The profit or loss on sale of an asset is calculated as: MCQ with Answer and Explanation

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The profit or loss on sale of an asset is calculated as:

A. Sale price less market value

B. Sale price less replacement cost

C. Sale price less original cost

D. Sale price less book value

Answer: Option D

Solution (By JKSSB Mock Tests)

Profit/loss on sale = Sale consideration - Book value (cost less accumulated depreciation).

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

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Practice More Accountancy and Book Keeping Questions

Question #1

Working capital is calculated as:

A. Quick assets - Current liabilities

B. Current assets - Current liabilities

C. Total assets - Total liabilities

D. Fixed assets - Long-term liabilities

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Correct Answer: Option B

Explanation:
Working capital = Current assets - Current liabilities.

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

Question #2

The 'Consolidation Procedure' under AS 21 requires:

A. Only adding assets

B. Ignoring subsidiary's data

C. Line by line adding of like items of assets, liabilities, income, expenses

D. Only adding profits

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Correct Answer: Option C

Explanation:
Consolidation combines similar items and eliminates intra-group transactions.

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

Question #3

Which of the following is an example of a capital receipt?

A. Sale of old newspapers

B. Loan received from bank

C. Commission received

D. Rent received

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Correct Answer: Option B

Explanation:
Loan is a capital receipt as it creates a liability. Others are revenue receipts.

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

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