| List I | List II |
| a. Capital is the difference between | 1. Cost of goods sold from sales |
| b. Gross profit is ascertained by deducting | 2. To find out cost of production |
| c. Wages paid for erecting machines are | 3. Assets and liabilities |
| d. The manufacturing account is prepared | 4. Debited to machinery account |
A. a-4, b-3, c-2, d-1
B. a-4, b-3, c-1, d-2
C. a-3, b-4, c-1, d-2
D. a-3, b-1, c-4, d-2
Answer: Option B
This Question Belongs to Commerce >> Accounting
Accounting provides information on
A. Cost and income for managers
B. Company's tax liability for a particular year
C. Financial conditions of an institutions
D. All of the above
The long term assets that have no physical existence but are rights that have value is known as
A. Current assets
B. Fixed assets
C. Intangible assets
D. Investments
The assets that can be converted into cash within a short period (i.e. 1 year or less) are known as
A. Current assets
B. Fixed assets
C. Intangible assets
D. Investments
Patents, Copyrights and Trademarks are
A. Current assets
B. Fixed assets
C. Intangible assets
D. Investments
The correct match is based on the following accounting principles:
a. Capital is the difference between (3) Assets and liabilities: Capital (or Owner's Equity) is defined as Total Assets minus Total Liabilities.
b. Gross profit is ascertained by deducting (1) Cost of goods sold from sales: Gross profit is calculated in the Trading Account by subtracting the Cost of Goods Sold (COGS) from Net Sales.
c. Wages paid for erecting machines are (4) Debited to machinery account: This is a capital expenditure, which increases the value of the asset (Machine) and is added to the cost of machinery rather than being treated as a revenue expense.
d. The manufacturing account is prepared (2) To find out cost of production: The purpose of a manufacturing account is to determine the cost of goods produced during the accounting period.
Therefore, the matching pairs are:
a-3, b-1, c-4, d-2
D. a-3, b-1, c-4, d-2
ans should be option d
ANSWER (B) IS WRONG
THE CORRECT ANSWER IS (D)