The break-even point is the point where: MCQ with Answer and Explanation

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The break-even point is the point where:

A. Profit is maximum

B. Loss is maximum

C. Total variable cost equals fixed cost

D. Total cost equals total revenue

Answer: Option D

Solution (By JKSSB Mock Tests)

At break-even point, there is no profit or loss; total revenue equals total costs.

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

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Question #1

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The cost of a machine is ₹1,00,000, scrap value ₹10,000, useful life 10 years. Annual depreciation under straight-line method:

A. ₹1,000

B. ₹10,000

C. ₹11,000

D. ₹9,000

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Correct Answer: Option D

Explanation:
Depreciation = (Cost - Scrap) / Life = (1,00,000 - 10,000) / 10 = ₹9,000.

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

Question #2

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'AS 9' pertains to:

A. Inventories

B. Taxes on income

C. Depreciation

D. Revenue Recognition

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Correct Answer: Option D

Explanation:
AS 9 Revenue Recognition provides guidance on when to recognize revenue.

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Question #3

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Under the Income Tax Act, the 'TDS' on payment of rent for plant and machinery exceeding ₹1,80,000 per annum is governed by which section, and what is the rate?

A. Section 194I at 2%

B. Section 194C at 2%

C. Section 194J at 10%

D. Section 194I at 10%

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Correct Answer: Option A

Explanation:
Section 194I(a) mandates TDS at 2% on rent paid for the use of plant, machinery, or equipment, provided the rent exceeds ₹1,80,000 in a financial year.

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