Goods given away as charity should be credited to: MCQ with Answer and Explanation

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Goods given away as charity should be credited to:

A. Cash Account

B. Charity Account

C. Sales Account

D. Purchases Account

Answer: Option D

Solution (By JKSSB Mock Tests)

Donating goods reduces the stock of purchased goods. Thus, the Purchases account is credited at cost price.

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

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Question #1

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If rent paid is Rs 10,000 and prepaid rent at year-end is Rs 2,000, what is the rent expense for the current year under accrual accounting?

A. Rs 2,000

B. Rs 12,000

C. Rs 10,000

D. Rs 8,000

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Correct Answer: Option D

Explanation:
Current year expense = Paid amount - Prepaid for next year = 10,000 - 2,000 = Rs 8,000.

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

Question #2

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Under the concept of 'Social Return on Investment' (SROI), a ratio of 3:1 indicates:

A. Taxes are 300% of profit

B. Financial profit is 3 times the social profit

C. Rs 1 of investment creates Rs 3 of social value

D. Rs 3 of investment creates Rs 1 of social value

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Correct Answer: Option C

Explanation:
SROI expresses the social value created for every unit of currency invested. A 3:1 ratio means Rs 3 of value is created per Rs 1 invested.

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

Question #3

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A cheque received from a customer and deposited but dishonoured is recorded in cash book by:

A. Debiting bank account and crediting customer account

B. Only a note

C. Crediting bank account and debiting customer account

D. No entry

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Correct Answer: Option C

Explanation:
On dishonour, the bank balance decreases, so credit bank; customer again becomes debtor, so debit customer.

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

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