The 'Accounting Cycle' begins with: MCQ with Answer and Explanation

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The 'Accounting Cycle' begins with:

A. Preparation of trial balance

B. Identification and recording of transactions in journal

C. Preparation of financial statements

D. Posting to ledger

Answer: Option B

Solution (By JKSSB Mock Tests)

The cycle starts with journalizing (recording) transactions.

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

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Question #1

The 'Level 1 Inputs' in fair value hierarchy are:

A. Cost of the asset

B. Quoted prices (unadjusted) in active markets for identical assets or liabilities

C. Unobservable inputs

D. Inputs based on market-corroborated data

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Correct Answer: Option B

Explanation:
Level 1 gives highest priority to quoted prices in active markets.

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

Question #2

The 'Surrender Value' of a keyman insurance policy received by a company is:

A. Capital receipt

B. Taxable as business income

C. Treated as loan

D. Exempt

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Correct Answer: Option B

Explanation:
Keyman insurance policy proceeds/surrender value are taxable as business income.

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

Question #3

Which of the following is a feature of a joint venture?

A. It is governed by the Companies Act

B. It is formed for a specific, short-term project

C. It has a separate legal entity

D. It has perpetual succession

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Correct Answer: Option B

Explanation:
A joint venture is a temporary partnership formed for a specific venture or project, and it ceases to exist once the project is completed.

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

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