VERIFICATION AND VALUATION OF ASSETS AND LIABILITIES
Que.
1. Define the term verification of assets.
Ans.:
According to Spice and Pegler "verification of assets implies an enquiry
into the value, ownership and title, existence and possession and the presence
of any charge on the assets”.
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| TYPES OF ASSETS VALUATION |
Que.
2. Describe the Classification of assets.
Ans.:
How to classify the assets? Which assets are fixed assets? And which are
current assets? What should be base of their classification? Some assets are
grouped as fixed asset at one place and current assets at another place.
Que.
3. Give two points of distinction between Vouching and Verification.
Ans.:
Vouching: 1. It is a process of examination of business transactions
- To determine the correctness of
business transactions recorded in the books of accounts.
Verification:
1. It is a process of physical examination of assets.
- To confirm the truth of assets
held and value of assets appearing In the balance sheet.
Que.
4. State two objects of verification and valuation of assets.
Ans.
1. To confirm that all assets and liabilities as shown in the balance sheet
actually exist on the date of balance sheet.
- To confirm that all assets held by
client are correctly valued in due compliance with legal formalities.
Que.
5. State any two problems in verification and valuation of assets.
Ans.:
How to classify the assets? Which assets are fixed assets and which are current
assets? What should be base for their classification? These are some problems
in valuation of assets.
Que.
6. Define wasting assets.
Ans.
Assets which goes on depleting by the process of extracting mineral from mines
are called wasting assets.
Que.
7. What is an Intangible asset?
Ans.
Assets which cannot be seen or touched are called intangible assets.
Que.
8. Name the types of Assets.
Ans.:
1. Fixed Assets. 2. Current Assets. 3. Wasting Assets. 4. Intangible Assets.
Que.
9. Define fixed assets.
Ans.:
Irrespective of market position fixed assets are to be valued at original cost
subject to depreciation. As the fixed assets are purchased for use in the
business and not for resale.
Que.
10. Define Contingent Liabilities?
Ans.:
According to W. B. Meigs, contingent liabilities may be defined as
"potential obligations, which may in the future develop into actual liabilities
or may dissolve without necessitating any outlay".
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