Subscription received in advance for a non-profit organisation is shown in the Balance Sheet as: MCQ with Answer and Explanation

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Subscription received in advance for a non-profit organisation is shown in the Balance Sheet as:

A. Asset

B. Expenditure

C. Liability

D. Income

Answer: Option C

Solution (By JKSSB Mock Tests)

It is a liability because it pertains to the future period.

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

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Question #1

The 'ICAI' issues:

A. Laws

B. Tax rules

C. Company rules

D. Accounting Standards (AS) and Ind AS for non-corporate entities

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Correct Answer: Option D

Explanation:
ICAI formulates Accounting Standards (AS) and recommends Ind AS, but MCA notifies Ind AS.

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

Question #2

The 'Interest Coverage Ratio' is:

A. EBIT / Interest

B. Sales / Interest

C. Net profit / Interest

D. Equity / Interest

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Correct Answer: Option A

Explanation:
Interest coverage ratio = Earnings before interest and taxes (EBIT) / Interest expense.

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

Question #3

The 'Stratified Sampling' in audit:

A. Ignores low-value items

B. Divides the population into homogeneous subgroups and selects samples from each

C. Selects items randomly

D. Selects all high-value items

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Correct Answer: Option B

Explanation:
Stratification improves audit efficiency by grouping items with similar characteristics.

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

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