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61. Tax deducted at source A/c appears in___________?

A. Assets side
B. Liability side
C. Profit & Loss A/c
D. Debited to Capital A/c

62. Investment in own share A/c appears in____________?

A. Asset side
B. Liability side
C. Netted from Capital
D. Profit & Loss A/c

63. Payments received in advance from a customer for a contract can be__________?

A. Shown as a deduction from contract work-in-progress on asset side
B. Shown as a liability
C. Credited to P&L A/c
D. Either A or B above

64. If a company has contingent liabilities, they appear in the__________?

A. Balance Sheet
B. Directors‘ report
C. Notes on account to Balance Sheet
D. Chairman‘s report

Contingent liabilities are disclosed in the notes to Balance Sheet

65. Recent developments have made much of a company‘s inventory obsolete. This obsolete inventory should be?

A. Written down to zero or its scrap value
B. Shown in the Balance Sheet at its replacement cost
C. Shown in the Balance Sheet at cost, but classified as a non-current asset
D. Carried in the accounting records at cost until it is sold

66. Which of the following is not classified as inventory in the financial statements?

A. Finished goods
B. Work-in-process
C. Stores and spares
D. Advance payments made to suppliers for raw materials

67. If actual bad debts are more than the provision for bad debts, then there will be a_____________?

A. Credit balance of Provision for Bad Debts Account
B. Debit balance of Provision for Bad Debts Account
C. Debit balance of Bad Debts Account
D. Debit balance of Discount on Debtors Account

68. The creation of provision for doubtful debts given as an adjustment requires____________?

A. Debit Profit and Loss Account and deduct the provision from debtors
B. Credit Profit & Loss Account and deduct the provision from debtors
C. Credit Profit and Loss Account and add the provision to debtors
D. Debit Profit & Loss Account and add the provision to debtors

69. Under the direct write-off method of recognizing a bad debt expense. Which of the following statements is/are true?

A. The bad debt expense is not matched with the related sales
B. Revenue is overstated in the year of sales
C. It violates the matching principle of accounting
D. All of the above

70. At the time of preparation of financial accounts, bad debt recovered account will be transferred to?

A. Debtors A/c
B. Profit & Loss A/c
C. Profit & Loss Adjustment A/c
D. Profit & Loss Appropriation A/c