The 'Book Profit' for MAT calculation under Section 115JB includes: MCQ with Answer and Explanation

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The 'Book Profit' for MAT calculation under Section 115JB includes:

A. Taxable income

B. Cash profit

C. Only net profit as per P&L

D. Net profit as per P&L after certain adjustments (additions/deletions)

Answer: Option D

Solution (By JKSSB Mock Tests)

Book profit under MAT is computed by making specified adjustments to net profit as per financial statements.

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

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Question #1

Cash basis accounting recognizes revenue when:

A. Cash is received

B. Sale invoice is raised

C. Services are performed

D. Order is received

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Correct Answer: Option A

Explanation:
Under cash basis, transactions are recorded only when cash is received or paid, not when accrued.

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Question #2

To ascertain profit under the Single Entry System (Statement of Affairs method), closing capital is compared with:

A. Cash Balance

B. Total Assets

C. Total Liabilities

D. Opening Capital

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Correct Answer: Option D

Explanation:
Profit or loss is determined by comparing the capital at the end of the year with the capital at the beginning, adjusted for drawings and fresh capital.

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Question #3

The 'Accounting Equation' remains intact under:

A. Cash system

B. Single entry only

C. Double entry system

D. All systems

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Correct Answer: Option C

Explanation:
Double entry system always maintains the balance of accounting equation. Single entry does not.

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

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