State whether True and False

• State with reasons, whether the following statements are true or false:
• Accrual concept implies accounting on cash basis.
• The Sales book is kept to record both cash and credit sales.
• Bank reconciliation statement is prepared to arrive at the bank balance.
• Finished goods are normally valued at cost or market price whichever is higher.
• Reducing balance method of depreciation is followed to have a uniform charge for depreciation and repairs and maintenance together.
• Discount at the time of retirement of a bill is a gain for the drawee.
• A withdrawal of cash from the business by the proprietor should be charged to profit and loss account as an expense.
• Partners can share profits or losses in their capital ratio, when thereisnoagreement.

Receipts and Payments Account highlights total income and expenditure.

1. Explain Cash and Mercantile system of accounting.