to the operation of business enterprise. For example, interest received on the deposits in the bank. Balance sheet is a statement and not an account. On the left side liabilities including capital and on the right side the assets are shown in the balance sheet.
Assets are the resources owned by a business entity. Liabilities are claims against the business or the amounts owed by business to outsiders and owners. Self-examination questions I Multiple choice questions Choose the correct answer . Closing stock is an item of .
(a) Fixed asset (b) Current asset (c) Fictitious asset (d) Intangible asset . Balance sheet is (a) An account (b) A statement (c) Neither a statement nor an account (d) None of the above . Net profit of the business increases the (a) Drawings (b) Receivables (c) Debts (d) Capital . Carriage inwards will be shown (a) In the trading account (b) In the profit and loss account (c) On the liabilities side (d) On the assets side .
Bank overdraft should be shown (a) In the trading account (b) Profit and loss account (c) On the liabilities side (d) On the assets side Accountancy - . Balance sheet shows the of the business. (a) Profitability (b) Financial position (c) Sales (d) Purchases . Drawings appearing in the trial balance is (a) Added to the purchases (b) Subtracted from the purchases (c) Added to the capital (d) Subtracted from the capital .
Salaries appearing in the trial balance is shown on the (a) Debit side of trading account (b) Debit side of profit and loss account (c) Liabilities side of the balance sheet (d) Assets side of the balance sheet . Current assets does not include (a) Cash (b) Stock (c) Furniture (d) Prepaid expenses . Goodwill is classified as (a) A current asset (b) A liquid asset (c) A tangible asset (d) An intangible asset Answer (b) (b) (d) (a) (c) (b) (d) (b) (c) (d) II Very short answer questions . Write a note