Which of the following is a major limitation of the Single Entry System? MCQ with Answer and Explanation

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Which of the following is a major limitation of the Single Entry System?

A. Trial balance cannot be prepared to check arithmetical accuracy

B. It is too complex to maintain

C. It requires highly qualified chartered accountants

D. It is mandatory for multinational corporations

Answer: Option A

Solution (By JKSSB Mock Tests)

Since both aspects (debit and credit) are not recorded, a Trial Balance cannot be extracted, making it vulnerable to undetected errors.

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

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Question #1

The 'Subsequent Events' in audit refer to:

A. All future events

B. Events before the balance sheet date

C. Events after auditor's report

D. Events occurring between the balance sheet date and date of auditor's report

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Correct Answer: Option D

Explanation:
Auditors consider events after the reporting period up to the date of the report.

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Question #2

Under the General Financial Rules (GFR) 2017, who is the primary authority responsible for sanctioning contingent expenditure in a government department?

A. The Ministry of Finance

B. The Controlling Officer

C. The Comptroller and Auditor General

D. The Head of the Department

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Correct Answer: Option B

Explanation:
Under GFR 2017, the Controlling Officer is primarily responsible for sanctioning contingent expenditure and ensuring that such expenditure is within the authorized limits.

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Question #3

The Margin of Safety is the difference between:

A. Total Cost and Variable Cost

B. Total Revenue and Total Cost

C. Selling Price and Variable Cost

D. Actual Sales and Break-Even Sales

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Correct Answer: Option D

Explanation:
Margin of safety indicates how much sales can drop before the business starts incurring a loss. Formula: Actual Sales - Break-Even Sales.

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