According to the Indian Financial System, 'Repo Rate' is the rate at which: MCQ with Answer and Explanation

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According to the Indian Financial System, 'Repo Rate' is the rate at which:

A. RBI borrows from commercial banks

B. Commercial banks lend to the public

C. RBI lends short-term funds to commercial banks

D. Banks lend to each other overnight

Answer: Option C

Solution (By JKSSB Mock Tests)

The Repurchase (Repo) rate is the rate at which the RBI lends money to commercial banks to manage short-term liquidity.

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

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Question #1

The 'Equalisation Levy 2.0' at 2% applies to:

A. Online advertisement

B. All sales

C. E-commerce supply of goods or services by non-resident e-commerce operator

D. All digital services

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Correct Answer: Option C

Explanation:
Finance Act 2020 expanded equalisation levy to e-commerce operators at 2%.

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

Question #2

Interest on a bank loan accrued but not paid at year-end is shown in the final accounts by:

A. Debiting Trading A/c, Deducting from Bank Loan

B. Debiting P&L A/c, Adding to Bank Loan in Balance Sheet

C. Ignoring it until paid

D. Crediting P&L A/c, Showing as an Asset

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Correct Answer: Option B

Explanation:
Accrued interest is an expense for the year (Debit P&L) and an outstanding liability (Added to loan or shown separately in Balance Sheet).

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Question #3

Tax evasion is:

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B. Legal use of tax laws to reduce liability

C. Government policy to waive taxes

D. Illegal non-payment or underpayment of taxes

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Correct Answer: Option D

Explanation:
Tax evasion involves illegal practices like hiding income or inflating expenses to avoid paying true tax liability.

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

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