Sunk costs are: MCQ with Answer and Explanation

Question
Sunk costs are:
A. Relevant for decision making
B. Variable costs of a project
C. Costs that have already been incurred and cannot be recovered
D. Future costs that differ among alternatives
Answer: Option C
Solution (By JKSSB Mock Tests)
Sunk costs are past expenditures. Since they cannot be changed by present or future decisions, they are considered irrelevant for decision making.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Question #1
S1: Goods distributed as free samples are debited to the Advertising Account. S2: Goods distributed as charity are debited to the Charities Account. Which statement(s) is/are correct?
A. S1 only
B. S2 only
C. Neither S1 nor S2
D. Both S1 and S2
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Correct Answer: Option D

Explanation:
Free samples are treated as a promotional expense (Advertising). Free charity goods are treated as a charitable donation. Both require debiting their respective nominal accounts.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
The 'Composition Scheme' under GST is not available to:
A. Service providers (except restaurant) with aggregate turnover above ₹50 lakh
B. Manufacturers
C. Traders
D. Restaurants not serving alcohol
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Correct Answer: Option A

Explanation:
Composition scheme for services is restricted to certain categories with turnover up to ₹50 lakh.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
In the Balance Sheet, assets are typically arranged in the order of:
A. Alphabetical order
B. Liquidity or Permanence
C. Date of purchase
D. Profitability or Loss
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Correct Answer: Option B

Explanation:
Marshalling of balance sheet assets is done either in the order of liquidity (most liquid first) or permanence (most fixed first).
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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