Which of the following is a direct tax in India? MCQ with Answer and Explanation

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Which of the following is a direct tax in India?

A. Corporate tax

B. Goods and Services Tax

C. Excise duty on liquor

D. Customs duty

Answer: Option A

Solution (By JKSSB Mock Tests)

Corporate tax is levied directly on company profits, thus a direct tax.

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

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Question #1

The 'Substantive Analytical Procedure' involves:

A. Physical verification only

B. Detailed testing of samples

C. Evaluating financial information through analysis of plausible relationships

D. Inquiry only

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Correct Answer: Option C

Explanation:
Substantive analytical procedures use ratios, trends, and relationships to detect misstatements.

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Question #2

A debit balance in a personal account of a creditor indicates:

A. Amount receivable from him

B. Amount payable to him

C. Both B and C

D. He has become debtor

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Correct Answer: Option C

Explanation:
A creditor account with debit balance means the firm has paid excess or he owes money, so he is a debtor.

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Question #3

The 'Reconciliation of Cost and Financial Accounts' is necessary because:

A. Audit requirement

B. Both use same principles

C. Different bases of valuation and items included lead to different profit figures

D. Tax requirement

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Correct Answer: Option C

Explanation:
Differences arise due to items like notional rent, depreciation method, etc., so reconciliation explains the divergence.

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