Which of the following is an example of a contingent liability? MCQ with Answer and Explanation

Question
Which of the following is an example of a contingent liability?
A. Sundry Creditors
B. Outstanding salaries
C. Bills Receivable discounted
D. Bills Payable
Answer: Option C
Solution (By JKSSB Mock Tests)
Bills receivable discounted is a contingent liability because the firm is only liable to pay the bank if the drawee fails to pay the bill on maturity.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Question #1
In the context of the Cash Book, the term 'C' written against an entry stands for:
A. Contra
B. Cash
C. Carry forward
D. Credit
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Correct Answer: Option A

Explanation:
The letter 'C' in the Ledger Folio column signifies a contra entry, which impacts both cash and bank columns.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
In 'Standard Costing', the formula for 'Material Usage Variance' is:
A. Standard Price × (Standard Quantity - Actual Quantity)
B. Actual Price × (Standard Quantity - Actual Quantity)
C. Standard Quantity × (Standard Price - Actual Price)
D. Actual Quantity × (Standard Price - Actual Price)
Discuss
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Correct Answer: Option A

Explanation:
Material usage variance = SP (SQ - AQ).
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
Social audit differs from financial audit mainly because:
A. It is always conducted by the CAG
B. It is done on a daily basis
C. It examines social impact and ethical behavior rather than just financial accuracy
D. It focuses solely on tax evasion
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Correct Answer: Option C

Explanation:
A social audit evaluates how well a company is achieving its social objectives and its impact on the community and environment.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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