Which accounting system violates the matching principle? MCQ with Answer and Explanation

Which accounting system violates the matching principle?
A. Fund-based System
B. Accrual System
C. Mercantile System
D. Cash System
Answer: Option D
Solution (By JKSSB Mock Tests)
The cash system violates the matching principle because it does not match the revenues of a specific period with the expenses incurred to generate them.

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Practice More Accountancy and Book Keeping Questions

Question #1
The formula 'Fixed Cost / Contribution Margin per Unit' is used to find:
A. Break-Even Point in Units
B. Break-Even Point in Sales Value
C. Target Profit
D. Margin of Safety

Correct Answer: Option A


Explanation:
This formula yields the exact number of units a company needs to sell to cover all its fixed and variable costs.

Question #2
Net Profit Ratio is calculated on:
A. Total assets
B. Gross sales
C. Net sales
D. Capital

Correct Answer: Option C


Explanation:
Net profit ratio = (Net profit / Net sales) * 100.

Question #3
Cash basis accounting recognizes revenue when:
A. Cash is received
B. Order is received
C. Services are performed
D. Sale invoice is raised

Correct Answer: Option A


Explanation:
Under cash basis, transactions are recorded only when cash is received or paid, not when accrued.