Tag: tax and its importance

Questions Related to tax and its importance

Capital receipt is shown in the balanced sheet on _______.

social science government budget and taxation indian taxation system taxation : need, principles and importance tax and its importance

  1. asset side

  2. debit side

  3. liability side

  4. none of the above

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Correct Option: C
Explanation:

A balance sheet is a statement of the assets, liabilities, and capital of a business or other organization at a particular time, which details the balance of income and expenditure over the preceding period. On a balance sheet capital receipt is shown on the liability side. 

Insurance claim received on account of machinery damaged completely by fire is called _________.

social science government budget and taxation indian taxation system taxation : need, principles and importance tax and its importance

  1. Capital receipt

  2. Revenue receipt

  3. Capital expenditures

  4. Revenue expenditures

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Correct Option: A
Explanation:

Insurance claim received on account of machinery damaged completely by fire is called capital receipt. As this is a receipt that deals with fixed assets, it falls under capital receipt.

Money spent by a student on buying an application form adds to ______.

social science government budget and taxation indian taxation system taxation : need, principles and importance tax and its importance

  1. tax revenue

  2. non-tax revenue

  3. profit

  4. none of the above

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Correct Option: B
Explanation:

Money spent by a student on buying an application form adds to non-tax revenue. Non Tax Revenue Receipts are those revenue receipts which are not generated by taxing the public.

Capital receipts are credited to _______.

social science government budget and taxation indian taxation system taxation : need, principles and importance tax and its importance

  1. respective account of capital nature

  2. trading and profit and loss account

  3. both a and b

  4. none of the above

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Correct Option: A
Explanation:

Capital receipt includes cash from the sale of fixed assets (either tangible or intangible), cash from the sale of shares in the business, cash from the issuance of a debt instrument. The receipts are directly credited to the respective account which is capital in nature.

According to 2009-10 data, the percentage contribution of non-tax revenue to the total revenue of the central and GDP was ______.

social science government budget and taxation indian taxation system taxation : need, principles and importance tax and its importance

  1. 22% and 3% respectively

  2. 22% and 2% respectively

  3. 2% and 22% respectively

  4. 3% and 22% respectively

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Correct Option: B
Explanation:

According to 2009-10 data, the percentage contribution of non-tax revenue to the total revenue of the central is 22%. Contribution of non-tax revenue to the total GDP is 3%. 

In the statement of financial position we record.

1. Capital receipts

2. Revenue expenditure

3. Deferred revenue expenditure

Which of the above statement is true?

social science government budget and taxation indian taxation system taxation : need, principles and importance tax and its importance

  1. Only 1

  2. 1 and 2

  3. 1 and 3

  4. All the above

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Correct Option: C
Explanation:

Capital receipts and deferred revenue expenditure are recorded in the statement of financial position.

The revenue generated by the government through internal and external loans is ___________.

social science government budget and taxation indian taxation system taxation : need, principles and importance tax and its importance

  1. capital receipts

  2. non-tax revenue

  3. private revenue

  4. public revenue

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Correct Option: A
Explanation:
  • The budget consists of capital receipts and capital payments. The capital receipts are loans raised by the Government from the general public and the foreign governments.

Which one of the following is a source of non-tax revenue for governments?

social science government budget and taxation indian taxation system taxation : need, principles and importance tax and its importance

  1. Import duty on cars

  2. Octroi at check points on roads

  3. Entrance fee to museums

  4. Excise duty on beverages

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Correct Option: C
Explanation:

Non-tax revenue is collected by the government from other sources, except through taxation, The sources of non-tax revenue(NTR) are:
(i) Fees and charges for various facilities like museums, license offices, etc
(ii) Dividend/profits from public sector units (PSUs)
(iii) Income from radio/TV broadcasting, etc

The Indian Income Tax is ________.

social science government budget and taxation indian taxation system taxation : need, principles and importance tax and its importance

  1. direct and proportional

  2. indirect and proportional

  3. direct and progressive

  4. indirect and progressive

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Correct Option: C

Which of the following tax have been abolished?

social science government budget and taxation indian taxation system taxation : need, principles and importance tax and its importance

  1. Custom duty

  2. Estate duty

  3. Direct tax

  4. Entertainment Tax

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Correct Option: B