A firm's 'Capital' is equal to: MCQ with Answer and Explanation

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A firm's 'Capital' is equal to:

A. Fixed assets

B. Total assets

C. Net assets (Total assets - Outside liabilities)

D. Total liabilities

Answer: Option C

Solution (By JKSSB Mock Tests)

Capital (owner's equity) = Total assets - Outside liabilities.

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

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Question #1

Revenue expenditure is intended to benefit:

A. Future periods

B. None

C. Current period only

D. Both current and future periods

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Correct Answer: Option C

Explanation:
Revenue expenditure benefits only the current accounting period and is charged to income.

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

Question #2

The 'Central Board of Indirect Taxes and Customs' (CBIC) is under:

A. RBI

B. Ministry of Law

C. Ministry of Finance, Department of Revenue

D. Ministry of Commerce

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Correct Answer: Option C

Explanation:
CBIC is the apex indirect tax body under the Department of Revenue.

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

Question #3

The mechanism by which a business can reduce its tax liability by claiming credit for taxes paid on purchases is called:

A. Tax Refund

B. Reverse Charge Mechanism (RCM)

C. Input Tax Credit (ITC)

D. Tax Deduction at Source (TDS)

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Correct Answer: Option C

Explanation:
ITC avoids the cascading effect of taxes by allowing a set-off of tax paid on inputs against tax payable on output.

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

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