An increase in provision for doubtful debts would result in
Decrease in net profit
Increase in net profit
Decrease in gross profit
Increase in gross profit
Correct answer is A
Increase in provision for doubtful debt occurs when the current year's provision for doubtful debts is more than the previous year's provision. In the final account, increase in provision for doubtful debts is debited to profit and loss account but in the balance sheet, the increase is added to any previous provision and the total subtracted from the debtors balance. Therefore, it will reduce the net profit from the profit and loss account.
A unit of a company capital is
Debenture
Stock
Premium
Share
Correct answer is D
Share can be defined as a unit of capital of a company allocated to an individual. It is the interest of the shareholder in the company mesured by in terms of money for purpose of liability in the first place and of interest in the second.
A trader bought goods worth #16,000 and sold three-quarter of it for #20,000
The margin would be
1/2
1/5
2/5
2/3
Correct answer is B
Margin = Profit/Selling Price x 100
= 4,000/20,000 x 100
= 20%
= 20/100
= 1/5
A trader bought goods worth #16,000 and sold three-quarter of it for #20,000
The gross profit is
#4,000
#8,000
#12,000
#6,000
Correct answer is A
No explanation has been provided for this answer.
The user of accounting information who is responsible for overall performance of the business is the
Customer
Employee
Shareholder
Director
Correct answer is D
Directors are agents to the company. They are expected to manage the business on behave of their principal, the shareholders. As a result, they are accountable to them. To achieve accountability, the directors ensure that the business earns a profit.