S1: The Profit and Loss Account shows the financial position of the business. S2: The Balance Sheet shows the financial position of the business. Which statement(s) is/are correct? MCQ with Answer and Explanation

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S1: The Profit and Loss Account shows the financial position of the business. S2: The Balance Sheet shows the financial position of the business. Which statement(s) is/are correct?

A. S1 only

B. S2 only

C. Both S1 and S2

D. Neither S1 nor S2

Answer: Option B

Solution (By JKSSB Mock Tests)

The Profit and Loss Account shows the financial performance (profit or loss) over a period. The Balance Sheet shows the financial position (assets and liabilities) at a specific point in time.

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

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Question #1

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The objective of 'Financial Statements' is to provide information about:

A. Only profit

B. Only assets

C. Financial position, performance, and cash flows

D. Only liabilities

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Correct Answer: Option C

Explanation:
Financial statements present the financial position, performance, and cash flows of an entity.

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Question #2

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The 'GST Refund' for zero-rated supplies without payment of tax (under bond/LUT) can be claimed for:

A. Both output tax and input tax credit

B. No refund

C. Output tax only

D. Unutilised input tax credit

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Correct Answer: Option D

Explanation:
When export is under bond/LUT without payment of IGST, refund of accumulated input tax credit can be claimed.

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Question #3

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For real accounts, the rule is:

A. Debit expenses and losses, Credit incomes and gains

B. None of these

C. Debit the receiver, Credit the giver

D. Debit what comes in, Credit what goes out

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Correct Answer: Option D

Explanation:
Real accounts (assets) follow: Debit what comes in, credit what goes out.

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