Which of the following is a feature of the double entry system? MCQ with Answer and Explanation

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Which of the following is a feature of the double entry system?

A. It records only one aspect of a transaction

B. It does not allow the preparation of a trial balance

C. It is only suitable for small businesses

D. It is a scientific and complete system

Answer: Option D

Solution (By JKSSB Mock Tests)

The double entry system records both aspects of every transaction, making it a scientific, complete, and universally accepted system.

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

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Question #1

A 'Clean Report' issued by an auditor is also known as an:

A. Qualified Opinion

B. Unqualified Opinion

C. Adverse Opinion

D. Disclaimer of Opinion

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Correct Answer: Option B

Explanation:
An unqualified opinion indicates the auditor found the financial statements to be free from material misstatements and in accordance with GAAP.

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Question #2

When starting a BRS with a debit balance as per the Cash Book, cheques issued but not yet presented for payment should be:

A. Ignored

B. Deducted

C. Added

D. Divided

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Correct Answer: Option C

Explanation:
These cheques decreased the cash book balance but not the pass book. To match the pass book, they must be added back.

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Question #3

Sunk costs are:

A. Variable costs of a project

B. Costs that have already been incurred and cannot be recovered

C. Relevant for decision making

D. Future costs that differ among alternatives

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Correct Answer: Option B

Explanation:
Sunk costs are past expenditures. Since they cannot be changed by present or future decisions, they are considered irrelevant for decision making.

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

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