The 'Section 40A(3)' disallows expenditure in excess of: MCQ with Answer and Explanation

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The 'Section 40A(3)' disallows expenditure in excess of:

A. No limit

B. ₹1,00,000

C. ₹10,000 paid in cash per day to a person

D. ₹2,000

Answer: Option C

Solution (By JKSSB Mock Tests)

Payment exceeding ₹10,000 in cash for expenses is disallowed, with certain exceptions.

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

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Question #1

The term 'Current Cost Accounting' deals with:

A. Historical cost

B. Replacement cost

C. Sunk cost

D. Opportunity cost

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Correct Answer: Option B

Explanation:
Current cost accounting values assets at their current replacement cost, not historical cost.

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Question #2

The 'Export Promotion Capital Goods' (EPCG) scheme allows import of capital goods at:

A. Only GST exemption

B. Concessional rate of customs duty subject to export obligation

C. High duty

D. Nil customs duty

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Correct Answer: Option B

Explanation:
EPCG allows import of capital goods at reduced duty against export commitment.

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Question #3

Which of the following statements about a 'Voucher' is incorrect?

A. A voucher is a documentary evidence of a transaction.

B. A debit voucher is prepared for cash payments.

C. A credit voucher is used for recording non-cash transactions.

D. A journal voucher is used for recording depreciation.

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Correct Answer: Option C

Explanation:
Credit voucher is used for cash receipts, not non-cash transactions. Non-cash are recorded via journal/transfer vouchers.

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

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