State with reasons, whether the following statements are true or false: (i) Trade Discount is a reduction granted by a supplier from the list price…

(i) False: Trade Discount is a reduction granted by a supplier from the list price of goods or services on business considerations other than for prompt payment. (ii) False: Trial balance only checks the arithmetical accuracy of the books. Errors of principle and errors of commission will not affect the agreement of the trial balance. (iii) True: Salary paid in advance relates to the coming accounting period and it has nothing to do with the current period. Hence it is not taken in the Profit and Loss Account as an expense. It is shown as a Current Asset in the Balance Sheet. (iv) False: When closing inventory is overstated, net income for the accounting period will also be overstated. (v) False: The drawer and payee may be same person in case of bill of exchange whereas in promissory note maker and payee can't be same person. (vi) False: Even though Goodwill is intangible asset it can be valued in terms of money. It can be measured in terms of physical units. (vii) True: Laboratory and library deposits are of the nature of security deposits to be refunded to the students on their leaving the College or University. Hence they are shown on the liability side of the Balance Sheet. (viii) True: As per Perpetual Existence company has existence independent of its members, it continues to be in existence despite the death, insolvency or change of members. (ix) False: Even if the company incurs losses, it has to pay interest on debentures. Debenture being debts on the company & debenture holders are not concerned with the profit or loss of the company, the interest is to be paid at the rate fixed on it at the time of issue of debenture.