Interest on capital is calculated on: MCQ with Answer and Explanation

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Interest on capital is calculated on:

A. Capital at the end of the year

B. Average capital

C. Opening capital (with adjustments for additional capital and drawings if specified)

D. Capital introduced initially only

Answer: Option C

Solution (By JKSSB Mock Tests)

Interest is computed on the opening capital, and if the deed provides, adjustments for additions/withdrawals during the year.

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

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Question #1

The primary objective of a statutory financial audit is to:

A. Detect all frauds and errors

B. Prepare the financial statements for management

C. Express an independent opinion on the financial statements

D. Guarantee the future viability of the company

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Correct Answer: Option C

Explanation:
The main objective is to form and express an independent opinion on whether the financial statements present a true and fair view.

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

Question #2

GST collected on sales is credited to:

A. Input GST Credit Account

B. Purchase Account

C. Sales Account

D. Output GST Liability Account

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Correct Answer: Option D

Explanation:
GST collected from customers is a liability to government, recorded as Output GST.

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Question #3

Under Marginal Costing, stock is valued at:

A. Prime Cost

B. Total Cost

C. Fixed Cost

D. Variable Manufacturing Cost

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Correct Answer: Option D

Explanation:
Marginal costing values inventory strictly on variable costs, treating fixed overheads as period costs written off immediately.

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