C) Complete the sentence: (5)
(1) Return outward are deducted from ________.
(2) Fixed deposit account comes under ________ group.
(3) Dissolution expenses are credited to _______ Account.
(4) New partner always brings his share of goodwill in _______.
(5) In receipt and payment account, the summary of ________ transactions are recorded.
Answers
Answer:
1. Return Outward are deducted from Purchases.
2. Fixed deposit account comes under Current Assets group.
3. Dissolution expenses are credited to Cash / Bank Account.
4. New partner always brings his share of goodwill in Cash.
5. In receipt and payment account, the summary of Cash transactions are recorded.
Explanation:
1. Return Outward are the Goods that are being returned by the customer to the Supplier. Goods can be returned if there is any defect in it. Return Outward are deducted from Purchases.
2. Fixed deposit can be said as a current or non current asset based on the duration. Hence, fixed deposits comes under Current asset group.
3. Dissolution expenses are credited to Cash/Bank account. Payment of realisation expenses results in outflow of cash. Therefore, they are credited to Cash/Bank A/c (as these lead to decrease in cash balance).
4. The new partner must pay his share of goodwill in the form of Cash only.
5. Only cash transactions in receipt and payment account. It generally shows a debit balance. In the case of overdraft balance, its net balance may be credit. Its closing balance shows closing cash in hand and closing cash at the bank.