A 'Cost Audit' is mandated for certain companies under: MCQ with Answer and Explanation

Question
A 'Cost Audit' is mandated for certain companies under:
A. Companies Act, 2013
B. GST Act
C. SEBI regulations
D. Income Tax Act
Answer: Option A
Solution (By JKSSB Mock Tests)
Cost audit is required for specified companies as per Section 148 of Companies Act, 2013.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Question #1
S1: Depreciation is charged on all fixed assets except land. S2: Depreciation is charged on land if it is a freehold land. Which statement(s) is/are correct?
A. Both S1 and S2
B. S1 only
C. S2 only
D. Neither S1 nor S2
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Correct Answer: Option B

Explanation:
Depreciation is charged on all depreciable fixed assets. Land (specifically freehold land) has an unlimited useful life and is not depreciated. Leasehold land is depreciated over the lease term. S1 is correct, S2 is incorrect.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
If Cost of Goods Sold (COGS) is Rs 1,50,000 and Gross Profit is 20% on Sales, what is the Sales value?
A. Rs 1,87,500
B. Rs 1,80,000
C. Rs 2,00,000
D. Rs 1,75,000
Discuss
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Correct Answer: Option A

Explanation:
If GP is 20% on sales, COGS is 80% on sales. Sales = COGS / 80% = 1,50,000 / 0.8 = Rs 1,87,500.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
An amount of Rs 10,000 withdrawn by the proprietor for personal use will cause:
A. No change in total assets
B. Decrease in Cash and Decrease in Capital
C. Increase in Drawings and Increase in Liabilities
D. Decrease in Cash and Increase in Capital
Discuss
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Correct Answer: Option B

Explanation:
Drawings reduce cash on the asset side and simultaneously reduce the proprietor's capital on the equity side.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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