Which of the following is an advantage of the double entry system? MCQ with Answer and Explanation

Question
Which of the following is an advantage of the double entry system?
A. No errors
B. Complete and reliable records
C. Simplicity
D. Low cost
Answer: Option B
Solution (By JKSSB Mock Tests)
Double entry provides a complete record and facilitates detection of errors through trial balance.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Practice More Accountancy and Book Keeping Questions

Question #1
The concept of 'Going Concern' assumes that:
A. The business will continue operations indefinitely
B. The business is not viable
C. Profits are not important
D. The business will be liquidated soon
Discuss
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Correct Answer: Option A

Explanation:
Going concern concept assumes that the enterprise will continue in operation for the foreseeable future, and has no intention to liquidate.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
Goods withdrawn by the owner for personal use should be credited to:
A. Capital Account
B. Sales Account
C. Purchases Account
D. Drawings Account
Discuss
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Correct Answer: Option C

Explanation:
When goods are withdrawn for personal use, the Purchases Account is credited to reduce the cost of goods available for sale, and Drawings is debited.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
Which of the following is an example of a fixed cost?
A. Factory rent
B. Direct labour (piece rate)
C. Carriage outward
D. Direct material
Discuss
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Correct Answer: Option A

Explanation:
Factory rent remains constant irrespective of production volume, hence fixed cost.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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