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91. Which of the following entries is correct in respect of reserve for discounts on accounts payable?

A. Debit P&L A/c and Credit Reserve for Discount on Accounts Payable A/c
B. Debit Accounts Payable A/c and Credit P&L A/c
C. Debit Reserve for Discount on Accounts Payable A/c and Credit P&L A/c
D. Debit Reserve for Discount on Accounts Payable A/c and credit Accounts Payable A/c

92. Sundry debtors as per Trial Balance is 43,000 which includes 2,200 due from ‗H in respect of goods sent to him on approval basis, the cost price of which is 1,800. Rectification would involve:

A. Adding 2,200 to closing stock
B. Deducting 1,800 from closing stock and deducting 2,200 each from debtors and sales
C. Adding 1,800 to closing stock and deducting 2,200 each from debtors and sales
D. Deducting 1,800 from debtors

93. Goods in stock worth 800 are destroyed by fire and the Insurance Co. is accepted the claim for 600. Adjustment would involve

A. Debit of 800 to Trading Account and credit of 600 and 200 to insurance company and
Profit and Loss Account respectively
B. Deduct the 800 from closing stock in the Trading Account
C. Credit insurance company for 600
D. Debit of 600 and 200 to insurance company and Profit and Loss Account respectively and
credit of 800 to Trading Account

94. Prepaid expenses are valued on the Balance Sheet at

A. Replacement cost
B. Current cost
C. Cost to acquire less accumulated amortization
D. Cost less expired portion

95. Which of the following relationships is/are false?

A. Net Profit = Gross Profit – Administration and Other expenses
B. Net Profit = Gross Profit + Administration expenses and Other expenses
C. Opening Stock + Purchases – Closing Stock = Cost of Sales
D. Both B. and C. above

96. Gross Profit is equal to_________?

A. Sales – Cost of goods sold
B. Sales – Closing Stock + Purchases
C. Opening Stock + Purchases – Closing Stock
D. None of the above

97. Which of the following shall not be deducted from net profit while calculating managerial remuneration?

A. Loss on sale of undertaking
B. Debts considered bad and written off
C. Liability arising from a breach of contract
D. Director‘s remuneration

98. Which of the following equations is correct?

A. Gross Profit+ Sales+ Direct expenses+ Purchases+ Closing stock = Opening stock
B. Gross Profit+ Sales+ Direct expenses+ Purchases- Closing stock = Opening Stock
C. Gross Profit + Opening Stock + Direct expenses + Purchases- Closing stock = Sales
D. Gross Profit – Opening Stock + Direct expenses + Purchases +Closing stock = Sales

99. Which of the following is not true with regard to preparation of Profit & Loss Account?

A. Profit & Loss Account is prepared for a certain period and hence it is an interim statement
B. Profit & Loss Account does not disclose the effect of non-financial items
C. Net Profits are ascertained on the basis of current costs
D. Net Profits as disclosed by P&L Account is not absolute

100. The Profit and Loss Account shows the:

A. Financial results of the concern for a period
B. Financial position of the concern on a particular date
C. Financial results of the concern on a particular date
D. Cost of goods sold during the period