The 'Suspense Account' is opened when: MCQ with Answer and Explanation

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The 'Suspense Account' is opened when:

A. A fraud is detected

B. Trial balance does not agree

C. Final accounts are prepared

D. An asset is sold

Answer: Option B

Solution (By JKSSB Mock Tests)

It holds the difference in trial balance until errors are located.

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

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Question #1

A Cash Voucher is prepared for:

A. Only cash payments

B. Only cash receipts

C. Both cash receipts and cash payments

D. Credit transactions

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Correct Answer: Option C

Explanation:
Cash vouchers are used to record all transactions involving the physical inflow or outflow of cash.

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

Question #2

A firm's current ratio is 1.5:1. It wants to maintain a current ratio of 2:1 by paying off some current liabilities. Which of the following will happen?

A. Current assets will decrease

B. Working capital will remain unchanged

C. Working capital will increase

D. Working capital will decrease

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Correct Answer: Option B

Explanation:
Paying current liabilities reduces both current assets (cash) and current liabilities equally, leaving working capital (CA - CL) unchanged, though ratio improves.

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

Question #3

The 'Anti-Profiteering' under GST ensures that:

A. Suppliers increase prices

B. Companies make no profit

C. Reduction in tax rates or benefit of ITC is passed on to consumers by reducing prices

D. No price change

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Correct Answer: Option C

Explanation:
Anti-profiteering provisions prevent unjust enrichment by suppliers.

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

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