Discount Allowed is considered a: MCQ with Answer and Explanation

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Discount Allowed is considered a:

A. Selling & Distribution Expense

B. Factory Expense

C. Direct Expense

D. Financial Expense

Answer: Option A

Solution (By JKSSB Mock Tests)

Discount allowed is given to encourage prompt payment by customers, treated as a selling/administrative expense in the P&L Account.

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

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Question #1

A: Internal audit is a continuous process. R: Internal audit is conducted by the statutory auditor. Choose the correct option.

A. A is false but R is true

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

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

D. A is true but R is false

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Correct Answer: Option D

Explanation:
Internal audit is a continuous, ongoing appraisal system by the management. It is conducted by internal audit staff, not the statutory (external) auditor, who conducts the annual financial audit. A is true, R is false.

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

Question #2

In the context of the Indian Financial System, the 'Deposit Insurance and Credit Guarantee Corporation' (DICGC) provides insurance coverage for bank deposits up to:

A. ₹10,00,000 per depositor per bank

B. ₹5,00,000 per depositor per bank

C. ₹2,00,000 per depositor per bank

D. ₹1,00,000 per depositor per bank

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Correct Answer: Option B

Explanation:
The DICGC insures all bank deposits (savings, fixed, current, recurring) up to a maximum limit of ₹5,00,000 per depositor per bank.

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Question #3

The 'Assembly of the Final Audit File' should be completed within:

A. 30 days of auditor's report

B. No time limit

C. 60 days of auditor's report (as per SA 230)

D. 90 days

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Correct Answer: Option C

Explanation:
The final file should be assembled within 60 days from the date of auditor's report.

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

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