A Suspense Account is generally closed when: MCQ with Answer and Explanation

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A Suspense Account is generally closed when:

A. The auditor approves it

B. The financial year ends

C. The balance sheet is signed

D. All errors causing the trial balance difference are rectified

Answer: Option D

Solution (By JKSSB Mock Tests)

The Suspense Account exists only as a temporary fix. Once all one-sided errors are found and rectified, its balance becomes zero.

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

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Question #1

A 'Standard Cost' is:

A. Actual cost incurred

B. A predetermined cost based on technical estimates

C. Average cost

D. Historical cost

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Correct Answer: Option B

Explanation:
Standard cost is a scientifically predetermined cost used as a benchmark for performance evaluation.

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Question #2

What is the maximum penalty for late filing of an Income Tax Return (ITR) under section 234F for a person with income above Rs 5 lakhs?

A. Rs 1,000

B. Rs 5,000

C. Rs 10,000

D. Rs 50,000

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Correct Answer: Option B

Explanation:
Currently, the maximum penalty under section 234F for delayed filing is Rs 5,000 (Rs 1,000 if total income is under 5 lakhs).

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

Question #3

Which document serves as the basis for recording transactions in the books of accounts?

A. Trial Balance

B. Financial Statement

C. Source Document

D. Ledger Account

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Correct Answer: Option C

Explanation:
Source documents (like invoices, receipts) provide the objective evidence and basic data for preparing accounting vouchers.

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

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