A debit balance in a personal account of a creditor indicates: MCQ with Answer and Explanation

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A debit balance in a personal account of a creditor indicates:

A. Amount receivable from him

B. He has become debtor

C. Both B and C

D. Amount payable to him

Answer: Option C

Solution (By JKSSB Mock Tests)

A creditor account with debit balance means the firm has paid excess or he owes money, so he is a debtor.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

The primary objective of Financial Management is:

A. Minimizing taxes

B. Maximizing market share

C. Profit maximization

D. Wealth maximization of shareholders

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Correct Answer: Option D

Explanation:
Wealth maximization is considered the superior objective as it accounts for long-term value creation, risk, and the time value of money.

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Question #2

In cost accounting, 'Variable Cost' per unit:

A. Increases with production

B. Fluctuates randomly

C. Decreases with production

D. Remains constant

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Correct Answer: Option D

Explanation:
Variable cost per unit remains constant; total variable cost changes with output.

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Question #3

The 'Performance Budgeting' technique focuses on:

A. Outputs and outcomes

B. Inputs only

C. Cash flows

D. Past performance

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Correct Answer: Option A

Explanation:
Performance budgeting links funding to results, emphasizing outputs and outcomes rather than just expenditure.

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