The journal entry for transferring 'Net Profit' to capital account is: MCQ with Answer and Explanation

Question

Share Report Error

The journal entry for transferring 'Net Profit' to capital account is:

A. Drawings A/c Dr. To Capital A/c

B. Profit & Loss A/c Dr. To Capital A/c

C. Capital A/c Dr. To Profit & Loss A/c

D. Profit & Loss Appropriation A/c Dr. To Capital A/c

Answer: Option B

Solution (By JKSSB Mock Tests)

Net profit is closed by debiting Profit & Loss A/c and crediting Capital A/c (or Retained Earnings for companies).

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Request complete Subject PDF

Discuss this Question (0)

No comments yet. Be the first to start the discussion!

Practice More Accountancy and Book Keeping Questions

Question #1

The 'HSN Code' requirement for invoices under GST for turnover above ₹5 crore:

A. 8-digit HSN

B. 4-digit HSN

C. 2-digit HSN

D. 6-digit HSN

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

Explanation:
Taxpayers with turnover > ₹5 crore must mention 6-digit HSN on invoices.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #2

If a partner's loan is interest-free, what is the treatment?

A. Interest is charged at the bank rate

B. Interest is charged at 6%

C. Interest is charged at 9%

D. No interest is charged

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

Explanation:
If the partnership deed is silent on interest on a partner's loan, it is not provided. If it is a loan, it's treated as a liability, but interest is only paid if agreed.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #3

Under FEMA, current account transactions are:

A. Only allowed for government

B. Generally permitted, subject to certain restrictions

C. Only allowed for exporters

D. Prohibited

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
Current account transactions are generally free unless specifically restricted.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Explore All Accountancy and Book Keeping MCQs