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Multiple Choice Question | Which Of The Following Items May Appear In A Balance Sheet? Brief Explanation With Reason: The correct answer is (c) as Capital, Drawings and Net Income are Balance Sheet Accounts while Revenue or Income and Expenses are Income Statement Accounts . So, all other options i.e., (a), (b) and (d) are incorrect. Capital is the amount which business owner invested into the business to start it or to further expand it. It is a permanent account so it is recorded on balance sheet as a claim against the assets of the business. Drawings are the withdrawal of cash or goods by the owner of the business for his own personal use. It is a Contra Equity Account as it reduces the owner's equity account and it is recorded on balance sheet on basis of separate business entity concept i.e., all the business matters are separated from the personal matters of the owner of the business and transactions are recorded from the points view of business and not from owner or o...

Multiple Choice Question Answer | Which Of The Following Does Not Reduce The Balance In Accounts Receivable? Reason: The correct answer is (c) "Recognizing bad debts expense", as the journal entry for recognizing bad debts expense is resulted in a debit to Bad Debt Expense Account Or Doubtful Debts Account Or Uncollectible Accounts Expense Account and a credit to Allowance for Bad Debts Account Or Allowance for Doubtful Account Or Provision for Doubtful Debts Account . It is just an estimation that a percentage of sales or accounts receivable may not be recovered from customers in future. So, it does not affect Accounts Receivable / Sundry Debtors . Accounts receivable account is only reduced when there is Actual Bad Debt Expense Or Bad Debts Written Off which means some of the debts due from customers are not paid to the company. So, it decreases the accounts receivable account / sundry debtors account. When actual bad debts are occurred, the journal entry to record is t...

True / False Question Answer With Brief Explanation: The Balance In Allowance For Doubtful Accounts Represents The Amount A Company Thinks It Will Not Collect From A Customer The correct answer is "True", as Allowance For Doubtful Accounts represents such an estimation of percentage of amount of Accounts Receivable or Sales that may not be recovered from customers in future.

T/F: The Net Accounts Receivable Reported In The Current Asset Section Of A Company's Balance Sheet Represents All Receivables Expected To Be Collected Within The Next Year. The correct answer is "True", as the Net Accounts Receivable (Gross Accounts Receivable - Allowance For Doubtful Accounts ) reported in the Current Asset Section of a company’s balance sheet represent all receivables expected to be collected within one accounting period or accounting cycle.

On Which Financial Statement And At What Amount Accounts Receivable  Are Reported? - A Solution To Multiple Choice Question With Example Accounts Receivable are reported at Net Realizable Value on the Balance Sheet , which is the amount expected to be collected / received from customers and it is calculated after deducting the value of Allowance For Doubtful Accounts from Accounts Receivable. So, the correct answer of multiple choice question is “Balance Sheet At The Net Realizable Value” Example: If a company has gross amount of Accounts Receivable (Sundry Debtors) of Rs. 52000. The Allowance for Doubtful Accounts is estimated at 4% of Gross Accounts Receivable. What is the value at which, accounts receivable are reported / recorded on the balance sheet. Here, Allowance of Doubtful Accounts = 52000 X 4% = Rs. 2080 Accounts Receivable to be reported on the balance sheet = Gross Amount of Accounts Receivable - Allowance For Doubtful Accounts Accounts Receivable to be ...

Multiple Choice Question (MCQ) Answerr - If A Company Employs The Gross Method Of Recording Accounts Receivable From Customers, Then Sales Discounts Taken Should Be Reported As What? Reason: The correct answer is “As A Deduction From Sales In Income Statement”, as Sales Discount is a Contra Revenue Account which is deducted from Gross Sales Revenue in Income Statement in order to calculate Net Sales. In equation form, we can find out Net Sales as shown below: Net Sales = Gross Sales - Sales Returns & Allowances - Sales Discounts So, if a company or corporation employs or uses the gross method of recording / recognizing Accounts Receivable From Customers , then sales discounts taken should be reported as a deduction from Sales in Income Statement and it provides the better view / representation of financial statements because it shows the sales figure  of the company after deduction of returns & allowances and discounts for the accounting period.

Postage Stamps On Hand (Unused) Are Classified As: The correct Answer of this MCQ is (d) "A Prepaid Expense". Reason: Because, the business not yet utilized the postage stamps in office works but the payment made in advance i.e., in purchasing postage stamps. ( Prepaid Expenses )

Multiple Choice Question (MCQ) In Which Account Are Postage Stamps Classified? The correct Answer is (c) "Office Supplies" Reason: Postage Stamps is classified as Office Supplies as it is used in the office by the business during the accounting period.