Trading, profit and loss account
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Two Hours Answers to this Paper must be written on the paper provided separately. You will not be allowed to write during the first 15 minutes. This time is to be spent in reading the Question Paper. The time given at the head of this Paper is the time allowed for writing the answers. Attempt all questions from Section A and any four questions from Section B. The intended marks for questions or parts of trading profit and loss account and balance sheet questions and answers are given in brackets [ ].
Section-A 40 Marks Attempt all questions from this Section. All current asset except stock and prepaid expenses are included in liquid asset. Liquid asset thus include cash, debtors, bills receivable and short term securities. Loss due to fall in demand, changing technology, changing fashion etc. Such expenditure is of non-recurring nature and results in acquisition of permanent assets.
Property acquired with the help of capital expenditure is utilised by the business for a long time and thereby it earns revenue. Thus, all expenditure incurred to acquire or increase the value of fixed assets which are used in the business for the purpose of earning revenue are called capital expenditure. Section — B 40 Marks Answer any four questions from this section. Give four reasons to support your answer. Your email address will not be published. Leave a Reply Cancel reply Your email address will not be published.
Revenue receipts are the receipts obtained during the normal course of business operation and are of a recurring nature. Sale proceeds of goods and services, interest received, dividend received, rent received are examples of revenue receipts.
Direct costs are those costs which can be easily, directly and wholly related to a particular cost unit or cost centre. Indirect costs are those costs which cannot be identified trading profit and loss account and balance sheet questions and answers, directly and wholly with a particular cost unit or cost centre. These consist of direct material cost, direct labour cost and direct expenses. Indirect costs are also known as over heads. Shakeholders supply financial capital or human capital.
Stakeholder do not buy goods or services from the organisation. Trading account is prepared to calculate the gross profit or loss. The result of transferred to capital account.