Question

STATE WHEATHER TRUE OR FALSE
1 Loan from bank will reduce the amount of capital. 2. Salary paid is a nominal account. 3 . Profit and loss account indicates the financial position of the business. 4.Trade Discount is the rebate allowed to the buyer for making prompt payment. 5. In accounting, a business is assume to last forever

Answer 1

Answer:

1.False

2.True

3.False

4.True

5.True

Explanation:

1.Loan from bank is a liability,true but on overall affect it is introduced in business and thus will increase the amount of capital.

2.Salary A/c is a nominal account which deals with particular category rather than a person or organization.

3.Profit and loss account shows the profitability of a business,to know the financial position one needs to look up to more than 1 account.

4.Trade discount is given mostly when payments are made promptly or in a given time period.

5.Going concern is the term we use for this assumption.