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.