Which of the following is a direct tax levied by the Union Government? MCQ with Answer and Explanation

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Which of the following is a direct tax levied by the Union Government?

A. Excise duty on alcohol

B. Income tax

C. Entertainment tax

D. Sales tax

Answer: Option B

Solution (By JKSSB Mock Tests)

Income tax is a direct tax. Excise on alcohol is state subject. Sales tax/VAT is state. Entertainment tax is local.

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Question #1

The 'Analytical Procedures' are required:

A. Only at planning stage

B. At planning, as substantive procedures, and at final review stage

C. Never

D. Only as substantive

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Correct Answer: Option B

Explanation:
SA 520 mandates analytical procedures at these stages.

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Question #2

The primary purpose of a 'Bank Reconciliation Statement' is to:

A. Reconcile the differences between the cash book and the pass book

B. Calculate the bank balance

C. Prepare the trial balance

D. Detect frauds

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Correct Answer: Option A

Explanation:
A BRS is prepared to identify and explain the reasons for the difference between the bank balance as per the cash book and the pass book.

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Question #3

Which of the following is considered a Direct Expense?

A. Salary to office clerk

B. Advertising

C. Wages paid to factory workers

D. Carriage outwards

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Correct Answer: Option C

Explanation:
Direct expenses are directly linked to the purchase or manufacturing of goods. Factory wages are a prime example.

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