A revenue expenditure wrongly capitalized will lead to: MCQ with Answer and Explanation

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A revenue expenditure wrongly capitalized will lead to:

A. Understatement of assets and profit

B. No effect

C. Overstatement of liabilities

D. Overstatement of assets and profit

Answer: Option D

Solution (By JKSSB Mock Tests)

Capitalizing revenue expense increases assets and reduces expenses, thus overstating profit and assets.

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

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Question #1

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A company issues 10,000 equity shares of ₹10 each at a premium of ₹5. The amount credited to Securities Premium A/c is:

A. ₹1,00,000

B. ₹1,50,000

C. ₹10,000

D. ₹50,000

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Correct Answer: Option D

Explanation:
Securities premium = shares * premium per share = 10,000 * 5 = ₹50,000.

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Question #2

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The 'HSN Code' under GST is used for:

A. Identifying the type of goods

B. Tax rate determination

C. Both A and C

D. Identifying the buyer

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Correct Answer: Option C

Explanation:
HSN (Harmonized System of Nomenclature) code classifies goods for tax rates.

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Question #3

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Which of the following is a feature of a cooperative society?

A. Voluntary association with democratic management

B. Managed by the government

C. Profit maximization is the main motive

D. Unlimited liability

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Correct Answer: Option A

Explanation:
A cooperative society is a voluntary association of persons who join together with a service motive rather than profit, and it is managed democratically.

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