When Preparing the Financial Statements Using a Manual Accounting System

question 29

Multiple Choice

When preparing the financial statements using a manual accounting system, the worksheet will show profit:

• A) in the DR column of the income statement and in the CR column of the balance sheet.
• B) as zero.
• C) as a CR to the capital account and a DR to the bank account.
• D) in the DR column of the adjustments and in the CR column of the balance sheet.

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Definitions:

IFRS 16

The International Financial Reporting Standard dictating lease accounting, requiring lessees to recognize nearly all leases on the balance sheet.

Lease Agreements

Contracts that outline the terms under which one party agrees to rent property owned by another party.

Technical Obsolescence

Technical obsolescence occurs when a product or component becomes outdated or less useful due to technological advancements, not because of physical wear.

Economic Conditions

The overall state of a country or region's economy, characterized by factors like GDP growth, unemployment rate, and inflation.