Capital expenditure is recorded in: MCQ with Answer and Explanation

Capital expenditure is recorded in:
A. Balance Sheet
B. Manufacturing Account
C. Trading Account
D. Profit & Loss Account
Answer: Option A
Solution (By JKSSB Mock Tests)
Capital expenditure results in acquisition of assets, shown on the asset side of Balance Sheet.

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Practice More Accountancy and Book Keeping Questions

Question #1
Assertion (A): The Public Financial Management System (PFMS) integrates with the Core Banking Solutions (CBS) of banks. Reason (R): This integration ensures that funds are credited directly to the beneficiary's account, eliminating leakages. Choose the correct option.
A. A is false but R is true
B. A is true but R is false
C. Both A and R are true but R is NOT the correct explanation of A
D. Both A and R are true and R is the correct explanation of A

Correct Answer: Option D


Explanation:
PFMS integrates with CBS to enable Direct Benefit Transfer (DBT). This direct credit to beneficiary accounts ensures transparency and eliminates middlemen, correctly explaining the purpose of the integration.

Question #2
Which of the following is NOT a fundamental accounting assumption as per AS-1?
A. Accrual
B. Consistency
C. Prudence
D. Going Concern

Correct Answer: Option C


Explanation:
Prudence is an accounting convention, not a fundamental assumption under AS-1. The three fundamental assumptions are Going Concern, Consistency, and Accrual.

Question #3
In case of a partnership firm, registration is:
A. Not compulsory but advisable
B. Required only for banking
C. Mandatory
D. Not possible

Correct Answer: Option A


Explanation:
Registration of partnership firm is optional, though unregistered firms face some disabilities.