Carriage inwards is shown on the: MCQ with Answer and Explanation

Question

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Carriage inwards is shown on the:

A. Asset side of Balance Sheet

B. Credit side of P&L Account

C. Debit side of Trading Account

D. Debit side of P&L Account

Answer: Option C

Solution (By JKSSB Mock Tests)

Carriage inwards is the transportation cost of bringing raw materials/purchases to the factory, hence it's a direct expense charged to the Trading Account.

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

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Question #1

In the absence of a partnership deed, profits are shared:

A. In the ratio of capital

B. Based on age

C. Equally

D. Based on experience

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Correct Answer: Option C

Explanation:
As per Indian Partnership Act, 1932, in absence of a deed, profits and losses are shared equally among partners.

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Question #2

Under the Income Tax Act, the 'TDS' on payment of commission or brokerage exceeding ₹15,000 in a financial year is governed by which section, and what is the rate?

A. Section 194J at 10%

B. Section 194C at 1%

C. Section 194H at 5%

D. Section 194Q at 0.1%

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Correct Answer: Option C

Explanation:
Section 194H mandates TDS at 5% on income by way of commission or brokerage (other than insurance commission) if the amount exceeds ₹15,000 in a financial year.

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Question #3

The journal entry for goods withdrawn by the proprietor for personal use is:

A. Purchases A/c Dr. To Drawings A/c

B. Capital A/c Dr. To Purchases A/c

C. Drawings A/c Dr. To Purchases A/c

D. Drawings A/c Dr. To Sales A/c

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Correct Answer: Option C

Explanation:
Goods taken for personal use reduce drawings and reduce purchases (or stock). Correct entry: Drawings A/c Dr. To Purchases A/c.

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