Which of the following is considered a Direct Expense? MCQ with Answer and Explanation

Which of the following is considered a Direct Expense?
A. Carriage outwards
B. Wages paid to factory workers
C. Advertising
D. Salary to office clerk
Answer: Option B
Solution (By JKSSB Mock Tests)
Direct expenses are directly linked to the purchase or manufacturing of goods. Factory wages are a prime example.

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Practice More Accountancy and Book Keeping Questions

Question #1
When preparing a BRS from the Pass Book balance (favorable), a cheque deposited but not collected will be:
A. Deducted
B. Ignored
C. Added
D. Divided

Correct Answer: Option C


Explanation:
The cash book balance is higher (receipt was recorded). To move from pass book to match the cash book, the amount must be added.

Question #2
Which of the following is NOT a type of audit report?
A. Qualified Report
B. Profitable Report
C. Unqualified Report
D. Adverse Report

Correct Answer: Option B


Explanation:
Audit reports can be unqualified (clean), qualified, adverse, or a disclaimer of opinion. There is no such thing as a 'Profitable Report'.

Question #3
In the context of PFMS, what does the term 'Plan' and 'Non-Plan' expenditure classification refer to, and what recent change was made to it?
A. It refers to recurring and non-recurring expenditure; it was replaced by the 'Revenue and Capital' classification.
B. It refers to central and state schemes; it was retained for better tracking.
C. It refers to development and non-development expenditure; it was abolished in 2017-18.
D. It refers to capital and revenue expenditure; it was merged into a single classification.

Correct Answer: Option C


Explanation:
The distinction between Plan and Non-Plan expenditure was abolished in the Union Budget of 2017-18. It was replaced by a more meaningful classification of Capital and Revenue expenditure to improve the quality of government spending.