Which concept dictates that Financial Statements should disclose all significant information affecting the judgment of a user? MCQ with Answer and Explanation

Question
Which concept dictates that Financial Statements should disclose all significant information affecting the judgment of a user?
A. Consistency
B. Materiality
C. Full Disclosure
D. Matching
Answer: Option C
Solution (By JKSSB Mock Tests)
The Full Disclosure principle ensures that investors and creditors have all the material information needed to make informed decisions.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Question #1
In India, the Finance Commission is responsible for:
A. Conducting audit
B. Distribution of tax revenues between Centre and States
C. Tax collection
D. Preparation of Union Budget
Discuss
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Correct Answer: Option B

Explanation:
Finance Commission recommends the sharing of central taxes with states, as per Article 280 of the Constitution.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
Overhead absorption rate is calculated as:
A. Budgeted overheads / Actual base
B. Actual overheads / Actual base
C. None
D. Budgeted overheads / Budgeted base
Discuss
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Correct Answer: Option D

Explanation:
Overhead absorption rate is usually predetermined based on budgeted figures to absorb overheads into products.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
Income received in advance is a:
A. Current Asset
B. Fixed Asset
C. Current Liability
D. Fictitious Asset
Discuss
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Correct Answer: Option C

Explanation:
Money received for services yet to be performed creates an obligation to provide the service, thus it is a liability.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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