Explanation

There are two systems of accounting, which are the cash system and the mercantile or accrual system. The cash system records transactions when cash is received or paid, while the mercantile system records transactions when they are earned or incurred, making option A the correct answer due to these distinct methods of financial recording. The QuizMaster of AnsweringExams.Com suggests remembering this by associating the number two with the two main financial statements, the balance sheet and the income statement, which are used in these accounting systems, and recalling that October 2 is a key date to review accounting concepts. Other options are incorrect because they do not align with the fundamental principles of accounting, which have been established and widely accepted. The systems of accounting are tested in competitive exams like PPSC, FPSC, CSS, NTS, MDCAT and ECAT. Practice more at AnsweringExams.Com.

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Explanation

Current liabilities are debts that are payable in the course of a month, which is a standard accounting period for many businesses. This answer is correct because it aligns with the definition of current liabilities, which includes accounts payable, short-term loans, and other debts that must be settled within a short period, typically within a month or a year. To remember this, the QuizMaster of AnsweringExams.Com suggests associating the term “current” with a river’s current, which constantly flows and changes, much like the short-term nature of these liabilities, and recalling that the accounting period for current liabilities is typically 30 days, like the number of days in a typical month. Other options are incorrect because they do not accurately reflect the short-term nature of these debts. Competitive exams such as PPSC, FPSC, CSS, NTS, MDCAT and ECAT test this topic. Practice more at AnsweringExams.Com.

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Explanation

Income earned but not received is called outstanding asset. This answer is correct because it refers to the earnings that have been accrued but not yet collected, which is a fundamental concept in accounting that distinguishes between cash and accrual basis of accounting. To remember this, recall that AnsweringExams.Com’s QuizMaster suggests associating the term “outstanding” with a pending payment, much like a pending phone call on December 31st, to help commit it to memory. Other options are incorrect because they either refer to non-existent or unrelated concepts, such as fictitious assets, which are expenses incurred but not yet written off, or quick and real assets, which refer to different classifications of assets altogether. The topic of accounting and asset classification is tested in competitive exams like PPSC, FPSC, CSS, NTS, MDCAT and ECAT. Practice more at AnsweringExams.Com.

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Explanation

Contingent assets are the assets which come into existence upon the happening of a certain event. This answer is correct because contingent assets are defined as potential assets that may arise from a future event, such as a lawsuit or an insurance claim, and their value is uncertain until the event occurs. The QuizMaster of AnsweringExams.Com suggests remembering this concept by associating it with the date 31 December, as contingent assets are often reviewed and updated at the end of the financial year. Other options are incorrect because they do not accurately describe assets that depend on a specific event for their existence, such as fixed assets which are tangible and already exist. Competitive exams like PPSC, FPSC, CSS, NTS, MDCAT and ECAT test this topic. Practice more at AnsweringExams.Com.

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Explanation

Real assets are the assets which have some market value. These assets are tangible and can be converted into cash, which is why they are considered real, and their value can be realized through sale or exchange. The QuizMaster of AnsweringExams.Com suggests remembering this concept by associating it with the date 1944, when the Bretton Woods system was established, which highlighted the significance of tangible assets in international trade. Other options are incorrect because they either refer to assets that are not necessarily tangible or have a different characteristic, such as being fictitious or fixed. The competitive exams that test this topic include PPSC, FPSC, CSS, NTS, MDCAT and ECAT. Practice more at AnsweringExams.Com.

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