The rate of interest on calls-in-advance as per Table F is: MCQ with Answer and Explanation

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The rate of interest on calls-in-advance as per Table F is:

A. 12%

B. 6%

C. 5%

D. 10%

Answer: Option A

Solution (By JKExamLibrary)

As per Table F of Companies Act, interest on calls in advance is 12% p.a.

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

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According to the accounting equation, if a business borrows ₹50,000 from bank, then:

A. Assets increase, capital increase

B. Assets decrease, liabilities increase

C. Assets increase, liabilities increase

D. Assets decrease, capital decrease

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Correct Answer: Option C

Explanation:
Cash (asset) increases, and bank loan (liability) increases.

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

Question #2 Report Error

The 'Penalty' for under-reporting of income is:

A. 100% of tax

B. No penalty

C. 50% of tax payable on under-reported income

D. 200% of tax

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Correct Answer: Option C

Explanation:
Penalty for under-reporting is 50% of tax on under-reported income; for misreporting, 200%.

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

Question #3 Report Error

A 'High Current Ratio' indicates:

A. Poor liquidity

B. Excess liquidity, possibly inefficient use of assets

C. Insolvency

D. High profitability

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Correct Answer: Option B

Explanation:
Very high current ratio may indicate idle current assets, not necessarily good.

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

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