In a common-size statement, all items are expressed as percentage of: MCQ with Answer and Explanation

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In a common-size statement, all items are expressed as percentage of:

A. Capital

B. Net profit

C. Gross profit

D. Total assets or total revenue

Answer: Option D

Solution (By JKSSB Mock Tests)

Common-size balance sheet expresses each item as % of total assets; income statement as % of net sales.

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

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Question #1

Cash flow from operating activities includes:

A. Issue of shares

B. Cash received from customers

C. Sale of machinery

D. Repayment of loan

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Correct Answer: Option B

Explanation:
Cash from customers is operating activity. Sale of machinery is investing, issue of shares and loan repayment are financing.

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Question #2

The 'Going Concern' assumption in audit is evaluated by:

A. Tax department

B. Shareholders

C. Auditor to assess whether the entity can continue in operation

D. Management only

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Correct Answer: Option C

Explanation:
Auditor must consider the appropriateness of management's use of going concern basis.

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

Question #3

The 'One Person Company' (OPC) concept was introduced in India by:

A. GST Act

B. Companies Act, 2013

C. Companies Act, 1956

D. Income Tax Act

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Correct Answer: Option B

Explanation:
OPC was introduced by Companies Act, 2013 to allow single entrepreneurs to have corporate status.

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

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