Trading & Profit or Loss Account

Q.

Which of the following would not appear in the profit and loss account?

1. Rent received

2. Cash Expenses

3. Capital

4. Carriage Inwards

Q.

Which of the following is to be recorded in a profit and loss account?

1. Capital Expenditure incurred on fixed asset

2. Sale of fixed asset

3. Purchase of fixed asset

4. Profit on sale of fixed asset

Q.

Which of the following is not included in the Trading account?

1. Foreman`s wages

2. Carriage inwards

3. Direct wages

4. Depreciation on office equipment

Q.

True and fair profit or loss of a company can be known by _________.

1. Preparing trial balance

2. Preparing respective ledger of account

3. Preparing trading a/c

4. Preparing trading & profit or loss a/c

Q.

A firm has not recorded the bad debts by mistake. Which of the following is the effect of bad debts omission?

1. Gross profit would be overstated

2. gross profit will be understated

3. Net profit would be understated

4. Net profit would be overstated

Q.

All direct expenses related to business are charged to:

1. Profit and loss account

2. Trading account

3. Directly to balance sheet

4. None of the above

Q.

Gross profit less expenses is known as:

1. Drawings

2. Cost of goods sold

3. Net Turnover

4. Net Profit

Q.

Calculate the gross profit /loss if:

Sales Rs. 60, 000; Closing stock Rs. 50, 000; Opening stock Rs. 10, 000; Purchases Rs. 40, 000; Wages Rs. 20, 000.

1. Profit of Rs. 40, 000

2. Loss of Rs. 20, 000

3. Profit of Rs. 20, 000

4. Loss of Rs. 10, 000

Q.

The trading account does not:

1. Calculate gross profit

2. Include the cost of goods sold

3. Show the assets of the company

4. Compare the sales with the cost of those sales

Q. All the core expenses related to the business are shown in .

1. profit or loss A/c
2. Trading account
3. balance sheet