The Indian Financial Management System for government accounting follows which method? MCQ with Answer and Explanation

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The Indian Financial Management System for government accounting follows which method?

A. Mercantile basis

B. Accrual basis only

C. Cash basis

D. Hybrid basis

Answer: Option C

Solution (By JKSSB Mock Tests)

Government accounting in India is primarily on cash basis, though there are moves towards accrual basis.

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

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Which of the following is not an objective of a financial audit?

A. Expressing an opinion on financial statements

B. Detection of fraud

C. Ensuring absolute accuracy of books

D. Detection of errors

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Correct Answer: Option C

Explanation:
Audit provides reasonable assurance, not absolute accuracy. The objective is to detect material misstatements due to fraud or error and express an opinion.

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Question #2

A firm's capital is ₹3,00,000, outside liabilities ₹1,50,000. Total assets will be:

A. ₹4,50,000

B. ₹1,50,000

C. ₹1,00,000

D. ₹3,00,000

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Correct Answer: Option A

Explanation:
Total Assets = Capital + Liabilities = ₹3,00,000 + ₹1,50,000 = ₹4,50,000.

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Question #3

Under the Indian Companies Act, 2013, financial statements include:

A. Only balance sheet

B. Only profit & loss account

C. Balance sheet, profit & loss account, cash flow statement, statement of changes in equity and notes

D. Only balance sheet and profit & loss account

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Correct Answer: Option C

Explanation:
As per Companies Act 2013, financial statements comprise balance sheet, profit and loss account, cash flow statement, statement of changes in equity and any explanatory notes.

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