A company's preliminary expenses written off is shown in: MCQ with Answer and Explanation

A company's preliminary expenses written off is shown in:
A. Trading Account
B. Not shown
C. Balance Sheet
D. Profit & Loss Account
Answer: Option D
Solution (By JKSSB Mock Tests)
Written off portion is charged to P&L Account as an expense.

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Practice More Accountancy and Book Keeping Questions

Question #1
The 'Related Party Disclosures' standard is:
A. AS 19
B. AS 21
C. AS 17
D. AS 18

Correct Answer: Option D


Explanation:
AS 18 requires disclosure of transactions with related parties.

Question #2
Under the imprest system of petty cash, the petty cashier is reimbursed with:
A. The exact amount spent during the period
B. Half of the original float
C. Ten percent of total cash sales
D. A fixed arbitrary amount every week

Correct Answer: Option A


Explanation:
In the imprest system, the chief cashier reimburses the petty cashier the exact amount disbursed so the float returns to its original fixed amount.

Question #3
A: The Trial Balance is a statement, not an account. R: It is prepared to check the arithmetical accuracy of the ledger. Choose the correct option.
A. Both A and R are true but R is NOT the correct explanation of A
B. A is true but R is false
C. A is false but R is true
D. Both A and R are true and R is the correct explanation of A

Correct Answer: Option A


Explanation:
The Trial Balance is indeed a statement of ledger balances, and its primary purpose is to check arithmetical accuracy. However, the fact that it is a statement does not explain why it checks accuracy; the double-entry system does.