The concept of 'Creative Accounting' in public finance refers to: MCQ with Answer and Explanation

The concept of 'Creative Accounting' in public finance refers to:
A. Only the use of accrual accounting
B. Only the calculation of primary deficit
C. Accounting practices that improve the reported fiscal position without improving the underlying fiscal reality
D. Transparent and accurate fiscal reporting
Answer: Option C
Solution (By JKSSB Mock Tests)
Creative accounting (or fiscal gimmickry) involves the use of accounting devices that temporarily improve reported deficit or debt figures without a corresponding improvement in the true intertemporal fiscal position.

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Practice More Economy Set 1 Questions

Question #1
The 'Goods and Services Tax' rate on construction of other residential property is:
A. 5% without ITC
B. 12%
C. 1%
D. 18%

Correct Answer: Option A


Explanation:
Non-affordable residential construction attracts 5% GST without ITC.

This question belongs to: Economy GK Economy Set 1
Question #2
The 'Goods and Services Tax' rate on footwear up to Rs 1,000 is:
A. 18%
B. 0%
C. 12%
D. 5%

Correct Answer: Option D


Explanation:
Footwear up to Rs 1,000 attracts 5% GST.

This question belongs to: Economy GK Economy Set 1
Question #3
In the context of labour markets, the 'Gig Economy' is characterised by:
A. Only agricultural self-employment
B. Only public-sector jobs
C. Only permanent full-time employment
D. Short-term, flexible jobs often mediated by digital platforms rather than traditional long-term employment contracts

Correct Answer: Option D


Explanation:
The gig economy refers to labour markets characterised by short-term contracts or freelance work, frequently organised through online platforms that match workers with individual tasks or projects.

This question belongs to: Economy GK Economy Set 1