An item of 'Outstanding Income' is shown in Balance Sheet as: MCQ with Answer and Explanation

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An item of 'Outstanding Income' is shown in Balance Sheet as:

A. Liability

B. Income

C. Expense

D. Asset

Answer: Option D

Solution (By JKSSB Mock Tests)

Outstanding income is receivable, hence a current asset.

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

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Question #1

The 'Intangible Asset' (AS 26) is recognised if:

A. It is purchased

B. It is probable that future economic benefits will flow and cost can be measured reliably

C. It is internally generated

D. It has physical substance

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Correct Answer: Option B

Explanation:
Intangible assets are recognised when they meet the definition and recognition criteria.

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

Question #2

When starting a BRS with a debit balance as per the Cash Book, cheques issued but not yet presented for payment should be:

A. Divided

B. Deducted

C. Ignored

D. Added

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Correct Answer: Option D

Explanation:
These cheques decreased the cash book balance but not the pass book. To match the pass book, they must be added back.

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

Question #3

The 'Capital Redemption Reserve' is created when preference shares are redeemed out of:

A. Profits

B. Securities premium

C. Proceeds of fresh issue

D. General reserve

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Correct Answer: Option A

Explanation:
When redemption is out of profits, an equivalent amount is transferred to Capital Redemption Reserve.

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

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