Contingent liabilities are shown as a footnote to the balance sheet to comply with which accounting convention? MCQ with Answer and Explanation

Question
Contingent liabilities are shown as a footnote to the balance sheet to comply with which accounting convention?
A. Consistency
B. Materiality
C. Full Disclosure
D. Conservatism
Answer: Option C
Solution (By JKSSB Mock Tests)
Full disclosure requires all significant information to be completely and fairly disclosed, including contingent liabilities via footnotes.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Question #1
A firm's assets total ₹10,00,000 and its owner's equity is ₹4,00,000. The firm borrows ₹2,00,000 from a bank. After the borrowing, what is the total liabilities to outsiders?
A. ₹4,00,000
B. ₹10,00,000
C. ₹6,00,000
D. ₹8,00,000
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Correct Answer: Option D

Explanation:
Initially, liabilities = Assets - Equity = 10,00,000 - 4,00,000 = 6,00,000. After borrowing 2,00,000, liabilities become 8,00,000.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
The use of 'Smart Contracts' in accounting is a direct result of development in:
A. Blockchain Technology
B. Cost Control
C. Double Entry System
D. PFMS
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Correct Answer: Option A

Explanation:
Smart contracts are self-executing contracts with terms written into lines of code, running on blockchain networks.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
The 'Financial Stability and Development Council' (FSDC) is chaired by:
A. Prime Minister
B. SEBI Chairman
C. RBI Governor
D. Union Finance Minister
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Correct Answer: Option D

Explanation:
FSDC is an apex body for financial sector stability, chaired by the Finance Minister.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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