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p-5 Multiple Choice Questions and Answers On Fapk PDF
p-5 Multiple Choice Questions and Answers On Fapk PDF
p-5 Multiple Choice Questions and Answers On Fapk PDF
in :: 1 ::
Ans.amount due
(19) Branch adjustment account is in the nature of………..
Ans.nominal account
(20) If the branch has collected money from a customer of the head office, then (in the head office
books) branch account is………..
Ans.debited
(21) In case of foreign branches, the remittances to and from head office should be converted
at……………
Ans.actual rate at which the remittances were made.
(22) Cash remitted by branch but not received by the head office is debited by the head office
to………………
Ans.cash-in-transit account.
(23) Goods sent by the head office to the branch not received by the branch are credited by H.O.
to………………
Ans.branch account
(24) Goods sent by branch x to branch y, will be debited to………………
Ans.branch y
(25) Closing stock + cost of goods sold—Purchases =…………………
Ans.opening stock
(26) The main object of the average clause is to discourage……………..
Ans.under insurance
(27) Under the average clause, the loss is suffered by both insurer and insured ………
a. Ans.in the ratio of risk covered
(28) Royalty account is in the nature of………..
a. Ans.nminal account
(28) If the right to recoup the shortcomings has expired, they are transferred by the lessee
to…………
Ans.Profit and loss account
(29) The receipts and payments account records receipts and payments of both apital
and …………….nature.
Ans.revenue
(30) Income and Expenditure accunt is a …………………
Ans. nominal account
(31) The income and expenditure account begins with …………….
Ans. no balance
(30) The value of goodwill, according to the simple profit method, is—
16. The product of current year's profit and number of years
17. The product of last year's profit and number of years
18. The product of average profits of the given years and number of years.
Ans.(iii)The product of average profits of the given years and number of years.
(31) The goodwill of a business is to be valued at 3 years' purchase of the average profits of the last
three years. The profits of the last three years are Rs. 5,000, Rs. 6,000 and Rs. 7,000
respectively. Hence, the goodwill be valued at—
(i) Rs. 18,000
(ii) Rs. 12,000
(iii) Rs. 15,000.
Ans. (i) Rs. 18,000
(32) A business has a capital of Rs. 40,000 at the end. It had earned profits of Rs. 5,000 during the
year. Hence, the average capital of the business will be —
(i) Rs. 42,500
(ii) Rs. 37,500
(iii) Rs. 35,000.
Ans.(ii) Rs. 37,500
(33) If the average capital of a business is Rs. 60,000 and the normal rate of profit is 15%, then the
normal profits will amount to—
(i) Rs. 10,000
(ii) Rs. 9,000
(iii) Rs. 15,000.
Ans.(ii) Rs. 9,000
(34) If the super-profits of a business are Rs. 6,000 and the normal rate of profit is 10%, then the
amount of goodwill as per the capitalisation method will be—
(i)Rs. 60,000
(ii) Rs. 600
(iii) Neither of the two.
Ans.(i)Rs. 60,000
(35) It is given that net assets available for equity and preference shares amount to Rs. 90,000. The
paid up capitals are 10,000 equity shares of Rs. 2 each and 5,000 preference shares of Rs. 10
each. Therefore, value of an equity share will be—
(i) Rs. 2 per share
(ii) Rs. 4 per share
(iii) Rs. 5 per share.
Ans.(ii) Rs. 4 per share
(36) It is given that net assets available for equity and preference shares amount to Rs.
1,87,000. The paid-up capitals are—10,000 equity shares of Rs. 4 each and 5,000 preference
shares of Rs. 10 each. Therefore, value of a preference share will be— (i) Rs. 10 per share
(ii) Rs. 8 per share
(iii) Rs. 20 per share.
Ans.(iii) Rs. 20 per share.
(37) Under the yield method of valuation of equity share capital, if for an equity share of Rs. 50, the
normal rate of return is 10% and the expected rate of return is 5%, then the value of an
equity share will be—
19. Rs. 25
20. Rs. 50
21. Rs. 100.
Ans.(i) Rs. 25
(38) For calculating the value of an equity share by intrinsic value method, it is essential to know—
(63) A contingent liability, not provided for, materialised to the extent of Rs. 1,000. The insurance
company paid Rs. 600 in respect of this liability. Hence, the amount to be charged from the
capital reduction account will be —
(i) Rs. 600
(ii) Rs. 400
(iii) Rs. 1,000.
Ans.(ii) Rs. 400
(64) A banking company can pay dividend on its shares without writing off —
(i) Preliminary expenses
(ii) Brokerage
(iii) The bad debts (provided adequate provision has been made).
Ans.(iii) The bad debts (provided adequate provision has been made).
(65) It is given that the paid-up capital, reserves and share premium account have balances
amounting to Rs. 10,00,000 Rs. 9,00,000 and Rs. 1,50,000 respectively. It is also given that the
profits of the company for the current year are Rs. 1,00,000. ft should make a transfer of—
(i) Rs. 30,000 to statutory reserve
(ii) Rs. 25,000 to statutory reserve
(iii) May be exempted from making such transfer.
Ans.(iii) May be exempted from making such transfer.
(66) Provision for bad debs and doubtful debts is —
(i) Not shown anywhere in the published accounts of a banking company
(ii) Shown on the debit side of the profit and loss account
(iii) Shown as a deduction from the interest and discount income on the credit side of profit
and loss account.
Ans.(i) Not shown anywhere in the published accounts of a banking company
(67) Rebate on biffs discounted account is a—
(i) Real account
(ii) Personal account
(iii) Nominal account.
Ans.(ii) Personal account
(68) If the balance of rebate on bills discounted is given in the trial balance, it will be taken to —
(i) Debit side of the profit and Joss account
(ii) Credit side of the profit and loss account as a deduction from interest and
discount
(iii) Liabilities side of the balance-sheet.
Ans.(iii) Liabilities side of the balance-sheet.
(69) Money at call and short notice is shown—
(i) On the liability side of the balance sheet
(ii) On the asset side of the balance sheet
(iii) It is a contra item.
Ans.(ii) On the asset side of the balance sheet
(70) Provision for taxation is shown—
(i) On the debit side of the profit and loss account
(ii)As a deduction from interest and discount on the credit side of the profit and
loss account
(iii)On the asset side of the balance sheet.
Ans. (ii) As a deduction from interest and discount on the credit side of the profit and loss
account
(71) Loans, cash credits and overdrafts are shown—
(i) On the asset side of the balance sheet
(ii) On the liability side of the balance sheet
(iii) These are contra items.
unexpired risks was to be increased by 5% of the net premiums. Hence, the amount of the
additional reserve will be—
(i) Rs. 20,000
(ii) Rs. 50,000
(iii) Rs. 70,000.
Ans.(iii) Rs. 70,000.
(82) It is given that the balance being profit of the last year amounted to Rs. 80,000. During the
current year, the business suffered a loss of Rs. 20,000 and dividends amounting to Rs. 15,000
were paid in respect of the previous year. Hence, the profit and loss appropriation account will
be credited by—
(i) Rs. 65,000
(ii) Rs. 45,000
(iii) Rs. 80,000.
Ans.(i) Rs. 65,000
(83) It is given that premiums, reinsurance premiums and commission on reinsurance ceded
amounted to Rs. 10,00,000, Rs. 50,000 and Rs. 30,000 respectively. Hence, premiums will be
shown in the revenue account at—
31. Rs.10,00,000
32. Rs. 9,50,000
33. Rs. 9,20,000.
Ans.(ii) Rs. 9,50,000
(84) Postulates of Accounting are:
(i) Exchange
(ii) Period
(iii) Unit of measure
(iv) All of these
Ans.(iv) All of these
(iii)Rs.72,000
(iv) None of these
Ans.(i) Rs. 47,250
(103) The rate of Gross Profit on sales is 20%. Sales up to date of fire amounted to Rs. 1,00,000.
Find Amount of Gross Profit:
(i) Rs. 20,000
(ii) Rs. 25,000
(iii)Rs. 50,000
(iv) None of these
Ans.(i) Rs. 20,000
(104) The rate of Gross Profit on cost of sales is 25%. Sales up to date of fire amounted to Rs.
1,00,000. Find amount of Gross Profit:
(i) Rs. 20,000
(ii) Rs. 25,000
(iii) Rs. 50,000
(iv) None of these
Ans.(i) Rs. 20,000
(105) Excess of assets over liabilities is called :
(i) Creditors
(ii) Profit
(iii) Capital
(iv) Goodwill
Ans.(iii) Capital
(106) Amount of Drawings is added at the time of finding out profit in single entry system:
(i) In closing capital
(ii) In opening capital
(iii) Not in any capital.
Ans. (i) In closing capital
(107) The amount of additional capital is deducted at the time of finding out profit in Single Entry
System:
(i) from closing capital
(ii) from opening capital
(iii) not from any capital.
Ans.(i) from closing capital
(108) Following records are made in single entry system, give correct answer:
(i) Only in cash book
(ii) In ledger, posting of personal accounts only
(iii) records in cash book and posting of only personal accounts in ledger.
Ans.(iii). records in cash book and posting of only personal accounts in ledger.
(109) Meaning of single entry system of Book-keeping is:
(i) Only one entry for each transaction.
(ii) Incomplete double entry system
(iii) Both entries only in accounts
Ans.(ii). Incomplete double entry system
(110) Single entry system of book-keeping system:
(i) is best system
(ii) is scientific system
(iii) is incomplete system
(iv) is most popular system.
Ans.(iii) is incomplete system
(111) Liabilities and assets respectively are Rs. 87,000 and Rs. 92,000. Amount of difference will be:
(i) Creditors
(ii) Debentures
(iii) Profit
(iv) Capital
(v) None out of these.
Ans.(iv) Rs. 5,000 Capital.
(112) To find out the opening and closing capitals, statement of affairs are prepared:
(i) One
(ii) Two
(iii) Four.
Ans.(ii) Two.
(113) The expenses which are not departmental:
(i) are charged to departments in sales ratio.
(ii) are charged to departments in the ratio of assets employed thereto.
(iii) are charged to general profit and loss account.
Ans. (iii) are charged to general profit and loss account.
(114) Cum-dividend quotation of shares means that the quotation includes:
(i) dividend which may be declared in future.
(ii) dividend declared recently but not yet paid.
(iii) nothing else but the price of the share.
Ans. (ii) dividend declared recently but not yet paid.
(115) A quotation is ex-interest when :
(i) the interest to the date of transaction is to be paid in addition to the settled price.
(ii) interest has already been deducted from the price.
(iii) no adjustment is necessary for interest.
Ans.(i) the interest to the date of transaction is to be paid in addition to the settled price.
(116) Interest is calculated on:
(i) market price of securities
(ii) purchase price of securities
(iii) book value of securities
(iv) face value of securities.
Ans.(iv) face value of securities.
(117) Meaning of ex-interest price of investment is :
(i) market price + interest
(ii) market price − interest
(iii) market price
(iv) none out of these
Ans.(ii) market price − interest
(118) The amount of goodwill is paid by the new partner:
(i) For getting share in future profits
(ii) For Paying Entry Fee
(iii) For Paying Capital
(iv) For getting right over assets.
Ans.(i) For getting share in future profits
(119) The value of goodwill is the highest of:
(i) Dog Goodwill
(ii) Rat Goodwill
(iii) Cat Goodwill
(iv) All the above
Ans.(iii) Cat Goodwill
(120) The present value of annuity of Re. 1 for 8 years at 10% is Rs. 2.487. Super profit is Rs.
22,000. The amount of goodwill will be :
(130) If the net assets taken over by the company are less than the purchase consideration, the
difference shall be treated as :
(i) Secret Reserve
(ii) Goodwill
(iii) Capital Reserve
(iv) General Reserve
Ans.(ii) Goodwill
(131) Interest on debentures is recorded in :
(i) Capital account
(ii) Net Revenue account
(iii) Revenue account
(iv) Not in any account
Ans.(ii) Net Revenue account
(132) Interest on bank loan is recorded in :
(i) Revenue account
(ii) Net revenue account
(iii) Capital Account
(iv) Not in any account
Ans.(ii) Net revenue account
(133) Equity share capital is recorded in :
(i) General balance Sheet
(ii) Net Revenue account
(iii) Capital account
(iv) Not in any account
Ans.(iii) Capital account
(134) When was banking company regulation act implemented?
(i) 1947
(ii) 1949
(iii) 1950
(iv) 1956
Ans.(ii) 1949
(135) How many schedules are there in the amended from of Final Account of Banking Company:
(i) 8
(ii) 10
(iii) 12
(iv) 16
Ans.(iv) 16
(136) What is the rate of statutory reserve to be maintained under section 17 of Banking Company
Act?
(i) 10% of Net Profit
(ii) 15% of Net Profit
(iii) 20% of Net Profit
(iv) 30% of Net Profit
Ans.(iii) 20% of Net Profit
(137) In which year 14 Banks were Nationalised?
(i) 1969
(ii) 1971
(iii) 1973
(iv) 1977
Ans.(i) 1969
(138) Paid up capital of a bank should not be less then the following percentage of subscribed capital
:
(i) 25%
(ii) 50%
(iii) 75%
(iv) 100%
Ans.(ii) 50%
(139) If nothing is given) What is the percentage maintained by Marine Insurance companies for
Reserve for Unexpired Risk :
(i) 40% of Net Premium
(ii) 50% of Net Premium
(iii) 60% of Net Premium
(iv) 100% of Net Premium.
Ans.(iv) 100% of Net Premium.
(140) When were General Insurance Companies nationalised:
38. 1955
39. 1969
40. 1971
41. 1973
Ans.(iii) 1971
(141) (If nothing is given) What is the percentage maintained for Additional Reserve :
(i) 10% of Net Premium
(ii) 20% of Net Premium
(iii) 0% of Net Premium
(iv) 25% of Net Premium
Ans.(iii) 0% of Net Premium
(142) (If nothing is given) What is the percentage maintained by Insurance Companies other than
Marine Insurance Company for Reserve for unexpired risk:
(i) 40% of Net Premium
(ii) 50% of Net Premium
(iii) 45% of Net Premium
(iv) 100% of Net Premium
Ans.(ii) 50% of Net Premium
(143) Medical expenses regarding claims are added to:
(i) Claims
(ii) Premium
(iii) Management Exp.
(iv) None of above
Ans.(i) Claims
(215) Livestock in the case of mixed farming is
i. a fixed asset.
ii. a current asset
iii. a wasting asset.
iv. a tangible asset.
Ans. ii. a current asset
(216) Crops are valued at
i. market price.
ii. cost price.
i. income tax
ii. bad debts
iii. depreciation
iv. staff welfare expenses
Ans. ii. bad debts
(233) Department A produced 1,000 units at a cost of Rs. 2,000 (excluding inter-departmental
transfer costs) and B produced 2,000 units at a cost of Rs. 10,000 (excluding inter-departmental
transfer costs). Each department transferred to the other department at cost one-fourth of its
production to be used as raw material. Total cost of department A is
i. Rs.4.500
ii. Rs.4.625
iii. Rs.3.200
iv. Rs.4,800
Ans. iv. Rs.4,800
(234) Provision for unrealised profit with respect to stocks when transfers are effected at transfer
price is to be charged to
i. departmental trading account
ii. departmental profit and loss account
iii. either (i) or (ii)
iv. general profit and loss account
Ans. iv. general profit and loss account
(235) Branch account under debtors system is a
i. real account
ii. nominal account
iii. personal account
iv. representative personal account.
Ans. ii. nominal account
(236) Branch account under stock and debtors system is a
i. real account
ii. nominal account
iii. personal account
iv. representative personal account
Ans. i. real account
(237) When branch 'A' sends goods to branch 'B' in the books of branch 'A' debit is given too
i. head office account
ii. branch 'B' account
i. a revenue expense
ii. a normal loss
iii. an asset
iv. a liability.
Ans. iii. an asset
(246) In the event of recoupment of short workings, the lessor
i. debits landlord's account
ii. credits sub-lessee's account
iii. debits short workings account
iv. debits profit, and loss account.
Ans. iii. debits short workings account
(247) In the books of lessor short workings irrecoverable are to be
i. credited to profit and loss account
ii. debited to profit and loss account
iii. credited to Trading account
iv. credited to short workings account.
Ans. iv. credited to short workings account.
(248) In case the right to recoup short workings has expired the balance in short workings account is
transferred by lessee to
i. profit and loss account
ii. landlord's account
iii. minimum rent account
iv. short workings suspense account.
Ans. i. profit and loss account
(249) When short workings are lo be recovered by a sublessee the account to be debited is
i. lessee's account
ii. short workings account
iii. profit and lessee's account
iv. none of the above.
Ans. i. lessee's account
(250) Under instalment system of purchase, interest suspense account in the books of the buyer is
i. Debited with the difference between instalment price and cash price.
ii. Credited with the difference between instalment price and cash price.
iii. Debited with the interest payable in respect of instalments due.
iv. Debited with the interest payable in respect of instalments not due.
Ans. i. Debited with the difference between instalment price and cash price.
(251) Under the hire-purchase system the buyer becomes the owner of goods :
i. Immediately after the delivery of goods.
ii. Immediately after the down payment.
iii. Immediately after the first instalment is paid.
iv. Immediately after the payment of last instalment.
Ans. iv. Immediately after the payment of last instalment.
(252) A Ltd. sells 100 machines Costing Rs. l,000 at Rs. 1,500 each on Hire-purchase basis
instalment due and received during the period Rs. 9,00,000. The Hire-purchase profit for the
period is
i. Rs. 9,00,000
ii. Rs. 50,000
iii. Rs. 30,000
iv. Rs. 15,00,000
Ans. iii. Rs. 30,000
(253) Stock out on hire at cost price is ascertained by
i. Deducting the gross profit margin from instalments not due and unpaid.
ii. Taking the cost in the proportion of paid instalments to total instalments.
iii. Taking the cost in the proportion of value of unpaid instalments to Hire-
Purchase price.
iv. None of the above.
Ans. i. Deducting the gross profit margin from instalments not due and unpaid.
(254) A Ltd. sells 100 machines at Hire-purchase price of Rs. 1,500 payable Rs. 300 Cash down and
the balance in 12 instalments equally. 400 instalments became due. Cash received was Rs.
65,000. instalments due and unpaid are
i. Rs. 40,000
ii. Rs. 5,000
iii. Rs. 80,000
iv. Rs. 85,000
Ans. ii. Rs. 5,000
(255) A tape-recorder was sold at a hire-purchase price of Rs. 1,200, payable in 12 equal instalments.
The buyer paid 4 instalments and the tape-recorders was repossessed after 7th instalment
balance due. The repossessed tape-recorders were valued at Rs. 850 and its original cost was
Rs. 900. Profit on repossession is
i. Rs. 50
ii. (−) Rs. 50
iii. 400.
iv. Rs. 350.
Ans. i. Rs. 50
(256) Under the net worth method the bases for ascertaining the profit is
i. the difference between the capital on two dates
ii. the difference between the gross assets on two dates
iii. the difference between the liabilities on two dates.
iv. the difference between capital assets and liabilities at close
Ans. i. the difference between the capitals on two dates
(257) Under the net worth method any additions to capital during the accounting period must be
i. added to profit
ii. subtracted from profit
iii. added to capital
iv. deducted from capital.
Ans. ii. subtracted from profit
(258) Cash received from debtors needed for the construction of cash account can be had from.
i. total debtors account
ii. balance sheet
iii. analysis of cash book
iv. pass book.
Ans. i. total debtors account
(259) Given the opening and closing balances of debtors and the figure of credit sales, the balancing
figure of total debtors account will give
(265) Which one of the following combinations of accounting assumptions are fundamental as per
AS—1?
i. Going concern, consistency, and accrual
ii. Going concern, conservatism, and historic cost
iii. Historic cost, consistency and conservatism
iv. Conservatism, consistency and accrual
Ans. i. Going concern, consistency, and accrual
(266) Any change in the accounting policy relating to inventories which has a material effect in the
current or later periods should be disclosed. This is in accordance with the accounting principle
of:
i. Going concern
ii. Conservatism
iii. Consistency
iv. Disclosure
Ans. iii. Consistency
(273) If net profit is taken as the basis to ascertain cash flow from operations, which one of the
following adjustments is correct and proper?
i. add decrease in current assets and current liabilities
ii. add increase in current liabilities and current assets
iii. add increase in current assets and deduct decrease in current liabilities.
iv. add decrease in current assets and add increase in current liabilities.
Ans. iv. add decrease in current assets and add increase in current liabilities.
(274) The conversion of debt to equity:
i. must be shown on a notional basis as a financing cash flow
ii. must be shown on a notional basis as an investment cash flow
iii. must not be shown as it is a non-cash transaction
iv. none of the above
Ans. iii. must not be shown as it is a non-cash transaction
(275) The cash flows associated with extraordinary items should be separately classified as a cash
flow from
i. operating activities
ii. investing activities
iii. financing activities
iv. under (i) or (ii) or (iii) as is appropriate
Ans. iv. under (i) or (ii) or (iii) as is appropriate
(276) Profit or loss for the period includes
i. Ordinary activities
ii. Extraordinary activities
iii. Prior period Items
iv. All the above.
Ans. iv. All the above.
(277) The perception of extraordinary events must be made with reference to
i. Business ordinarily carried on by an enterprise
ii. The frequency with which such events are expected to occur
iii. Both (i) and (ii)
iv. The size of the transaction.
Ans. i. Business ordinarily carried on by an enterprise
(278) Prior period Items must be shown
i. In the current profit and loss account along with the ordinary activities
ii. In the current profit and loss account in a manner that their impact on the
current profit or loss can be perceived
iii. As adjustments to reserves
iv. As a separate Item in the balance sheet.
Ans. ii. In the current profit and loss account in a manner that their impact on the current
profit or loss can be perceived.
(279) A change in the estimated life of the asset, which necessitates adjustment in the depreciation is
an example of
i. Prior period item
ii. Ordinary Item
iii. Extraordinary item
iv. Change in the accounting estimate.
Ans. iv. Change in the accounting estimate.
i. selling costs
ii. research and development costs
iii. cost of hiring plant and equipment for the contract
iv. general administration cost
Ans. iii. cost of hiring plant and equipment for the contract
(289) Which one of the following is a cost that may be allocated to contracts as it is attributable to
contract activity?
i. insurance
ii. claims from third parties
iii. research and development
iv. selling costs
Ans. i. insurance
(290) Estimated total loss on the contract:
i. spread over accounting periods equally
ii. must be recognised as an expense immediately
iii. allocated on the basis of architects certificates
iv. allocated on the basis of percentage of completion
Ans. ii. must be recognised as an expense immediately
(291) Which one of the following is excluded in research and development costs?
i. Amortisation of patent and licences
ii. Payment to outside bodies for research and development projects related to the
enterprise
iii. Cost of materials and services consumed.
iv. Costs incurred on research to maintain existing products.
Ans. iv.Costs incurred on research to maintain existing products.
(292) The benchmark treatment of research and development costs is
i. to expense it in the year in which it is incurred
ii. to treat such expenditure as deferred revenue expenditure
iii. (i) or (ii)
iv. to capitalise such expenditure and provide depreciation
Ans. i. to expense it in the year in which it is incurred
(293) Deferred research and development costs are amortised on the basis of
i. sales of the product
ii. use of the product or process
iii. time basis (time during which the product is used or sold)
iv. all the above
Ans. iv. all the above
(294) Research and development costs should be expensed in the year in which it is incurred if
i. estimated research and development costs exceed the future revenues
ii. the technical feasibility of the product has not been established.
iii. the management has no intention to produce the product
iv. adequate revenues do not exist to complete the project and market the product
or process
v. all the above.
Ans. v. all the above.
(295) Which one of the following items is not dealt with by AS-9?
i. Revenue recognition on sale of goods
ii. Revenue recognition on rendering of services
iii. Revenue recognition on the use of resources of the enterprise
iv. Unrealised gains on the holding of current assets.
Ans. iv.Unrealised gains on the holding of current assets.
(296) Which one of the following items is dealt with by AS-9?
i. Realised and unrealised holding gains in relation to fixed assets
ii. Unrealised holding gains in relation to current assets
iii. Revenue recognised on rendering of services
iv. Realised or unrealised gains from foreign currency translation.
Ans. iii. Revenue recognised on rendering of services
(297) Completed service contract method is applicable to which one of the following?
i. Sale of software products
ii. Sale of software development
iii. Installation fees
iv. Royalties.
Ans. iii. Installation fees
(298) In the case of consignment sales revenue is to be recognised on
i. Preparation of pro-forma invoice by the consignor
ii. Receipt of goods by the consignee
iii. Receipt of cash by the consignor
iv. Sale of goods to a third party
Ans. iv. Sale of goods to a third party
(299) Which one of the following is not a component of the cost of fixed asset?
i. Installation costs
ii. Financing costs
iii. Administration and general expenses
iv. Start up and commissioning costs.
Ans. iii. Administration and general expenses
(300) A decrease in net book value arising on revaluation of fixed assets is to be debited to be
i. revaluation reserve
ii. Profit and loss account
iii. General reserve
iv. Capital reserve.
Ans. ii. Profit and loss account
(301) Items of fixed assets that have been retired from active use and are held for disposal should be
stated at :
i. Net book value
ii. Net realisable value
iii. Lower of the net book value and net realisable value
iv. Higher of the net book value and net realisable value.
Ans. iii. Lower of the net book value and net realisable value