The system of accounting where revenue is recognized only when cash is received is: MCQ with Answer and Explanation

Question
The system of accounting where revenue is recognized only when cash is received is:
A. Accrual basis
B. Hybrid system
C. Mercantile system
D. Cash basis
Answer: Option D
Solution (By JKSSB Mock Tests)
Under the cash basis of accounting, transactions are recorded strictly upon the actual receipt or payment of cash.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Question #1
The 'Earnings Per Share' (EPS) as per AS 20 is computed as:
A. Net profit / Number of equity shares outstanding
B. Gross profit / Number of shares
C. Net profit before preference dividend / Equity shares
D. EBIT / Shares
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Correct Answer: Option A

Explanation:
Basic EPS = (Net profit - Preference dividend) / Weighted average equity shares.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
Section 80D deduction is for:
A. Life insurance premium
B. Donations
C. Health insurance premium
D. Education loan interest
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Correct Answer: Option C

Explanation:
Section 80D allows deduction for medical insurance premium.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
If total assets are ₹5,00,000 and outside liabilities are ₹2,00,000, what is the capital?
A. ₹7,00,000
B. ₹5,00,000
C. ₹2,00,000
D. ₹3,00,000
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Correct Answer: Option D

Explanation:
Capital = Assets - Liabilities. Therefore, ₹5,00,000 - ₹2,00,000 = ₹3,00,000.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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