The primary objective of 'Tax Audit' is: MCQ with Answer and Explanation

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The primary objective of 'Tax Audit' is:

A. To certify financial statements for banks

B. To audit GST returns

C. To assess corporate governance

D. To check compliance with income tax provisions

Answer: Option D

Solution (By JKSSB Mock Tests)

Tax audit under Section 44AB ensures compliance with income tax law and correct reporting of income.

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

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Question #1

Working Capital Management specifically deals with:

A. Fixed assets and long-term debt

B. Current assets and current liabilities

C. Dividend payouts

D. Issuing new equity shares

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Correct Answer: Option B

Explanation:
It involves managing the relationship between a firm's short-term assets and its short-term liabilities to ensure adequate liquidity.

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Question #2

Which of the following is a feature of standard costing?

A. It is a historical cost system

B. It is used for external reporting

C. It ignores variances

D. It uses predetermined costs for control purposes

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Correct Answer: Option D

Explanation:
Standard costing uses predetermined (standard) costs to compare with actual costs, allowing for variance analysis and cost control.

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Question #3

The objective of 'Financial Statements' is to provide information about:

A. Only liabilities

B. Financial position, performance, and cash flows

C. Only profit

D. Only assets

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Correct Answer: Option B

Explanation:
Financial statements present the financial position, performance, and cash flows of an entity.

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

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