The 'Fund-based Accounting' is used by: MCQ with Answer and Explanation

The 'Fund-based Accounting' is used by:
A. Sole traders
B. Companies
C. Non-profit organizations and government entities
D. Partnership firms
Answer: Option C
Solution (By JKSSB Mock Tests)
Fund-based accounting tracks resources for specific purposes, common in NPOs and government.

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Practice More Accountancy and Book Keeping Questions

Question #1
Which of the following is a 'period cost'?
A. Direct labour
B. Royalty on production
C. Direct material
D. Rent of office building

Correct Answer: Option D


Explanation:
Period costs are not tied to production volume and are expensed in the period incurred. Office rent is a period cost.

Question #2
The Trading Account shows a gross profit of Rs 50,000. Indirect expenses are Rs 20,000 and indirect income is Rs 5,000. What is the Net Profit?
A. Rs 25,000
B. Rs 75,000
C. Rs 30,000
D. Rs 35,000

Correct Answer: Option D


Explanation:
Net Profit = Gross Profit (50,000) + Indirect Income (5,000) - Indirect Expenses (20,000) = Rs 35,000.

Question #3
S1: In the context of PFMS, the 'Direct Benefit Transfer' (DBT) scheme mandates the use of Aadhaar for authentication. S2: DBT transfers funds directly from the government treasury to the beneficiary's bank account. Which statement(s) is/are correct?
A. Both S1 and S2
B. Neither S1 nor S2
C. S2 only
D. S1 only

Correct Answer: Option A


Explanation:
Both statements are correct. DBT aims to eliminate leakages by transferring funds directly to beneficiaries' accounts via PFMS, and it heavily relies on Aadhaar seeding and authentication for identity verification.