Life Membership Fees received by a club is treated as: MCQ with Answer and Explanation

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Life Membership Fees received by a club is treated as:

A. Deferred Revenue Income

B. Capital Receipt (added to Capital Fund)

C. Revenue Receipt (credited to Income & Expenditure A/c)

D. Current Liability

Answer: Option B

Solution (By JKSSB Mock Tests)

It is a one-time non-recurring receipt representing a lifetime obligation, hence capitalized and added to the Capital Fund.

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

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Question #1

The 'Throughput Accounting' emphasises:

A. Increasing fixed cost

B. Maximising throughput (sales minus material cost) while minimising operating expenses and inventory

C. Maximising production volume

D. Reducing labour cost

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Correct Answer: Option B

Explanation:
Throughput accounting is based on the Theory of Constraints.

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

Question #2

Which voucher is prepared when cash is paid for stationery?

A. Receipt Voucher

B. Contra Voucher

C. Payment Voucher

D. Journal Voucher

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Correct Answer: Option C

Explanation:
A payment voucher is prepared for all cash payments, including payments for expenses like stationery.

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Question #3

A 'Voucher' in accounting is:

A. A trial balance

B. A journal entry

C. A document evidencing a transaction

D. A ledger account

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Correct Answer: Option C

Explanation:
A voucher is a written document serving as evidence of a business transaction.

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

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