Which of the following is not classified as inventory in the financial statements?

A: Finished goods

B: Work-in-process

C: Stores and spares

D: Advance payments made to suppliers for raw materials

Answer & Explanation Discussion
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Advance payments made to suppliers for raw materials

If actual bad debts are more than the provision for bad debts, then there will be a_____________?

A: Credit balance of Provision for Bad Debts Account

B: Debit balance of Provision for Bad Debts Account

C: Debit balance of Bad Debts Account

D: Debit balance of Discount on Debtors Account

Answer & Explanation Discussion
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Debit balance of Provision for Bad Debts Account

The creation of provision for doubtful debts given as an adjustment requires____________?

A: Debit Profit and Loss Account and deduct the provision from debtors

B: Credit Profit & Loss Account and deduct the provision from debtors

C: Credit Profit and Loss Account and add the provision to debtors

D: Debit Profit & Loss Account and add the provision to debtors

Answer & Explanation Discussion
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Debit Profit and Loss Account and deduct the provision from debtors

Under the direct write-off method of recognizing a bad debt expense. Which of the following statements is/are true?

A: The bad debt expense is not matched with the related sales

B: Revenue is overstated in the year of sales

C: It violates the matching principle of accounting

D: All of the above

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All of the above

At the time of preparation of financial accounts, bad debt recovered account will be transferred to?

A: Debtors A/c

B: Profit & Loss A/c

C: Profit & Loss Adjustment A/c

D: Profit & Loss Appropriation A/c

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Profit & Loss A/c

The balance of Revaluation Reserve pertaining to an asset that has been disposed off or retired can be transferred to?

A: General Reserve A/c

B: Profit & Loss A/c

C: Asset A/c

D: Capital Reserve A/c

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Capital Reserve A/c

Average Accounting Return is a measure of accounting profit relative to:

A: Book value

B: Intrinsic value

C: Cost

D: Market value

Answer & Explanation Discussion
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Book value

Recent developments have made much of a companys inventory obsolete. This obsolete inventory should be?

A: Written down to zero or its scrap value

B: Shown in the Balance Sheet at its replacement cost

C: Shown in the Balance Sheet at cost, but classified as a non-current asset

D: Carried in the accounting records at cost until it is sold

Answer & Explanation Discussion
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Written down to zero or its scrap value

Depreciation is calculated on the____________?

A: Cost price of asset

B: Market price

C: Cost+ Transport+ Installation expenses

D: Cost or market values whichever is less

Answer & Explanation Discussion
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Cost+ Transport+ Installation expenses

1 12 13 14 15 16 40