State with reasons, whether the following statements are true or false: (a) The concept of conservatism when applied to the balance sheet results in…

(a) (a) False: Conservatism states that the accountant / entity should not anticipate any future income. However, they should provide for all possible / probable losses. Imprudent use of concept of conservatism may lead to understatement of income and assets. (b) False: Renovation of cabins increased the number of cabins. This has an effect on the future revenue generating capability of the business. Thus, this renovation expense is capital expenditure in nature. (c) False: Bank reconciliation statement is prepared to reconcile and explain the causes of differences between bank balance as per cash book and the same as per bank statement as on a particular date. (d) False: The provision for bad debts is debited to Profit and loss Account and in Balance Sheet it is shown either on liability side or deducted from the head debtors. (e) True: Depreciation is a non-cash expense and unlike other normal expenditure (e.g. wages, rent, etc.) does not result in any cash outflow. (f) True: Discount at the time of retirement of a bill is a gain for the drawee and loss for the drawer. (g) True: According to the principle of conservatism provision is maintained for the losses to be incurred in future. Discount on creditors is an income so provision in not maintained. (h) False: the firm will receive full value of sum assured of the joint life policy on the death of the partner. (i) True: Where in case of the Trading activities for Non-Profit organization, the profit / loss from such activity is to be transferred to the income Expenditure Account at the time of consolidation. (j) False: A fixed charge is a mortgage on specific assets. A floating charge generally covers all the assets of the company including future one