Sage Computerised Accounting - Qp7

Fixed assets are indeed items that belong to the business and are expected to depreciate over time. These assets are typically long-term investments that are essential for the operations of the business, such as vehicles, premises, and equipment. As they are used, they lose value due to wear and tear, technological advancements, or other factors. Therefore, the statement "Fixed assets are items such as vehicles, premises, and equipment that belong to the business and which depreciate" is accurate and true.

Direct expenses are costs that can be specifically attributed to the production of goods or services. These expenses are directly related to the manufacturing process or the provision of a service. Examples of direct expenses include raw materials, direct labor costs, and direct overhead costs. By contrast, indirect expenses are costs that are not directly linked to production, such as administrative expenses or sales and marketing expenses. Therefore, the statement that direct expenses are those expenses directly linked to production is true.

Nominal codes 2000-2999 do not indicate Sales. This statement is false. The range of nominal codes mentioned does not have a specific indication or association with sales. Nominal codes are used in accounting to categorize different types of transactions and expenses. Sales may be recorded under a different range of nominal codes depending on the specific accounting system or company's chart of accounts.

Miscellaneous overheads refer to the ongoing expenses that a business incurs in order to operate efficiently. These expenses are not directly related to the production of goods or services but are necessary for the day-to-day functioning of the business. Examples of miscellaneous overheads include rent, utilities, office supplies, insurance, and maintenance costs. Therefore, it is correct to say that miscellaneous overheads are indeed ongoing expenses of operating a business.

When a debtor fails to pay their debt, it becomes necessary to write off the debt as a bad debt. Writing off a debt means that the creditor acknowledges that the debt is unlikely to be recovered and removes it from their accounts receivable. This is done to reflect the accurate financial position of the creditor and to comply with accounting principles. Therefore, the statement that a debtor who does not pay their debt should be written off as a bad debt is true.

Liabilities are not debts that customers owe. Liabilities refer to the financial obligations or debts that a company or individual owes to others, such as loans, accounts payable, or accrued expenses. It does not specifically pertain to debts owed by customers. Therefore, the given statement is false.