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

Voucher approach implies that every financial transaction must be supported by:
A. An audit report
B. Documentary evidence
C. Verbal approval
D. A trial balance
Answer: Option B
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).

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Practice More Accountancy and Book Keeping Questions

Question #1
S1: Under Ind AS 109, financial assets are classified into three measurement categories: Amortized Cost, Fair Value Through Other Comprehensive Income (FVTOCI), and Fair Value Through Profit or Loss (FVTPL). S2: Equity investments are always measured at Amortized Cost. Which statement(s) is/are correct?
A. Neither S1 nor S2
B. S1 only
C. S2 only
D. Both S1 and S2

Correct Answer: Option B


Explanation:
S1 is correct as per Ind AS 109. S2 is incorrect because equity investments do not have contractual cash flows that are solely payments of principal and interest (SPPI), so they cannot be measured at Amortized Cost; they are measured at FVTPL or FVTOCI.

Question #2
Advance tax must be paid in instalments during the financial year if the estimated tax liability exceeds:
A. Rs 50,000
B. Rs 10,000
C. Rs 1,00,000
D. Rs 5,000

Correct Answer: Option B


Explanation:
Under Section 208, advance tax is mandatory if the estimated tax liability for the year is Rs 10,000 or more.

Question #3
A trial balance is prepared to check:
A. The financial position of the business
B. The cash flow of the business
C. The arithmetical accuracy of the ledger
D. The profitability of the business

Correct Answer: Option C


Explanation:
The primary purpose of a trial balance is to verify the arithmetical accuracy of the ledger by ensuring total debits equal total credits.