JKSSB Accounts Assistant (Finance) - Social Accounting, Social Audit & Single Entry System Practice Test MCQ's

JKSSB Accounts Assistant (Finance) - Social Accounting, Social Audit & Cash-Based Single Entry System Practice Test

Targeted 50 MCQ Practice Module focusing on: Concept of Social Accounting, Social Audit, and Cash-Based Single Entry System of Accounting.

Select your answers and click Submit Assessment Answers at the bottom to calculate your total score and review explanations.

📢 Stay Updated on JKSSB Exam Materials! Follow the Official WhatsApp Channel: Join Channel Here  |  💬 Contact Admin Direct

SECTION I: Social Accounting - Concepts, Objectives & Framework [Questions 1 to 13]

1. Social Accounting mainly deals with measuring and reporting:

Only financial transactions with shareholders Social costs and social benefits arising from business activities Tax liabilities of the government Personal accounts of employees

Explanation: Social accounting captures the impact of an organization's activities on society, including social costs (pollution, resource depletion) and social benefits (employment, welfare).

2. The concept of Social Accounting emerged mainly to address concern about:

Foreign exchange fluctuations Social responsibility and impact of business on the community and environment Depreciation of fixed assets Computation of GST liability

Explanation: Social accounting arose from a growing recognition that businesses affect and are accountable to society beyond just shareholders.

3. Which of the following best describes "Social Cost"?

Cost incurred for advertising a product Cost borne by society due to negative externalities of business operations, e.g. pollution Cost of raw material purchased Salary paid to top management

Explanation: Social cost refers to the negative external impact of production/business activity that falls on society rather than the firm itself.

4. The "Triple Bottom Line" concept in social accounting refers to measuring performance on:

Profit, Loss, and Tax People, Planet and Profit Assets, Liabilities, and Capital Sales, Purchases and Expenses

Explanation: Triple Bottom Line (coined by John Elkington) evaluates a firm's social, environmental, and economic performance — "People, Planet, Profit".

5. Human Resource Accounting, a branch of social accounting, primarily deals with:

Valuation and reporting of human capital as an organizational asset Calculation of income tax on salaries Preparation of the Trial Balance Depreciation on office furniture

Explanation: Human Resource Accounting attempts to identify, measure, and report the value of an organization's human capital as an asset.

6. Which of the following is an example of a "Social Benefit" generated by business enterprises?

Air pollution from factory Employment generation and skill development in the local community Excessive use of natural resources Increase in traffic congestion

Explanation: Social benefits are positive externalities of business, such as employment creation, skill development, and community welfare.

7. Corporate Social Responsibility (CSR) under the Companies Act, 2013 mandates certain companies to spend at least what percentage of average net profits of the preceding three years on CSR activities?

1% 2% 5% 10%

Explanation: Section 135 of the Companies Act, 2013 requires eligible companies to spend at least 2% of average net profit of the preceding three financial years on CSR.

8. The Abt Model and Linowes Model are associated with which area of accounting?

Cost Accounting Social Accounting (Social Balance Sheet approaches) Inflation Accounting Government Budgeting

Explanation: Clark Abt and David Linowes proposed early models for preparing a socio-economic operating statement/social balance sheet reflecting a firm's social costs and benefits.

9. A "Social Balance Sheet" primarily attempts to present:

Only the financial assets and liabilities of a firm The net social contribution of an enterprise to different stakeholders like employees, society, government, and environment The tax payable to Income Tax Department The market value of company shares

Explanation: A social balance sheet reports the enterprise's contribution to and impact on various stakeholder groups, not just financial position.

10. Which of the following is NOT typically considered a stakeholder group in Social Accounting?

Employees Local Community Environment Competitor's shareholders

Explanation: Social accounting stakeholders include employees, community, government, environment, customers, and society at large — not a rival firm's shareholders.

11. Sustainability reporting frameworks such as the Global Reporting Initiative (GRI) are closely linked to which accounting concept?

Social and Environmental Accounting Inventory Valuation Depreciation Accounting Cash Flow Statement

Explanation: GRI standards guide organizations in reporting their economic, social, and environmental impacts, forming a core part of social/sustainability accounting.

12. Social Cost-Benefit Analysis (SCBA) is primarily used to evaluate:

Personal income tax slabs Public and private projects from the point of view of society as a whole, rather than just the investor Bank interest rates Foreign currency conversion rates

Explanation: SCBA evaluates a project's total costs and benefits to society, including externalities, rather than only the private financial return.

13. Environmental Accounting, a sub-area of social accounting, focuses on:

Recording and reporting the environmental costs and impacts of business activities Recording only cash transactions Preparing salary sheets Filing GST returns

Explanation: Environmental accounting identifies, measures, and reports the environmental costs and benefits attributable to an organization's activities.

SECTION II: Social Audit - Meaning, Process & Applications [Questions 14 to 25]

14. Social Audit can best be defined as:

A statutory audit of financial statements by a Chartered Accountant A process of reviewing official records and determining whether reported expenditures reflect actual money spent on the ground, involving public participation An audit conducted only by the Income Tax Department An internal audit of manufacturing defects

Explanation: Social audit is a participatory process where the community verifies whether reported public expenditure matches actual work/benefit delivered.

15. In India, Social Audit gained major statutory recognition through which legislation?

The Companies Act, 2013 The Right to Information Act, 2005 The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005 The Income Tax Act, 1961

Explanation: Section 17 of MGNREGA, 2005 mandates regular Social Audit of all works executed under the scheme through the Gram Sabha.

16. Which grassroots body is primarily responsible for conducting Social Audit under MGNREGA?

Gram Sabha Reserve Bank of India Securities and Exchange Board of India Comptroller and Auditor General (CAG)

Explanation: The Gram Sabha, the village-level assembly of registered voters, is legally mandated to conduct social audits of MGNREGA works.

17. The primary objective of Social Audit is to ensure:

Maximization of shareholder profit Public accountability, transparency, and community participation in government/development programs Reduction in income tax rates Faster depreciation of assets

Explanation: Social audit aims to make public officials and implementing agencies accountable to the citizens who are meant to benefit from a scheme.

18. A public hearing organized as part of the social audit process, where beneficiaries and officials openly discuss findings, is popularly known as:

Jan Sunwai (Public Hearing) Board Meeting Extraordinary General Meeting Annual General Meeting

Explanation: Jan Sunwai is the open public forum where social audit findings are read out and discussed with officials and the community present.

19. How does Social Audit fundamentally differ from a conventional Financial Audit?

Social Audit examines only financial records with no public role, while Financial Audit involves community participation Social Audit evaluates social, economic and environmental performance with community participation, while Financial Audit primarily verifies financial statement accuracy Both are identical in scope and process Social Audit is conducted only by external Chartered Accountants

Explanation: Social audit has a broader, participatory scope covering non-financial impact, whereas financial audit focuses narrowly on the accuracy of financial statements.

20. Which independent body/unit is typically established at the state level in India to facilitate and oversee Social Audits under MGNREGA?

Social Audit Unit (SAU) / State Society for Social Audit State Public Service Commission State Finance Commission State Election Commission

Explanation: States are required to set up an independent Social Audit Unit to facilitate regular and impartial social audits of MGNREGA works.

21. Social Audit as a concept was significantly strengthened in India's rural governance following which Constitutional Amendment empowering Panchayati Raj Institutions?

42nd Amendment 73rd Amendment 86th Amendment 61st Amendment

Explanation: The 73rd Constitutional Amendment Act, 1992 empowered Panchayati Raj Institutions, laying the foundation for participatory governance and social audit through Gram Sabhas.

22. Which of the following is a key benefit of conducting regular Social Audits of government welfare schemes?

Increases corruption and leakages Enhances transparency, reduces corruption, and improves the effectiveness of public spending Removes the need for any financial record-keeping Eliminates the role of Gram Sabha

Explanation: Regular social audits expose irregularities and leakages, driving accountability and better outcomes in public spending.

23. A "Social Audit Calendar" refers to:

A festival calendar of the village A pre-announced schedule specifying the dates for conducting social audits of different Gram Panchayats An annual tax filing calendar A stock market trading calendar

Explanation: Social Audit Units prepare and publish a calendar so that every Gram Panchayat's works are audited at least once every six months.

24. Grievances identified during a Social Audit process are typically addressed through:

A formal grievance redressal mechanism / action-taken report by the implementing authority Direct court litigation only Ignoring the findings Private negotiation between officials only

Explanation: Findings raised in the Jan Sunwai are recorded and the implementing authority is required to file an action-taken report addressing each grievance.

25. Social Audit primarily promotes which principle of good governance?

Centralization of power Participatory democracy and bottom-up accountability Secrecy of public records Reduction of citizen involvement

Explanation: Social audit institutionalizes citizen participation in monitoring public programs, strengthening bottom-up accountability.

SECTION III: Cash-Based Single Entry System - Fundamentals [Questions 26 to 38]

26. The Single Entry System of accounting can best be described as:

A scientific and complete system recording both debit and credit aspects of every transaction An unscientific, incomplete, and irregular method of recording only some aspects of transactions, mainly personal and cash accounts A system used exclusively by large multinational companies A system that eliminates the need for a Cash Book

Explanation: Single entry is an incomplete and unsystematic mode of recording where only personal accounts and a cash book are generally kept.

27. Under the Cash-Based Single Entry System, which of the following accounts is generally maintained completely and regularly?

Nominal Accounts Cash Account Real Accounts (other than cash) All ledger accounts equally

Explanation: In single entry, the Cash Book is usually maintained regularly since cash is the most vital asset to track; other accounts are kept incompletely or not at all.

28. Which of the following is a major limitation of the Single Entry System?

It requires excessive bookkeeping staff It does not allow preparation of a Trial Balance to verify arithmetical accuracy since only partial records are kept It records both debit and credit for every transaction, causing duplication It is more expensive to maintain than double entry

Explanation: Since only incomplete records are kept, there are no comprehensive ledger balances to check via a Trial Balance, so arithmetical accuracy cannot be verified.

29. Single Entry System is most commonly and suitably adopted by:

Multinational listed companies Sole proprietors and small partnership firms Government departments only Banking companies

Explanation: Small businesses such as sole proprietorships and small partnerships often adopt single entry due to its simplicity and low cost.

30. "Pure Single Entry" is a form of single entry system where only which type of accounts are maintained?

Only Personal Accounts Only Nominal Accounts Only Real Accounts Both Nominal and Real Accounts fully

Explanation: Under Pure Single Entry, only personal accounts of debtors and creditors are maintained; cash and other accounts are not kept, though this form is rarely practicable.

31. "Simple Single Entry" system maintains which combination of accounts?

Only Real Accounts Personal Accounts and a Cash Book Only Nominal Accounts A complete set of subsidiary books

Explanation: Simple Single Entry maintains Personal Accounts along with a Cash Book, giving slightly more information than pure single entry.

32. Under "Quasi Single Entry" (the most commonly practiced form), the books maintained include:

Only the Cash Book Personal Accounts, Cash Book, and some subsidiary books like Sales Book, Purchases Book etc. A full Ledger with all Real, Personal and Nominal accounts Only the Sales Book

Explanation: Quasi Single Entry, the most widely used form in practice, maintains Personal Accounts, a Cash Book, and some subsidiary books alongside.

33. As compared to the Double Entry System, the Single Entry System of accounting is:

More scientific and reliable Unscientific, unsystematic and less reliable for statutory reporting purposes Mandatory for listed public companies Preferred by statutory auditors for large corporations

Explanation: Because it lacks a systematic recording of dual aspects, single entry is unscientific and not accepted for statutory/legal reporting by large entities.

34. Under Cash-Based Single Entry System, transactions not involving cash directly, such as credit sales and credit purchases, are:

Always recorded fully and accurately in separate ledger accounts Often not systematically recorded and must be estimated/reconstructed using available information such as total debtors and creditors accounts Automatically posted to the Nominal Ledger Ignored entirely with no adjustment possible

Explanation: Since credit transactions aren't cash-based, they are often reconstructed later using memorandum accounts like Total Debtors and Total Creditors Accounts.

35. In the Cash-Based Single Entry System, since Nominal Accounts (expenses and incomes) are not maintained systematically, it becomes difficult to directly prepare:

The Cash Book A Trading and Profit & Loss Account in the conventional format A list of debtors A bank reconciliation statement

Explanation: Without regular nominal accounts recording each expense/income, a proper Trading and P&L Account cannot be prepared directly and must be reconstructed.

36. Which of the following is an advantage of the Single Entry System for a small trader?

It provides full details for tax assessment purposes as required by law It is simple, less time-consuming, and economical, requiring no expert bookkeeping knowledge It allows easy detection of fraud through cross-checking It provides accurate figures for obtaining large bank loans

Explanation: Single entry is simple and inexpensive because it avoids the technicalities of full double-entry bookkeeping, suiting small traders with limited transactions.

37. Since Real Accounts (other than cash) are generally not maintained under Single Entry System, ascertaining the value of assets like furniture or stock requires:

No effort as it is directly available from ledger Physical verification and estimation at the end of the period Reference to the Nominal Ledger Reference to the Suspense Account

Explanation: As no ledger account is kept for such assets, their values must be estimated through physical stock-taking/valuation at period end.

38. The Cash-Based Single Entry System is also sometimes referred to as:

"Accounts from Incomplete Records" "Double Account System" "Consolidated Accounting System" "Standard Costing System"

Explanation: Since only partial and incomplete records of transactions are maintained, the single entry system is popularly known as "Accounting from Incomplete Records".

SECTION IV: Statement of Affairs & Profit Ascertainment [Questions 39 to 50]

39. Under the Single Entry System, profit or loss for a period is usually ascertained by comparing:

Total Sales and Total Purchases only Capital in the beginning and Capital at the end of the accounting period, duly adjusted Cash Balance in the beginning and Cash Balance at the end only Fixed Assets purchased during the year

Explanation: Under the Net Worth Method, profit is derived by comparing adjusted opening and closing capital rather than through a conventional P&L account.

40. Which statement is prepared under the Single Entry System to ascertain the Capital of a business by listing estimated assets and liabilities?

Trial Balance Statement of Affairs Bank Reconciliation Statement Cash Flow Statement

Explanation: A Statement of Affairs is a list of estimated assets and liabilities (similar in appearance to a Balance Sheet) used to ascertain capital under incomplete records.

41. The correct formula to ascertain Profit under the Net Worth (Statement of Affairs) Method is:

Profit = Closing Capital + Drawings − Additional Capital Introduced − Opening Capital Profit = Opening Capital − Closing Capital Profit = Total Sales − Total Purchases Profit = Closing Cash Balance − Opening Cash Balance

Explanation: This standard formula adjusts the change in capital for drawings (added back) and additional capital introduced (deducted) to isolate the trading profit.

42. A "Statement of Affairs" differs from a formal "Balance Sheet" mainly because:

It is based on complete double-entry ledger balances that are fully verified It is based on estimates, incomplete records, and figures obtained partly from memory, making it less reliable It cannot include any liabilities It is prepared only by government auditors

Explanation: Unlike a Balance Sheet drawn from a complete double-entry ledger, a Statement of Affairs relies on estimation and incomplete data, so it is less reliable.

43. If a proprietor introduces additional capital during the year under the Single Entry System, this amount should be:

Added while calculating profit, since it is not business income Ignored completely Deducted while calculating profit, since it increased capital for reasons other than trading profit Treated as an expense

Explanation: Additional capital introduced increases capital without relating to trading profit, so it is subtracted while computing actual profit for the period.

44. If the proprietor has withdrawn cash/goods for personal use (Drawings) during the year, this amount is:

Added back while ascertaining profit under the Net Worth method, since it reduced capital without being a business loss Deducted from profit Ignored completely as it has no impact Treated as a business expense in the Trading Account

Explanation: Drawings reduce capital for personal, non-business reasons, so they must be added back to reflect the true trading profit.

45. The "Conversion Method" of accounting under Single Entry System involves:

Converting incomplete single entry records into a complete double entry set of books to prepare Trading, P&L Account, and Balance Sheet Converting cash sales into credit sales Converting fixed assets into current assets Converting liabilities into assets

Explanation: The Conversion Method reconstructs missing ledger accounts (like Total Debtors, Total Creditors, Bills accounts) to arrive at a full set of double-entry financial statements.

46. Under Single Entry System, the amount of Total Sales for the period (including credit sales) can generally be ascertained by preparing a:

Total Debtors Account Total Creditors Account Capital Account Drawings Account

Explanation: A Total (Sundry) Debtors Account, built using opening/closing debtor balances and cash received, is used to derive the missing figure of total sales, including credit sales.

47. Similarly, the amount of Total Purchases (including credit purchases) during the period can be ascertained under Single Entry System by preparing a:

Total Debtors Account Total Creditors Account Bills Receivable Account Suspense Account

Explanation: A Total (Sundry) Creditors Account is used, based on opening/closing creditor balances and payments made, to arrive at the missing total purchases figure.

48. Under Single Entry System, if opening capital is ₹80,000, closing capital is ₹1,20,000, drawings during the year were ₹15,000, and no additional capital was introduced, the Profit for the year is:

₹40,000 ₹55,000 ₹1,05,000 ₹25,000

Explanation: Profit = Closing Capital + Drawings − Additional Capital − Opening Capital = 1,20,000 + 15,000 − 0 − 80,000 = ₹55,000.

49. In the Statement of Affairs Method, if liabilities exceed assets at the start of the business, the resulting figure represents:

A Capital Deficiency (Negative Capital) Net Profit Gross Profit Reserve Fund

Explanation: When total liabilities exceed total assets in a Statement of Affairs, the excess represents a capital deficiency, i.e., negative capital.

50. One of the key disadvantages of relying on the Single Entry System (Statement of Affairs Method) for profit ascertainment, as compared to preparing a proper Trading and Profit & Loss Account, is that:

It gives exact, item-wise details of each revenue and expense affecting profit It only shows the net change in capital and fails to disclose the detailed reasons/heads of income and expenditure behind the profit or loss It requires maintaining a full set of Nominal Accounts It is more time-consuming than Double Entry bookkeeping

Explanation: The Net Worth method only reveals the overall change in capital, without breaking down the specific income and expense heads that caused the profit or loss.

🏠 Go to Home 📢 Join WhatsApp Channel 💬 Message Me on WhatsApp