The 'Gratuity' is a: MCQ with Answer and Explanation

Question
The 'Gratuity' is a:
A. Defined contribution plan
B. Short-term benefit
C. Termination benefit
D. Defined benefit plan
Answer: Option D
Solution (By JKSSB Mock Tests)
Gratuity is a defined benefit plan as the employer's obligation is to provide a specific amount.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Practice More Accountancy and Book Keeping Questions

Question #1
The difference between standard cost and actual cost is called:
A. Variance
B. Waste
C. Margin
D. Profit
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Correct Answer: Option A

Explanation:
Variance is the difference between standard (expected) cost and actual cost.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
Which of the following is an example of a contingent liability?
A. Bills Receivable discounted
B. Outstanding salaries
C. Bills Payable
D. Sundry Creditors
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Correct Answer: Option A

Explanation:
Bills receivable discounted is a contingent liability because the firm is only liable to pay the bank if the drawee fails to pay the bill on maturity.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
The 'Business Entity Concept' means:
A. The business is not liable for debts
B. The business is a separate entity from its owners
C. The owner and business are the same
D. Only companies are separate entities
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Correct Answer: Option B

Explanation:
For accounting purposes, the business is treated as distinct from the proprietor.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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