The 'Accounting Cycle' begins with: MCQ with Answer and Explanation

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The 'Accounting Cycle' begins with:

A. Preparation of trial balance

B. Identification and recording of transactions in journal

C. Posting to ledger

D. Preparation of financial statements

Answer: Option B

Solution (By JKExamLibrary)

The cycle starts with journalizing (recording) transactions.

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

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Practice More Accountancy and Book Keeping Questions

Question #1 Report Error

Under GST, the Reverse Charge Mechanism (RCM) means:

A. The tax rate is negative

B. Exports are tax-free

C. Liability to pay tax shifts from the supplier to the recipient of goods/services

D. The government pays tax to the supplier

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Correct Answer: Option C

Explanation:
Normally, the supplier collects and pays GST. Under RCM, the buyer/recipient is directly liable to pay the tax to the government.

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

Question #2 Report Error

The 'Accounting Policy Changes' are applied:

A. Arbitrarily

B. Only with government approval

C. Retrospectively, unless impracticable

D. Prospectively

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Correct Answer: Option C

Explanation:
Ind AS 8 requires retrospective application of changes in accounting policies.

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

Question #3 Report Error

The 'Audit Documentation' (working papers) is the property of:

A. Auditor

B. Client

C. Shareholders

D. Government

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Correct Answer: Option A

Explanation:
Working papers belong to the auditor; client does not have a right to them.

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

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