State with reasons, whether the following statements are true or false: (i) Wages paid for erection of machinery are debited to Profit and Loss…

(i) False: Such wages being related to capital asset hence should be debited to the machinery account. (ii) False: Warehousing costs related to finished goods are expensed when incurred and are not included in inventory costs unless storage is incurred for getting the inventory ready for sale i.e. until and unless storage is required as a part of process of production of inventory like in case of wine. (iii) True: Cash transactions are straightaway recorded in the Cash Book and on the basis of such a record, ledger accounts are prepared. Therefore, the Cash Book is a subsidiary book. But the Cash Book itself serves as the cash account and the bank account; the balances are entered in the trial balance directly. The Cash Book therefore, is part of the ledger also. Hence, it has also to be treated as a principal book. The Cash Book is thus both a subsidiary book and a principal book. (iv) True: In case of the promissory note, it is generally the maker who makes the payment, but in case of the bill of exchange, the person accepting the bill shall be liable to make the payment to the holder of the bill. (v) False: The business of partnership may not end on death of a partner if the partnership deed provides clause for continuation of the business by the surviving partners. (vi) False: Debenture interest is payable before the payment of any dividend on shares.