S1: In the Single Entry System, a Statement of Affairs is prepared instead of a Balance Sheet. S2: The Statement of Affairs is prepared to ascertain the profit or loss. Which statement(s) is/are correct? MCQ with Answer and Explanation
S1: In the Single Entry System, a Statement of Affairs is prepared instead of a Balance Sheet. S2: The Statement of Affairs is prepared to ascertain the profit or loss. Which statement(s) is/are correct?
A. Neither S1 nor S2
B. S2 only
C. S1 only
D. Both S1 and S2
Answer: Option C
Solution (By JKSSB Mock Tests)
The Single Entry System is incomplete, so a Statement of Affairs (similar to a Balance Sheet) is prepared to find the capital at a given date. Profit or loss is ascertained by comparing opening and closing capital, not directly from the Statement of Affairs. S1 is correct, S2 is incorrect.
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