Question

Match List-I with List-II:
\begin{tabular{ll} List-I (Term) & List-II (Meaning)
(A) Capital & (I) The persons or firms to whom goods or services have been rendered
& on credit and payment has not been received
(B) Income & (II) Amount due to creditors and for bills due
(C) Debtors & (III) All assets minus external liabilities
(D) Payables & (IV) Revenue minus expenses

Choose the correct answer from the options given below:

• (A) - (III), (B) - (IV), (C) - (I), (D) - (II)
• (A) - (I), (B) - (II), (C) - (III), (D) - (IV)
• (A) - (IV), (B) - (II), (C) - (I), (D) - (III)
• (A) - (III), (B) - (IV), (C) - (II), (D) - (I)

Hint:

Debtors are entities from whom the business is owed money (C - I).
Income is calculated as Revenue minus Expenses (B - IV).
These matches immediately lead to the correct option.

Answer 1

The Correct Option is A

Step 1: Understanding the Concept:
This matching question tests the accounting and financial terms used to evaluate a business enterprise's balance sheet and income statement.

Step 2: Detailed Explanation:
Let us match the accounting terms in List-I with their definitions in List-II:
- (A) Capital: In business, capital (owner's equity or net worth) represents the owner's claim on assets, calculated as:
\[ \text{Capital} = \text{Total Assets} - \text{External Liabilities} \]
Thus, (A) matches with (III).
- (B) Income: Net income represents the net earnings of a business, calculated as total revenue minus total expenses.
Thus, (B) matches with (IV).
- (C) Debtors: These are customers or entities who owe money to the business for goods or services purchased on credit.
Thus, (C) matches with (I).
- (D) Payables: These are short-term liabilities representing the money the business owes to creditors.
Thus, (D) matches with (II).
This gives the sequence: (A)-(III), (B)-(IV), (C)-(I), (D)-(II).

Step 3: Final Answer:
The correct option is 1.