Commerce MCQs
Topic Notes: Commerce
MCQs and preparation resources for competitive exams, covering important concepts, past papers, and detailed explanations.
Plato
- Biography: Ancient Greek philosopher (427–347 BCE), student of Socrates and teacher of Aristotle, founder of the Academy in Athens.
- Important Ideas:
- Theory of Forms
- Philosopher-King
- Ideal State
231
If depreciation appears in the trial balance, where should it be recorded in the final accounts?
Answer:
the profit and loss account
When an item appears in the trial balance, it has already been adjusted in the ledger. Therefore, it is treated as an expense and recorded only in the Profit and Loss account. If it were an adjustment outside the trial balance, it would appear in both the P&L and the Balance Sheet.
232
Which of the following mathematical equations regarding inventory and cost of goods sold is incorrect?
Answer:
Cost of the goods sold - Closing Stock - Purchases = Opening Stock
The fundamental formula is: Opening Stock + Purchases - Closing Stock = Cost of Goods Sold (COGS). Rearranging this, we get: COGS + Closing Stock - Purchases = Opening Stock. Option A is incorrect because it subtracts the closing stock instead of adding it, failing to correctly isolate the opening stock value based on the standard accounting identity.