Commercial Applications
It is a statement of assets and liabilities. It is prepared to judge the financial position on a particular date.
- Receipts and Payments Account
- Income and Expenditure Account
- Balance Sheet
- None of these
Answer
Balance Sheet
Reason — Balance Sheet is a statement which shows the assets and liabilities of an organisation and its Capital Fund on a particular date. It depicts the financial position of the organisation on a specified date. Assets are shown on the right hand side and liabilities are shown on the left hand side.
Related Questions
Assertion (A): The Receipts and Payments Account reflects non-cash transactions such as depreciation.
Reason (R): Depreciation is a non-cash expense that affects the organization's financial position.
- A is true but R is false
- A is false but R is true
- Both A and R are true and R explains A.
- Both A and R are true but R does not explain A.
It is a summary of all incomes and expenses of the current accounting year. It is prepared to know the surplus or deficit during the accounting year.
- Receipts and Payments Account
- Income and Expenditure Account
- Balance Sheet
- None of these
A charitable organization has recently sold old office furniture and purchased new sports equipment. In the Receipts and Payments Account, where would these transactions appear, and what impact would they have on the final balance?
- Sale of furniture appears on the debit side; purchase of sports equipment appears on the credit side, reducing the final balance.
- Sale of furniture appears on the credit side; purchase of sports equipment appears on the debit side, increasing the final balance.
- Both transactions appear on the debit side, reducing the final balance.
- Both transactions appear on the credit side, increasing the final balance.
All cash payments are recorded on the …………… side of the receipt and payment accounts.
- Credit
- Debit
- Both (A) and (B)
- None of these