The 'Input Tax Credit' on capital goods under GST is available: MCQ with Answer and Explanation

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The 'Input Tax Credit' on capital goods under GST is available:

A. Only on goods up to ₹5,000

B. 100% in the first year

C. Not allowed

D. Spread over the useful life

Answer: Option B

Solution (By JKSSB Mock Tests)

ITC on capital goods can be availed fully in the year of purchase, except for certain blocked credits.

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

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Practice More Accountancy and Book Keeping Questions

Question #1

Under 'Finance Lease', the lessee records the leased asset in his books as per:

A. AS 19

B. AS 10

C. AS 6

D. AS 2

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Correct Answer: Option A

Explanation:
AS 19 Leases requires lessee to capitalize finance lease.

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

Question #2

'Borrowing Costs' eligible for capitalization are determined as per:

A. AS 12

B. AS 10

C. AS 9

D. AS 16

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Correct Answer: Option D

Explanation:
AS 16 Borrowing Costs provides guidance on capitalization of borrowing costs on qualifying assets.

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Question #3

Carriage inwards is shown on the:

A. Credit side of P&L Account

B. Debit side of Trading Account

C. Asset side of Balance Sheet

D. Debit side of P&L Account

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Correct Answer: Option B

Explanation:
Carriage inwards is the transportation cost of bringing raw materials/purchases to the factory, hence it's a direct expense charged to the Trading Account.

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

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