Tax evasion is: MCQ with Answer and Explanation

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Tax evasion is:

A. Government policy to waive taxes

B. Postponement of tax payment legally

C. Legal use of tax laws to reduce liability

D. Illegal non-payment or underpayment of taxes

Answer: Option D

Solution (By JKSSB Mock Tests)

Tax evasion involves illegal practices like hiding income or inflating expenses to avoid paying true tax liability.

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

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Question #1

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If an asset is purchased and a post-dated cheque is given, the transaction is immediately recorded in:

A. Journal Proper

B. Cash Book

C. Sales Book

D. Purchase Book

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Correct Answer: Option A

Explanation:
Until the post-dated cheque becomes currently payable, the transaction is treated as credit and recorded in the Journal Proper.

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Question #2

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The term 'Net Realizable Value' means:

A. Original cost

B. Market price

C. Estimated selling price less costs to complete and sell

D. Replacement cost

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Correct Answer: Option C

Explanation:
NRV = estimated selling price in ordinary course less estimated costs of completion and estimated costs to make the sale.

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Question #3

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In Social Accounting, treating pollution emitted by a factory as a negative entry is an example of pricing an:

A. Opportunity Cost

B. Internal Cost

C. External Cost (Negative Externality)

D. Sunk Cost

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Correct Answer: Option C

Explanation:
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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