The 'Operating Cycle' concept is used to determine: MCQ with Answer and Explanation

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The 'Operating Cycle' concept is used to determine:

A. Current asset/liability classification

B. Inventory valuation

C. Depreciation method

D. Fixed asset classification

Answer: Option A

Solution (By JKSSB Mock Tests)

An asset/liability is current if expected to be realised/settled within the operating cycle or 12 months, whichever longer.

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

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Question #1

A 'Supporting Voucher' is also known as:

A. Cash voucher

B. Transfer voucher

C. Journal voucher

D. Source document

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Correct Answer: Option D

Explanation:
Source documents like bills, receipts support the transaction.

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Question #2

The maximum rate of IGST under GST Act can be:

A. 20%

B. 28%

C. 40%

D. 14%

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Correct Answer: Option C

Explanation:
IGST rate is the sum of CGST and SGST rates; since CGST/SGST can go up to 20% each, IGST can be up to 40%.

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Question #3

The use of artificial intelligence (AI) in accounting is currently transforming:

A. Automated invoice processing and anomaly detection

B. The basic accounting equation

C. The abolition of all taxes

D. The legal definition of a company

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Correct Answer: Option A

Explanation:
AI automates routine tasks like data entry and enhances fraud detection by recognizing patterns (anomalies) faster than human auditors.

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

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