Income tax paid in advance should be shown on the ________________.

Debit side of profit & loss acount

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Assets side of the balance sheet

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Liability side of the balance sheet

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Credit side of the profit & loss account

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Solution

The correct option is B Assets side of the balance sheet
Asset means anything that the company has a right on. Income tax is an obligation that is to be met. Income tax if paid in advance is an obligation paid in advance that means that you pay in advance before it is actually due. Hence, it is an asset for the company.

Suggest Corrections

Similar questions

State whether the following statement are true or false.

1. Final Accounts are prepared on the basis of Trial Balance.
2. Trading Account is a part of Profit & Loss Account.
3. Profit Loss Account is prepared to find out Gross Profit or Gross Loss.
4. Gross Profit or Gross Loss is transferred to Balance Sheet.
5. An amount of net profit is added to the capital.
6. All indirect expenses are debited to trading account.
7. Balance Sheet is a statement and not an account.
8. Capital account is a personal account.
9. Amount of prepaid expenses appears on assets side.
10. Bank Overdraft is a liability of business concern.

Debit balance in the profit and loss account is a profit. Comment.

Q. All except _________ are shown on debit side of trading and profit and loss a/c.

Q. Credit balance of Profit & Loss Account shown in the liabilities side is accumulated profit and at the time of admission of a new partner, it is fully distributed among old partners in their old ratio.

Q. Objective Questions :
Answer in one Sentence :

How is a debit balance of profit and loss account dealt with on death of a partner?

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