Nominal accounts are closed at the end of the accounting year by transferring them to: MCQ with Answer and Explanation

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Nominal accounts are closed at the end of the accounting year by transferring them to:

A. Suspense Account

B. Trading and Profit & Loss Account

C. Capital Account

D. Balance Sheet

Answer: Option B

Solution (By JKSSB Mock Tests)

Nominal accounts represent expenses and incomes, which are summarized into the Trading and P&L accounts to determine net profit/loss.

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

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Question #1

A Value Added Statement is an important component of:

A. Bank Reconciliation

B. Cost Sheet

C. Social Accounting

D. Cash Flow Statement

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Correct Answer: Option C

Explanation:
A Value Added Statement shows how much wealth the company has created and how it is distributed among employees, government, providers of capital, and retained earnings.

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Question #2

Which of the following is a feature of marginal costing?

A. It distinguishes between fixed and variable costs

B. It includes fixed overheads in product cost

C. It is used for external reporting

D. It values inventory at full cost

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Correct Answer: Option A

Explanation:
Marginal costing strictly separates costs into fixed and variable components, charging only variable costs to the product.

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Question #3

The term 'Current Cost Accounting' deals with:

A. Sunk cost

B. Replacement cost

C. Historical cost

D. Opportunity cost

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Correct Answer: Option B

Explanation:
Current cost accounting values assets at their current replacement cost, not historical cost.

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

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