11. Which account shows Net Profit or Net Loss of the business?
Ans. Profit and Loss account shows Net Profit or Net Loss of the business.
12. What do you mean by direct expenses?
Ans. The expenses which are directly related with production or purchase of goods or services are called direct expenses.
13. What do you mean by accrued income?
Ans. The income which is due but not yet received is called accrued income.
14. To which account is gross profit transferred?
Ans. Gross profit is transferred to Profit and Loss account.
15. A person who is engaged in day – to – day activities of the business.
Ans. Active or Working Partner.
16. What type of institutions / concerns prepares Income and Expenditure Account?
Ans. ‘Not for profit’ concerns such as Sports clubs, Charitable Hospitals, Schools, Colleges, Universities, Welfare Associations, Religious Concerns, Professional Institutions, etc. Prepare Income and Expenditure Account.
17. What do you mean by non – recurring expenses?
Ans. Non – recurring expenditure is any capital expenditure which is spent for acquisition of fixed assets like purchase of land or furniture, in order to run the concern and it gives benefits for a long period say more than 3 years.
18. What do you mean by recurring expenses?
Ans. Recurring expenditure is that expenditure of which benefit lasts for a maximum period of one year and is incurred on purchase of goods or services, in order to carry out the main activity of the concern.
19. Which ‘ Final Accounts’ do the ‘Not for Profit’ Concerns prepare?
Ans. The ‘Not for Profit’ concerns prepare Income and Expenditure Account and Balance sheet in their final accounts.
20. Which account is prepared by the ‘Not for Profit’ concerns for finding out surplus or deficit of the financial year?
Ans. Income and expenditure Account is prepared by the ‘Not for Profit’ concerns to find out surplus or deficit of the financial year.