The term 'Sweat Equity' refers to: MCQ with Answer and Explanation

Question

Share Report Error

The term 'Sweat Equity' refers to:

A. Bonus shares

B. Rights shares

C. Shares issued to promoters for their efforts

D. Shares issued to employees at discount or for consideration other than cash

Answer: Option D

Solution (By JKSSB Mock Tests)

Sweat equity shares are issued to employees or directors for providing know-how or value addition.

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

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Question #1

A 'Secret Reserve' is created by:

A. Only banks

B. Overstatement of assets

C. Disclosure in notes

D. Undervaluation of assets or overstatement of liabilities

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Correct Answer: Option D

Explanation:
Secret reserve is created by showing lower profits, like undervaluing stock or overstating provision, not disclosed in balance sheet.

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

Question #2

A: Internal check is a system of routine checks on the work of staff. R: Internal check is the same as internal audit. 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 true but R is false

D. A is false but R is true

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Correct Answer: Option C

Explanation:
Internal check is a continuous, routine system where the work of one employee is automatically checked by another. Internal audit is a separate, continuous appraisal system by specialized staff. They are not the same. A is true, R is false.

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Question #3

The 'Composition Scheme' under GST is not available to:

A. Service providers (except restaurant) with aggregate turnover above ₹50 lakh

B. Restaurants not serving alcohol

C. Traders

D. Manufacturers

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Correct Answer: Option A

Explanation:
Composition scheme for services is restricted to certain categories with turnover up to ₹50 lakh.

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