In financial management, 'Float' refers to: MCQ with Answer and Explanation

Question

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In financial management, 'Float' refers to:

A. The amount of petty cash

B. Issuing new shares

C. The time difference between writing a cheque and its actual clearance from the bank

D. Sinking fund investments

Answer: Option C

Solution (By JKSSB Mock Tests)

Float is the delay in the clearing system, creating a temporary discrepancy between the firm's cash balance and the bank's ledger balance.

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

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Question #1

The 'Analytical Procedures' are required:

A. Only at planning stage

B. Only as substantive

C. Never

D. At planning, as substantive procedures, and at final review stage

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Correct Answer: Option D

Explanation:
SA 520 mandates analytical procedures at these stages.

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Question #2

Blockchain technology in accounting is primarily used for:

A. Calculating depreciation

B. Preparing tax returns

C. Manual ledger posting

D. Immutable and transparent record-keeping

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Correct Answer: Option D

Explanation:
Blockchain provides a distributed ledger that is secure, transparent, and tamper-proof.

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Question #3

In the Balance Sheet, assets are typically arranged in the order of:

A. Alphabetical order

B. Profitability or Loss

C. Date of purchase

D. Liquidity or Permanence

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Correct Answer: Option D

Explanation:
Marshalling of balance sheet assets is done either in the order of liquidity (most liquid first) or permanence (most fixed first).

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

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