Which of the following statements is correct?
Income and expenditure relating to special funds should not be dealt with in the income and expenditure account.
The correct answer is option 3. Income and expenditure relating to special funds should not be dealt with in the income and expenditure account because these transactions are related to a specific fund and should be recorded separately to ensure clarity and proper accounting for restricted funds. The other options are incorrect: the income and expenditure account is a nominal account, not a real account; receipts and payments include both capital and revenue receipts, not just capital receipts; and honorarium payments are generally considered revenue expenditure, not capital expenditure.
Important Questions from Basics of Accounting
Match the following accounting concepts with the meaning/implications.
Accounting
Concept
Meaning
Implication
(i)
Money
measurement
concept(a)
Capital of the proprietor is considered as a liability
(ii)
Business
entity concept(b)
Fixed assets are
valued on a cost basis(iii)
Going concern concept
(c)
Changes in purchasing power are ignored
Which of the following statements is INCORRECT?
Which of the following statements is correct?
______ is defined as a statement or a list of all ledger account balances taken from various ledger books on a particular date to check the arithmetical accuracy.
Accounting is rightly referred to as the '________' of business.
