A 'Drawings' account is a: MCQ with Answer and Explanation

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A 'Drawings' account is a:

A. Real account

B. Valuation account

C. Nominal account

D. Personal account

Answer: Option D

Solution (By JKSSB Mock Tests)

Drawings account represents the proprietor, hence it is a personal account.

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

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Question #1

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The 'GST Compensation Cess' on motor vehicles for personal use is:

A. Nil

B. Varies from 1% to 22% depending on engine capacity and type

C. 10%

D. Fixed 28%

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Correct Answer: Option B

Explanation:
Compensation cess on automobiles ranges from 1% to 22% over and above the 28% GST.

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Question #2

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X and Y share profits 3:2. They admit Z for 1/5th share, which he gets entirely from X. The new profit sharing ratio will be:

A. 1:2:2

B. 3:2:1

C. 2:1:2

D. 2:2:1

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Correct Answer: Option D

Explanation:
X's new share = 3/5 - 1/5 = 2/5. Y = 2/5. Z = 1/5. Ratio = 2:2:1.

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Question #3

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The 'Expected Credit Loss' for trade receivables:

A. Always requires 12-month ECL

B. Only when default occurs

C. No impairment

D. Can use simplified approach (lifetime ECL) if there is no significant financing component

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Correct Answer: Option D

Explanation:
Ind AS 109 allows the simplified approach for trade receivables and contract assets.

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