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

The 'Section 40A(3)' disallows expenditure in excess of:
A. ₹10,000 paid in cash per day to a person
B. ₹2,000
C. No limit
D. ₹1,00,000
Answer: Option A
Solution (By JKSSB Mock Tests)
Payment exceeding ₹10,000 in cash for expenses is disallowed, with certain exceptions.

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Practice More Accountancy and Book Keeping Questions

Question #1
A: The Public Account of India includes funds like the Provident Fund. R: The government can withdraw money from the Public Account without parliamentary approval. Choose the correct option.
A. Both A and R are true and R is the correct explanation of A
B. Both A and R are true but R is NOT the correct explanation of A
C. A is false but R is true
D. A is true but R is false

Correct Answer: Option A


Explanation:
The Public Account of India holds money like Provident Funds, where the government acts as a banker. Since these funds belong to others, the government can make payments from this account without parliamentary approval. Both are true and R explains A.

Question #2
The 'Purchase Returns Book' records:
A. Goods returned by customers
B. Credit purchases
C. Goods returned to suppliers
D. Cash purchases

Correct Answer: Option C


Explanation:
Purchase returns (returns outward) are recorded in this subsidiary book.

Question #3
Goodwill is classified as:
A. Intangible asset
B. Current asset
C. Tangible asset
D. Fictitious asset

Correct Answer: Option A


Explanation:
Goodwill is an intangible asset representing the value of a business's reputation, customer relationships, etc.