Assets Liabilities

Step 1: Find increase.

Step 2: Calculate percentage change.

Step 3: Conclude.
Therefore, the percentage change is 25%.
Final Answer:

Step 1: Definition of current assets.
As per accounting standards, current assets are those which are expected to be realised, sold, or consumed in the normal course of business within one year or within the operating cycle (whichever is longer).
Step 2: Examples.
Cash, debtors, bills receivable, stock, prepaid expenses, etc., are included in current assets.
Step 3: Eliminate wrong options.
- 3 months and 6 months: Too short, not general definition.
- 2 years: Too long.
Step 4: Conclude.
Hence, current assets are those which are expected to be realised within one year.
Final Answer:

Step 1: Current account meaning.
In partnership, when fixed capital method is used, all adjustments like interest on capital, drawings, profit share, and interest on drawings are recorded in the Current Account.
Step 2: Possible balances.
- Positive balance: When credits (profits, interest on capital) exceed debits.
- Negative balance: When debits (drawings, losses, interest on drawings) exceed credits.
- Zero balance: When both sides equalise.
Step 3: Conclude.
Hence, the Current Account can have positive, negative, or zero balance.
Final Answer:

Step 1: Meaning of liquid assets.
Liquid assets are those current assets which can be easily converted into cash without significant loss of value.
Step 2: Examples.
- Bills Receivable = short-term promise to pay, easily realisable.
- Debtors = amounts receivable from customers, part of liquid assets.
- Cash = already liquid.
Step 3: Conclude.
Thus, all the given items (BR, Debtors, Cash) are liquid assets.
Final Answer:

Step 1: Concept of asset valuation.
Fixed assets are tangible long-term assets like machinery, building, etc. They are recorded at historical cost.
Step 2: Treatment in financial statements.
As per accounting principles and Companies Act, fixed assets are shown at cost price less accumulated depreciation.
Step 3: Eliminate wrong options.
- (A) Par value: Applies to shares, not fixed assets.
- (C) At cost price: Incorrect, depreciation must be deducted.
- (D) At realisable value: Incorrect, as only impairment may affect valuation, not general realisation.
Step 4: Conclude.
Thus, fixed assets are shown at cost price less depreciation.
Final Answer:

Step 1: Classification of assets.
- Current Assets: Cash, stock, debtors, etc.
- Liquid Assets: Readily realizable assets like cash and bank.
- Intangible Assets: Non-physical assets like goodwill, patents, trademarks, copyrights.
Step 2: Identify patents and copyrights.
Patents and copyrights are legal rights, non-physical in nature, and generate future economic benefits. Thus, they are intangible assets.
Step 3: Conclude.
Hence, patents and copyrights are classified as Intangible Assets.
Final Answer:

Step 1: Nature of provision for tax.
Provision for tax represents the estimated amount payable to the government for the current accounting period.
Step 2: Balance sheet treatment.
It is shown under “Current liabilities” because it is payable within a short period (within one year).
Step 3: Eliminate wrong options.
- Option (B) Internal reserve: Wrong, because reserve is appropriation of profit, not liability.
- Option (C) Both: Wrong, it cannot be both.
- Option (D): Not correct since option (A) is right.
Step 4: Conclude.
Therefore, Provision for Tax is treated as a Current Liability.
Final Answer:

Step 1: Nature of General Reserve.
General Reserve is an appropriation of profit created out of surplus earnings of a business. It is part of reserves and surplus shown under “Liabilities” in the balance sheet.
Step 2: Accounting treatment.
Reserves are created by transferring a portion of net profits. Since profits belong to the owners, reserves are a liability of the firm towards its partners/shareholders. Hence, they always carry a credit balance.
Step 3: Eliminate options.
- Option (A) Debit Balance Wrong, because reserves cannot be debit.
- Option (C) Both debit and credit Wrong, reserves are only credit.
- Option (D) None of these Wrong, because (B) is correct.
Step 4: Conclude.
Thus, General Reserve Account always shows a credit balance.
Final Answer: