What is the primary benefit of Just-in-Time (JIT) funding under the PFMS framework? MCQ with Answer and Explanation

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What is the primary benefit of Just-in-Time (JIT) funding under the PFMS framework?

A. Reduces the borrowing cost of the Central Government by preventing unspent balances

B. Slows down project implementation

C. Increases bank interest for agencies

D. Eliminates state governments from the process

Answer: Option A

Solution (By JKSSB Mock Tests)

JIT ensures funds are released only when actually needed for expenditure, minimizing the government's borrowing costs on idle parked funds.

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

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Question #1

The term 'Test of Details' in audit refers to:

A. Planning the audit

B. Issuing the audit report

C. Testing the details of transactions and balances

D. Testing the internal controls

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Correct Answer: Option C

Explanation:
Tests of details involve examining the underlying documentation for specific transactions and account balances to verify their accuracy.

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Question #2

The 'Digital Rupee' (e₹) is issued by:

A. NPCI

B. Reserve Bank of India

C. Commercial banks

D. Government of India

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Correct Answer: Option B

Explanation:
CBDC (Central Bank Digital Currency) is issued by the RBI.

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Question #3

Assertion (A): Under Ind AS 41, biological assets are measured at fair value less costs to sell. Reason (R): This is because biological transformation makes historical cost accounting less relevant for these assets. Choose the correct option.

A. Both A and R are true and R is the correct explanation of A

B. A is false but R is true

C. A is true but R is false

D. Both A and R are true but R is NOT the correct explanation of A

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Correct Answer: Option A

Explanation:
Ind AS 41 requires biological assets to be measured at fair value less costs to sell. This is because biological growth, degeneration, and production (transformation) make historical cost less meaningful. R correctly explains A.

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