Which of the following is a feature of cash-based accounting? MCQ with Answer and Explanation

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Which of the following is a feature of cash-based accounting?

A. Recognizes revenue when earned

B. Provides a true and fair view of financial position

C. Records credit transactions

D. Simple to maintain

Answer: Option D

Solution (By JKSSB Mock Tests)

Cash-based accounting is very simple to maintain as it only records actual cash inflows and outflows, ignoring credit transactions and accruals.

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

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Question #1

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The 'Government Company' as per Companies Act is one in which not less than 51% of paid-up share capital is held by:

A. Foreign investors

B. Central/State Government(s)

C. Public

D. RBI

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Correct Answer: Option B

Explanation:
As per Section 2(45) of Companies Act, 2013, government company has at least 51% government shareholding.

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

Question #2

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The 'Deferred Revenue Expenditure' is an expenditure that:

A. Is entirely charged to current year

B. Provides benefit over several accounting periods

C. Is never written off

D. Is capital expenditure

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Correct Answer: Option B

Explanation:
Deferred revenue expenditure (e.g., heavy advertisement) is written off over a number of years.

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Question #3

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The 'Test of Details' includes:

A. Vouching, tracing, and inspection of documents

B. Ratio analysis

C. Budget comparison

D. Trend analysis

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Correct Answer: Option A

Explanation:
Test of details are specific tests of transactions and balances.

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

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