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

Question
Which system of accounting recognizes income when it is earned irrespective of receipt?
A. Single entry system
B. Accrual system
C. Hybrid system
D. Cash system
Answer: Option B
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
At the time of retirement of a partner, the balance of General Reserve is distributed among:
A. Equally among all partners
B. Only the retiring partner
C. Only continuing partners in new ratio
D. All partners in their old profit sharing ratio
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Correct Answer: Option D

Explanation:
General reserve represents accumulated past profits earned by all partners, so it is credited to all partners in their old ratio.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
In cost accounting, the 'Economic Batch Quantity' (EBQ) formula is identical to the EOQ formula. If the setup cost per batch is ₹500, annual demand is 10,000 units, and carrying cost is ₹10 per unit per annum, what is the EBQ?
A. 500 units
B. 2,000 units
C. 1,414 units
D. 1,000 units
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Correct Answer: Option D

Explanation:
EBQ = Square root of (2 * Annual Demand * Setup Cost) / Carrying Cost per unit. EBQ = sqrt((2 * 10,000 * 500) / 10) = sqrt(1,000,000) = 1,000 units.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
The 'Letter of Undertaking' (LUT) for export without payment of IGST is valid for:
A. Financial year
B. Month
C. One transaction
D. One year
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Correct Answer: Option A

Explanation:
LUT is valid for a financial year; fresh LUT is filed each year.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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