Financial Statements of a Sole Trade

The correct heading for the statement of financial position of a sole trader at the end of December 2020 is ‘Statement of financial position:

• For the year ended 31 December 2020 .

• As at 31 December 2013.

• For the period ended 31 December 2020 .

• As at December 2020.

A statement of financial position is:

• A statement listing the business’s income and expenditure for the year

• A statement listing what the business owes at a particular point of time

• A statement of money received and paid out during the year

• A statement listing the business’s total assets, liabilities and capital at a particular point of time

A sole trader buys goods totalling ₹10,000 and sells 60% of them for ₹ 9,000 what is the trader’s gross profit?

• ₹9,000

• ₹3,000

• ₹6,000

• ₹4,000

Gross profit equals:

• Sales less the cost of goods sold

• The difference between the sales and purchases

• Purchases less closing inventory

• Sales less closing inventory

The cost of goods sold is:

• Sales less purchases and opening inventory

• Purchases plus opening inventory

• Opening inventory plus purchases less closing inventory

• Sales minus opening inventory

From the following list identify a current liability:

• Mortgage on the premises

• Accounts receivable

• Bank loan for 5 years

• Accounts payable

Statement used to prepare financial statements of the business is called:

• Financial Statement

• Bank Reconciliation Statement

• Trial Balance

• All of these

On debit side of Trading Account we record:

• Indirect Expense

• Direct Expense

• Both of these

• None of these

Which are indirect expense of the followings?

• Rent Income

• Insurance premium

• Wages

• All of these

On credit side of Profit and Loss Account we record:

• Direct Income

• Direct Expenses

• Indirect Expenses

• Indirect Income