In Social Accounting, an 'externality' refers to: MCQ with Answer and Explanation

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In Social Accounting, an 'externality' refers to:

A. Foreign exchange transactions

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

C. Outsourced services

D. External auditors

Answer: Option B

Solution (By JKSSB Mock Tests)

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

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

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Question #1

Notes to Accounts are provided to:

A. Calculate daily cash flow

B. Replace the Trial Balance

C. Make the balance sheet look longer

D. Provide detailed disclosures and accounting policies

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Correct Answer: Option D

Explanation:
Notes to Accounts offer detailed breakdowns, accounting policies, and explanatory information supporting the numbers in the financial statements.

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Question #2

The 'Job Work' under GST means:

A. Employment

B. Processing or treatment on goods belonging to another registered person

C. Service contract

D. Consultancy

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Correct Answer: Option B

Explanation:
Job work involves undertaking a process on goods owned by another person.

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Question #3

In a BRS, when a cheque is issued but not presented, the cash book balance is:

A. Equal to the pass book balance

B. Lower than the pass book balance

C. Unaffected

D. Higher than the pass book balance

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Correct Answer: Option B

Explanation:
Issuing a cheque immediately reduces the cash book balance, but the bank balance (pass book) remains high until the cheque is cleared.

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

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