Question

donations paid is
a) debited to costing
b) ignored in costing
c) debited to financial profit and loss account​

Answer 1

Answer:

Depreciation on computer purchased for office. F Not shown in cost sheet but credited to P & L a/c. vii. Donations. G Expenses debited only in the financial

Answer 2

Answer:

The correct answer is option (c)

Donations paid is debited to financial profit and loss account.

Explanation:

• The expenses for business firm are Charities or donations which are non-business expenditure.
• So, In profit and loss account these expenses are shown.
• The profit and loss account in which the revenues, expenses and costs incurred are summarized in the financial statement.
• For a specific purpose the donations are received and are used for specific activity.
• The receipt for donations are separately recorded.
• The general expenses are also debited from the profit and loss account.  
• In balance sheet the donations are shown in the liabilities side which are capitalized.
• In profit and loss account, the loss and the profit earned are represented during the accounting period.
• Before creating the balance sheet, the profit loss account is created.

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