Under single entry system, opening capital is ascertained by preparing: MCQ with Answer and Explanation

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Under single entry system, opening capital is ascertained by preparing:

A. Statement of affairs

B. Profit and loss account

C. Income and expenditure account

D. Trading account

Answer: Option A

Solution (By JKSSB Mock Tests)

In single entry, a statement of affairs (similar to balance sheet) is prepared to ascertain opening and closing capital.

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

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Question #1

Which of the following is shown on the credit side of Trading Account?

A. Sales

B. Wages

C. Purchases

D. Opening stock

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Correct Answer: Option A

Explanation:
Sales (net) appears on the credit side of Trading Account. Opening stock, purchases, wages appear on debit side.

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Question #2

S1: The Profit and Loss Appropriation Account is prepared after the Profit and Loss Account. S2: It shows the distribution of net profit among partners. Which statement(s) is/are correct?

A. Both S1 and S2

B. S1 only

C. Neither S1 nor S2

D. S2 only

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Correct Answer: Option A

Explanation:
The P&L Appropriation Account is an extension of the P&L Account, prepared after it. Its purpose is to distribute the net profit among partners by accounting for interest, salaries, and profit shares. Both are correct.

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Question #3

When a trial balance does not tally, the difference is transferred to:

A. Drawings account

B. Profit and Loss account

C. Suspense account

D. Capital account

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Correct Answer: Option C

Explanation:
A suspense account is opened to temporarily park the difference.

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

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