Prepaid insurance appearing in the trial balance is shown: a) on the credit side of the trading account b) on the credit side of profit and loss account c) on the assets side of the balance sheet d) None of the option

Open in App

Solution

Option c) on the assets side of the balance sheet.

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.

Q. Write the word/term or phrase which can substitute each of the following statement.

Profit and Loss Account appearing on the asset side of a balance sheet.

From the following trial balance of Mr. A. Lal, prepare trading, profit and loss account and balance sheet as on March 31, 2017.

Account Title	Debit Amount Rs	Credit Amount Rs
Stock as on April 01, 2016	16,000
Purchases and Sales	67,600	1,12,000
Returns inwards and outwards	4,600	3,200
Carriage inwards	1,400
General expenses	2,400
Bad debts	600
Discount received		1,400
Bank over draft		10,000
Interest on bank overdraft	600
Commission received		1,800
Insurance and taxes	4,000
Scooter expenses	200
Salaries	8,800
Cash in hand	4,000
Scooter	8,000
Furniture	5,200
Building	65,000
Debtors and Creditors	6,000	16,000
Capital		50,000

Closing stock Rs 15,000.

Q. Following is the Trial Balance as on 31st March 2016. Prepare Trading and Profit and Loss Account and Balance Sheet :-

Particulars	Debit (₹)	Credit (₹)
Stock (1st April 2015)	8,000
Sales		2,20,000
Purchases	1,26,000
Productive Wages	56,500
Salaries	16,000
Stores Consumed	6,050
Carriage	3,050
Rent and Rates	5,200
Insurance	1,320
Machinery	52,000
Building	67,000
Capital less Drawings		1,45,600
Sundry Debtors	44,000
Sundry Creditors		20,000
Secured Loan		15,000
Furniture	3,350
General Expenses	2,600
Cash in hand	1,930
Bad Debts	1,020
Bank	6,580
Total	4,00,600	4,00,600
Total

Additional Information :
(a) Stock on 31st March 2016 is ₹ 20,600.
(b) Depreciate machinery @ 10% p.a.
(c) Make a Provision @ 5% for Doubtful Debts.
(d) Provide

2 \frac{1}{2} %

for discount on sundry debtors.
(e) Rent and Rates include security deposit of ₹ 400.
(f) Insurance prepaid ₹ 120.

On dissolution, how you deal with partner’s loan if it appears on the

(a) Assets side of the Balance Sheet

(b) Liabilities side of the Balance Sheet

Join BYJU'S Learning Program