The 'Traditional Approach' classifies accounts into: MCQ with Answer and Explanation

Question
The 'Traditional Approach' classifies accounts into:
A. Income, expenses, assets
B. Assets, liabilities, equity
C. Current and non-current
D. Real, personal, nominal
Answer: Option D
Solution (By JKSSB Mock Tests)
Under traditional British approach, accounts are classified as personal, real, and nominal.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Question #1
S1: Break-even point is the level of sales where total revenue equals total costs. S2: At the break-even point, the contribution equals fixed costs. Which statement(s) is/are correct?
A. Neither S1 nor S2
B. Both S1 and S2
C. S1 only
D. S2 only
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Correct Answer: Option B

Explanation:
The break-even point is where Total Revenue = Total Costs (Fixed + Variable), resulting in zero profit. At this point, Contribution (Sales - Variable Costs) exactly equals Fixed Costs. Both statements are correct.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
S1: In a partnership, if a partner retires, his loan to the firm is transferred to his loan account, which is a liability for the firm. S2: If the retiring partner's loan is not settled immediately, it is treated as a loan and interest is allowed as per the deed or at 6% p.a. if the deed is silent. Which statement(s) is/are correct?
A. Neither S1 nor S2
B. S2 only
C. Both S1 and S2
D. S1 only
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Correct Answer: Option C

Explanation:
Both statements are correct. Upon retirement, the partner's capital balance is transferred to his loan account if not paid immediately. This becomes a liability, and interest is charged to the P&L Account at the agreed rate or 6% p.a. if silent.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
A Trial Balance is prepared primarily to check the:
A. Arithmetical accuracy of ledger accounts
B. Liquidity of the firm
C. Financial position of the business
D. Profitability of the business
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Correct Answer: Option A

Explanation:
Trial Balance lists all debit and credit balances to ensure total debits equal total credits, verifying mathematical accuracy.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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