Which of the following statements is true?
A)Provision for doubtful debts represents the amount that cannot be collected
B)The distinction between capital and revenue items is important because it is of fundamental importance to the determination of profits
C)Goods lost by fire need not be accounted for since they are not sales
D)Free samples received are business gains

Question

Quizplus · Accepted Answer

The distinction between capital and revenue items is crucial for accurately determining profits. Capital items are associated with long-term assets and investments, while revenue items relate to the day-to-day running of the business and affect the profit and loss account. Correctly categorizing these items ensures that financial statements reflect the true financial position and performance of the business.

Which of the Following Statements Is True