Answer to Question #78268 in Accounting for garry

Question

State weather the following statements are True or False.

1. For a trading firm, revenue is recognised when the goods are delivered.
2. In the income statement, insurance would be classified as a financial expense.
3. Allowance for doubtful debts is a negative liability.
4. Accrued expenses are liabilities yet to be paid.
5. The physical stocktake valuation at the end of the accounting period is deducted from 'Cost of goods available for sale'.

Answer 1

1. For a trading firm, revenue is recognised when the goods are delivered - false.
2. In the income statement, insurance would be classified as a financial expense - false.
3. Allowance for doubtful debts is a negative liability - true.
4. Accrued expenses are liabilities yet to be paid - true.
5. The physical stock take valuation at the end of the accounting period is deducted from 'Cost of goods available for sale' - true.