The 'Safe Harbour Rules' under transfer pricing provide: MCQ with Answer and Explanation

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The 'Safe Harbour Rules' under transfer pricing provide:

A. Criminal prosecution

B. Penalty provisions

C. No relief

D. Circumstances in which tax authorities accept transfer price declared by taxpayer

Answer: Option D

Solution (By JKSSB Mock Tests)

Safe harbour rules reduce litigation by accepting declared margins in specified conditions.

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

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Question #1

Interest on drawings is shown in the Profit & Loss Account on the:

A. It is not shown in P&L A/c

B. Both sides

C. Credit side

D. Debit side

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Correct Answer: Option C

Explanation:
Interest on drawings is an income for the business, hence it is credited to the Profit and Loss Account.

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

Question #2

The 'Trial Balance' is prepared to:

A. Check accuracy of posting

B. Determine financial position

C. Ascertain profit

D. Prepare cash flow

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Correct Answer: Option A

Explanation:
Primary purpose is to verify arithmetical accuracy of ledger postings.

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

Question #3

In BRS, if overdraft as per pass book is the starting point, bank charges not recorded in cash book will:

A. Not considered

B. No change

C. Decrease overdraft

D. Increase overdraft

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Correct Answer: Option D

Explanation:
Bank charges reduce passbook balance, so overdraft increases. So add to overdraft as per passbook.

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

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