The 'Arm's Length Price' is: MCQ with Answer and Explanation

The 'Arm's Length Price' is:

A. Market price

B. Government fixed price

C. Price that would be charged between unrelated parties

D. Price charged between related parties

Answer: Option C

Arm's length price is the price applied in a transaction between independent parties under similar conditions.

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

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Question #1 Report Error

The 'GST Audit' is required for taxpayers with turnover exceeding:

A. ₹2 crore

B. ₹5 crore

C. ₹10 crore

D. ₹1 crore

Correct Answer: Option A

Explanation:
GST audit by a chartered accountant/cost accountant is required if aggregate turnover exceeds ₹2 crore.

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

Question #2 Report Error

Which of the following is an example of a real account?

A. Salary Account

B. Sales Account

C. Machinery Account

D. Creditor Account

Correct Answer: Option C

Explanation:
Machinery Account represents a tangible asset, which is a real account. The rule is 'Debit what comes in, credit what goes out'.

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

Question #3 Report Error

The 'Zero-Rated Supply' under GST includes:

A. Exempt supplies

B. All supplies

C. Exports and supplies to SEZ

D. Nil-rated supplies

Correct Answer: Option C

Explanation:
Zero-rated supplies attract 0% GST, and input tax credit is available.

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