State whether the following statements are true or false with reasons

1) Book-keeping and accounting are one and the same thing. – False.
Reason:  Book Keeping is a part of Accounting. It is Primary stage in accounting.

2) Conservatism means to follow safe side. – True.
Reason:  The accountants follow the rule, “anticipate no profit but provide for all possible losses’. This policy of recording is following safe side while recording business transactions.

3) The double entry system is based on “Dual Aspect” concept. –True.
Reason: Concept recognises the fact is that for every debit, there is a corresponding credit. This is the basis of the entire double entry system of book-keeping

4) Bank overdraft is an asset of the business. – False
Reason: It is a liability of business. is a liability of business.

5) Solvent person is a person whose assets are more than his liabilities.- True.
Reason: Assets are properties owned by businessman and liabilities are his debts. If assets are more than liabilities, the person will be able to pay off his liabilities.

6) Cash discount does not appear in the books of accounts.- False.
Reason: Cash discount is the concession given tee encouraging prompt payment. It is always recorded.

7) A transaction is concerned with money or money’s worth – True.
Reason: The term ‘Transaction’ means exchange of goods and services between two persons or parties for money or money’s worth. 

8) Accounting is the language of business.- True.
Reason: Accounting is means of communicating the results of business operations to various parties interested or connected with the business.

9) In civilization, accounting was done by owners. – False
Reason:  During evolution of accounting, in the earlier times of civilization, accounting was done by agents who managed the property of wealthy people.

10) Book-keeping is useful to find out all tax liabilities. – True.
Reason : Book-keeping means recording of business transactions in the books of accounts in a systematic way. On the basis of the record maintained, the businessman prepares final accounts.