Which of the following is NOT a feature of cash basis accounting? MCQ with Answer and Explanation

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Which of the following is NOT a feature of cash basis accounting?

A. Complies with matching principle

B. Simple to maintain

C. Used by small professionals

D. Records only cash transactions

Answer: Option A

Solution (By JKSSB Mock Tests)

Cash basis does not follow the matching principle, as revenues and expenses are recorded only when cash is exchanged.

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

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Question #1

Residential status under the Income Tax Act depends primarily on:

A. Physical presence (number of days) in India during the previous year

B. Place of birth

C. Location of assets owned

D. Citizenship of the individual

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Correct Answer: Option A

Explanation:
An individual's residential status for tax purposes is determined by their period of stay in India during the relevant financial year, irrespective of citizenship.

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

Question #2

A 'Vote on Account' is:

A. An advance grant to meet expenditure for a part of the year

B. Final budget passed by Parliament

C. Excess grant

D. Supplementary grant

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Correct Answer: Option A

Explanation:
Vote on Account is a provision for meeting expenses for a short period before the full budget is passed.

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

Question #3

Cash basis accounting recognizes revenue when:

A. Cash is received

B. Services are performed

C. Order is received

D. Sale invoice is raised

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Correct Answer: Option A

Explanation:
Under cash basis, transactions are recorded only when cash is received or paid, not when accrued.

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

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