Which Of The Following Items May Appear In A Balance Sheet | Multiple Choice Question (MCQ) Answer

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 other points of view.

Net Income or Net Profit is the difference between Total Revenues minus (-) Total Expenses. It is also recorded on balance sheet in owner's equity section. The excess of revenues over expenses is Net Income while excess of expenses over revenues is Net Loss for the period.