In a two-column cash book, the bank column showed a credit balance of ₹5,000. This means: MCQ with Answer and Explanation

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In a two-column cash book, the bank column showed a credit balance of ₹5,000. This means:

A. Cash at bank ₹5,000

B. Petty cash ₹5,000

C. Fixed deposit ₹5,000

D. Bank overdraft ₹5,000

Answer: Option D

Solution (By JKSSB Mock Tests)

Credit balance in bank column indicates liability towards bank, i.e., overdraft.

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

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Question #1

A credit balance in the Income and Expenditure Account of an NPO indicates:

A. Capital Fund

B. Cash in hand

C. Deficit (Excess of Expenditure over Income)

D. Surplus (Excess of Income over Expenditure)

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Correct Answer: Option D

Explanation:
An Income & Expenditure Account is a nominal account. A credit balance means incomes exceed expenses, resulting in a Surplus.

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Question #2

In the context of recent developments, what is the full form of 'Ind-AS'?

A. Indian Accounting Standards

B. Indian Audit Standards

C. International Accounting Standards

D. Internal Accounting System

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Correct Answer: Option A

Explanation:
Ind-AS stands for Indian Accounting Standards, which are the standards converged with IFRS (International Financial Reporting Standards) and notified under the Companies Act.

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Question #3

The 'Expected Credit Loss' model (Ind AS 109) requires recognition of impairment on:

A. 12-month expected credit losses or lifetime expected credit losses depending on credit risk

B. No provision

C. Only when default occurs

D. Only incurred losses

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Correct Answer: Option A

Explanation:
ECL model recognises either 12-month ECL (Stage 1) or lifetime ECL (Stage 2/3) based on deterioration in credit risk.

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