Accounting · Financial Statements Analysis
Analyze the following statements regarding accounting principles and financial instruments: 1. Forward points are added to the spot rate if the base currency is at a premium. 2. The cost of goods sold includes administrative expenses and selling commissions. 3. Sale of old scrap material is treated as a revenue receipt in the trading account. 4. Premium received on the issue of debentures is a revenue receipt. 5. In a direct quote, if the forward bid is more than the forward ask, the currency is at a discount. 6. Opening stock plus net purchases minus closing stock equals the gross profit. 7. Capital receipts include funds raised through the issuance of long-term bonds in the capital market. Which of these statements are correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Statements 1, 3, and 7 are correct.✓
- 2Statements 1, 2, 4, and 6 are correct.
- 3Statements 2, 3, 5, and 7 are correct.
- 4All statements are correct.
Correct answer
Statements 1, 3, and 7 are correct.
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