Which of the following is not a financial statement? MCQ with Answer and Explanation

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Which of the following is not a financial statement?

A. Balance Sheet

B. Profit & Loss Account

C. Trial Balance

D. Cash Flow Statement

Answer: Option C

Solution (By JKSSB Mock Tests)

Trial balance is a working paper, not a financial statement.

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

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Question #1

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If a business purchases goods worth ₹60,000 paying ₹20,000 cash and the balance on credit, the accounting equation will show:

A. Increase in assets ₹60,000, increase in liabilities ₹40,000, decrease in capital ₹0

B. Increase in assets ₹40,000, increase in liabilities ₹40,000

C. Increase in assets ₹60,000, increase in liabilities ₹40,000, decrease in capital ₹20,000

D. Increase in assets ₹60,000, increase in liabilities ₹60,000

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Correct Answer: Option A

Explanation:
Assets increase by ₹60,000 (stock), cash decreases by ₹20,000, net assets increase ₹40,000; liabilities increase by ₹40,000 (creditors). Capital is unchanged. Equation: Assets = Liabilities + Capital, here +40,000 = +40,000 + 0.

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Question #2

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In Social Accounting, an 'externality' refers to:

A. Foreign exchange transactions

B. Uncompensated impact of a firm's actions on third parties

C. External auditors

D. Outsourced services

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Correct Answer: Option B

Explanation:
Externalities (like pollution) are costs or benefits affecting society that are not reflected in traditional financial statements.

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Question #3

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A 'Contra Entry' is recorded in:

A. Cash book (with bank and cash columns)

B. Journal proper

C. Purchase book

D. Sales book

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Correct Answer: Option A

Explanation:
Contra entries (like cash deposited into bank) involve both cash and bank, recorded in cash book.

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

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