The 'Surrender Value' of a keyman insurance policy received by a company is: MCQ with Answer and Explanation

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The 'Surrender Value' of a keyman insurance policy received by a company is:

A. Exempt

B. Treated as loan

C. Taxable as business income

D. Capital receipt

Answer: Option C

Solution (By JKSSB Mock Tests)

Keyman insurance policy proceeds/surrender value are taxable as business income.

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

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Practice More Accountancy and Book Keeping Questions

Question #1

The 'Direction of Testing' for existence of assets is from:

A. Accounting records to physical asset

B. Physical asset to accounting records

C. Both ways

D. No testing

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Correct Answer: Option A

Explanation:
To verify existence, select from records and verify physically. Completeness is opposite.

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

Question #2

TDS (Tax Deducted at Source) must be deposited to the credit of the Central Government by the deductor usually within:

A. 7th day of the next month

B. Same day of deduction

C. 30 days of deduction

D. End of the financial year

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Correct Answer: Option A

Explanation:
Generally, TDS deducted in a month must be deposited to the government by the 7th of the following month.

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

Question #3

Prime Cost consists of:

A. Factory Cost + Administrative Overheads

B. Indirect Material + Indirect Labor + Indirect Expenses

C. Direct Material + Direct Labor + Direct Expenses

D. Direct Material + Direct Labor + Factory Overheads

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Correct Answer: Option C

Explanation:
Prime cost is the aggregate of all direct costs: direct materials, direct labor, and direct/chargeable expenses.

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

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