Principles and Practice of Accounting - 8 mtp MTP

1. (a) State with reasons whether the following statements are True or False: i. Depreciation cannot be provided in case of loss, in a financial year. ii. At the end of the accounting year, all the nominal accounts of the ledger book are balanced. iii. Any amount spent for replacement of worn out part of a machine is capital expenditure. iv. In case of admission of a new partner in a partnership firm, the profit/loss on revaluation account is transferred…

(a) Sunshine Ltd. keeps no stock records but a physical inventory of stock is made at the end of each quarter and the valuation is taken at cost. The company’s year ends on 31%t March, 2024 and their accounts have been prepared to that date. The stock valuation taken on 31% March, 2024 was however, misleading and you have been advised to value the closing stocks as on 31st March, 2024 with the stock figure as on 31st December, 2023…

4. Out of the total cheques amounting to = 84,000 issued in, the last week of March, 2024, cheques aggregating ~ 57,000 were encashed in March, 2024.

Dividends of ~ 70,000 collected by the Bank and Fire insurance premium of = 40,000 paid by it were not recorded in the cash book.