Daily Quiz For ICWAI Intermediate Students

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| By Kumarnirmalprasa

Kumarnirmalprasa

Community Contributor

Quizzes Created: 2 | Total Attempts: 522

Questions: 10 | Attempts: 241 | Updated: Mar 20, 2023

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Daily quiz for Icwai intermediate students. This quiz contains questions from all 6 papers.

Questions and Answers

1.

Which of the following item is not shown in Income and Expenditure account?
- A.
  
  Items of revenue nature received during the current year
- B.
  
  Items of revenue nature current year received during previous year
- C.
  
  Capital Expenditure
- D.
  
  Loss on sale of assets
Correct Answer
C. Capital Expenditure

Explanation
Capital Expenditure is not shown in the Income and Expenditure account because it is a type of expenditure that is incurred for acquiring or improving fixed assets, such as land, buildings, or equipment, which are not consumed or sold during the current accounting period. The Income and Expenditure account only includes items of revenue nature, such as income and expenses, which are related to the day-to-day operations of the organization. Capital Expenditure is typically recorded in the Balance Sheet as an asset and is depreciated over its useful life.

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2.

Every Banking Company incorporated in India is required to transfer at least 20% of its profit to Reserve Fund.
- A.
  
  True
- B.
  
  False
Correct Answer
A. True

Explanation
Every banking company incorporated in India is required to transfer at least 20% of its profit to a reserve fund. This is a mandatory requirement set by the regulatory authorities to ensure that the banking company maintains a sufficient reserve to cover any potential losses or contingencies. By transferring a portion of their profits to the reserve fund, banks can strengthen their financial position and enhance their ability to withstand economic downturns or unexpected events. This requirement also helps to protect the interests of depositors and maintain the stability of the banking system. Therefore, the statement is true.

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3.

There are in total two parties to a Promissory Note. Name them
- A.
  
  Maker or Issuer
- B.
  
  Drawer
- C.
  
  Payee
- D.
  
  Drawee
Correct Answer(s)
A. Maker or Issuer
C. Payee

Explanation
A Promissory Note is a legal document that outlines a promise made by one party, known as the Maker or Issuer, to pay a specific amount of money to another party, known as the Payee. The Maker or Issuer is the individual or entity who creates and signs the Promissory Note, thereby assuming the obligation to repay the debt. The Payee, on the other hand, is the recipient of the promised payment and is entitled to receive the specified amount from the Maker or Issuer.

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4.

Dividend has been declared out of profit on re–issue of forfeited shares.
- A.
  
  True
- B.
  
  False
Correct Answer
A. True

Explanation
The statement is true because when shares are forfeited, they are typically re-issued by the company. If a dividend is declared on these re-issued shares, it means that the company is using the profits generated from its operations to distribute dividends to shareholders. This indicates that the company has made a profit and has decided to share it with its shareholders through dividends.

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5.

Salary paid to a working partner of a firm is chargeable to income– tax in the hands of such partner under the head __________.
- A.
  
  Income from salary
- B.
  
  Income from house property
- C.
  
  Profits and gains from business and profession
- D.
  
  Income from other sources
Correct Answer
A. Income from salary

Explanation
The salary paid to a working partner of a firm is chargeable to income-tax in the hands of such partner under the head "Income from salary". This means that the working partner's salary will be taxed as per the income tax rules and regulations applicable to individuals earning income from salary.

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6.

Xmas Charities received anonymous donation of Rs. 5 lakhs. The said sum is.
- A.
  
  Exempt from tax
- B.
  
  Fully taxable
- C.
  
  Partly taxable and Partly exempted
- D.
  
  None of the above
Correct Answer
A. Exempt from tax

Explanation
The anonymous donation of Rs. 5 lakhs received by Xmas Charities is exempt from tax. This means that the organization does not have to pay any taxes on this donation.

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7.

Sales for two consequtive months of a company are Rs. 3,80,000 and Rs. 4,20,000. The company’s net profits for these months amounted to Rs. 24,000 and Rs. 40,000 respectively. There is no change in P/V ratio or fixed costs. The P/V ratio of the company is
- A.
  
  25%
- B.
  
  30%
- C.
  
  35%
- D.
  
  40%
Correct Answer
D. 40%

Explanation
The P/V ratio (Profit-Volume ratio) is calculated by dividing the contribution (sales minus variable costs) by the sales. In this case, the contribution for the first month can be calculated as Rs. 3,80,000 (sales) minus Rs. 24,000 (net profit), which equals Rs. 3,56,000. Similarly, the contribution for the second month can be calculated as Rs. 4,20,000 (sales) minus Rs. 40,000 (net profit), which equals Rs. 3,80,000. The P/V ratio is then calculated by dividing the average contribution (Rs. 3,56,000 + Rs. 3,80,000 divided by 2) by the average sales (Rs. 3,80,000 + Rs. 4,20,000 divided by 2), resulting in a P/V ratio of 40%.

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8.

Variants of VAT (VALUE ADDED TAX):
- A.
  
  Gross Product Variant
- B.
  
  Income Variant
- C.
  
  Consumption Variant
- D.
  
  All of the Above
Correct Answer
D. All of the Above

Explanation
The correct answer is "All of the Above" because the question is asking about the variants of VAT (Value Added Tax), and all three options listed - Gross Product Variant, Income Variant, and Consumption Variant - are indeed different variants of VAT. This means that all of these options are correct and applicable when discussing the variants of VAT.

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9.

Re—order Level is ______________ usage multiplied by _________________lead time.

Correct Answer
Maximum Usage, Maximum

Explanation
The reorder level is determined by multiplying the maximum usage by the maximum lead time. This means that when the usage of a product is at its highest and the lead time for replenishment is also at its maximum, the reorder level will be set to ensure that there is enough stock to meet the demand during that time period.

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4
10.

The due date for filling return of income u/s.139(1) in the case of individual assessee having turnover above Rs. 60 lakhs is ___________.
- A.
  
  30th September of the assessment year
- B.
  
  31st March of the assessment year
- C.
  
  31st August of the assessment year
- D.
  
  30th June of the assessment year
Correct Answer
A. 30th September of the assessment year

Explanation
The due date for filing the return of income u/s.139(1) in the case of an individual assessee having turnover above Rs. 60 lakhs is 30th September of the assessment year. This means that individuals with a turnover above Rs. 60 lakhs need to file their income tax return by 30th September of the assessment year.

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Current Version
Mar 20, 2023

Quiz Edited by
ProProfs Editorial Team
Feb 13, 2013

Quiz Created by
Kumarnirmalprasa

Daily Quiz For Icwai Intermediate Students

Which of the following item is not shown in Income and Expenditure account?

Every Banking Company incorporated in India is required to transfer at least 20% of its profit to Reserve Fund.

There are in total two parties to a Promissory Note. Name them

Dividend has been declared out of profit on re–issue of forfeited shares.

Salary paid to a working partner of a firm is chargeable to income– tax in the hands of such partner under the head __________.

Xmas Charities received anonymous donation of Rs. 5 lakhs. The said sum is.

Sales for two consequtive months of a company are Rs. 3,80,000 and Rs. 4,20,000. The company’s net profits for these months amounted to Rs. 24,000 and Rs. 40,000 respectively. There is no change in P/V ratio or fixed costs. The P/V ratio of the company is

Variants of VAT (VALUE ADDED TAX):

Re—order Level is usage multiplied by ___lead time.

The due date for filling return of income u/s.139(1) in the case of individual assessee having turnover above Rs. 60 lakhs is ___________.