In which of the following methods, the cost of the asset is spread over in equal proportion during its useful economic life?
(A) Straight-line method
(B) Written down value method
(C) Units-of-production method
(D) Sum-of-the years‘-digits method
Which of the following factors are primarily considered to determine the economic life of an asset?
(A) Passage of time, asset usage, and obsolescence
(B) Tax regulations and SEBI guidelines
(C) Tax regulations and asset usage
(D) SEBI guidelines and Asset usage
Under the direct write-off method of recognizing a bad debt expense. Which of the following statements is/are true?
(A) The bad debt expense is not matched with the related sales
(B) Revenue is overstated in the year of sales
(C) It violates the matching principle of accounting
(D) All of the above
The creation of provision for doubtful debts given as an adjustment requires____________?
(A) Debit Profit and Loss Account and deduct the provision from debtors
(B) Credit Profit & Loss Account and deduct the provision from debtors
(C) Credit Profit and Loss Account and add the provision to debtors
(D) Debit Profit & Loss Account and add the provision to debtors
If actual bad debts are more than the provision for bad debts, then there will be a_____________?
(A) Credit balance of Provision for Bad Debts Account
(B) Debit balance of Provision for Bad Debts Account
(C) Debit balance of Bad Debts Account
(D) Debit balance of Discount on Debtors Account
Which of the following is not classified as inventory in the financial statements?
(A) Finished goods
(B) Work-in-process
(C) Stores and spares
(D) Advance payments made to suppliers for raw materials
Recent developments have made much of a company‘s inventory obsolete. This obsolete inventory should be?
(A) Written down to zero or its scrap value
(B) Shown in the Balance Sheet at its replacement cost
(C) Shown in the Balance Sheet at cost, but classified as a non-current asset
(D) Carried in the accounting records at cost until it is sold
If a company has contingent liabilities, they appear in the__________?
(A) Balance Sheet
(B) Directors‘ report
(C) Notes on account to Balance Sheet
(D) Chairman‘s report
Payments received in advance from a customer for a contract can be__________?
(A) Shown as a deduction from contract work-in-progress on asset side
(B) Shown as a liability
(C) Credited to P&L A/c
(D) Either
Investment in own share A/c appears in____________?
(A) Asset side
(B) Liability side
(C) Netted from Capital
(D) Profit & Loss A/c