An asset is classified as current if it is expected to be realised within: MCQ with Answer and Explanation

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An asset is classified as current if it is expected to be realised within:

A. 12 months from the date of Balance Sheet

B. Both A and B are correct

C. Operating cycle, whichever is shorter

D. Operating cycle, whichever is longer

Answer: Option B

Solution (By JKSSB Mock Tests)

As per Schedule III, a current asset is one that is expected to be realized within 12 months from reporting date or within the operating cycle, whichever is longer.

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

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Question #1

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During dissolution of a partnership, realization expenses paid by a partner on behalf of the firm are:

A. Debited to Partner's Capital A/c, Credited to Cash A/c

B. Debited to Realisation A/c, Credited to Partner's Capital A/c

C. Ignored in the books

D. Debited to Cash A/c, Credited to Realisation A/c

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Correct Answer: Option B

Explanation:
Because the firm owes the partner for this expense, it is charged to Realisation (Debit) and credited to the Partner's Capital account.

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Question #2

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Input Tax Credit on motor vehicles is blocked under GST except when used for:

A. Personal use

B. Further supply of vehicles or transportation of goods/passengers

C. Office commuting

D. All cases

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Correct Answer: Option B

Explanation:
ITC on motor vehicles is generally blocked, but allowed if used for specified purposes like transport services, further supply, etc.

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Question #3

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The Indian Financial Management System (IFMS) integrates:

A. Only pension payments

B. Expenditure, receipts, and debt management

C. Only receipts

D. Only state government accounts

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Correct Answer: Option B

Explanation:
IFMS is a comprehensive system covering all aspects of government financial management including budget, expenditure, receipts, and debt.

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