Basics of Financial Mathematics Test 35

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Basics of Financial Mathematics Test 35

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Weekly Quiz Competition

Question 1
1 / -0

Depreciation is the fall in the ____________ of a fixed asset through physical wear and tear due to use or passage of time or from any other cause.

A
Quality

B
Value

C
Either (A) or (B)

D
None of the above

Solution

Physical wear and tear resulting from use: It is the cause of charging depreciation for the assets which lose their value from the constant use such as fixed assets such as building; plant, machinery etc. get worn out and torn out due to the regular use.
Question 2
1 / -0

As part of the Taxation Reforms in 1991, the rates of taxation were reduced in respect of_______________.

A
Corporate Income Tax

B
Personal Income Tax

C
Customs Duties

D
All of the above

Solution
Question 3
1 / -0

Depreciation Accounting has been defined by the ________ as " a system of accounting which aims to distribute the cost or other basic value of tangible capital assets less salvage (if any) over the estimated useful life of the unit (which may be a group of assets) in a systematic and rational manner. It is a process of allocation and not of valuation".

A
The Institute of Chartered Accountants of England

B
The Institute of Chartered Accountants of India

C
American Institute of Certified Public Accountants

D
The Institute of Chartered Accountants of Pakistan

Solution

Accounting Standards Codification 360-10-35-4 defines depreciation .depreciation expense ceases in as much as the full cost of the asset has been recorded to expense. Committee of the American Institute of Certified Public Accountants .
Question 4
1 / -0

Which of the following statement is/are NOT correct?

A
Provision for bad debts appears as a liability on the balance sheet

B
The provision for bad debts is owed to the proprietor

C
Bad debts could be less than the provision for bad debts

D
Bad debts could exceed the provision for bad debts
Question 5
1 / -0

________ is not a Direct Tax.

A
Income Tax

B
Wealth Tax

C
Gift Tax

D
Entertainment Tax

Solution

Income tax, wealth tax and gift tax are all direct taxes. Entertainment tax is an indirect tax. It is a tax on any kind of entertainment activities. It might include cinema, theaters etc. Entertainment falls in List 2 of the Seventh Schedule of the Constitution of India and is exclusively reserved as a revenue source for the state governments.
Question 6
1 / -0

Which of the following is not part of the Taxation Reforms in 1991?

A
Increase in Basic Exemption Limits for Individuals & Hindu Undivided Families (HUFs)

B
Reduction & rationalization of Income Tax Rates

C
Compulsory filing of returns in respect of Individuals having income below Basic Exemption Limits

D
All of the above

Solution
Question 7
1 / -0

__________ has defined depreciation as "a measure of the wearing out, consumption or other loss of value of a depreciable asset arising from use, effluxion of time or obsolescence through technology and market changes. Depreciation is allocated so as to charge a fair proportion of depreciable amount in each accounting period during the expected useful life of the asset. Depreciation includes amortization of assets whose useful life is predetermined."

A
The Institute of Chartered Accountants of England

B
The Institute of Chartered Accountants of India

C
American Institute of Certified Public Accountants

D
The Institute of Chartered Accountants of Pakistan

Solution

Accounting Standard 6 issued by the Institute of the Chartered Accountants of India defines 'depreciation' as “a measure of the wearing out, consumption or other loss of value of a depreciable asset arising from use, effluxion of time or obsolescence through technology and market changes.
Question 8
1 / -0

Suppose a shopkeepers buys inputs worth $$Rs. 2,00,000$$ and his sales are worth $$Rs. 4,00,000$$ in a month. The input tax rate is $$4$$% and output tax rate is $$10$$%. What is value added tax here after set off of input tax credit?

A
$$Rs. 32,000$$

B
$$Rs. 8000$$

C
$$Rs. 4,000$$

D
$$Rs. 20,000$$

Solution

Output tax $$= 10$$% of $$400000 = Rs. 40000$$;
Input tax $$= 4$$% of $$200000 = Rs. 8000$$
Hence, Value Added Tax $$= 40000 - 8000 = Rs. 32000$$.
Question 9
1 / -0

National income differs from net national product at market price by the amount of ____________.

A
current transfers from the rest of the world

B
net indirect taxes

C
national debt interest

D
it does not differ
Question 10
1 / -0

At present, the marginal rate of income tax (i.e., tax for the highest slab) is _______.

A
$$10$$%

B
$$20$$%

C
$$30$$%

D
$$40$$%

Solution

Marginal rate of income tax means highest slab of income tax, i.e., $$30$$% for individuals having income above $$Rs. 10,00,000$$.

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Basics of Financial Mathematics Test 35

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Basics of Financial Mathematics Test 35

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SHARING IS CARING

Question 1

Quality

Value

Either (A) or (B)

None of the above

Solution

Question 2

Corporate Income Tax

Personal Income Tax

Customs Duties

All of the above

Solution

Question 3

The Institute of Chartered Accountants of England

The Institute of Chartered Accountants of India

American Institute of Certified Public Accountants

The Institute of Chartered Accountants of Pakistan

Solution

Question 4

Provision for bad debts appears as a liability on the balance sheet

The provision for bad debts is owed to the proprietor

Bad debts could be less than the provision for bad debts

Bad debts could exceed the provision for bad debts

Question 5

Income Tax

Wealth Tax

Gift Tax

Entertainment Tax

Solution

Question 6

Increase in Basic Exemption Limits for Individuals & Hindu Undivided Families (HUFs)

Reduction & rationalization of Income Tax Rates

Compulsory filing of returns in respect of Individuals having income below Basic Exemption Limits

All of the above

Solution

Question 7

The Institute of Chartered Accountants of England

The Institute of Chartered Accountants of India

American Institute of Certified Public Accountants

The Institute of Chartered Accountants of Pakistan

Solution

Question 8

$$Rs. 32,000$$

$$Rs. 8000$$

$$Rs. 4,000$$

$$Rs. 20,000$$

Solution

Question 9

current transfers from the rest of the world

net indirect taxes

national debt interest

it does not differ

Question 10

$$10$$%

$$20$$%

$$30$$%

$$40$$%

Solution

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