The accounting equation is based on which concept? MCQ with Answer and Explanation

Question
The accounting equation is based on which concept?
A. Matching Concept
B. Money Measurement Concept
C. Dual Aspect Concept
D. Business Entity Concept
Answer: Option C
Solution (By JKSSB Mock Tests)
The dual aspect concept states that every transaction has two aspects, which forms the basis of the accounting equation: Assets = Liabilities + Capital.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Question #1
A 'Debit Note' is issued by:
A. Auditor to company
B. Bank to customer
C. Seller to buyer for goods returned
D. Buyer to seller for goods returned
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Correct Answer: Option D

Explanation:
A debit note is prepared by the buyer when returning goods, informing the seller that his account is debited.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
In a manufacturing account, 'Prime Cost' includes:
A. Administration overheads
B. Selling overheads
C. All factory overheads
D. Direct materials, direct labour, direct expenses
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Correct Answer: Option D

Explanation:
Prime cost is the sum of all direct costs.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
The 'Suspense Account' is opened when:
A. Trial balance does not agree
B. Final accounts are prepared
C. An asset is sold
D. A fraud is detected
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Correct Answer: Option A

Explanation:
It holds the difference in trial balance until errors are located.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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