Which of the following will not appear in Profit and Loss Account of a business?
Correct answer: A. Drawings
- A. Drawings
- B. Bad debts
- C. Accrued expenses
- D. Reserve for discount on Sundry Creditors
Explanation
Drawings are withdrawals of capital by the proprietor and are adjusted against capital, not treated as a business expense in the Profit and Loss Account. Bad debts, accrued expenses and discount provisions can affect profit.
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About Financial Statements
Financial statements present a business's financial performance and position through the income statement, statement of financial position, cash flow statement and changes in equity. Questions involve preparing and interpreting these statements, adjusting entries, depreciation, closing inventory, accrued and prepaid items, and distinguishing profit from cash flow.
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