Which of the following is an 'Accounting Estimate'? MCQ with Answer and Explanation

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Which of the following is an 'Accounting Estimate'?

A. Depreciation method

B. Useful life of an asset

C. Inventory valuation method

D. Revenue recognition policy

Answer: Option B

Solution (By JKSSB Mock Tests)

Useful life is an estimate; depreciation method is an accounting policy.

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

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Question #1

The 'Health and Education Cess' is levied at:

A. 10%

B. 2% of tax

C. 4% of tax

D. 1%

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Correct Answer: Option C

Explanation:
Health and Education Cess at 4% is levied on income tax (including surcharge).

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

Question #2

A bill of exchange is drawn on 1st January 2024 for 3 months. Its maturity date is:

A. 3rd April 2024

B. 1st April 2024

C. 4th April 2024

D. 31st March 2024

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Correct Answer: Option C

Explanation:
Three months from 1st Jan is 1st April, plus three days of grace = 4th April 2024.

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

Question #3

A 'Bank Overdraft' is shown in Balance Sheet as:

A. Current liability

B. Current asset

C. Long-term liability

D. Contra asset

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Correct Answer: Option A

Explanation:
Bank overdraft is repayable on demand, hence a current liability.

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

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