The Government: Budget and the Economy Test

Result

The Government: Budget and the Economy Test - 20

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Weekly Quiz Competition

Question 1
1 / -0

The practice of RBI lending to government through ad hoc treasury bills is _______.

A
currently in vogue

B
abolished

C
will soon be abolished

D
none of above
Question 2
1 / -0

Everything except is capital receipt ______________.

A
Loans

B
Money from debenture holders

C
Both a & b

D
None of the above
Question 3
1 / -0

The percentage of concessional debt to external total debt in 2016-17 is _______.

A
9.3

B
8.2

C
7.1

D
6.0
Question 4
1 / -0

Evasion and tax avoidance in India is at a ________ Level.

A
high

B
moderate

C
low

D
none of the above

Solution

The terms "tax avoidance" and "tax evasion" are often used interchangeably, but they are very different concepts. Basically, tax avoidance is legal, while tax evasion is not. Businesses get into trouble with the revenue department when they intentionally evade taxes.In India no one likes to pay taxes as a result both tax evasion and avoidance are high.
Question 5
1 / -0

It is not uncommon in deferred revenue expenditure ___________.

A
that benefit may last for few years, 3-5 years

B
that it is an incidental expenditure with heavy amount

C
it is recurring expenditure

D
both (A) & (B)
Solution
Deferred Revenue Expenditure is an expenditure which is revenue in nature and incurred during an accounting period, but its benefits are to be derived from a number of following accounting periods. These expenses are unusually large in amount and, essentially, the benefits are not consumed within the same accounting period.
Features of deferred revenue expenditure are :-
Expenditures for developments,improvement and alterations are revenue expenditures but treated as capital expenditure.
These expenditures are not immediately written off in the year of actual expenditure but split over a period of certain years as per the decisions and policies of the management.
These expenditures are treated as assets and shown at the assets side of balance sheet.
It is an incidental expenditure with heavy amount.
Question 6
1 / -0

Revenue receipts ________________.

A
Have no effect on balance sheet

B
Have no effect on profit and loss account

C
Both a & b

D
None of the above

Solution

Revenue receipts refer to those receipts which neither create any liability nor cause any reduction in the assets of the government. They are regular and recurring in nature and government receives them in its normal course of activities.
Revenue receipt is the item of income statement or profit and loss account, and it does not affect balance sheet.
Question 7
1 / -0

Payment into the business by proprietor is ___________.

A
Revenue receipts

B
Capital receipt

C
Deferred revenue receipt

D
None of the above

Solution

Capital receipts are business receipts which are not related to the day to day business activities of a company. They occur occasionally and provide benefit for a long period of time.
Capital receipts are normally presented in the balance sheet of a company when realized and generally occur as a result of the following events:
1. Sale of fixed assets
2. Issuance of capital in the form of shares
3. issuance of debt instruments
4. Capital contribution by the proprietor.
Therefore, payment into the business by proprietor which is a capital contribution by proprietor in business is a capital receipt.
Question 8
1 / -0

_________ is the outcome of a firm's activity in the accounting period, part of its rewards for offering goods or services to the public.

A
Deferred revenue receipts

B
Revenue receipts

C
Capital receipts

D
None of the above

Solution

Receipts which are recurring (received again and again) by nature and which are available for meeting all day to day expenses (revenue expenditure) of a business concern are known as "Revenue receipts", e.g. sale proceeds of goods, interest received, commission received, rent received, dividend received etc.
Revenue Receipts appears on the credit side of the Profit and Loss Account as income for the financial year.
Question 9
1 / -0

Amount received from sale of capital asset or contribution made by proprietor towards the capital of the business are known as _________.

A
deferred revenue receipts

B
revenue receipts

C
capital receipts

D
none of the above
Solution
Capital receipts are business receipts which are not related to the day to day business activities of a company. They occur occasionally and provide benefit for a long period of time.
Capital receipts are normally presented in the balance sheet of a company when realized and generally occur as a result of the following events:
1. Sale of fixed assets
2. Issuance of capital in the form of shares
3. Issuance of debt instruments
Question 10
1 / -0

Which of the following is/are revenue receipt?

A
Receipts from sales of fixed assets.

B
Fees received for services by Company Secretary.

C
Interest on loan paid by Company Secretary.

D
None of the above.

Solution

Revenue receipts are receipts that occur routinely. They are realized from day to day business activities of a company and are needed by any business to survive and strive. Revenue receipts are normally received through the sale of stock-in-trade and the provision of services to customers in the ordinary course of business. The effect of revenue receipts is normally shown only in the income statement of the company.
Services provided by company secretary are in the normal course of business, therefore, it is a revenue receipt.

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Re-Attempt Weekly Quiz Competition

The Government: Budget and the Economy Test - 20

Result

The Government: Budget and the Economy Test - 20

Score

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Rank

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SHARING IS CARING

Question 1

currently in vogue

abolished

will soon be abolished

none of above

Question 2

Loans

Money from debenture holders

Both a & b

None of the above

Question 3

9.3

8.2

7.1

6.0

Question 4

high

moderate

low

none of the above

Solution

Question 5

that benefit may last for few years, 3-5 years

that it is an incidental expenditure with heavy amount

it is recurring expenditure

both (A) & (B)

Solution

Question 6

Have no effect on balance sheet

Have no effect on profit and loss account

Both a & b

None of the above

Solution

Question 7

Revenue receipts

Capital receipt

Deferred revenue receipt

None of the above

Solution

Question 8

Deferred revenue receipts

Revenue receipts

Capital receipts

None of the above

Solution

Question 9

deferred revenue receipts

revenue receipts

capital receipts

none of the above

Solution

Question 10

Receipts from sales of fixed assets.

Fees received for services by Company Secretary.

Interest on loan paid by Company Secretary.

None of the above.

Solution

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