Accountancy MCQs | Chapter-wise Multiple Choice Questions with Answers

Question #1221

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The 'Accounting for Taxes on Income' (AS 22) requires:

A. Only MAT

B. Only current tax

C. Deferred tax accounting for timing differences

D. Ignoring tax

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Correct Answer: Option C

Explanation:
AS 22 mandates recognition of deferred tax assets/liabilities for timing differences.

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Question #1222

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The 'Intangible Asset' (AS 26) is recognised if:

A. It is internally generated

B. It is purchased

C. It has physical substance

D. It is probable that future economic benefits will flow and cost can be measured reliably

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Correct Answer: Option D

Explanation:
Intangible assets are recognised when they meet the definition and recognition criteria.

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Question #1223

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The 'Financial Reporting' under Indian GAAP for non-corporate entities is governed by:

A. Ind AS only

B. Accounting Standards (AS) issued by ICAI

C. IFRS

D. Companies Act only

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Correct Answer: Option B

Explanation:
Non-company entities follow AS issued by ICAI.

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Question #1224

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The 'Deferred Tax Asset' is recognised when:

A. There is no difference

B. Accounting income is higher

C. Losses are incurred

D. Taxable income is higher than accounting income due to timing differences

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Correct Answer: Option D

Explanation:
When taxable income > accounting income, entity will pay more tax now but less in future, creating a deferred tax asset.

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Question #1225

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The 'Provision for Bad Debts' is created by:

A. Debiting Profit & Loss Account and crediting Provision for Bad Debts

B. Crediting Cash Account

C. Debiting Debtors Account

D. Debiting Sales Account

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Correct Answer: Option A

Explanation:
The adjusting entry: P&L A/c Dr. To Provision for Bad Debts.

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Question #1226

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The 'Outstanding Salary' is recorded by:

A. No entry

B. Debit Outstanding Salary A/c, Credit Salary A/c

C. Debit Salary A/c, Credit Outstanding Salary A/c

D. Debit Cash A/c, Credit Salary A/c

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Correct Answer: Option C

Explanation:
To record accrued expense: Salary A/c Dr. To Outstanding Salary A/c.

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Question #1227

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The 'Prepaid Insurance' is adjusted by:

A. Debit Cash A/c, Credit Insurance A/c

B. Debit Prepaid Insurance A/c, Credit Insurance A/c

C. Ignore

D. Debit Insurance A/c, Credit Prepaid Insurance A/c

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Correct Answer: Option B

Explanation:
Prepaid insurance is an asset, so Prepaid Insurance A/c Dr. To Insurance A/c.

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Question #1228

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The 'Depreciation' entry is:

A. Debit Depreciation A/c, Credit P&L A/c

B. Debit Asset A/c, Credit Depreciation A/c

C. Debit Depreciation A/c, Credit Asset A/c

D. Debit P&L A/c, Credit Depreciation A/c

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Correct Answer: Option C

Explanation:
Depreciation is an expense: Depreciation A/c Dr. To Asset A/c (or Accumulated Depreciation).

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Question #1229

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The 'Income Tax Refund' received is:

A. Deferred revenue

B. Liability

C. Revenue receipt

D. Capital receipt

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Correct Answer: Option C

Explanation:
Income tax refund is a revenue receipt as it pertains to business profits.

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Question #1230

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The 'Fringe Benefit Tax' (FBT) was abolished in India from:

A. Assessment Year 2010-11

B. Never existed

C. Still in force

D. Assessment Year 2005-06

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Correct Answer: Option A

Explanation:
FBT was introduced in 2005 and abolished from AY 2010-11.

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Question #1231

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The 'Banking Cash Transaction Tax' (BCTT) was a:

A. GST component

B. Indirect tax

C. TDS

D. Direct tax on cash withdrawals above certain limit (now abolished)

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Correct Answer: Option D

Explanation:
BCTT was a direct tax on cash withdrawals from banks, abolished in 2009.

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Question #1232

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The 'Securities Transaction Tax' (STT) is levied under:

A. Securities Contracts (Regulation) Act

B. Finance Act (Chapter VII of Finance (No.2) Act, 2004)

C. GST Act

D. Income Tax Act

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Correct Answer: Option B

Explanation:
STT is levied through the Finance Act.

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Question #1233

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The 'Dividend Distribution Tax' (DDT) was abolished and dividend now taxed in hands of:

A. Company

B. Both

C. Shareholder

D. No tax

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Correct Answer: Option C

Explanation:
From FY 2020-21, DDT was abolished; dividend is taxable in the hands of shareholders.

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Question #1234

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The 'Equalisation Levy' at 6% applies to:

A. Specified services like online advertisement provided by non-residents

B. All digital services

C. All goods

D. E-commerce operators

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Correct Answer: Option A

Explanation:
Equalisation levy at 6% is on consideration for specified digital services by non-residents; a separate 2% levy on e-commerce supply.

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Question #1235

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The 'Faceless Penalty' scheme under income tax was introduced in:

A. 2021

B. 2017

C. 2019

D. 2020

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Correct Answer: Option A

Explanation:
Faceless penalty scheme was launched in 2021 to impart transparency.

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Question #1236

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The 'GST Amnesty Scheme' provides:

A. No benefit

B. Reduction in tax rates

C. Exemption from all taxes

D. Waiver of late fees for non-filers of returns for past periods

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Correct Answer: Option D

Explanation:
Amnesty schemes allow filing of pending returns with reduced/waived late fees.

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Question #1237

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The 'e-Way Bill' validity for distance up to 100 km is:

A. 1 day

B. 2 days

C. 3 days

D. 5 days

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Correct Answer: Option A

Explanation:
For up to 100 km, e-way bill is valid for 1 day.

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Question #1238

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The 'GST Registration' threshold for normal states for supply of goods is:

A. ₹10 lakh

B. ₹1.5 crore

C. ₹40 lakh

D. ₹20 lakh

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Correct Answer: Option C

Explanation:
The threshold for goods supplier in normal states is ₹40 lakh (₹20 lakh for services).

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Question #1239

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The 'GST Suvidha Providers' (GSPs) are:

A. Tax officials

B. Private entities authorised to provide GST compliance services

C. Government agencies

D. Banks

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Correct Answer: Option B

Explanation:
GSPs facilitate taxpayers in filing returns and other GST compliances via software.

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Question #1240

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The 'Taxpayer's Charter' under Income Tax assures:

A. No penalty

B. Fair, courteous, and reasonable treatment

C. Tax exemption to all

D. No scrutiny

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Correct Answer: Option B

Explanation:
The charter enumerates rights of taxpayers and obligations of the tax department.

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