from the following:Started business with cash ₹1,00,000. (ii) Purchased goods for cash 20,000 and on credit ? ₹30,000. (iii) Sold goods for cash costing 10,000 and on credit costingt ₹15,000 both at a of 20%.

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ANSWER :ASSETS : CASH ₹92,000 + stock ₹ 25,000 + Debtors ₹ 18,000 =LIABILITIES Creditors ₹ 30,000 + Capital ₹ 1,05,000.
Discussion
999.

Prepare an AccountingEquation from the following : (i) Started business with cash ₹50,000 andgoods ₹30,000. (ii)Purchased goodcash ₹30,000 and on credit from Karan ₹20,000. (iii)Goodscosting₹40,000 were soldfor ₹55,000. ltBRgt (IV)Withdrew cashfor presonaluse ₹10,000 (v) Rentoutstading₹2,000.

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Answer :ASSETS: Cash ₹ 65,00 + STOCK ₹ 40,000 = Liabilities: Outstanding Rent₹ 2,000 + CREDITORS ₹ 20,000 + CAPITAL: ₹ 83,000
Discussion
1000.

Preparean AccordingEquationand Blancesheetof thefollowingbasise: (i) Ajeetstarted business withcash ₹20,000. (ii) He Purchased furniture for ₹2,000. (iii)He pid rent of ₹ 200. (iv) He purchased goods on credit ₹3,000. (v) He soldgoods (cost price ₹2,000) for ₹5,000 on cah.

Answer»


ANSWER :ASSETS: CASH ₹ 22,800 + Furniture ₹ 2,000 + Stock₹ 1,000 =LIABILITIES CREDITORS ₹ 3,000 + Capital₹22,800.
Discussion