S1: Under GST, the 'Reverse Charge Mechanism' (RCM) is applicable on the import of services. S2: Under RCM, the supplier is liable to pay the GST. Which statement(s) is/are correct? MCQ with Answer and Explanation

S1: Under GST, the 'Reverse Charge Mechanism' (RCM) is applicable on the import of services. S2: Under RCM, the supplier is liable to pay the GST. Which statement(s) is/are correct?
A. Neither S1 nor S2
B. Both S1 and S2
C. S2 only
D. S1 only
Answer: Option D
Solution (By JKSSB Mock Tests)
S1 is correct; RCM applies to the import of services. S2 is incorrect because under RCM, the liability to pay GST shifts from the supplier to the recipient of the goods or services.

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Practice More Accountancy and Book Keeping Questions

Question #1
S1: ABC analysis is a technique of inventory control. S2: In ABC analysis, 'A' items represent high value and low quantity. Which statement(s) is/are correct?
A. S2 only
B. Neither S1 nor S2
C. S1 only
D. Both S1 and S2

Correct Answer: Option D


Explanation:
ABC analysis classifies inventory based on usage value. 'A' items are the most valuable, typically representing a small percentage of total quantity but a large percentage of total inventory cost. Both statements are correct.

Question #2
Which principle states that an asset must be recorded at the price paid to acquire it?
A. Historical Cost Principle
B. Matching Principle
C. Realization Principle
D. Conservatism Principle

Correct Answer: Option A


Explanation:
The historical cost principle requires that assets be recorded at their original purchase price, irrespective of changes in market value over time.

Question #3
The 'Minor' in a partnership can be admitted:
A. As a managing partner
B. Only to the benefits of the partnership
C. As a sleeping partner with liability
D. As a full partner

Correct Answer: Option B


Explanation:
A minor cannot be a partner but can be admitted to benefits of the firm, with limited liability.