Part A: Multiple-Choice Questions
Choose the correct answer for each question.
1. For an individual less than 60 years old, what is the Health and Education Cess for income above Rs. 10 Lakh?
(A) 0.08
(B) 0.02
(C) 0.04 ✅
(D) 0.06
2. According to the Accounting Equation, Assets minus liabilities is equal to:
(A) Debt and other Borrowings
(B) None of them
(C) Stockholder’s equity or Owner’s capital ✅
(D) Zero
3. An Account is a type of:
(A) Nominal Account
(B) None of the given options
(C) Real Account
(D) Personal Account ✅
4. Interest under section 234C is imposed when there is a delay in payment of an installment of advance tax.
(A) TRUE ✅
(B) FALSE
5. Which of the following is NOT a major branch of Accounting?
(A) Cost Accounting
(B) Management Accounting
(C) Financial Accounting
(D) Fund Accounting ✅
6. Who among the following is/are NOT users of accounting information?
(A) Political Parties ✅
(B) Regulatory Agencies
(C) Employees & Trade Unions
(D) Investors
7. A person is known as a resident of India if any of the below conditions are met:
(A) Stayed in India for 60 days or more in the previous year
(B) Resided in India for 182 or more days during the previous year
(C) Stayed in India for a period of 365 days or more in the 4 years preceding the relevant financial year
(D) All three are correct ✅
8. On January 1st, 2009, an entity’s balance sheet showed total assets of Rs. 750 and liabilities of Rs. 250. What was the Owners’ equity at January 1st?
(A) Rs. 250
(B) Rs. 1000
(C) Rs. 500 ✅
(D) Rs. 750
9. Which of the following account will be debited when there is an increase in an Asset?
(A) Income Account
(B) Asset Account ✅
(C) Capital Account
(D) Liability Account
10. The accrual basis of accounting records revenues when they are:
(A) Readily available for use
(B) Contracted
(C) Earned ✅
(D) Collected
11. The Rent Receivables Account is a type of:
(A) Real Account
(B) Nominal Account
(C) None of the given options
(D) Personal Account ✅
12. Accounting entries involve a minimum of how many accounts?
(A) There is no such rule
(B) Three Accounts
(C) Two Accounts ✅
(D) One Account
13. Which of the following is an example of business liability?
(A) Debtors
(B) Creditors ✅
(C) Cash in hand
(D) Land
