Under the 'Cash Basis' of accounting, outstanding expenses are: MCQ with Answer and Explanation

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Under the 'Cash Basis' of accounting, outstanding expenses are:

A. Recorded as asset

B. Recorded as liability

C. Not recorded

D. Recorded as income

Answer: Option C

Solution (By JKSSB Mock Tests)

Cash basis only records cash transactions, so outstanding expenses are ignored.

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

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Question #1

Creating a provision for doubtful debts is an application of which accounting convention?

A. Full Disclosure

B. Conservatism

C. Materiality

D. Consistency

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Correct Answer: Option B

Explanation:
Conservatism (Prudence) requires anticipating potential future losses (like bad debts) and providing for them immediately.

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Question #2

The 'Survey' under Income Tax Act (Section 133A) is:

A. Assessment

B. Visit by tax authorities to discover and collect information

C. A raid

D. Audit

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Correct Answer: Option B

Explanation:
Survey is a verification of books at business premises without seizure.

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Question #3

Which of the following is a direct tax levied by the Union Government?

A. Income tax

B. Sales tax

C. Excise duty on alcohol

D. Entertainment tax

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Correct Answer: Option A

Explanation:
Income tax is a direct tax. Excise on alcohol is state subject. Sales tax/VAT is state. Entertainment tax is local.

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

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