A: The Purchases Book records only credit purchases of goods. R: Cash purchases of goods are recorded in the Cash Book. Choose the correct option. MCQ with Answer and Explanation

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A: The Purchases Book records only credit purchases of goods. R: Cash purchases of goods are recorded in the Cash Book. Choose the correct option.

A. Both A and R are true and R is the correct explanation of A

B. Both A and R are true but R is NOT the correct explanation of A

C. A is false but R is true

D. A is true but R is false

Answer: Option A

Solution (By JKExamLibrary)

The Purchases Book is strictly for credit purchases of trading goods. Cash purchases are recorded in the Cash Book. R correctly explains why cash purchases are excluded from the Purchases Book.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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When a fixed asset is sold, any profit on sale is credited to:

A. Balance Sheet

B. Capital Account

C. Profit & Loss Account

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Correct Answer: Option C

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Profit on sale of fixed asset is a revenue gain, shown in Profit & Loss Account.

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The 'Operating Profit' is calculated as:

A. EBITDA - Depreciation

B. Gross profit - Operating expenses

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D. Net profit + Interest

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Explanation:
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The 'Equalisation Levy' was expanded in 2020 to cover:

A. E-commerce supply of goods and services by non-resident e-commerce operators

B. All services

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D. Physical goods

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Correct Answer: Option A

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