The Indian Financial Management System for government accounting follows which method? MCQ with Answer and Explanation

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The Indian Financial Management System for government accounting follows which method?

A. Mercantile basis

B. Accrual basis only

C. Cash basis

D. Hybrid basis

Answer: Option C

Solution (By JKSSB Mock Tests)

Government accounting in India is primarily on cash basis, though there are moves towards accrual basis.

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

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Question #1

Which tax reform introduced the concept of 'One Nation, One Tax'?

A. Wealth Tax Abolition

B. Goods and Services Tax (GST)

C. Value Added Tax (VAT)

D. Fringe Benefit Tax

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Correct Answer: Option B

Explanation:
GST integrated multiple indirect taxes across India into a single unified tax structure.

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Question #2

The 'Group Engagement Partner' is responsible for:

A. Overall group audit opinion and direction, supervision, and performance of the group audit engagement

B. Only his own work

C. Tax filing

D. Component audit only

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Correct Answer: Option A

Explanation:
The engagement partner takes overall responsibility.

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Question #3

In cost accounting, the 'Economic Batch Quantity' (EBQ) formula is identical to the EOQ formula. If the setup cost per batch is ₹500, annual demand is 10,000 units, and carrying cost is ₹10 per unit per annum, what is the EBQ?

A. 2,000 units

B. 1,000 units

C. 1,414 units

D. 500 units

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Correct Answer: Option B

Explanation:
EBQ = Square root of (2 * Annual Demand * Setup Cost) / Carrying Cost per unit. EBQ = sqrt((2 * 10,000 * 500) / 10) = sqrt(1,000,000) = 1,000 units.

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

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