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CBSE Questions for Class 12 Commerce Accountancy Financial Statements Of A Company Quiz 11 - MCQExams.com
CBSE
Class 12 Commerce Accountancy
Financial Statements Of A Company
Quiz 11
While finalising the Financial Accounts XYZ Associates did not consideration the financial condition of a debtor amounting to Rs.25,000 who has been declared insolvent. How does this affect the true and fair view of the financial results of XYZ Associates.
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0%
Gross profit understated to the extent
0%
Net worth overstated to that extent
0%
Stock overvalued to that extent
0%
Net profit and debtors overstated to that extent
Explanation
If a debtor declared insolvent it means nothing could be recovered from his estate, this is known as bad debts. It is a loss for the company and it is shown in debit side of profit and loss account. If this loss is not taken into consideration debit side of profit and loss account will be 25000 less so net profit will be overstated and this amount is not deducted from debtors so debtors will also be overstated.
Decrease in owner's equity can be caused by _____________________.
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0%
Withdrawal of cash for self use by the proprietor
0%
Withdrawal of goods for self use by the owner
0%
Payment of personal expenses of the proprietor by the business
0%
All the three
Explanation
A decrease in owner's equity caused by a decrease in assets or an increase in liabilities resulting from the operations of business. Assets or cash taken out of a business for the owner's personal use. The account affected when receiving cash from the owner as an investment.
Which of the following transactions would have no impact on owner's capital?
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Purchase of land from the proceeds of a bank loan
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Withdrawal of profits
0%
Net loss
0%
Cash brought in by owner as additional capital
Explanation
Purchase of land from the proceeds of a bank loan would have no impact on the owner's capital. The entries to be passed on purchase of land are
Cash A/c Dr.
To Bank Loan A/c
On purchase of Land the following entry will be passed-
Land A/c Dr.
To Cash A/c
Thus, it has no impact on the owner's capital.
Finalized statement of a company includes _________.
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balance sheet, cash flow statement, statement of change in equity, notes to Accounts
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balance sheet, statement of profit and loss a/c, statement of change in equity, notes to Accounts
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balance sheet, statement of profit and loss a/c, cash flow statement, statement of change in equity, notes to Accounts
0%
balance sheet, statement of profit and loss a/c, cash flow statement, statement of change in equity
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