Trading & profit or loss Account

Q.

What is branch adjustment account?

Q.

When is the closing stock shown in the trial balance ?

Q.

If the closing stock is shown in the trial balance, it means___

1. Adjustment for the closing stock is yet to be done.

2. None of the above

3. Adjustment for the closing stock has already been done and it will be shown as a current asset on the asset side of the balance sheet only.

4. Adjustment for the closing stock has already been done and it will be shown in trial balance only.

Q.

What are adjusting entries? Why are they necessary for preparing final accounts?

Q.

If depreciation reduces profits, reduces value of assets and also reduces capital of the proprietor, then why do enterprises provide for depreciation?

Q. Where is the closing stock appearing in the Trial Balance is shown?

1. On the Dr. side of Trading A/c.
2. On the Cr. side of Trading A/c.
3. On the Assets side of Balance Sheet.
4. On the Cr. side of Trading A/c and on the assets side of Balance Sheet.

Q.

What are the effects of depreciation on profit and loss account and balance sheet?

Q.

"In case of a long-term asset, repair and maintenance expenses are expected to rise in later years than in the earlier year." Which method, is suitable for charging depreciation if the management does not want to increase the burden on profits and loss account on account of depreciation and repair.

Q. Select the most appropriate alternatives from those given below

A list of balances of all the accounts in ledger is called __________.
a) Balance Sheet
b) Profit & Loss A/c
c) Trading A/c
d) Trial Balance

Q.

Which of the following are affected if the closing stock is given in adjustments?

1. Trading account & Balance Sheet

2. Profit & loss account & balance sheet

3. Balance sheet only

4. Cash Flow Statement & Balance Sheet

Q.

How is depreciation recorded in accounting? Find the Answer at BYJUS

Q. Closing Stock appearing in the Trial Balance is shown _____________________.

1. Only on the debit side of Trading Account
2. Both on the credit side of Trading Account as well as on Assets side of Balance Sheet.
3. Only on the Assets side of the Balance Sheet.
4. Only on the credit side of Trading Account

Q. Closing stock in the Trial Balance implies that _____________.

1. it is adjusted in the Purchase A/c
2. it is already adjusted in the opening stock
3. it is adjusted in the Cost of Sale A/c
4. it is adjusted in the Profit and Loss A/c

Q.

When will adjustment of closing stock be required to be done?

1. When it is given in trial balance

2. When it is given in the trading account

3. When it is given in the additional information

4. None of these

Q.

If the Depreciation is not accounted, the net profit for the period will be ______

1. None of the above

2. Overstated

3. Understated

4. Uneffected

Q. Select the most appropriate answers from the alternatives given below and rewrite the sentence.

The amount of depreciation goes on decreasing in every year under the _________ Method.
a) Fixed instalment
b) Straight Line
c) Revaluation
d) Written Down Value

Q.

A joint stock company had bought machinery for Rs 100000 including therein a boiler worth Rs 10000. The machinery account was for the first four years credited for depreciation on the reducing instalment system at the rate of 10% per annum. During the fifth year, i.e, the current year, the boiler becomes useless on account of damage to its parts. The damaged boiler is sold for Rs 2000 which amount is credited to machinery account.

Prepare the machinery account for the current year, adjusting therein the cash received and the loss suffered on the damaged boiler and the depreciation of the machinery for the current year.

The answer given in the book is: Loss on sale of boiler=Rs 4561; closing balance of machinery account = Rs 53144