The 'Anti-Profiteering Authority' under GST ensures: MCQ with Answer and Explanation

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The 'Anti-Profiteering Authority' under GST ensures:

A. Companies do not make profit

B. Benefits of tax rate reduction are passed to consumers

C. Tax evasion is prevented

D. Suppliers charge high prices

Answer: Option B

Solution (By JKSSB Mock Tests)

It ensures that reduction in tax rates or benefit of ITC is passed on as commensurate price reduction.

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

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Question #1

Payment of a liability out of cash will result in:

A. Increase in a liability and decrease in capital

B. Decrease in an asset and decrease in capital

C. Decrease in an asset and decrease in a liability

D. Increase in an asset and increase in a liability

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Correct Answer: Option C

Explanation:
Cash (Asset) decreases and the corresponding Liability also decreases, keeping the accounting equation balanced.

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

Question #2

Under Section 80D of the Income Tax Act, a deduction is allowed for:

A. Life insurance premiums

B. Interest on education loan

C. Donations to charities

D. Medical insurance premiums

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Correct Answer: Option D

Explanation:
Section 80D provides deductions for premiums paid toward health/medical insurance for self, family, and parents.

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Question #3

S1: The Trading Account shows the gross profit or loss. S2: The Profit and Loss Account shows the net profit or loss. Which statement(s) is/are correct?

A. Neither S1 nor S2

B. S1 only

C. Both S1 and S2

D. S2 only

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Correct Answer: Option C

Explanation:
The Trading Account calculates Gross Profit/Loss by matching direct expenses with net sales. The Profit and Loss Account calculates Net Profit/Loss by matching all indirect expenses and incomes with the Gross Profit. Both are correct.

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