The term 'Capitalisation' of reserves means: MCQ with Answer and Explanation
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Question #1
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The term 'Prepaid Expense' is treated as:
Correct Answer: Option C
Explanation:
Prepaid expenses are treated as current assets because they represent future economic benefits for which payment has already been made.
Prepaid expenses are treated as current assets because they represent future economic benefits for which payment has already been made.
This question belongs to:
Accountancy and Statistics
Accountancy and Book Keeping
Question #2
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The column 'J.F.' in a ledger account stands for:
Correct Answer: Option C
Explanation:
Journal Folio (J.F.) indicates the page number of the journal from where the specific entry was posted.
Journal Folio (J.F.) indicates the page number of the journal from where the specific entry was posted.
This question belongs to:
Accountancy and Statistics
Accountancy and Book Keeping
Question #3
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S1: Capital expenditure increases the earning capacity of the business. S2: Revenue expenditure maintains the earning capacity of the business. Which statement(s) is/are correct?
Correct Answer: Option D
Explanation:
Capital expenditure is incurred to acquire or improve assets, thereby increasing earning capacity. Revenue expenditure is incurred for day-to-day operations to maintain the existing earning capacity. Both statements are correct.
Capital expenditure is incurred to acquire or improve assets, thereby increasing earning capacity. Revenue expenditure is incurred for day-to-day operations to maintain the existing earning capacity. Both statements are correct.
This question belongs to:
Accountancy and Statistics
Accountancy and Book Keeping
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