In accounting, what does the term 'Vouching' fundamentally imply? MCQ with Answer and Explanation

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In accounting, what does the term 'Vouching' fundamentally imply?

A. Calculating totals

B. Filing tax returns

C. Creating financial forecasts

D. Substantiating entries with documentary evidence

Answer: Option D

Solution (By JKSSB Mock Tests)

Vouching is the process of examining documentary evidence to ascertain the accuracy and authenticity of accounting entries.

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

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Question #1

When bad debts previously written off are recovered, which account is credited?

A. Bad Debts Account

B. Suspense Account

C. Debtor's Personal Account

D. Bad Debts Recovered Account

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Correct Answer: Option D

Explanation:
Bad debts recovered represent a gain for the business and are credited to a separate nominal account called 'Bad Debts Recovered Account'.

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Question #2

The 'Alternate Minimum Tax' (AMT) applies to:

A. Non-corporate taxpayers claiming deductions under certain sections

B. All companies

C. Foreign companies

D. All individuals

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Correct Answer: Option A

Explanation:
AMT is for non-corporate assessees having adjusted total income exceeding ₹20 lakhs and claiming specified deductions.

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Question #3

The 'Finance Act' gives effect to:

A. Financial proposals of the government for the year

B. Banking regulation

C. Insurance regulation

D. Company law amendments

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Correct Answer: Option A

Explanation:
Finance Act is passed to enact the tax proposals of the budget.

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

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