In the three-column cash book, discount columns are: MCQ with Answer and Explanation

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In the three-column cash book, discount columns are:

A. Not posted, only totalled and transferred

B. Posted to ledger accounts individually

C. Used for bank reconciliation

D. Balanced like cash columns

Answer: Option A

Solution (By JKSSB Mock Tests)

Discount columns in cash book are merely memorandum; total discount allowed and received are posted to respective ledger accounts, not individually.

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

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Question #1

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Assertion (A): Under Ind AS 115, an entity should recognize revenue when (or as) it satisfies a performance obligation. Reason (R): A performance obligation is satisfied when the customer obtains control of the good or service. Choose the correct option.

A. Both A and R are true but R is NOT the correct explanation of A

B. A is false but R is true

C. Both A and R are true and R is the correct explanation of A

D. A is true but R is false

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Correct Answer: Option C

Explanation:
Ind AS 115's core principle is recognizing revenue upon satisfaction of performance obligations. Satisfaction occurs precisely when control of the underlying good or service transfers to the customer. R perfectly explains A.

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Question #2

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Which of the following is a capital receipt?

A. Sale of old machinery at profit (excess over WDV)

B. Interest on investment

C. Commission earned

D. Dividend received

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Correct Answer: Option A

Explanation:
Sale of fixed asset, even if profit, is a capital receipt; the profit portion may be revenue, but the sale proceeds are capital.

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Question #3

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Goodwill is classified as:

A. Current asset

B. Tangible asset

C. Intangible asset

D. Fictitious asset

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Correct Answer: Option C

Explanation:
Goodwill is an intangible asset representing the value of a business's reputation, customer relationships, etc.

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