Tag: commercial studies

Questions Related to commercial studies

During the year goods destroyed by fire was Rs. $10,000$. This insurance company accepted the claim for Rs. $6,000$ and paid the money after the close of financial year. In relation to this which of the following statement is correct?

commercial studies company final accounts forms of statements of profit and loss operating profit (ebit) meaning, need and format of profit and loss account

  1. Trading A/c will be credited by Rs. $10,000$, Profit & Loss A/c will be debited by Rs. $6,000$ and in balance sheet insurance claim will be shown at Rs. $4,000$

  2. Trading A/c will be credited by Rs. $10,000$, Profit & Loss A/c will be debited by Rs. $10,000$

  3. Trading A/c will be credited by Rs. $10,000$, Profit & Loss A/c will be debited by Rs. $4,000$ and in balance sheet insurance claim will be shown at Rs. $6,000$

  4. None of the statement is correct

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Correct Option: C

State the reasons whether the following are true or false.
The gain from sale of capital assets need not be added to revenue to ascertain the net profit of a business.

commercial studies company final accounts forms of statements of profit and loss operating profit (ebit) meaning, need and format of profit and loss account

  1. True

  2. False

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Correct Option: B

From the following details calculate the net profit for the year ending $31-3-2015$

Particulars Rs.
Opening Stock $1,50,000$
Purchase $2,50,000$
Manufacturing Expenses $80,000$
Selling Expenses $20,000$
Administration Expenses $10,000$
Financial Charges $5,000$
Sales $5,55,000$

Sales include damaged goods sold for Rs. $5,000$ against the cost price of Rs. $12,000$. Gross profit margin on normal sales is $20\%$ on the sales.

commercial studies company final accounts forms of statements of profit and loss operating profit (ebit) meaning, need and format of profit and loss account

  1. Rs. $65,000$

  2. Rs. $68,000$

  3. Rs. $70,000$

  4. Rs. $77,000$

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Correct Option: B

Which is the characteristic feature of profit & loss account?

commercial studies company final accounts forms of statements of profit and loss operating profit (ebit) meaning, need and format of profit and loss account

  1. Accounts transferred to profit & loss account do not exist after being transferred to profit & loses account

  2. It is prepared at the last date of the accounting period.

  3. It is a statement

  4. All of the above

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Correct Option: A

In a sole traders profit and loss account firm taxation accounts are not present because ______________.

commercial studies company final accounts forms of statements of profit and loss operating profit (ebit) meaning, need and format of profit and loss account

  1. the proprietor of such a business pays income tax in his private capacity

  2. the Income tax department has not made laws regarding the taxation of firms

  3. as sole trader has a simple business so tax paying is not required

  4. the business is separate undertaking for the purposes of tax

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Correct Option: A

Everyday office expenses are charged to _____________.

commercial studies company final accounts forms of statements of profit and loss operating profit (ebit) meaning, need and format of profit and loss account

  1. Selling expenses

  2. Administrative expenses

  3. Marketing expenses

  4. Financial expenses

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Correct Option: B

Which of the following would not appear in the profit and loss account?

commercial studies company final accounts forms of statements of profit and loss operating profit (ebit) meaning, need and format of profit and loss account

  1. Rent received

  2. Cash expenses

  3. Carriage outwards

  4. Drawings

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Correct Option: D

__________ profit is profit before interest and tax (EBIT).

commercial studies company final accounts forms of statements of profit and loss operating profit (ebit) meaning, need and format of profit and loss account

  1. Net

  2. Operating

  3. Gross

  4. Super

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Correct Option: B

Dividend received from shares entry is made in ______________.

commercial studies company final accounts forms of statements of profit and loss operating profit (ebit) meaning, need and format of profit and loss account

  1. Trading account

  2. Profit and loss account

  3. Balance sheet

  4. None of the above

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Correct Option: B

Basic principle to be followed while preparing trading and profit & loss account is ____________________.

commercial studies company final accounts forms of statements of profit and loss operating profit (ebit) meaning, need and format of profit and loss account

  1. Expenses for the full trading period should be included

  2. Revenue received for the whole period be included

  3. Expenditure which is for other period to be included

  4. Both a & b

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Correct Option: D