Which of the following is a direct income? MCQ with Answer and Explanation

Which of the following is a direct income?
A. Interest on investment
B. Commission received
C. Sale of scrap
D. Discount received
Answer: Option C
Solution (By JKSSB Mock Tests)
Sale of scrap is directly related to production, thus a direct income credited to Trading Account. Discount, commission, interest are indirect.

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Practice More Accountancy and Book Keeping Questions

Question #1
The point at which Total Revenue equals Total Cost is known as:
A. Maximum Profit Point
B. Break-Even Point
C. Margin of Safety
D. Shut-down Point

Correct Answer: Option B


Explanation:
At the break-even point, a business makes neither a profit nor a loss (Total Revenue = Total Costs).

Question #2
S1: Audit reporting is the final stage of the audit process. S2: The auditor's report is addressed to the shareholders of the company. Which statement(s) is/are correct?
A. S2 only
B. Both S1 and S2
C. Neither S1 nor S2
D. S1 only

Correct Answer: Option B


Explanation:
Audit reporting is indeed the final stage where the auditor expresses their opinion. Under the Companies Act, the auditor's report is addressed to the members (shareholders) of the company. Both statements are correct.

Question #3
Which of the following is a non-cash item in the Profit & Loss Account?
A. Rent paid
B. Commission paid
C. Salaries paid
D. Depreciation

Correct Answer: Option D


Explanation:
Depreciation is a non-cash expense, as no cash outflow occurs.