Zero Base Budgeting requires: MCQ with Answer and Explanation

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Zero Base Budgeting requires:

A. Using last year's budget as base

B. Justification of every budget item from scratch

C. Only incremental changes

D. No justification

Answer: Option B

Solution (By JKSSB Mock Tests)

ZBB starts from a 'zero base', and every function and expenditure must be justified.

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

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Question #1

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Agricultural income in India is:

A. Taxable only for corporate farmers

B. Taxable at a flat rate of 10%

C. Fully taxable

D. Exempted under Section 10(1)

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Correct Answer: Option D

Explanation:
Section 10(1) of the Income Tax Act exempts agricultural income from Central Income Tax.

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Question #2

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The 'Provisional Assessment' under GST can be requested when:

A. Return is delayed

B. Audit is pending

C. Value of supply or rate of tax cannot be determined at the time of supply

D. Tax rate is not known

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Correct Answer: Option C

Explanation:
Provisional assessment under Section 60 allows payment of tax on a provisional basis when valuation/rate is uncertain.

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Question #3

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In the context of the Indian Financial System, the 'Deposit Insurance and Credit Guarantee Corporation' (DICGC) provides insurance coverage for bank deposits up to:

A. ₹5,00,000 per depositor per bank

B. ₹10,00,000 per depositor per bank

C. ₹2,00,000 per depositor per bank

D. ₹1,00,000 per depositor per bank

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Correct Answer: Option A

Explanation:
The DICGC insures all bank deposits (savings, fixed, current, recurring) up to a maximum limit of ₹5,00,000 per depositor per bank.

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