If a business purchases land for Rs 10 lakhs and its market value increases to Rs 15 lakhs, it is still recorded at Rs 10 lakhs due to: MCQ with Answer and Explanation

Question

If a business purchases land for Rs 10 lakhs and its market value increases to Rs 15 lakhs, it is still recorded at Rs 10 lakhs due to:

A. Cost Concept

B. Dual Aspect Concept

C. Going Concern Concept

D. Money Measurement Concept

Answer: Option A

Solution (By JKSSB Mock Tests)

The Cost Concept (Historical Cost) requires assets to be recorded at their original purchase price, ignoring subsequent market value fluctuations.

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Question #1

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Social accounting is primarily concerned with:

A. Maximizing shareholder wealth

B. Minimizing corporate taxes

C. Calculating national income and economic performance of the country

D. Recording petty cash expenses

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Correct Answer: Option C

Explanation:
At a macro level, social accounting (or national income accounting) measures the economic activity, income, and expenditure of a nation.

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Question #2

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In Social Accounting, an 'externality' refers to:

A. Foreign exchange transactions

B. External auditors

C. Outsourced services

D. Uncompensated impact of a firm's actions on third parties

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Correct Answer: Option D

Explanation:
Externalities (like pollution) are costs or benefits affecting society that are not reflected in traditional financial statements.

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Question #3

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The 'Revenue from Contracts with Customers' (Ind AS 115) requires identification of performance obligations. A performance obligation is:

A. Only services

B. The contract as a whole

C. Each promise to transfer a distinct good or service (or series)

D. Only goods

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Correct Answer: Option C

Explanation:
Distinct goods/services are separate performance obligations.

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