SSC CGL Finance – Accounting: Meaning, Scope, Limitations & Basic Concepts – Level 1 · Warm-up

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SSC CGL Finance – Accounting: Meaning, Scope, Limitations & Basic Concepts – Level 1 · Warm-up – 12 questions, subject: Finance & Economics (Tier II Paper III). Every question has the correct answer with a one-line explanation; tap "Show Answer". Free practice for TNPSC, UPSC, SSC, Bank and RRB exams – Shanmugam IAS Academy, Coimbatore.

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1.  
Which subject is called the “language of business”?

Correct Answer: D [Accounting]

Explanation:

Accounting communicates the results and position of a business in money terms – hence the language of business.

2.  
Arrange in orderWhich is the correct order of the first three steps of the accounting process?

Correct Answer: B [Identifying → Measuring → Recording]

Explanation:

I-M-R-C: identify the event, measure it in money, record it, then classify it.

3.  
The capital of a business is equal to:

Correct Answer: C [Assets − Liabilities]

Explanation:

Answer: Assets − Liabilities. From A = L + C, C = A − L.

4.  
Total assets of a firm are ₹ 6,40,000 and capital is ₹ 4,75,000. Its liabilities are:

Correct Answer: A [₹ 1,65,000]

Explanation:

L = A − C = 6,40,000 − 4,75,000 = 1,65,000.

5.  
Cash or goods taken by the owner from the business for personal use are called:

Correct Answer: C [Drawings]

Explanation:

Drawings reduce the owner's capital; they are not business expenses.

6.  
Persons who owe money to the business for goods sold on credit are called:

Correct Answer: B [Debtors]

Explanation:

Debtors (trade receivables) owe the business; creditors are owed by it.

7.  
Which discount is NOT recorded in the books of account?

Correct Answer: A [Trade discount]

Explanation:

Trade discount is deducted from the list price on the invoice itself; only cash discount is recorded.

8.  
Which branch of accounting mainly finds the cost per unit of a product?

Correct Answer: D [Cost accounting]

Explanation:

Cost accounting ascertains and controls cost per unit, job or process.

9.  
Which of the following is a current asset?

Correct Answer: A [Stock of goods]

Explanation:

Stock is expected to be sold within the operating cycle; the others are held for long-term use.

10.  
Fill in the blankBook-keeping is mainly concerned with ______.

Correct Answer: C [recording and classifying transactions]

Explanation:

Book-keeping = identifying, measuring, recording, classifying; analysis and interpretation belong to accounting.

11.  
A written document that supports an accounting entry is called a:

Correct Answer: B [Voucher]

Explanation:

Cash memos, invoices and receipts are vouchers – the evidence for entries.

12.  
Statement-basedWhich is/are correct?
I. Accounting records only events that can be measured in money.
II. Accounting shows the effect of changes in the price level on assets.

Correct Answer: D [Only I]

Explanation:

Money measurement is a basic feature; ignoring price-level changes is a limitation, so II is false.

➤ Full notes, shortcuts and every answer explained – SSC CGL 2026 Finance & Economics (Tier II Paper III) book (₹149): www.shanmugamiasacademy.in/study-materials/ssc-cgl-finance-economics

📘 SSC CGL 2026 – General Studies – Finance & Economics (Tier II Paper III)
Here you get the answer with a one-line explanation. 1,064 original questions with worked answers · Part A Finance & Accounts and Part B Economics & Governance notes · practice sets + 3 mock tests
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