The 'Deferred Tax Asset' is recognised when: MCQ with Answer and Explanation

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The 'Deferred Tax Asset' is recognised when:

A. Accounting income is higher

B. Losses are incurred

C. Taxable income is higher than accounting income due to timing differences

D. There is no difference

Answer: Option C

Solution (By JKSSB Mock Tests)

When taxable income > accounting income, entity will pay more tax now but less in future, creating a deferred tax asset.

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

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Practice More Accountancy and Book Keeping Questions

Question #1

The 'Loss from House Property' can be carried forward for how many years?

A. 8 years

B. Indefinitely

C. 4 years

D. Not allowed

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Correct Answer: Option A

Explanation:
House property loss can be carried forward for 8 assessment years.

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

Question #2

The foundational principle of Double Entry Bookkeeping is:

A. Assets must be greater than liabilities

B. Every debit has a corresponding credit

C. Expenses must equal incomes

D. Cash received must equal cash paid

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Correct Answer: Option B

Explanation:
Double entry bookkeeping relies on the dual aspect concept, meaning every transaction affects at least two accounts with equal debits and credits.

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Question #3

Under Cost Accounting, abnormal wastage of material is transferred to:

A. Costing Profit & Loss Account

B. Work in Progress Account

C. Factory Overheads Account

D. Finished Goods Account

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Correct Answer: Option A

Explanation:
Abnormal losses are not treated as a cost of production; they are transferred directly to the Costing P&L account to avoid inflating product costs.

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

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