TRADING ACCOUNT PROFIT AND LOSS ACCOUNT

Which of the following is an operating expense?
– a) Interest paid
– b) Loss on sale of fixed assets
– c) Bad debts
– d) Salaries
– Answer: d) Salaries

Which of the following is a non-operating income?
– a) Sales
– b) Discount received
– c) Commission received
– d) Interest on investments
– Answer: d) Interest on investments

Which of the following will be credited to the Profit and Loss Account?
– a) Depreciation
– b) Salaries
– c) Rent received
– d) Bad debts
– Answer: c) Rent received

Which of the following items will not appear in the Profit and Loss Account?
– a) Interest received
– b) Depreciation
– c) Sales
– d) Rent paid
– Answer: c) Sales

Which of the following expenses is treated as a financial expense?
– a) Rent paid
– b) Depreciation
– c) Interest on loan
– d) Salaries
– Answer: c) Interest on loan

The net profit of a business is transferred to:
– a) Trading Account
– b) Profit and Loss Appropriation Account
– c) Capital Account
– d) Balance Sheet
– Answer: b) Profit and Loss Appropriation Account

Prepaid insurance is shown in:
– a) Trading Account
– b) Profit and Loss Account
– c) Balance Sheet
– d) Income and Expenditure Account
– Answer: c) Balance Sheet

Accrued commission is shown in:
– a) Trading Account
– b) Profit and Loss Account
– c) Balance Sheet
– d) Cash Book
– Answer: c) Balance Sheet

Which of the following is not a revenue expense?
– a) Office rent
– b) Depreciation
– c) Purchase of machinery
– d) Salaries
– Answer: c) Purchase of machinery

The Profit and Loss Account is prepared to ascertain:
– a) Financial position
– b) Gross profit or loss
– c) Net profit or loss
– d) Working capital
– Answer: c) Net profit or loss

Provision for discount on debtors is shown in:
– a) Trading Account
– b) Profit and Loss Account
– c) Balance Sheet
– d) Income and Expenditure Account
– Answer: b) Profit and Loss Account

Which of the following items is included in the Profit and Loss Appropriation Account?
– a) Office rent
– b) Interest on capital
– c) Bad debts
– d) Discount received
– Answer: b) Interest on capital

Which of the following is shown on the credit side of the Profit and Loss Account?
– a) Depreciation
– b) Salaries
– c) Discount received
– d) Bad debts
– Answer: c) Discount received

Which of the following is a direct expense?
– a) Office rent
– b) Carriage inwards
– c) Office salaries
– d) Depreciation
– Answer: b) Carriage inwards

The net profit is transferred to:
– a) Capital Account
– b) Cash Account
– c) Trading Account
– d) Balance Sheet
– Answer: a) Capital Account

Which of the following items is not shown in the Profit and Loss Account?
– a) Interest received
– b) Discount received
– c) Salaries
– d) Sales
– Answer: d) Sales

The Balance Sheet shows:
– a) Cash balance
– b) Gross profit
– c) Financial position
– d) Net profit
– Answer: c) Financial position

The capital of a business is shown in the:
– a) Trading Account
– b) Profit and Loss Account
– c) Balance Sheet
– d) Cash Book
– Answer: c) Balance Sheet

Outstanding expenses are shown in the:
– a) Trading Account
– b) Profit and Loss Account
– c) Balance Sheet
– d) Income and Expenditure Account
– Answer: c) Balance Sheet

Prepaid expenses are shown in the:
– a) Trading Account
– b) Profit and Loss Account
– c) Balance Sheet
– d) Cash Book
– Answer: c) Balance Sheet

Which of the following items is not included in the Balance Sheet?
– a) Cash balance
– b) Closing stock
– c) Gross profit
– d) Outstanding expenses
– Answer: c) Gross profit

Which of the following is shown on the liability side of the Balance Sheet?
– a) Cash balance
– b) Closing stock
– c) Sundry creditors
– d) Outstanding expenses
– Answer: c) Sundry creditors

The Balance Sheet is prepared to ascertain:
– a) Gross profit
– b) Net profit
– c) Financial position
– d) Working capital
– Answer: c) Financial position

Which of the following is shown on the asset side of the Balance Sheet?
– a) Sundry debtors
– b) Sundry creditors
– c) Outstanding expenses
– d) Capital
– Answer: a) Sundry debtors

Which of the following items is not shown in the Balance Sheet?
– a) Sundry debtors
– b) Sundry creditors
– c) Gross profit
– d) Capital
– Answer: c) Gross profit

Which of the following items is shown in the Balance Sheet?
– a) Sales
– b) Purchases
– c) Closing stock
– d) Gross profit
– Answer: c) Closing stock

The net profit is shown in the:
– a) Trading Account
– b) Profit and Loss Account
– c) Balance Sheet
– d) Cash Book
– Answer: c) Balance Sheet

Which of the following is shown as an asset in the Balance Sheet?
– a) Outstanding expenses
– b) Prepaid expenses
– c) Sundry creditors
– d) Capital
– Answer: b) Prepaid expenses

Which of the following is not shown on the asset side of the Balance Sheet?
– a) Prepaid expenses
– b) Sundry debtors
– c) Outstanding expenses
– d) Closing stock
– Answer: c) Outstanding expenses

Which of the following is shown on the liability side of the Balance Sheet?
– a) Sundry debtors
– b) Prepaid expenses
– c) Closing stock
– d) Sundry creditors
– Answer: d) Sundry creditors

The Balance Sheet is prepared as on a:
– a) Particular date
– b) Particular period
– c) Financial year
– d) Accounting year
– Answer: a) Particular date

Which of the following is shown on the asset side of the Balance Sheet?
– a) Outstanding expenses
– b) Sundry creditors
– c) Prepaid expenses
– d) Capital
– Answer: c) Prepaid expenses

The Balance Sheet shows:
– a) Financial performance
– b) Financial position
– c) Gross profit
– d) Net profit
– Answer: b) Financial position

Which of the following is shown on the liability side of the Balance Sheet?
– a) Cash balance
– b) Closing stock
– c) Sundry creditors
– d) Sundry debtors
– Answer: c) Sundry creditors

Which of the following items is not included in the Balance Sheet?
– a) Cash balance
– b) Closing stock
– c) Gross profit
– d) Outstanding expenses
– Answer: c) Gross profit

The net profit is transferred to:
– a) Trading Account
– b) Profit and Loss Appropriation Account
– c) Capital Account
– d) Balance Sheet
– Answer: b) Profit and Loss Appropriation Account