Which of the following statements is true with regard to written down value method of depreciation?

✅ B. Deduct prepaid expenses from respective expenses and show it as an asset

Option A : Add prepaid expenses to respective expenses and show it as an asset Option B : Deduct prepaid expenses from respective expenses and show it as an asset Option C : Add prepaid expenses to respective expenses and show it as a liability Option D : Deduct prepaid expenses from respective expenses and show it as a liability… Read more

✅ B. Show the true financial position in the Balance Sheet

Option A : Calculate the true profit Option B : Show the true financial position in the Balance Sheet Option C : Provide funds for replacement of fixed assets Option D : Both and Correct Answer : Show the true financial position in the Balance Sheet Read more

✅ D. The Trial Balance has no statutory importance from the point of view of law

Option A : The Trial Balance is prepared after preparing the Profit and Loss Account Option B : The Trial Balance shows only balances of Assets and Liabilities Option C : The Trial Balance shows only nominal account balances Option D : The Trial Balance has no statutory importance from the point of view of law Correct Answer : The… Read more

✅ B. Deduct income received in advance from respective income and show it as a liability

Option A : Add income received in advance to respective income and show it as a liability Option B : Deduct income received in advance from respective income and show it as a liability Option C : Add income received in advance to respective income and show it as asset Option D : Deduct income received in advance from respective… Read more

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Option A : Previous years profit is overstated and current years profit is also overstate Option B : Previous years profit is understated and current years profit is overstate Option C : Option D : Previous years profit is overstated and current years profit is understate Correct Answer : Previous years profit is overstated and current years profit is understated. Read more

✅ D. A credit balance in the Pass Book indicates excess of deposits over withdrawals

Option A : If a Trial Balance tallies, it always means that none of the transactions has been completely omitted Option B : A Trial Balance will not tally if a transaction is omitted Option C : A customer to whom goods have been sold on credit cannot avail himself of a cash discount Option D : A credit balance… Read more

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Option A : Expenses in connection with issue of equity shares Option B : Preoperative expenses Option C : Heavy advertising expenses to introduce a new product Option D : Legal expenses incurred in defending a suit for breach of contract to supply goods Correct Answer : Read more

✅ D. Directors remuneration Read More Details about this Mcq

Option A : Loss on sale of undertaking Option B : Debts considered bad and written off Option C : Liability arising from a breach of contract Option D : Directors remuneration Read More Details about this Mcq Correct Answer : Directors remuneration Read more