S1: GST is a comprehensive indirect tax. S2: GST is levied on the manufacture of goods. Which statement(s) is/are correct? MCQ with Answer and Explanation

S1: GST is a comprehensive indirect tax. S2: GST is levied on the manufacture of goods. Which statement(s) is/are correct?
A. S1 only
B. Both S1 and S2
C. S2 only
D. Neither S1 nor S2
Answer: Option A
Solution (By JKSSB Mock Tests)
GST is a comprehensive indirect tax levied on the *supply* of goods and services. It replaced the tax on manufacture (Excise Duty) and tax on sale (VAT). S1 is correct, S2 is incorrect.

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Practice More Accountancy and Book Keeping Questions

Question #1
An amount of Rs 5,000 received from Mohan was incorrectly credited to Sohan's account. This is an example of:
A. Error of Principle
B. Error of Omission
C. Error of Commission
D. Compensating Error

Correct Answer: Option C


Explanation:
Posting to the correct side but the wrong personal account is a clerical mistake classified as an error of commission.

Question #2
Under GST, the term 'mixed supply' refers to:
A. Two or more individual supplies made together for a single price
B. Supply of goods and services for a single price
C. Supply of capital goods only
D. Supply of exempt and taxable items together

Correct Answer: Option A


Explanation:
Mixed supply means two or more individual supplies of goods or services made in conjunction for a single price, where each item can be supplied separately.

Question #3
Under Cost Accounting, abnormal wastage of material is transferred to:
A. Finished Goods Account
B. Costing Profit & Loss Account
C. Factory Overheads Account
D. Work in Progress Account

Correct Answer: Option B


Explanation:
Abnormal losses are not treated as a cost of production; they are transferred directly to the Costing P&L account to avoid inflating product costs.