The term 'Fictitious Assets' are: MCQ with Answer and Explanation

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The term 'Fictitious Assets' are:

A. Intangible assets

B. Current assets

C. Tangible assets

D. Deferred revenue expenditures shown as assets

Answer: Option D

Solution (By JKSSB Mock Tests)

Fictitious assets are deferred revenue expenditures (like preliminary expenses) that have no realizable value but are shown on the asset side of the balance sheet.

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

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Practice More Accountancy and Book Keeping Questions

Question #1

The 'Net Profit' is transferred to:

A. Drawings Account

B. Balance Sheet liability side

C. Trading Account

D. Capital Account (or Retained Earnings)

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Correct Answer: Option D

Explanation:
Net profit is added to owner's capital or retained earnings.

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Question #2

X and Y share profits in ratio 3:2. Z is admitted with 1/5th share. Sacrificing ratio of X and Y is:

A. Equal to new ratio

B. 2:3

C. 1:1

D. 3:2

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Correct Answer: Option D

Explanation:
If new partner's share is given without specifying sacrifice, old partners sacrifice in their old ratio. So 3:2.

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Question #3

Which account acts as a 'contra' account to Gross Debtors in the Balance Sheet?

A. Bad Debts Account

B. Sales Return Account

C. Discount Allowed Account

D. Provision for Doubtful Debts Account

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Correct Answer: Option D

Explanation:
Provision for doubtful debts has a credit balance and is deducted from the debit balance of Debtors, acting as a contra-asset.

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