When bad debts previously written off are recovered, which account is credited? MCQ with Answer and Explanation
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Question #1
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S1: GST is a destination-based tax. S2: GST revenue goes to the state where the goods are manufactured. Which statement(s) is/are correct?
Correct Answer: Option C
Explanation:
GST is a destination-based consumption tax. The revenue goes to the state where the goods or services are *consumed*, not where they are manufactured (which was the case under the origin-based CST). S1 is correct, S2 is incorrect.
GST is a destination-based consumption tax. The revenue goes to the state where the goods or services are *consumed*, not where they are manufactured (which was the case under the origin-based CST). S1 is correct, S2 is incorrect.
This question belongs to:
Accountancy and Statistics
Accountancy and Book Keeping
Question #2
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S1: The Profit and Loss Appropriation Account is prepared by a company. S2: The Profit and Loss Appropriation Account is prepared by a partnership firm. Which statement(s) is/are correct?
Correct Answer: Option D
Explanation:
A company does not prepare a Profit and Loss Appropriation Account; it transfers profits to reserves and dividends via the Statement of Changes in Equity. Only a partnership firm prepares this account to distribute profits among partners. S1 is incorrect, S2 is correct.
A company does not prepare a Profit and Loss Appropriation Account; it transfers profits to reserves and dividends via the Statement of Changes in Equity. Only a partnership firm prepares this account to distribute profits among partners. S1 is incorrect, S2 is correct.
This question belongs to:
Accountancy and Statistics
Accountancy and Book Keeping
Question #3
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An auditor checking the arithmetical accuracy of the books performs what kind of check?
Correct Answer: Option B
Explanation:
Routine checking involves casting (totalling), carry-forwards, and ledger posting verifications to ensure basic mathematical accuracy.
Routine checking involves casting (totalling), carry-forwards, and ledger posting verifications to ensure basic mathematical accuracy.
This question belongs to:
Accountancy and Statistics
Accountancy and Book Keeping
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