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Question
Do you agree/disagree with the following statement:
Gross profit is an operation profit.
Options
Agree
Disagree
Solution
Gross profit is an operation profit. - Disagree.
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RELATED QUESTIONS
Rokadimal of Rajkot and Gunjal of Pune, entered into a Joint Venture to purchase and sale goods and agreed to share profit and losses in the proportion of 4 : 1 respectively.
Rokadimal paid Rs 11,500 for carriage.
Rokadimal discounted this bill with the bank for Rs 92,000.
Gunjal paid Rs 13,500 got advertisement.
Gunjal paid Rs 7,000 for selling expenses and he is entitled for a commission on sales at 5% Co-venturers settled their accounts.
Write the word/phrase/term, which can substitute the following sentence.
Debit balance of Trading Account.
Write the word/phrase/term, which can substitute the following sentence.
Credit balance of Profit and Loss Account.
From the following Trading Balance of M/s Ajay and Vijay you are required to prepared Trading and Profit and Loss Account for the year ended 31st March, 2009 and Balance Sheet as on that date
Trial Balance as on 31st March , 2009
| Particulars | Debit Amount Rs. | Credit Amount Rs. |
|
Capital A/c's Ajay Vijay |
60000 35000 |
|
| Purchases and Sales | 46,700 | 85,000 |
| Sundry Debtors and Creditors | 28000 | 25000 |
| Bills Receivable and payable | 5000 | 6000 |
| Commission | 4600 | 1800 |
| Opening stock | 18000 | |
| Wages | 9900 | |
| Investment | 13500 | |
| Postage and Telegrams | 3600 | |
| Insurance | 1200 | |
| Plant and Machinery | 40700 | |
| Furniture | 18000 | |
| Cash in hand | 2500 | |
| Carriage | 3200 | |
| Bad debts | 400 | |
| Prepaid Rent | 7000 | |
| Salaries | 10500 |
Adjustments:
1) The closing stock is valued at Rs 31,000.
2) Outstanding expenses were wages Rs. 1,400, salaries Rs 800.
3) Depreciate Plant and Machinery by 10%.
4) Insurance at Rs 500 is paid in advance.
5) Provide for further bad debts of Rs 1,500.
6) Commission due but not received Rs 1,200.
Sanjay and Sudhir are partners sharing profit and losses in the ratio 3: 2. The Trial Balance of the firm on 31st March, 2010 was follows:
| Trial Balance as on 31st March, 2010 | |||
| Particulars | Amount (Rs.) |
Particulars | Amount (Rs.) |
| Opening stock | 20,000 | Capital A/c's | |
| Purchases | 30,000 | Sanjay | 40,000 |
| Debtors | 12,000 | Sudhir | 30,000 |
| Wages | 5,000 | Sales | 70,000 |
| Salaries | 10,000 | Sundry Creditors | 21,000 |
| Land and building | 30,000 | Bills Payable | 20,000 |
| Plant and machinery | 25,000 | Discount | 5,000 |
| Furniture | 16,000 | Outstanding Rent | 1,500 |
| Advertisement (for 2 years) | 6,000 | ||
| Bills Receivable | 8,000 | ||
| Insurance | 2,000 | ||
| Drawings: | |||
| Sanjay | 2,000 | ||
| Sudhir | 3,000 | ||
| Cash in hand | 5,500 | ||
| Rent | 10,000 | ||
| Power and Fuel | 3,000 | ||
| 1,87,500 | 1,87,500 | ||
Adjustments:
1) Stock on hand on 31st March, 2010 was at Rs. 35,000.
2) Write off Rs. 2,000, for further Bad debts and maintain R.D.D. at 5% on debtors.
3) Depreciate Land and Building at 5% and Machinery at 10%.
4) Outstanding expenses were wages Rs 2,000 and salary Rs 1,000.
5) Credit purchases amounted to Rs 4,000 were not recorded in the books of accounts.
6) Provide interest on Partners Capital at 5% p.a.
From the above Trial Balance and adjustments prepare Trading and Profit and Loss Account for the year ended 31st March, 2010 and Balance Sheet as on that data.
From the following Trial Balance of M/s Sanjay and Vijay, you are required to prepare Trading and Profit and Loss Account for the year ended 31st March, 2013 and Balance Sheet as on that date after taking into consideration the adjustments given below.
Trial Balance as on 31st March, 2013
| Debit Balance |
Amount
Rs
|
Credit Balance |
Amount
Rs
|
| Salaries and wages | 12000 | Sales | 110000 |
| Postage and Telegram | 1,750 | Sundry Creditors | 72700 |
| Opening Stock | 23,500 | Bills Payable | 40000 |
| Plant and Machinery | 70,000 | 10% Bank loan (Taken on 1st Oct 2012) | 60000 |
| Advertisement | 5,000 | Outstanding Audit fees | 5900 |
| Import duty | 2,100 | Capital A/c- | |
| Bad debts | 1000 | Sanjay | 45000 |
| Purchases | 98500 | Vijay | 45000 |
| Sundry Debtors | 45800 | ||
| Bills Receivable | 16700 | ||
| Carriage outward | 1800 | ||
| Wages and stationery (Note 2) | 14000 | ||
| Printing and stationery | 4600 | ||
| Cash in hand | 1850 | ||
| Leasehold Premises | 80000 | ||
| 378600 | 378600 |
Adjustments:
1) Closing stock was valued at Rs 30,000.
2) Postage stamps of Rs 250 and stationery of Rs 400 are unused.
3) Goods of Rs 2,500 distributed as free samples.
4) Leasehold property is to be run for 10 years w.e.f. 1st October, 2012.
5) Depreciate Plant and Machinery at 10% p.a.
6) Mr. Rajan, our customer become insolvent and could not pay his debts of Rs 1,500.
Following is the Balance sheet of Harsha and Versha's firm on 31st March, 2016. They share profit and losses in the ratio of 3 : 2.
Balance sheet as on 31st March, 2016
| Liabilities | Amount (Rs.) | Assets | Amount (Rs.) |
| Capital A/c: | Land & building | 2,00,000 | |
| Harsha | 2,80,000 | Furniture | 76,000 |
| Varsha | 2,80,000 | Sundry debtors | 3,00,000 |
| Sundry creditors | 4,00,000 | Stock | 1,60,000 |
| Cash at bank | 2,24,000 | ||
| 9,60,000 | 9,60,000 |
They decided to admit Asha on 1st April, 2016, into partnership on the following terms:
1) Asha should bring Rs. 80,000 as her share of goodwill, which is to be retained in the business.
2) She should bring Rs. 1,00,000 as her capital for 1/4th share in future profits.
3) land and building to be valued at Rs. 2,40,000 and furniture be reduced by 10%.
4) A provision of 5% on debetors to be made for doubtful debts.
5) The stock is to be taken at a value of Rs. 2,00,000.
6) The excess of capital of Harsha and Varsha over their due proportion of sharing profits in the firm is to be transferred to their respective loan accounts.
Prepare :
Profit and Loss Adjustment Account, Partner's Capital Account and new Balance Sheet of the firm.
Ashok and Sangmesh are in partnership sharing profit and losses in the ratio of 2: 1. From the following trial balance and adjustments given below, you are required to prepare Trading and Profit and Loss Account for the year ended on 31st March 2016 and Balance sheet as on that date:
Trial Balance as on 31st March 2016
| Particulars | Debit Amount (Rs.) |
Credit Amount (Rs.) |
| Prepaid insurance | 3,200 | |
| Insurance | 8,000 | |
| R.D.D. | 4,000 | |
| Discount | 3,200 | |
| Postage and telephone | 12,800 | |
| Debtors and creditors | 2,64,000 | 2,72,000 |
| Salaries | 2,24,000 | |
| Wages | 96,000 | |
| Opening stock | 1,92,200 | |
| Carriage | 4,000 | |
| Purchased and sales | 7,72,800 | 12,06,400 |
| Return inward/Outward | 22,400 | 36,800 |
| Bank Overdraft | 4,83,200 | |
| Plant and Machinery | 96,000 | |
| Land and Building | 7,04,000 | |
| Partner's Capital accounts : | ||
| Ashok | 2,08,000 | |
| Sangmesh | 1,92,000 | |
| 24,02,400 | 24,02,400 |
Adjustment :
(1) Write off Rs. 8,000 for bad debts and provide R.D.D. @ 5% on debtors.
(2) Goods worth Rs. 16,000 were distributed as free samples.
(3) Closing stock on 31st March 2016 was valued at the cost of Rs. 2,24,000 while its market price was Rs. 2,40,000.
(4) The salaries were outstanding at Rs. 8,000.
(5) Depreciation : Land and Building @ 5% p.a. and Plant and Machinery @ 10 % p.a.
Darshan and Amar were partners sharing profit and losses in the proportion of 2: 1. Their balance sheet is as follows:
Balance sheet as on 31st March 2016
| Liabilities | Amt(Rs) | Amt(Rs) | Assets | Amt(Rs) | Amt(Rs) |
| Capital A/cs: | Building | 1,00,000 | |||
| Darshan | 96,000 | Furniture | 20,000 | ||
| Amar | 64,000 | 1,60,000 | Equipments | 10,000 | |
| General reserve | 18,000 | Debtors | 63,000 | ||
| Profit and Loss A/c | 6,000 | Less: R.D.D | 3,000 | 60,000 | |
| Creditors | 80,000 | Stock | 84,000 | ||
| Pawans loan A/c | 26,000 | Cash | 16,000 | ||
| 2,90,000 | 2,90,000 |
On 1st April, 2016 Ranjit is admitted in the partnership on the following terms.
(1) Ranjit should bring in cash Rs 48,000 as capital for 1/5th share in future profits.
(2) Goodwill was raised in the books of the firm for Rs 18,000
(3) Building is revalued st RS 1,12,000 and tghe value of stock to be reduced by Rs 6,000
(4) Reserve for doubtful debts be maintained at Rs 1,800.
(5) Pawans loand is to be repaid.
Prepare:
(1) Revaluation A/c
(2) Capital A/cs of partners and
(3) Balance sheet of the new firm
Write the word/phrase/term, which can substitute the following sentence.
The accounts that are prepared at the end of each accounting year.
Write the word/phrase/term, which can substitute the following sentence.
An asset which can be converted into cash easily.
Write the word/phrase/term, which can substitute the following sentence.
Order in which fixed assets are recorded first in the Balance Sheet.
State whether the following statement is True or False with reasons.
Carriage inward is a carriage on purchase.
State whether the following statement is True or False with reasons.
Prepaid expenses are treated as liabilities.
State whether the following statement is True or False with reasons.
Wages paid for the installation of Machinery is a Revenue expenditure.
State whether the following statement is True or False with reasons.
Income received in advance is a liability.
State whether the following statement is True or False with reasons.
Depreciation is not calculated on Current Assets.
State whether the following statement is True or False with reasons.
Indirect expenses are debited to Trading Account.
Find odd one
Find odd one.
Partners are _____ liable for the debts of the firm.
The withdrawal by partner for personal use from the firm is ________ to his account.
The expenses paid for trading purpose are known as _______ expenses.
Trading Account is prepared on the basis of ______ expenses.
Answer in one sentence only.
As per which principle of accounting, closing stock is valued at cost price or at market price whichever is less?
Answer in one sentence only.
Why wages paid for installation of machinery are not shown in Trading Account?
Answer in one sentence only.
What do you mean by indirect incomes?
Do you agree/disagree with the following statement:
Profit and Loss Account reflects the true Financial position.
Do you agree/disagree with the following statement:
Free distribution of goods is debited to the trading account.
Calculate 12.5 % P.A. depreciation on Furniture :
(a) on ₹ 2,20,000 for 1 year
(b) on ₹ 10,000 for 6 months
From the following Trial Balance of M/S Mitesh and Mangesh, you are required to prepare Trading and Profit and Loss Account for the year ended 31st March 2019, and Balance Sheet as on that date.
Trial Balance as on 31st March 2019
| Debit Balance | Amount (₹) | Credit Balance | Amount (₹) |
| Stock as on (1/4/2018) | 25,000 | Sundry Creditors | 38,000 |
| Building | 48,500 | Sales | 1,75,000 |
| Carriage | 1,780 | Capital: | |
| Factory Insurance | 2,700 | Mitesh | 1,50,000 |
| Postage | 1,600 | Mangesh | 50,000 |
| Bills Receivable | 13,700 | Outstanding Salaries | 2,000 |
| Sundry Debtors | 52,200 | Bills Payable | 18,000 |
| Return Inward | 1,600 | Return outword | 1,800 |
| Purchases | 68,900 | ||
| Audit fees | 1,800 | Current A/c: | |
| Loose tools | 32,000 | Mitesh | 3,000 |
| Manufacturing Expenses | 1,820 | Mangesh | 2,000 |
| Electricity Charges | 2,600 | ||
| General Expenses | 3,400 | ||
| Export duty | 1,000 | ||
| Cash in hand | 75,000 | ||
| Bank Balance | 29,000 | ||
| Conveyance | 4,100 | ||
| Furniture | 64,000 | ||
| Salaries | 2,000 | ||
| Rent, Rate & Taxes | 3,700 | ||
| Drawings: | |||
| Mitesh | 1,200 | ||
| Mangesh | 2,200 | ||
| 4,39,800 | 4,39,800 |
Adjustments :
1) Mitesh and Mangesh are sharing Profit and losses in the ratio 3: 1.
2) Partners are entitled to get Commission @ 1% each on Gross Profit.
3) The closing stock is valued at ₹ 23,700.
4) Outstanding Expenses - Audit fees ₹ 400; carriage ₹ 600.
5) The building is valued at ₹ 46,500.
6) Furniture is depreciated by 5%.
7) Provide Interest on Partner's capital at 2.5% pa.
8) Goods of ₹ 900 were taken by Mangesh for his personal use.
9) Write off ₹ 1,000 as Bad Debts and maintain R.D.D at 3% on Sundry Debtors.
From the following Trial Balance and adjustments given below of Reena and Aarti, you are required to prepare Trading and Profit and Loss Account for the year ended 31st March 2019 and Balance Sheet as on that date.
Trial Balance as on 31st March 2019
| Debit Balance | Amount ₹ | Credit Balance | Amount ₹ |
| Purchases | 35,500 | Sales | 58,200 |
| Sundry Debtors | 40,000 | Sundry Creditors | 25,700 |
| Sales Returns | 1,000 | Purchases Returns | 500 |
| Opening Stock | 18,100 | R.D.D | 800 |
| Bad debts | 500 | Discount | 50 |
| Land and Building | 25,000 | Commission | 250 |
| Furniture | 20,000 | Capital: | |
| Discount | 1,000 | Reena | 50,000 |
| Royalties | 700 | Aarti | 30,000 |
| Rent | 1,900 | ||
| Salaries | 3,000 | ||
| Wages | 800 | ||
| Insurance | 1,500 | ||
| Drawings: | |||
| Reena | 2,000 | ||
| Aarti | 1,000 | ||
| Cash at Bank | 11,500 | ||
| Cash in Hand | 2,000 | ||
| 1,65,500 | 1,65,500 |
Adjustments :
- Closing Stock valued at ₹ 22,000.
- Write off ₹ 900 for Bad and doubtful debts and create a provision for Reserve for doubtful debts ₹ 1,000.
- Create a provision for Discount on Debtors @ 3% and creditors @ 5%.
- Outstanding Expenses - Wages ₹ 700 and Salaries ₹ 800.
- Insurance is paid for 15 months, w.e.f. 1st April 2018
- Depreciate Land and Building @ 5%
- Reena & Aarti are Sharing Profits & Losses in their Capital Ratio.
The insurance premium is paid for the year ending 1st September 2019 amounted to ₹ 1,500. Calculate prepaid insurance assuming that the year ending is 31st March 2019.
Kavya and Bhavya are partners, sharing profits and losses in the ratio 3 : 2. From the following Trial Balance and adjustments, prepare: Trading and Profit and loss Account for the year ending and Balance Sheet as on that date.
| Trial Balance as on 31st March, 2020 | ||
| Particulars | Debit Amount (₹) | Credit Amount (₹) |
| Capital: | ||
| Kavya | 7,50,000 | |
| Bhavya | 5,00,000 | |
| Sundry Debtors | 2,25,000 | |
| Sundry Creditors | 1,50,000 | |
| Rent (10 Months) | 5,000 | |
| Opening Stock | 2,67,750 | |
| Building | 4,25,000 | |
| Salaries | 25,000 | |
| Commission | 400 | 475 |
| Vehicles | 1,85,000 | |
| Sales | 4,20,250 | |
| Purchases | 3,20,250 | |
| Wages | 5,000 | |
| Office Expenses | 10,000 | |
| Bank Overdraft | 75,000 | |
| Goods Returns | 2,750 | 1,750 |
| Provident Fund Investment | 4,00,000 | |
| Cash in Hand | 20,000 | |
| Provident Fund Contribution | 50,000 | |
| Provident Fund | 1,40,000 | |
| Cash at Bank | 1,00,000 | |
| Interest on P.F. Investment | 21,000 | |
| Drawing: | ||
| Kavya | 10,000 | |
| Bhavya | 7,500 | |
| Bad-debts | 1,675 | |
| R.D.D. | 1,850 | |
| Total | 20,60,325 | 20,60,325 |
Adjustments :
- Closing Stock ₹ 1,80,000.
- Outstanding wages ₹ 1,500 and Salaries ₹ 1,000
- Depreciate Vehicles @ 5% p.a.
- Write off Bad debts of ₹ 2,500 and provide for R.D.D at 5% Sundry Debtors.
- Bhavya withdrew Goods of ₹ 3,000 for her personal use.
From the following Trial Balance of Riddhi and Siddhi, you are required to prepare Trading and Profit & Loss Account for the year ended 31st March, 2020 and Balance Sheet as on that date after considering the additional information given below.
| Trial Balance as on 31st March, 2020 | ||
| Debit Balance | Debit (₹) | Credit (₹) |
| Stock (1/4/2018) | 48,000 | |
| Capital - Riddhi | 50,000 | |
| Siddhi | 30,000 | |
| Purchases | 22,500 | |
| Wages | 800 | |
| Carriage Inward | 1,000 | |
| Sundry Creditors | 27,600 | |
| Bills Payable | 20,000 | |
| Cash in hand | 2,850 | |
| Insurance | 1,200 | |
| Sundry Debtors | 32,000 | |
| Bank Overdraft | 18,000 | |
| Carriage outward | 900 | |
| Land and Building | 42,500 | |
| Furniture | 38,700 | |
| Sales | 47,000 | |
| Purchase Return | 500 | |
| Sales Return | 400 | |
| Rent | 1,800 | |
| Bad-debts | 300 | |
| R.D.D | 350 | |
| Discount | 700 | 1,000 |
| Travelling Expenses | 250 | |
| Advertisements | 4,150 | |
| 1,96,250 | 1,96,250 | |
Adjustments:
- Closing stock ₹ 48,700.
- Outstanding Expenses - Wages ₹ 700 and Travelling Expenses ₹ 200.
- Depreciate Land and Building by 10% and Furniture by 5%.
- Insurance Paid in Advance ₹ 300.
- Goods of ₹ 3,000 destroyed by fire and Insurance Company rejected the claim fully.
From the following information, calculate Current Assets:
Debtors ₹ 60,000, Creditors ₹ 30,000, Bills payable ₹ 20,000, Stock ₹ 30,000, Loose tools ₹ 10,000, Bank overdraft ₹ 10,000.
State whether the following statement is True or False with reason:
Carriage Inward is carriage on purchases.
Find odd one.
Find odd one
Find odd one.
Registration of Partnership is ______ in India.
Find odd one.
Find the odd one:
From the following Trial Balance and Adjustments of Rushabh and Yesha, you are required to prepare final accounts as on 31st March, 2023. Profit and Loss sharing ratio of partners is their capital ratio.
| Trial Balance as on 31st March, 2023 | ||
| Particulars (Name of Accounts) | Debit (₹) | Credit (₹) |
| Capital and Drawings : | ||
| Rushabh | 40,000 | 2,00,000 |
| Yesha | 28,000 | 1,00,000 |
| Purchases and Sales | 2,80,000 | 5,21,000 |
| Debtors and Creditors | 1,80,000 | 1,20,000 |
| Sales Return and Purchase Return | 4,000 | 6,000 |
| Bills Receivable and Bills Payable | 30,000 | 41,600 |
| Cash Balance and Bank Overdraft | 2,000 | 28,000 |
| Bad Debts and Provision for Doubtful Debts | 800 | 2,600 |
| Wages and Outstanding Wages | 70,000 | 4,000 |
| Machinery | 80,000 | |
| Furniture | 24,000 | |
| Opening Stock of Goods | 92,200 | |
| Prepaid Insurance | 400 | |
| Salaries | 46,000 | |
| Insurance Premium | 4,000 | |
| Rent -Taxes | 24,000 | |
| Advertisement Expenses | 5,800 | |
| Goodwill | 1,44,000 | |
| Leasehold Building | 28,000 | |
| 8 % Loan (From 1111/22) | 60,000 | |
| 10,83,200 | 10,83,200 | |
Adjustments :
(1) Closing stock is of ₹ 2,20,000. Its market value is 20 % more than its value.
(2) Calculate interest on capital @ 6 % p.a.
(3) Interest on drawings to be charged from partners: Rushabh ₹ 1,800, Yesha ₹ 1,200
(4) Provision for doubtful debts is to be kept at 5 %.
(5) Outstanding expenses at the end of the year: Rent ₹ 600, Salary ₹ 1,900.
(6) Provide depreciation at 10 % on machinery and at 5 % on furniture.
(7) Write off ₹ 8,000 from Leasehold Building.
Royalty paid on production is shown in the ______.
From the following Trial Balance and Adjustments given below of Rutul and Atul, you are required to prepare Trading and Profit and Loss Account for the year ended 31st March, 2023 and Balance Sheet as on that date.
| Trial Balance as on 31st March, 2023 | |||
| Debit Balances | Amount (₹) | Credit Balances | Amount (₹) |
| Purchases | 71,000 | Sales | 1,16,400 |
| Sundry Debtors | 80,000 | Sundry Creditors | 51,400 |
| Sales Returns | 2,000 | Purchase Returns | 1,000 |
| Opening Stock | 36,200 | R.D.D. | 1,600 |
| Bad Debts | 1,000 | Discount | 100 |
| Land & Building | 50,000 | Commission | 500 |
| Furniture | 40,000 | Capital A/cs: | |
| Discount | 2,000 | Rutul | 1,00,000 |
| Royalties | 1,400 | Atul | 60,000 |
| Rent | 3,800 | ||
| Salaries | 6,000 | ||
| Wages | 1,600 | ||
| Insurance | 3,000 | ||
| Drawing: | |||
| Rutul | 4,000 | ||
| Atul | 2,000 | ||
| Cash at Bank | 23,000 | ||
| Cash in Hand | 4,000 | ||
| 3,31,000 | 3,31,000 | ||
Adjustments:
(1) Closing stock valued at ₹ 44,000.
(2) Write off ₹ 1,800 for bad and doubtful debts and create a provision for reserve for doubtful debts ₹ 2,000.
(3) Create a provision for discount on debtors @ 3% and on creditors @ 5%.
(4) Outstanding expenses: Wages ₹ 1,400 and Salaries ₹ 1,600.
(5) Insurance is paid for 15 months, w.e.f. 1st April, 2022.
(6) Depreciate Land and Building @ 5%.
(7) Rutul and Atul are sharing Profits and Losses in their Capital Ratio.
Find an odd one.
Mama and Kaka are partners in partnership firm sharing profits and losses equally. You are required to prepare Profit and Loss Account for the year ended 31st March, 2019 and Balance Sheet as on that date:
| Trial Balance as on 31st March, 2019 | |||
| Debit Balances | Amount (₹) | Cebit Balances | Amount (₹) |
| Insurance | 30,000 | Capital Accounts: | |
| Land and Building ((Addition of ₹ 40,000 wef. 1st July, 2018)) | 1,00,000 | Mama | 1,00,000 |
| Salaries | 10,000 | Kaka | 1,00,000 |
| Export duty | 5,000 | 10% Bank Loan (taken on1st Oct. 2018) | 60,000 |
| Interest | 2,000 | Interest | 3,000 |
| Furniture | 80,000 | Bills payable | 16,000 |
| Debtors | 52,000 | - | |
| 2,79,000 | 2,79,000 | ||
Adjustment:
- Gross profit amounted to ₹ 69,000.
- Prepaid insurance ₹ 7,500.
- Depreciate Land and Building at 10% p.a. and Furniture 5% p.a.
- Write ₹ 2,000 for bad debts and maintain R.D.D. at 5% on sundry debtors.
- Closing stock is valued at ₹ 69,000.
Find odd one.
Find odd one.
Find the odd one.
Find odd one.
