Closing Stock given in the Trial Balance is shown only in the Balance Sheet.
Answer
True. Reason: When closing stock is given in trial balance it denotes that it has already been deducted out of Purchases given in Trial Balance. Hence, it will be shown only on the assets side of Balance Sheet.
Outstanding Wages given in the Trial Balance are transferred to Trading Account.
Answer
False. Reason: Outstanding Wages given in trial balance means that they have already been added in the wages. Hence, they will be shown only on the liability side of Balance Sheet.
False. Reason: Balance Sheet is a statement and not an account. It has no debit or credit sides. It is only a statement showing the financial position of the firm on a particular date.
A Profit and Loss Account is a point statement whereas a Balance Sheet is period statement.
Answer
False. Reason: A profit and loss account is a period statement because it depicts the results of operations of whole period. Balance Sheet is a point statement because it reflects the financial position of an enterprise at a specified point of time.
Any expenditure intended to benefit the current period is revenue expenditure.
Answer
True. Reason: The benefit of revenue expenditure is received during the current year itself and it does not result in the acquisition of capital asset which may increase the earning capacity of the business in future.
The provision for discount on debtors is calculated after deducting the provision for doubtful debts from debtors.
Answer
True. Reason: The reason is that the discount will be allowed only to those debtors who will make prompt payment. Hence, provision for discount is calculated on good debtors arrived at after deducting the provision for doubtful debts.