The Profit and Loss Appropriation Account is prepared: MCQ with Answer and Explanation

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The Profit and Loss Appropriation Account is prepared:

A. Only in case of losses

B. Instead of Profit & Loss Account

C. After preparing Profit & Loss Account

D. Before preparing Trading Account

Answer: Option C

Solution (By JKSSB Mock Tests)

P&L Appropriation Account is prepared after the Profit & Loss Account to distribute the net profit among partners.

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

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Question #1

The system of recording transactions where each transaction is recorded once only is called:

A. Double entry

B. Cash basis

C. Mercantile

D. Single entry

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Correct Answer: Option D

Explanation:
Single entry system does not record both aspects; often only personal accounts are maintained.

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Question #2

A bank reconciliation statement is prepared to reconcile the difference between:

A. Cash book and sales book

B. Pass book and purchase book

C. Cash book and petty cash book

D. Cash book (bank column) and pass book

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Correct Answer: Option D

Explanation:
BRS reconciles the bank balance as per cash book (bank column) with the balance as per bank statement (pass book).

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Question #3

A: The Purchases Book records only credit purchases of goods. R: Cash purchases of goods are recorded in the Cash Book. Choose the correct option.

A. A is true but R is false

B. Both A and R are true and R is the correct explanation of A

C. Both A and R are true but R is NOT the correct explanation of A

D. A is false but R is true

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Correct Answer: Option B

Explanation:
The Purchases Book is strictly for credit purchases of trading goods. Cash purchases are recorded in the Cash Book. R correctly explains why cash purchases are excluded from the Purchases Book.

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

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