Which of the given statements is/are correct in the context of account balances of the Ledger? (i) A debit balance of a personal account means that the party owes that amount to the business. (ii) All real accounts show a debit balance. (iii) Nominal accounts are not usually balanced, but closed by transfer to the Profit and Loss Account, at the time of preparing the final accounts.
All (i), (ii) and (iii)
The correct answer is option 1. All three statements are correct. A debit balance in a personal account indicates that the business is owed money. Real accounts can have either debit or credit balances depending on the nature of the account. Nominal accounts are closed by transferring to the Profit and Loss account.
Similar Questions
Which of the following pairs is NOT correctly matched in the context of account balances shown in the Trial Balance?
Which of the following is (are) an example(s) of fictitious assets?
(i) Debit balance of Profit and Loss account
(ii) Goodwill
___________ is a record of assets and liabilities of any firm.
Which of the following options is an INCORRECT pair considering a firm's balance sheet?
A trial balance shows
(i) Credit balances
(ii) Debit balances
A businessman can find out what his business owns and what it owes from _______.
Which among the following will be shown as the debit balance in a trial balance?
Reserves and surpluses are shown on which side and under which head in the balance sheet?
What is/are the objective(s) of preparing the trial balance?
Important Questions from Balance sheet statement
What is/are the objective(s) of preparing the trial balance?
Which among the following will be shown as the debit balance in a trial balance?
Reserves and surpluses are shown on which side and under which head in the balance sheet?
In a Balance sheet, expenses incurred but not yet paid are shown as _____.
Given below are two statements:
Statement I : Deferred Tax Liabilities (Net) is the amount of tax on the temporary difference between the accounting income and taxable income. It arises when the accounting income is more than the taxable income.
Statement II : Deferred Tax Liabilities (Net) and Deferred Tax Assets (Net) are only book entries i.e. they are neither actual liability nor actual asset.
In the light of the above statements, choose the correct answer from the options given below:
