State with reasons, whether the following statements are True or False: (i) Nominal Accounts are balanced at the end of the Accounting Year. (ii)…

(i) False: Nominal Accounts are not balanced. The balances at the end are transferred to Trading/ Profit & Loss A/c. (ii) False: Overhaul expenses are incurred to put second-hand machinery in working condition to derive endurable long-term advantage. So, it should be capitalized. (iii) True: The conservatism concept states that one shall not account for anticipated profits but shall provide all prospective losses. Valuing inventory at cost or net realisable value whichever is less, therefore is based on principle of conservatism. (iv) False: A promissory note should not be made payable to the bearer. The payee must be to a certain person. (v) False: It depicts the cash system of accounting rather than the accrual system, as the cash receipts and payments pertaining to any year are entered in the Receipts and payments account. The principle of accrual is not followed with regard to the receipts and payments account of a non-profit organization. (vi) False: Legal heirs of a deceased partner are entitled to all the dues of deceased partner.