As per the concept of Social Accounting, the entity should account for: MCQ with Answer and Explanation

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As per the concept of Social Accounting, the entity should account for:

A. Government levies only

B. Financial performance alone

C. Only economic transactions

D. Social costs and benefits

Answer: Option D

Solution (By JKSSB Mock Tests)

Social Accounting involves measuring and reporting the social and environmental impact of an entity's activities.

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

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Question #1

Which of the following statements best describes the 'Money Measurement Concept'?

A. All assets are recorded at market value.

B. All transactions and events are recorded in terms of money.

C. Only cash transactions are recorded.

D. Only profitable transactions are recorded.

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Correct Answer: Option B

Explanation:
The money measurement concept states that only those transactions which can be expressed in monetary terms are recorded in the books of accounts.

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Question #2

According to AS-2 (Valuation of Inventories), which cost formula is widely accepted for measuring historical cost of inventory?

A. FIFO or Weighted Average Cost

B. Next-In-First-Out (NIFO)

C. LIFO (Last In First Out)

D. Replacement Cost

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Correct Answer: Option A

Explanation:
AS-2 recommends FIFO or Weighted Average Cost. LIFO is generally not permitted under Indian Accounting Standards.

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Question #3

S1: Margin of Safety is the excess of break-even sales over actual sales. S2: Margin of Safety is calculated as (Actual Sales - Break-Even Sales). Which statement(s) is/are correct?

A. S2 only

B. S1 only

C. Neither S1 nor S2

D. Both S1 and S2

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Correct Answer: Option A

Explanation:
Margin of Safety is the excess of *actual* or *budgeted* sales over the break-even sales, not the other way around. S1 is incorrect. S2 correctly states the formula: Actual Sales - Break-Even Sales.

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