The 'Fund-based Accounting' is used by: MCQ with Answer and Explanation

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The 'Fund-based Accounting' is used by:

A. Companies

B. Sole traders

C. Non-profit organizations and government entities

D. Partnership firms

Answer: Option C

Solution (By JKExamLibrary)

Fund-based accounting tracks resources for specific purposes, common in NPOs and government.

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

The 'Audit Risk' is composed of:

A. Only inherent risk

B. Inherent risk, control risk, detection risk

C. Business risk and financial risk

D. Only detection risk

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Correct Answer: Option B

Explanation:
Audit risk = Inherent risk × Control risk × Detection risk.

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

Question #2 Report Error

An 'Adverse Opinion' is issued when:

A. Misstatements are pervasive and material, and financial statements do not present a true and fair view

B. There is a limitation of scope

C. Financial statements are true and fair

D. Auditor is unable to obtain evidence

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Correct Answer: Option A

Explanation:
Adverse opinion indicates that financial statements are materially misstated.

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

Question #3 Report Error

As per AS 3, interest paid on loan is classified as:

A. Financing activity

B. Operating activity

C. Investing activity

D. None

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Correct Answer: Option A

Explanation:
Interest paid on borrowings is a financing activity under AS 3.

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

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