Which system of accounting recognizes income when it is earned irrespective of receipt? MCQ with Answer and Explanation

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Which system of accounting recognizes income when it is earned irrespective of receipt?

A. Accrual system

B. Hybrid system

C. Cash system

D. Single entry system

Answer: Option A

Solution (By JKSSB Mock Tests)

Accrual basis records revenues when earned and expenses when incurred, not when cash is received or paid.

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

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Question #1

The 'Nil-Rated Supply' under GST means:

A. Goods with 0% GST but ITC available

B. Zero-rated supplies

C. Non-taxable supplies

D. Goods with 0% GST and no ITC on inputs (exempt)

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Correct Answer: Option D

Explanation:
Nil-rated supplies are taxed at 0% but no input tax credit is available. Exempt supplies also fall here. Zero-rated (export) allows ITC.

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

Question #2

The 'Employee Benefits' (Ind AS 19) includes:

A. Short-term benefits, post-employment benefits, other long-term benefits, termination benefits

B. Only pension

C. Only gratuity

D. Only wages

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Correct Answer: Option A

Explanation:
Ind AS 19 covers various types of employee benefits.

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Question #3

The term 'Current Cost Accounting' deals with:

A. Sunk cost

B. Opportunity cost

C. Historical cost

D. Replacement cost

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Correct Answer: Option D

Explanation:
Current cost accounting values assets at their current replacement cost, not historical cost.

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

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