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Home Questions TN7Z5RPD3N
Target Exam

CUET

Subject

Accountancy

Chapter

Financial Statements of a Company

Question:

Match the following items with the head in which they are shown in the company's Statement of Profit and Loss.

PARTICULARS HEAD
A) Consumption of material I) Depreciation and amortisation expense
B) Sale of Services II) Employee benefit expenses
C) Goodwill written off III) Revenue from operations
D) Canteen expenses IV) Cost of materials consumed

Choose the correct answer from the options given below.

Options:

A-I, B-III, C-IV, D-II

A-IV, B-I, C-II, D-III

A-IV, B-III, C-I, D-II

A-IV, B-III, C-II, D-I

Correct Answer:

A-IV, B-III, C-I, D-II

Explanation:

The correct answer is option 3- A-IV, B-III, C-I, D-II.

PARTICULARS HEAD
A) Consumption of material IV) Cost of materials consumed
B) Sale of Services III) Revenue from operations
C) Goodwill written off I) Depreciation and amortisation expense
D) Canteen expenses II) Employee benefit expenses

* Consumption of material- Cost of Materials. It applies to manufacturing companies. It consists of raw materials and other materials consumed in manufacturing of goods.

* Sale of Services- Revenue from operations This includes: (i) Sale of products (ii) Sale of services (iii) Other operating revenues

* Goodwill written off -Depreciation and amortisation expense. Depreciation is the diminution in the value of fixed assets whereas amortisation is writing off the amount relating to intangible assets.

* Canteen expenses- Employee benefit expenses. Expenses incurred on employees towards salary, wages, leave encashment, staff welfare, etc., are shown under this head. Employees benefit expenses may be further categorised into direct and indirect expenses. 

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