State with reasons whether the following statements are True or False: (i) Legal fees to acquire property is Capital Expenditure. (ii) Abnormal…

(i) True: Legal fee paid to acquire any property is part of the cost of that property. It is incurred to possess the ownership right of the property and hence a capital expenditure. (ii) False: Abnormal amounts of wasted materials, labour or other production overheads expenses are generally not included in the costs of inventories. (iii) False: Imprest system part of petty cash book. It is not part of single column cash book. (iv) True: The Cinema Hall could not be started without license. Expenditure incurred to obtain the license is pre-operative expense which is capitalised. Such expenses are amortised over a period of time. (v) False: Useful life is either i. The period over which a depreciable assets is expected to be used by the enterprises. ii. The number of production or similar units expected to be obtained from the use of asset by the enterprise. (vi) False: The rationale behind the opening of a suspense account is to avoid delay in the preparation of financial statements.