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Income and Expenditure Account

Any capital P...

Question

Any capital Profit or any appreciation in value of fixed assets may be distributed as dividend provided ______________________.

A

The revaluation of all the assets discloses a surplus

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B

The profit has been realized in cash

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C

The articles of company permit such a distribution

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D

All of the above

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Solution

The correct option is D All of the above
Revaluation of fixed assets may be done if the value of the existing assets are high ups due to market scenario. Appreciated value is part of capital profits and may be distributed as dividend if the revaluation of all assets are showing surplus, the profits are realized in cash and if the articles of the company permits such distribution.

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Q. Depreciation Accounting has been defined by the ________ as " a system of accounting which aims to distribute the cost or other basic value of tangible capital assets less salvage (if any) over the estimated useful life of the unit (which may be a group of assets) in a systematic and rational manner. It is a process of allocation and not of valuation".

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Q. K and A are partners in a firm. They share profits and losses in the ratio of

4 : 1

. They decide to dissolve the firm K Capital - Rs

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