The 'Warranty' in a sales contract may be: MCQ with Answer and Explanation

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The 'Warranty' in a sales contract may be:

A. Always a separate performance obligation

B. Not accounted

C. Either assurance-type (no separate obligation) or service-type (separate obligation) depending on whether it provides additional service

D. Always a provision

Answer: Option C

Solution (By JKSSB Mock Tests)

Ind AS 115 distinguishes between assurance and service warranties.

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

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Question #1

The Profit and Loss Appropriation Account is prepared:

A. Before preparing Trading Account

B. Instead of Profit & Loss Account

C. After preparing Profit & Loss Account

D. Only in case of losses

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Correct Answer: Option C

Explanation:
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

Question #2

Which voucher is used for recording cash sales?

A. Journal voucher

B. Debit voucher

C. Cash voucher

D. Credit voucher

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Correct Answer: Option C

Explanation:
Cash sales involve receipt of cash, so a cash voucher (receipt voucher) is prepared.

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

Question #3

A credit sale of ₹10,000 to Ram was posted as ₹1,000. This is an error of:

A. Compensation

B. Commission

C. Omission

D. Principle

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Correct Answer: Option B

Explanation:
Error of commission occurs when a transaction is incorrectly recorded, e.g., wrong amount, wrong posting.

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

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