- FINANCE, t 1) Life Insurance Premium will be treated as Drawiry TAT Na, Loan on Mortgage” is a liability, Whereas ‘Interest on Leg oan Q. 20. Arrange assets in the order of permanence "| Sundry Debtors, Stock, Investment, Land and Building, Cash in Hand, Moi, Cash at Bank, Goodwill, Plant and Machinery, Furniture, Loose Tools, Mayet Securities. eta [Ans () Goodwill (ii) Land and Building or chicle (iii) Plant and Machinery (iv) Motor Vehicle zs {¥) Loose Tools (vi) Furniture (vif) Investment (Long-Term) (viii) Stock (&), Sundry Debtors (x) Marketable Securities (Sho (xi) Cash at Bank (xii) Cash in Hand] HIGHER ORDER THINKING SKILLS (HOTS) QUESTIONS Goodwill is classified under which class of assets? L What type of liability is ‘Bill Discounted but not matured"? ‘ Where are Contingent Liabilities shown in financial statements? What are Contingent Assets? Where do they appear in financial Statements ad MT) why? Give one example of Contingent Assets. Mr. Khanna is the owner of a Theatre. He spent %5,00,000 for increasing iy seating capacity of the Theatre. Where will it be shown and why? What will be the effect of overstatement of closing stock on Gross Profit? Modern Ltd. sold goods for 760,000 to Mr. Ashok at a profit of 20% on sie These goods are still in the godown of Modern Ltd. at the buyer's risk at ty close of financial year. What treatment will be made for these goods by Moden Ld. Calculate the amount of ‘Gross Profit’ when net loss is %75,000, Operating Expenses are %1,20,000 and Sales are €3,00,000. 10. Calculate the amount of ‘Sales’ when purchases amount to %6,00,000; Gros Profit 21,30,000 and Net Profit %40,000. 11. Cost of Goods Sold + Gross Profit = 12. Interest paid is deducted from interest earned in the Profit & Loss Account. |si a correct treatment? * ANSWERS TO HIGHER ORDER THINKING SKILLS (HOTS) QUESTIONS - Intangible Assets, Contingent Liability, They are shown as a footnote just below the Balance Sheet. » Contingent asset means a right or the possibility of an inflow of econ pnt ‘o the firm in future. They are not shown in the financial ‘Calise of convention of. Prudence. AP le