In Social Accounting, treating pollution emitted by a factory as a negative entry is an example of pricing an: MCQ with Answer and Explanation

In Social Accounting, treating pollution emitted by a factory as a negative entry is an example of pricing an:
A. Internal Cost
B. External Cost (Negative Externality)
C. Opportunity Cost
D. Sunk Cost
Answer: Option B
Solution (By JKSSB Mock Tests)
Pollution is an external cost because the burden is borne by society, not directly reflected in the company's internal financial books.

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Practice More Accountancy and Book Keeping Questions

Question #1
The Companies Act, 2013 mandates that all companies must maintain their books of accounts under the:
A. Single Entry System
B. Cash System
C. Accrual (Mercantile) System
D. Hybrid System

Correct Answer: Option C


Explanation:
Section 128 of the Companies Act, 2013 strictly requires companies to maintain accounts on an accrual basis and according to the double-entry system.

Question #2
The 'Tax on Provident Fund contributions' above specified limit was introduced by:
A. Finance Act, 2021
B. 2019
C. No tax
D. Finance Act, 2020

Correct Answer: Option A


Explanation:
Interest on employee contributions exceeding ₹2.5 lakh per annum (₹5 lakh for government employees) in PF is taxable from FY 2021-22.

Question #3
Under the Income Tax Act, if a house property is self-occupied, what is the Annual Value of that property?
A. Nil (Zero)
B. The fair rent of the property
C. The municipal valuation of the property
D. The actual rent received

Correct Answer: Option A


Explanation:
Under Section 23(2) of the Income Tax Act, if a house property is used for the owner's own residence (self-occupied), its Annual Value is taken as Nil (Zero).