Q26. Transfer to General Reserve (for a sole proprietorship) is shown in:#26 Hard
✅ a) P&L A/c (Debit) and shown in B/S under Capital
For sole traders, appropriations are often made directly from net profit in P&L and accumulated in capital/reserve.
For sole traders, appropriations are often made directly from net profit in P&L and accumulated in capital/reserve.
Q27. Under-stated opening stock will:#27 Hard
✅ a) Overstate current period GP
Lower opening stock reduces COGS, artificially increasing gross profit.
Lower opening stock reduces COGS, artificially increasing gross profit.
Q28. Which item is added to purchases to compute Cost of Goods Available for Sale?#28 Hard
✅ b) Carriage inward
COG Available = Opening Stock + Net Purchases + Direct Expenses (e.g., carriage inward) before deducting closing stock.
COG Available = Opening Stock + Net Purchases + Direct Expenses (e.g., carriage inward) before deducting closing stock.
Q29. Net profit transferred to P&L Appropriation A/c is computed as:#29 Hard
✅ b) Gross Profit less indirect expenses plus other incomes
Net profit from P&L (after adjusting indirect items) is transferred to Appropriation A/c for distribution.
Net profit from P&L (after adjusting indirect items) is transferred to Appropriation A/c for distribution.
Q30. In a partnership, the order of appropriation is generally:#30 Hard
✅ b) Net profit → Partners’ salary → Interest on capital → Reserves → Distribution
Appropriation starts with net profit from P&L and then allocates as per agreement before dividing the balance among partners.
Appropriation starts with net profit from P&L and then allocates as per agreement before dividing the balance among partners.
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