A 'Capital Reserve' can be used for: MCQ with Answer and Explanation

Question

Share Report Error

A 'Capital Reserve' can be used for:

A. Payment of salaries

B. Distribution of dividend

C. Writing off revenue losses

D. Issue of bonus shares

Answer: Option D

Solution (By JKSSB Mock Tests)

Capital reserve, generally, can be used for issuing fully paid bonus shares, not for dividend distribution (except some specific reserves).

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

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Question #1

The 'Search and Seizure' under Section 132 of Income Tax Act is commonly known as:

A. Raid

B. Survey

C. Assessment

D. Audit

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Correct Answer: Option A

Explanation:
Search and seizure is an extreme measure to unearth undisclosed income.

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

Question #2

The 'Qualifying Asset' under Ind AS 23 includes:

A. All intangible assets

B. Inventories routinely manufactured in large quantities

C. Assets that take a substantial period of time to get ready for their intended use or sale

D. All fixed assets

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Correct Answer: Option C

Explanation:
Qualifying asset requires substantial time to get ready.

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Question #3

Accounting by Non-Profit Organizations (NPOs) usually revolves around which system?

A. Standard Costing

B. Responsibility Accounting

C. Social Accounting

D. Fund Based Accounting

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Correct Answer: Option D

Explanation:
NPOs use fund-based accounting where resources are categorized into specific funds based on restrictions placed by donors.

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

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