Question

Match the following pairs : 

Group ‘A’		Group ‘B’
(1)	Income and Expenditure A/c	(a)	Withdrawals in cash or kind
(2)	Drawings	(b)	Negotiable instrument
(3)	Bill of Exchange	(c)	Similar to Profit and Loss account
(4)	Co-venturers’ Liability	(d)	Limited
(5)	Intangible Asset	(e)	Computer
		(f)	Unlimited
		(g)	Goodwill
		(h)	Building

Answer 1

The above columns can be correctly matched as follows:

Group ‘A’		Group ‘B’
(1)	Income and Expenditure A/c	(c)	Similar to Profit and Loss account
(2)	Drawings	(a)	Withdrawals in cash or kind
(3)	Bill of Exchange	(b)	Negotiable instrument
(4)	Co-venturers’ Liability	(d)	Limited
(5)	Intangible Asset	(g)	Goodwill

Explanation

Point (1) in Group ‘A’ is matched with point (c) in Group ‘B’.

Income and Expenditure A/c is quite similar to Profit and Loss A/c. Both the accounts are nominal in nature and record only revenue expenses and incomes. Capital items are ignored while preparing these accounts.

Point (2) in Group ‘A’ is matched with point (a) in Group ‘B’.

Drawings refer to the withdrawal of goods or cash by the proprietor from the business for his/her personal use.

Point (3) in Group ‘A’ is matched with point (b) in Group ‘B’.

A bill of exchange is a negotiable instrument containing in writing an unconditional order signed by the maker, directing certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument.  

Point (4) in Group ‘A’ is matched with point (d) in Group ‘B’.

Joint Venture is a form of business similar to partnership where two or more persons or organizations join hands to work-out some specific event. However, the liability of co-venturers is limited to a particular venture only.

Point (5) in Group ‘A’ is matched with point (g) in Group ‘B’.

An asset that has no physical existence is regarded as an intangible asset. For example, goodwill, trademarks, copyrights etc.