Voucher approach implies that every financial transaction must be supported by: MCQ with Answer and Explanation

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Voucher approach implies that every financial transaction must be supported by:

A. Documentary evidence

B. An audit report

C. A trial balance

D. Verbal approval

Answer: Option A

Solution (By JKSSB Mock Tests)

The essence of the voucher system is to ensure no entry is made in the books without an authentic, authorized documentary evidence (voucher).

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

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Question #1

The financial statement that shows profitability for a period is:

A. Cash Flow Statement

B. Profit and Loss Account

C. Balance Sheet

D. Funds Flow Statement

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Correct Answer: Option B

Explanation:
Profit and Loss Account shows the net profit or loss over a period.

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Question #2

The 'Cost of Inventory' does not include:

A. Customs duty

B. Freight inwards

C. Selling and distribution costs

D. Storage costs necessary in production process

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Correct Answer: Option C

Explanation:
Selling costs are excluded from inventory cost as per AS 2.

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Question #3

The 'Return on Investment' (ROI) formula is:

A. Net profit / Sales

B. Sales / Capital employed

C. Net profit / Capital employed

D. Gross profit / Sales

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Correct Answer: Option C

Explanation:
ROI = Net profit before interest and tax / Capital employed, or sometimes PAT/CE. Typically, Net profit / Capital employed.

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

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