Q.State whether the following statement is True or False:
Credit balance of profit and loss A/c shows net profit.
🔒You're viewing a preview — the full solution, concept, methods & PYQ mapping are locked.
🔒 Start your 14-day free trial to unlock the full solution →Concept understanding — Partnership Final Accounts
A partnership's final accounts follow the same Trading Account → Profit and Loss Account → Balance Sheet structure as a sole proprietorship, with a Profit and Loss Appropriation Account inserted before the Balance Sheet and each partner's Capital (and, under the Fixed Method, Current) Account shown separately. Standard adjustments — closing stock, outstanding/prepaid expenses, depreciation, further bad debts and the Reserve for Doubtful Debts, and outstanding interest on …
This true/false statement concerns what a credit balance of the Profit and Loss Account represents. …
In the Profit and Loss Account, a credit balance means incomes exceed expenses, i.e. a net profit; the statement is true.
…
Showing the 12 most recent of 18 on this concept.
- CBSE 2026Set ANNUAL1 markQ.Complete the table: Cost of goods sold = Opening Stock + Purchases − .........
›Reveal solutionSolution
The missing term is Closing Stock. Cost of goods sold measures only the goods actually sold, so the stock still on hand at the year end must be removed from the goods available for sale.
Method
Goods available for sale during the year = Opening Stock + Purchases (plus any direct expenses). The stock that remains unsold at the close of the year has not yet been sold, so it is deducted to arrive at the cost of the goods that were actually sold.
| Item | Amount | …
- CBSE 2026Set ANNUAL1 markQ.Complete the table:
Sales Purchases Gross Profit ........ 1,80,000 20,000 ›Reveal solutionSolution
Sales = ₹2,00,000. Gross Profit = Sales − Cost of goods sold, so Sales = Cost of goods sold + Gross Profit. With only purchases given (no opening/closing stock), purchases stand for the cost of goods sold.
Method
In the Trading Account, Gross Profit = Sales − Cost of goods sold. Re-arranging gives Sales = Cost of goods sold + Gross Profit. As no opening or closing stock is stated, purchases (₹1,80,000) are taken as the cost of goods sold.
…
- CBSE 2026Set ANNUAL1 markQ.Expenses which are paid before due date are called as _____.
›Reveal solutionSolution
Expenses paid before their due date are called Prepaid Expenses (expenses paid in advance).
Under the accrual/matching principle, only the expense relating to the current accounting year is charged to the Profit and Loss Account. When an expense is paid before it becomes due — i.e. its benefit will be received in the next period — the amount paid in advance is a Prepaid Expense.
…
- CBSE 2025Set ANNUAL1 markQ.Trading Account is prepared on the basis of ______ expenses.
›Reveal solutionSolution
The missing word is Direct.
Final accounts split expenses into two groups:
Expense type Where recorded Examples Direct (incurred to bring goods to saleable condition) Trading Account Wages, carriage inward, freight, import duty, factory power Indirect (running the business) Profit & Loss Account Salary, rent, advertising, office expenses … - CBSE 2025Set ANNUAL1 markMCQQ.Find the odd one:(a) Wages account(b) Salary account(c) Royalty account(d) Import duty account
›Reveal solutionSolution
The odd one is the Salary account.
Group the four items by where they are recorded in final accounts:
Item Nature Recorded in Wages account Direct expense Trading A/c Royalty account Direct expense Trading A/c Import duty account Direct expense Trading A/c Salary account Indirect expense Profit & Loss A/c … - CBSE 2025Set ANNUAL1 markMCQQ.Find the odd one:(a) Machinery account(b) Furniture account(c) Computer account(d) Rent account
›Reveal solutionSolution
The odd one is the Rent account.
Group the four items by their nature:
Item Nature Shown in Machinery account Fixed asset Balance Sheet (Assets) Furniture account Fixed asset Balance Sheet (Assets) Computer account Fixed asset Balance Sheet (Assets) Rent account Expense (nominal) Profit & Loss A/c … - CBSE 2025Set ANNUAL1 markMCQQ.Find the odd one:(a) General reserve account(b) Creditors account(c) Machinery account(d) Capital account
›Reveal solutionSolution
Group the four accounts by where they appear in the books. Three of them are liabilities/owners' claims; only Machinery account is an asset, so it is the odd one out.
Classifying each item
Item Nature Side of Balance Sheet General Reserve account Accumulated profit (owners' fund) Liabilities side Creditors account Liability (amount owed to suppliers) Liabilities side Machinery account Fixed / real asset Assets side Capital account Owners' fund Liabilities side Three of the four are claims against the firm's assets (liabilities and owners' funds) and appear on the liabilities side. Machinery is the only asset in the list, so it does not fit the common feature shared by the rest.
…
- CBSE 2024Set ANNUAL1 markMCQQ.Find odd one.(a) Building(b) Machinery(c) Furniture(d) Bills payable.
›Reveal solutionSolution
Three of the items are assets; one is a liability. The liability is the odd one.
When the items are placed in a Balance Sheet they split cleanly:
Item Nature Balance Sheet side Building Fixed asset Assets Machinery Fixed asset Assets Furniture Fixed asset Assets Bills Payable Current liability Liabilities … - CBSE 2024Set ANNUAL1 markMCQQ.Find the odd one:(a) General Reserve(b) Creditors(c) Investments(d) Capital
›Reveal solutionSolution
Three items appear on the liabilities side of the Balance Sheet; one is an asset. The asset is the odd one.
Sorting the four items into a Balance Sheet:
Item Nature Balance Sheet side General Reserve Accumulated profit (owners' fund) Liabilities Creditors Current liability Liabilities Capital Owners' fund Liabilities Investments Asset Assets … - CBSE 2023Set ANNUAL1 markQ.Write the word/phrase/term, which can substitute the following sentence. Credit balance of Profit and Loss Account.
›Reveal solutionSolution
A credit balance in the Profit and Loss Account means the total of the credit side (incomes/gains) is greater than the debit side (expenses/losses) — the term for it is Net Profit.
Why: The Profit and Loss Account is a nominal account. Following the rule "debit all expenses and losses, credit all incomes and gains," a credit balance shows that gains have exceeded losses. This surplus is the firm's Net Profit …
- CBSE 2023Set ANNUAL1 markQ.Calculate 12.5% P.A. depreciation on Furniture: on ₹ 2,20,000 for 1 year on ₹ 10,000 for 6 months
›Reveal solutionSolution
Charge 12.5% p.a. on each amount for its own period: ₹2,20,000 for a full year and ₹10,000 for 6 months. Total depreciation = ₹28,125.
Method: Depreciation = Value × Rate × (Months ÷ 12).
Amount (₹) Rate Period Depreciation (₹) 2,20,000 12.5% p.a. 1 year (12/12) 27,500 10,000 12.5% p.a. 6 months (6/12) 625 - CBSE 2022Set ANNUAL1 markMCQQ.To find out Net Profit or Net Loss of the business __________ account is prepared.(a) Trading(b) Capital(c) Current(d) Profit & Loss
›Reveal solutionSolution
The Profit & Loss Account is the account prepared to ascertain the Net Profit or Net Loss.
The question tests where the net result of a business is determined among the final accounts.
- Trading Account deals only with direct items (opening/closing stock, purchases, sales, direct expenses) and gives the Gross Profit or Gross Loss.
- The Profit & Loss Account then takes that gross result and adjusts all indirect expenses (salaries, rent, depreciation, etc.) and indirect incomes to arrive at the Net Profit or Net Loss. …
🎓Unlock everything free for 14 days
- ✓Full step-by-step solutions
- ✓Concept-first explanations
- ✓Methods, shortcuts & mistakes
- ✓PYQ mapping + timed mock tests
Full access for 14 days. No credit card required.