The balance of 'Petty Cash Book' is: MCQ with Answer and Explanation

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The balance of 'Petty Cash Book' is:

A. An asset

B. An expense

C. Income

D. A liability

Answer: Option A

Solution (By JKSSB Mock Tests)

Petty cash balance is cash in hand, an asset.

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

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Question #1

The objective of social audit is to:

A. Maximize profits

B. Detect financial frauds

C. Assess the social impact of an organization's activities

D. Ensure compliance with tax laws

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Correct Answer: Option C

Explanation:
Social audit evaluates how well an organization achieves its social and environmental goals, assessing its broader impact on society.

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

Question #2

A credit balance in the bank column of cash book indicates:

A. Fixed deposit

B. Cash at bank (favourable)

C. Bank overdraft

D. Petty cash balance

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Correct Answer: Option C

Explanation:
A credit balance in bank column means the firm owes money to bank, i.e., bank overdraft.

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

Question #3

The 'Engagement Letter' in audit is:

A. The audit programme

B. A letter of appointment of auditor

C. A written agreement between auditor and client detailing scope and terms of audit

D. Tax notice

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Correct Answer: Option C

Explanation:
Engagement letter formalises the audit engagement.

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

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