JKSSB Financial Accounting Mcqs | JKSSB FAA PDF

Introduction to JKSSB Financial Accounting and Its Terms

Financial accounting is a crucial aspect of business management and decision-making. It involves the systematic recording, analysis, and reporting of a company’s financial transactions. The primary purpose of financial accounting is to provide accurate and reliable information about the financial performance and position of a business to various stakeholders, including investors, creditors, management, and regulatory authorities.

Key Terms in Financial Accounting:

1. Assets: These are resources owned by a company, such as cash, inventory, buildings, and equipment.
2. Liabilities: These represent the obligations of a company, such as loans, accounts payable, and other debts.
3. Equity: Equity represents the ownership interest in a company, often divided into common stock and retained earnings.
4. Revenue: This is the income generated from the primary activities of a business, such as sales of goods or services.
5. Expenses: These are the costs incurred in the process of earning revenue, including operating expenses, interest, and taxes.
6. Income Statement: Also known as the profit and loss statement, it summarizes a company’s revenues, expenses, and profits over a specific period.
7. Balance Sheet: This financial statement provides a snapshot of a company’s financial position at a specific point in time, including its assets, liabilities, and equity.
8. Cash Flow Statement: This statement outlines the cash inflows and outflows from operating, investing, and financing activities, providing insights into a company’s liquidity and financial flexibility.
9. Depreciation: It is the systematic allocation of the cost of a tangible asset over its useful life.
10. Accrual Accounting: This method recognizes revenue and expenses when they are earned or incurred, regardless of when the cash is received or paid.

JKSSB Financial Accounting Multiple-Choice Questions (MCQs):

1. What does the balance sheet primarily show?
   a. Revenues
   b. Expenses
   c. Financial position
   d. Cash flows
2. Which financial statement reflects the profitability of a company over a specific period?
   a. Balance sheet
   b. Income statement
   c. Cash flow statement
   d. Statement of equity
3. Assets = Liabilities + Equity. This equation represents the:
   a. Income statement
   b. Cash flow statement
   c. Balance sheet
   d. Statement of retained earnings
4. What is the purpose of depreciation in financial accounting?
   a. To increase assets
   b. To allocate the cost of an asset over its useful life
   c. To decrease equity
   d. To calculate revenue
5. When are expenses recognized in accrual accounting?
   a. When cash is received
   b. When goods are sold
   c. When they are incurred
   d. At the end of the fiscal year
   
   
   What does the balance sheet primarily show? Answer: c. Financial position
   
   Which financial statement reflects the profitability of a company over a specific period? Answer: b. Income statement
   
   Assets = Liabilities + Equity. This equation represents the: Answer: c. Balance sheet
   
   What is the purpose of depreciation in financial accounting? Answer: b. To allocate the cost of an asset over its useful life
   
   When are expenses recognized in accrual accounting? Answer: c. When they are incurred