Which of the following is NOT a limitation of financial accounting? MCQ with Answer and Explanation

Question
Which of the following is NOT a limitation of financial accounting?
A. Provides data for tax assessment
B. Subject to estimation and judgment
C. Ignores price level changes
D. Ignores qualitative aspects
Answer: Option A
Solution (By JKSSB Mock Tests)
Providing data for tax assessment is a utility of financial accounting, not a limitation. The others are recognized limitations.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Practice More Accountancy and Book Keeping Questions

Question #1
When starting a BRS with a debit balance as per the Cash Book, cheques issued but not yet presented for payment should be:
A. Ignored
B. Added
C. Divided
D. Deducted
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Correct Answer: Option B

Explanation:
These cheques decreased the cash book balance but not the pass book. To match the pass book, they must be added back.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
The 'Service Concession Arrangements' are dealt with by:
A. Ind AS 116
B. Ind AS 115
C. Ind AS 109
D. Appendix A of Ind AS 115 (IFRIC 12)
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Correct Answer: Option D

Explanation:
Service concession arrangements (like BOT projects) are addressed by IFRIC 12, incorporated as an appendix.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
Cash basis accounting recognizes revenue when:
A. Services are performed
B. Order is received
C. Sale invoice is raised
D. Cash is received
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Correct Answer: Option D

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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