A specific tax levied for a particular purpose on top of the basic tax rate is known as: MCQ with Answer and Explanation

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A specific tax levied for a particular purpose on top of the basic tax rate is known as:

A. Excise

B. Tariff

C. Surcharge

D. Cess

Answer: Option D

Solution (By JKSSB Mock Tests)

A cess (e.g., Health and Education Cess) is levied for a specific purpose and the revenue must be utilized for that objective only.

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

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Question #1

Which tax reform introduced the concept of 'One Nation, One Tax'?

A. Goods and Services Tax (GST)

B. Fringe Benefit Tax

C. Wealth Tax Abolition

D. Value Added Tax (VAT)

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Correct Answer: Option A

Explanation:
GST integrated multiple indirect taxes across India into a single unified tax structure.

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

Question #2

A: The Trial Balance is a statement, not an account. R: It is prepared to check the arithmetical accuracy of the ledger. Choose the correct option.

A. A is false but R is true

B. Both A and R are true but R is NOT the correct explanation of A

C. Both A and R are true and R is the correct explanation of A

D. A is true but R is false

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Correct Answer: Option B

Explanation:
The Trial Balance is indeed a statement of ledger balances, and its primary purpose is to check arithmetical accuracy. However, the fact that it is a statement does not explain why it checks accuracy; the double-entry system does.

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Question #3

The 'Retention Period' for audit working papers is generally:

A. 1 year

B. 10 years

C. 7 years (or as per SQC 1)

D. No requirement

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Correct Answer: Option C

Explanation:
As per ICAI's Standard on Quality Control, retention period is at least 7 years.

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

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