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

What is the primary benefit of Just-in-Time (JIT) funding under the PFMS framework?
A. Increases bank interest for agencies
B. Reduces the borrowing cost of the Central Government by preventing unspent balances
C. Eliminates state governments from the process
D. Slows down project implementation
Answer: Option B
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.

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Practice More Accountancy and Book Keeping Questions

Question #1
A company's standard cost for a product includes 10 kg of material at ₹5 per kg. The actual production was 1,000 units, and 10,500 kg of material was used at ₹4.50 per kg. What is the Material Usage Variance?
A. ₹5,000 (Adverse)
B. ₹2,500 (Adverse)
C. ₹2,500 (Favorable)
D. ₹5,000 (Favorable)

Correct Answer: Option B


Explanation:
Standard Quantity for Actual Production (SQ) = 1,000 * 10 = 10,000 kg. Actual Quantity (AQ) = 10,500 kg. Standard Price (SP) = ₹5. Usage Variance = (SQ - AQ) * SP = (10,000 - 10,500) * 5 = -500 * 5 = ₹2,500 Adverse.

Question #2
A: A Trial Balance agrees when total debits equal total credits. R: An agreeing Trial Balance guarantees the absolute accuracy of the books of accounts. Choose the correct option.
A. Both A and R are true and R is the correct explanation of A
B. A is true but R is false
C. Both A and R are true but R is NOT the correct explanation of A
D. A is false but R is true

Correct Answer: Option B


Explanation:
A Trial Balance agrees when total debits equal total credits. However, it does not guarantee absolute accuracy, as errors like compensating errors, errors of principle, or complete omissions do not affect the tally. A is true, R is false.

Question #3
All revenues received, loans raised, and money received in repayment of loans by the Government of India form part of the:
A. Prime Minister's Relief Fund
B. Contingency Fund of India
C. Consolidated Fund of India
D. Public Account of India

Correct Answer: Option C


Explanation:
As per Article 266(1), all these inflows form the Consolidated Fund of India, from which no money can be spent without parliamentary approval.