Amortisation is related to: MCQ with Answer and Explanation

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Amortisation is related to:

A. Tangible assets

B. Fictitious assets only

C. Intangible assets

D. Current assets

Answer: Option C

Solution (By JKSSB Mock Tests)

Amortisation is the systematic write-off of intangible assets like patents, copyrights.

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

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Question #1

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The 'Retention Period' for audit working papers is generally:

A. 1 year

B. 10 years

C. 7 years (or as per SQC 1)

D. No requirement

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Correct Answer: Option C

Explanation:
As per ICAI's Standard on Quality Control, retention period is at least 7 years.

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

Question #2

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In a piecemeal distribution of cash during the dissolution of a partnership firm, which method is typically used?

A. Maximum Loss Method

B. Both B and C

C. Proportionate Capital Method

D. Surplus Capital Method

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Correct Answer: Option B

Explanation:
When cash is realized in installments during dissolution, it is distributed using either the Maximum Loss Method or the Surplus Capital (Proportionate Capital) Method to ensure partners' capital accounts are correctly adjusted.

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Question #3

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Under single entry system, profit = closing capital - opening capital + drawings - additional capital introduced. This statement is:

A. Only for companies

B. Correct

C. Incorrect

D. Partially correct, needs other adjustments

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Correct Answer: Option B

Explanation:
In single entry, adjusted profit is derived from capital comparison: Profit = Closing capital + Drawings - Opening capital - Additional capital.

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

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