- Net profit would decrease
- Net profit would increase
- Gross profit would overstate
- Gross profit would understate
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Direction : Two statements I and II are given. These statement may be either independent causes or may be effects of independent causes or a common cause. One of these statements may be the effect of the other statements. Read both the statements and decide which of the following answer choice correctly depicts the relationship between these two statements. Mark answer : I. The local co-operative credit society has decided to stop giving loans to farmers with immediate effect. II. A large number of credit society members have withdrawn major part of their deposits from the credit society.?
Answer: Option 2 Clearly, withdrawal of funds by society members is bound to reduce the lending power of the society.
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The debts which are to be repaid within a short period (year or less) are known as?
Answer: Option 1 The debts which are to be repaid within a short period (year or less) are known as Current liabilities. Current liabilities are a company's debts or obligations...
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Which of the following is the effect on net income if a business decreases its provision for bad debts?
Answer: Option 1 Net income will increase is the effect on net income if a business decreases its provision for bad debts.
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Which of the following is the most common cause of bad debt?
Answer: Option 4 Debtor declared to be a bankrupt is the most common cause of bad debt. A bad debt is a monetary amount owed to a creditor that is...
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Which accounting concept dictates the inclusion of 'provision for doubtful debts' in the financial statements?
Answer: Option 4 Prudence concept dictates the inclusion of 'provision for doubtful debts' in the financial statements.
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Which of the following is a commonly used base to create the provision for doubtful debts?
Answer: Option 2 Total credit sales is a commonly used base to create the provision for doubtful debts. The provision for doubtful debts is the estimated amount of bad debt...
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In situation of bankruptcy, stock which is recorded above common stock and below debt account is?
Answer: Option 2 In situation of bankruptcy, stock which is recorded above common stock and below debt account is preferred stock. Preferred stock refers to a class of ownership that...
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An interest rate which is paid by firm as soon as it issues debt is classified as pre-tax?
Answer: Option 4 An interest rate which is paid by firm as soon as it issues debt is classified as pre-tax cost of debt. In most cases, this phrase refers...
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A person who has no money to pay off his debts?
Answer: Option 4 One word substitute is Insolvent. Debtor: a person, country, or organization that owes money. Pauper: a very poor person. Beggar: a person, typically a homeless one, who lives by asking...
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Who said this "Good citizen makes good state and bad citizen makes bad state"-?
Answer: Option 1 Plato said "Good citizen makes good state and bad citizen make bad state".
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