IT Controls, General Controls, Application Controls-100 MCQs

MCQs on IT Controls, General Controls, Application Controls, Risk area, and IT security and System Development Life Cycle Audit of systems under development:

Multiple Choice Questions:

1. What is the primary objective of IT General Controls?

A) To ensure the accuracy and completeness of data

B) To prevent unauthorized access to data

C) To ensure the availability and integrity of IT systems

D) To ensure compliance with regulatory requirements

Answer: C) To ensure the availability and integrity of IT systems

1. Which of the following is an example of an IT Application Control?

A) Access controls to prevent unauthorized access to data

B) Data validation controls to ensure accuracy and completeness of data

C) Backup and recovery controls to ensure availability of data

D) All of the above

Answer: D) All of the above

1. What is the primary risk associated with inadequate IT controls?

A) Financial loss due to unauthorized transactions

B) Reputation damage due to data breaches

C) Non-compliance with regulatory requirements

D) All of the above

Answer: D) All of the above

1. Which of the following is a key component of IT security?

A) Firewalls to prevent unauthorized access

B) Encryption to protect data confidentiality

C) Access controls to prevent unauthorized access

D) All of the above

Answer: D) All of the above

1. What is the primary objective of a System Development Life Cycle (SDLC) audit?

A) To ensure that the system is developed on time and within budget

B) To ensure that the system meets the requirements of the users

C) To ensure that the system is developed with adequate controls and security

D) To ensure that the system is developed with adequate documentation

Answer: C) To ensure that the system is developed with adequate controls and security

1. Which of the following is an example of an IT General Control?

A) Data validation controls to ensure accuracy and completeness of data

B) Access controls to prevent unauthorized access to data

C) Backup and recovery controls to ensure availability of data

D) Change management controls to ensure that changes are properly authorized and tested

Answer: D) Change management controls to ensure that changes are properly authorized and tested

1. What is the primary objective of IT Application Controls?

A) To ensure the accuracy and completeness of data

B) To prevent unauthorized access to data

C) To ensure the availability and integrity of IT systems

D) To ensure compliance with regulatory requirements

Answer: A) To ensure the accuracy and completeness of data

1. Which of the following is a key component of IT risk management?

A) Risk assessment to identify potential risks

B) Risk mitigation to reduce the likelihood or impact of risks

C) Risk monitoring to ensure that risks are properly managed

D) All of the above

Answer: D) All of the above

1. What is the primary objective of IT security awareness training?

A) To ensure that employees understand the importance of IT security

B) To ensure that employees understand the potential risks associated with IT systems

C) To ensure that employees understand the controls and procedures in place to mitigate IT risks

D) All of the above

Answer: D) All of the above

1. Which of the following is a key component of a System Development Life Cycle (SDLC) audit?

A) Review of system requirements to ensure that they are complete and accurate

B) Review of system design to ensure that it meets the requirements of the users

C) Review of system testing to ensure that it is adequate and effective

D) All of the above

Answer: D) All of the above

True or False Questions:

1. True or False: IT General Controls are designed to ensure the accuracy and completeness of data.

Answer: False (IT General Controls are designed to ensure the availability and integrity of IT systems)

1. True or False: IT Application Controls are designed to prevent unauthorized access to data.

Answer: False (IT Application Controls are designed to ensure the accuracy and completeness of data)

1. True or False: IT risk management involves identifying, assessing, and mitigating IT-related risks.

Answer: True

1. True or False: IT security awareness training is designed to ensure that employees understand the importance of IT security.

Answer: True

1. True or False: A System Development Life Cycle (SDLC) audit is designed to ensure that the system is developed on time and within budget.

Answer: False (A System Development Life Cycle (SDLC) audit is designed to ensure that the system is developed with adequate controls and security)

1. True or False: IT General Controls include data validation controls to ensure accuracy and completeness of data.

Answer: False (IT General Controls include change management controls to ensure that changes are

1. True or False: IT Application Controls are designed to ensure the availability and integrity of IT systems.

Answer: False (IT Application Controls are designed to ensure the accuracy and completeness of data)

1. True or False: IT risk management involves identifying, assessing, and mitigating IT-related risks.

Answer: True

1. True or False: IT security awareness training is designed to ensure that employees understand the potential risks associated with IT systems.

Answer: True

1. True or False: A System Development Life Cycle (SDLC) audit is designed to ensure that the system is developed with adequate documentation.

Answer: False (A System Development Life Cycle (SDLC) audit is designed to ensure that the system is developed with adequate controls and security)

1. True or False: IT General Controls include backup and recovery controls to ensure availability of data.

Answer: True

1. True or False: IT Application Controls include access controls to prevent unauthorized access to data.

Answer: True

1. True or False: IT risk management involves identifying, assessing, and mitigating business-related risks.

Answer: False (IT risk management involves identifying, assessing, and mitigating IT-related risks)

1. True or False: IT security awareness training is designed to ensure that employees understand the controls and procedures in place to mitigate IT risks.

Answer: True

1. True or False: A System Development Life Cycle (SDLC) audit is designed to ensure that the system is developed on time and within budget.

Answer: False (A System Development Life Cycle (SDLC) audit is designed to ensure that the system is developed with adequate controls and security)

1. True or False: IT General Controls include change management controls to ensure that changes are properly authorized and tested.

Answer: True

Match the Column Questions

Column A                                        Column B

1. IT General Controls                                a) Ensure accuracy and completeness of data

2. IT Application Controls                         b) Ensure availability and integrity of IT systems

3. IT Risk Management                             c) Identify, assess, and mitigate IT-related risks

4. IT Security Awareness Training             d) Ensure employees understand IT security importance

5. System Development Life Cycle Audit  e) Ensure system developed with adequate controls and security

Answers:

1. b) Ensure availability and integrity of IT systems

2. a) Ensure accuracy and completeness of data

3. c) Identify, assess, and mitigate IT-related risks

4. d) Ensure employees understand IT security importance

5. e) Ensure system developed with adequate controls and security

Column A                                        Column B

1. Backup and Recovery Controls                a) Prevent unauthorized access to data

2. Change Management Controls                 b) Ensure changes properly authorized and tested

3. Data Validation Controls                          c) Ensure accuracy and completeness of data

4. Access Controls                                       d) Ensure availability and integrity of IT systems

5. IT Security Controls                               e) Protect against unauthorized access or malicious attacks

Answers:

1. d) Ensure availability and integrity of IT systems

2. b) Ensure changes properly authorized and tested

3. c) Ensure accuracy and completeness of data

4. a) Prevent unauthorized access to data

5. e) Protect against unauthorized access or malicious attacks

Column A                                        Column B

1. System Development Life Cycle              a) Ensure system developed with adequate controls and security

2. IT Risk Assessment                                  b) Identify, assess, and mitigate IT-related risks

3. IT Security Awareness Training               c) Ensure employees understand IT security importance

4. IT General Controls                                 d) Ensure availability and integrity of IT systems

5. IT Application Controls                          e) Ensure accuracy and completeness of data

Answers:

1. a) Ensure system developed with adequate controls and security

2. b) Identify, assess, and mitigate IT-related risks

3. c) Ensure employees understand IT security importance

4. d) Ensure availability and integrity of IT systems

5. e) Ensure accuracy and completeness of data

Column A                                        Column B

1. IT Security Controls                          a) Protect against unauthorized access or malicious attacks

2. Data Backup and Recovery Controls             b) Ensure availability and integrity of IT systems

3. Change Management Controls                       c) Ensure changes properly authorized and tested

4. IT Risk Management                                      d) Identify, assess, and mitigate IT-related risks

5. System Development Life Cycle Audit          e) Ensure system developed with adequate controls and security

Answers:

1. a) Protect against unauthorized access or malicious attacks

2. b) Ensure availability and integrity of IT systems

3. c) Ensure changes properly authorized and tested

4. d) Identify, assess, and mitigate IT-related risks

5. e) Ensure system developed with adequate controls and security

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January 24, 2025

Incentive Exam, IT Audit

Chapter 9 of Accounts Code of AG -500 MCQs

Chapter 9 of Accounts Code of AG -500 MCQs – Accounts General: Monthly and Annual Accounts of the Central and State Governments of 

Multiple Choice Questions:

1. What is the primary purpose of preparing monthly accounts by the Accountant General?

A) To provide detailed information on government expenditures

B) To provide a summary of government revenues

C) To monitor government finances on a regular basis

D) To provide an analysis of government financial performance

Answer: C) To monitor government finances on a regular basis

1. Which of the following is a key component of the monthly accounts prepared by the Accountant General?

A) Detailed breakdown of government revenues

B) Summary of government expenditures

C) Analysis of government financial performance

D) All of the above

Answer: B) Summary of government expenditures

1. What is the purpose of preparing annual accounts by the Accountant General?

A) To provide detailed information on government expenditures

B) To provide a summary of government revenues

C) To provide a comprehensive picture of government finances

D) To provide an analysis of government financial performance

Answer: C) To provide a comprehensive picture of government finances

1. Which of the following is a key component of the annual accounts prepared by the Accountant General?

A) Detailed breakdown of government revenues

B) Summary of government expenditures

C) Analysis of government financial performance

D) All of the above

Answer: D) All of the above

1. What is the role of the Accountant General in preparing monthly and annual accounts?

A) To prepare detailed breakdown of government revenues and expenditures

B) To provide summary of government revenues and expenditures

C) To analyze government financial performance

D) To ensure accuracy and completeness of accounts

Answer: D) To ensure accuracy and completeness of accounts

1. What is the purpose of the "Monthly Expenditure Report"?

A) To provide detailed information on government expenditures

B) To provide a summary of government revenues

C) To monitor government finances on a regular basis

D) To provide an analysis of government financial performance

Answer: C) To monitor government finances on a regular basis

1. Which of the following is a key component of the "Monthly Expenditure Report"?

A) Detailed breakdown of government revenues

B) Summary of government expenditures

C) Analysis of government financial performance

D) All of the above

Answer: B) Summary of government expenditures

1. What is the purpose of the "Annual Finance Report"?

A) To provide detailed information on government expenditures

B) To provide a summary of government revenues

C) To provide a comprehensive picture of government finances

D) To provide an analysis of government financial performance

Answer: C) To provide a comprehensive picture of government finances

1. Which of the following is a key component of the "Annual Finance Report"?

A) Detailed breakdown of government revenues

B) Summary of government expenditures

C) Analysis of government financial performance

D) All of the above

Answer: D) All of the above

1. What is the role of the Accountant General in preparing the "Monthly Expenditure Report" and "Annual Finance Report"?

A) To prepare detailed breakdown of government revenues and expenditures

B) To provide summary of government revenues and expenditures

C) To analyze government financial performance

D) To ensure accuracy and completeness of reports

Answer: D) To ensure accuracy and completeness of reports

True or False Questions:

1. True or False: The primary purpose of preparing monthly accounts by the Accountant General is to provide detailed information on government expenditures.

Answer: False (The primary purpose is to monitor government finances on a regular basis)

1. True or False: The "Monthly Expenditure Report" provides a detailed breakdown of government revenues.

Answer: False (The report provides a summary of government expenditures)

1. True or False: The "Annual Finance Report" provides a comprehensive picture of government finances.

Answer: True

1. True or False: The Accountant General is responsible for preparing detailed breakdown of government revenues and expenditures.

Answer: False (The Accountant General is responsible for ensuring accuracy and completeness of accounts)

1. True or False: The "Monthly Expenditure Report" and "Annual Finance Report" are prepared by the Ministry of Finance.

Answer: False (The reports are prepared by the Accountant General)

Questions 6-10

1. True or False: The primary purpose of preparing annual accounts by the Accountant General is to provide detailed information on government expenditures.

Answer: False (The primary purpose is to provide a comprehensive picture of government finances)

1. True or False: The "Annual Finance Report" provides a summary of government revenues and expenditures.

Answer: True

1. True or False: The Accountant General is responsible for analyzing government financial performance.

Answer

1. True or False: The Accountant General is responsible for ensuring accuracy and completeness of accounts.

Answer: True

1. True or False: The "Monthly Expenditure Report" provides a detailed breakdown of government revenues and expenditures.

Answer: False (The report provides a summary of government expenditures)

1. True or False: The "Annual Finance Report" provides a comprehensive picture of government finances.

Answer: True

1. True or False: The Accountant General prepares the "Monthly Expenditure Report" and "Annual Finance Report".

Answer: True

1. True or False: The Ministry of Finance is responsible for preparing the "Monthly Expenditure Report" and "Annual Finance Report".

Answer: False (The Accountant General is responsible for preparing the reports)

1. True or False: The primary purpose of preparing monthly accounts by the Accountant General is to monitor government finances on a regular basis.

Answer: True

1. True or False: The "Monthly Expenditure Report" provides an analysis of government financial performance.

Answer: False (The report provides a summary of government expenditures)

1. True or False: The "Annual Finance Report" provides a detailed breakdown of government revenues.

Answer: False (The report provides a comprehensive picture of government finances)

1. True or False: The Accountant General is responsible for preparing detailed breakdown of government revenues and expenditures.

Answer: False (The Accountant General is responsible for ensuring accuracy and completeness of accounts)

1. True or False: The "Monthly Expenditure Report" and "Annual Finance Report" are used to monitor government finances.

Answer: True

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January 24, 2025

Incentive Exam

M.S.O. (A&E) Volume-II Chapter 1 & 2 of (Appropriation Accounts & Finance Accounts)-MCQs

 M.S.O. (A&E) Volume-II Chapter 1 & 2  of (Appropriation Accounts &  Finance Accounts)-MCQs

1. What is the primary purpose of Appropriation Accounts?

A) To provide detailed information on government expenditures

B) To provide a summary of government revenues

C) To show the appropriation of funds for various government activities

D) To provide an analysis of government financial performance

Answer: C) To show the appropriation of funds for various government activities

1. What is the difference between Appropriation Accounts and Finance Accounts?

A) Appropriation Accounts show revenues, while Finance Accounts show expenditures

B) Appropriation Accounts show expenditures, while Finance Accounts show revenues

C) Appropriation Accounts provide detailed information, while Finance Accounts provide summary information

D) Appropriation Accounts provide summary information, while Finance Accounts provide detailed information

Answer: C) Appropriation Accounts provide detailed information, while Finance Accounts provide summary information

1. What is the purpose of the "Abstract of Appropriation Accounts"?

A) To provide detailed information on government expenditures

B) To provide a summary of government revenues

C) To show the appropriation of funds for various government activities

D) To provide an overview of the Appropriation Accounts

Answer: D) To provide an overview of the Appropriation Accounts

1. What is the significance of the "Voted and Charged Expenditure" distinction in Appropriation Accounts?

A) It distinguishes between expenditure authorized by Parliament and expenditure not authorized by Parliament

B) It distinguishes between revenue expenditure and capital expenditure

C) It distinguishes between current expenditure and future expenditure

D) It distinguishes between expenditure on revenue account and expenditure on capital account

Answer: A) It distinguishes between expenditure authorized by Parliament and expenditure not authorized by Parliament

1. What is the purpose of the "Reconciliation Statement" in Appropriation Accounts?

A) To reconcile the difference between the budget estimates and the actual expenditure

B) To reconcile the difference between the revenue receipts and the revenue expenditure

C) To reconcile the difference between the capital receipts and the capital expenditure

D) To reconcile the difference between the opening balance and the closing balance

Answer: A) To reconcile the difference between the budget estimates and the actual expenditure

1. What is the primary purpose of Finance Accounts?

A) To provide detailed information on government expenditures

B) To provide a summary of government revenues

C) To show the financial position of the government

D) To provide an analysis of government financial performance

Answer: C) To show the financial position of the government

1. What is the difference between the "Consolidated Fund" and the "Contingency Fund"?

A) The Consolidated Fund is for meeting expenditure, while the Contingency Fund is for meeting unforeseen expenditure

B) The Consolidated Fund is for meeting revenue expenditure, while the Contingency Fund is for meeting capital expenditure

C) The Consolidated Fund is for meeting current expenditure, while the Contingency Fund is for meeting future expenditure

D) The Consolidated Fund is for meeting expenditure on revenue account, while the Contingency Fund is for meeting expenditure on capital account

Answer: A) The Consolidated Fund is for meeting expenditure, while the Contingency Fund is for meeting unforeseen expenditure

1. What is the purpose of the "Public Account"?

A) To account for government revenues and expenditures

B) To account for government borrowings and repayments

C) To account for government investments and returns

D) To account for government transactions not included in the Consolidated Fund

Answer: D) To account for government transactions not included in the Consolidated Fund

1. What is the significance of the "Reserve Funds" in Finance Accounts?

A) They are used to meet unforeseen expenditure

B) They are used to meet revenue expenditure

C) They are used to meet capital expenditure

D) They are used to meet expenditure on revenue account

Answer: A) They are used to meet unforeseen expenditure

1. What is the purpose of the "Notes to the Accounts" in Finance Accounts?

A) To provide detailed information on government expenditures

B) To provide a summary of government revenues

C) To provide additional information on the financial transactions of the government

D) To provide an analysis of government financial performance

Answer: C) To provide additional information on the financial transactions of the government

1. What is the purpose of the "Schedule of Expenditure" in Appropriation Accounts?

A) To provide detailed information on government expenditures

B) To provide a summary of government revenues

C) To show the appropriation of funds for various government activities

D) To provide an overview of the Appropriation Accounts

Answer: A) To provide detailed information on government expenditures

1. What is the purpose of the "Reconciliation Statement" in Appropriation Accounts?

A) To reconcile the difference between the budget estimates and the actual expenditure

B) To reconcile the difference between the revenue receipts and the revenue expenditure

C) To reconcile the difference between the capital receipts and the capital expenditure

D) To reconcile the difference between the opening balance and the closing balance

Answer: A) To reconcile the difference between the budget estimates and the actual expenditure

1. What is the difference between "Voted Expenditure" and "Charged Expenditure" in Appropriation Accounts?

A) Voted Expenditure is authorized by Parliament, while Charged Expenditure is not

B) Voted Expenditure is not authorized by Parliament, while Charged Expenditure is

C) Voted Expenditure is for revenue purposes, while Charged Expenditure is for capital purposes

D) Voted Expenditure is for capital purposes, while Charged Expenditure is for revenue purposes

Answer: A) Voted Expenditure is authorized by Parliament, while Charged Expenditure is not

1. What is the purpose of the "Finance Accounts" in government accounting?

A) To provide detailed information on government expenditures

B) To provide a summary of government revenues

C) To show the financial position of the government

D) To provide an analysis of government financial performance

Answer: C) To show the financial position of the government

1. What is the difference between the "Consolidated Fund" and the "Public Account" in Finance Accounts?

A) The Consolidated Fund is for meeting expenditure, while the Public Account is for meeting revenue

B) The Consolidated Fund is for meeting revenue, while the Public Account is for meeting expenditure

C) The Consolidated Fund is for meeting government transactions, while the Public Account is for meeting non-government transactions

D) The Consolidated Fund is for meeting capital transactions, while the Public Account is for meeting revenue transactions

Answer: A) The Consolidated Fund is for meeting expenditure, while the Public Account is for meeting revenue

1. What is the purpose of the "Notes to the Accounts" in Finance Accounts?

A) To provide detailed information on government expenditures

B) To provide a summary of government revenues

C) To provide additional information on the financial transactions of the government

D) To provide an analysis of government financial performance

Answer: C) To provide additional information on the financial transactions of the government

1. What is the purpose of the "Appropriation Accounts" in government accounting?

A) To provide detailed information on government expenditures

B) To provide a summary of government revenues

C) To show the appropriation of funds for various government activities

D) To provide an analysis of government financial performance

Answer: C) To show the appropriation of funds for various government activities

1. What is the difference between "Appropriation Accounts" and "Finance Accounts"?

A) Appropriation Accounts show revenues, while Finance Accounts show expenditures

B) Appropriation Accounts show expenditures, while Finance Accounts show revenues

C) Appropriation Accounts provide detailed information, while Finance Accounts provide summary information

D) Appropriation Accounts provide summary information, while Finance Accounts provide detailed information

Answer: C) Appropriation Accounts provide detailed information, while Finance Accounts provide summary information

1. What is the purpose of the "Schedule of Expenditure" in Appropriation Accounts?

A) To provide detailed information on government expenditures

B) To provide a summary of government revenues

C) To show the appropriation of funds for various government activities

D) To provide an overview of the Appropriation Accounts

Answer: A) To provide detailed information on government expenditures

1. What is the significance of the "Voted and Charged Expenditure" distinction in Appropriation Accounts?

A) It distinguishes between expenditure authorized by Parliament and expenditure not authorized by Parliament

B) It distinguishes between revenue expenditure and capital expenditure

C) It distinguishes between current expenditure and future expenditure

D) It distinguishes between expenditure on revenue account and expenditure on capital account

Answer: A) It distinguishes between expenditure authorized by Parliament and expenditure not authorized by Parliament

1. What is the purpose of the "Reconciliation Statement" in Appropriation Accounts?

A) To reconcile the difference between the budget estimates and the actual expenditure

B) To reconcile the difference between the revenue receipts and the revenue expenditure

C) To reconcile the difference between the capital receipts and the capital expenditure

D) To reconcile the difference between the opening balance and the closing balance

Answer: A) To reconcile the difference between the budget estimates and the actual expenditure

True or False

1. True or False: Appropriation Accounts show the actual expenditure incurred by the government during a financial year.

Answer: True

1. True or False: Finance Accounts provide a detailed breakdown of government revenues.

Answer: False (Finance Accounts provide a summary of government revenues)

1. True or False: The "Abstract of Appropriation Accounts" provides a detailed breakdown of government expenditures.

Answer: False (The "Abstract of Appropriation Accounts" provides a summary of government expenditures)

1. True or False: Voted Expenditure is expenditure that is not authorized by Parliament.

Answer: False (Voted Expenditure is expenditure that is authorized by Parliament)

1. True or False: Charged Expenditure is expenditure that is authorized by Parliament.

Answer: True

1. True or False: The "Schedule of Expenditure" in Appropriation Accounts provides a summary of government revenues.

Answer: False (The "Schedule of Expenditure" provides a detailed breakdown of government expenditures)

1. True or False: Finance Accounts are prepared on a cash basis.

Answer: True

1. True or False: Appropriation Accounts are prepared on an accrual basis.

Answer: True

1. True or False: The "Reconciliation Statement" in Appropriation Accounts reconciles the difference between the budget estimates and the actual expenditure.

Answer: True

1. True or False: The "Notes to the Accounts" in Finance Accounts provide additional information on the financial transactions of the government.

Answer: True

1. True or False: The Consolidated Fund is used to meet government expenditures.

Answer: True

1. True or False: The Public Account is used to meet government revenues.

Answer: False (The Public Account is used to account for government transactions not included in the Consolidated Fund)

1. True or False: The "Finance Accounts" provide a detailed breakdown of government expenditures.

Answer: False (The "Finance Accounts" provide a summary of government expenditures)

1. True or False: Appropriation Accounts are used to monitor government expenditures.

Answer: True

1. True or False: Finance Accounts are used to monitor government revenues.

Answer: True

Questions 16-20

1. True or False: Voted Expenditure is expenditure that is not charged on the Consolidated Fund.

Answer: True

1. True or False: Charged Expenditure is expenditure that is charged on the Consolidated Fund.

Answer: True

1. True or False: The "Abstract of Appropriation Accounts" provides a detailed breakdown of government revenues.

Answer: False (The "Abstract of Appropriation Accounts" provides a summary of government expenditures)

1. True or False: Finance Accounts are prepared by the Comptroller and Auditor General of India.

Answer: True

1. True or False: Appropriation Accounts are prepared by the Ministry of Finance.

Answer: False (Appropriation Accounts are prepared by the Comptroller and Auditor General of India)

1. True or False: The "Schedule of Expenditure" in Appropriation Accounts provides a summary of government expenditures.

Answer: False (The "Schedule of Expenditure" provides a detailed breakdown of government expenditures)

1. True or False: Finance Accounts provide a detailed breakdown of government revenues and expenditures.

Answer: False (Finance Accounts provide a summary of government revenues and expenditures)

1. True or False: Appropriation Accounts are used to monitor government revenues.

Answer: False (Appropriation Accounts are used to monitor government expenditures)

1. True or False: The "Reconciliation Statement" in Appropriation Accounts reconciles the difference between the budget estimates and the actual revenue.

Answer: False (The "Reconciliation Statement" reconciles the difference between the budget estimates and the actual expenditure)

1. True or False: The "Notes to the Accounts" in Finance Accounts provide additional information on the financial transactions of the government.

Answer: True

1. True or False: The Consolidated Fund is used to meet government revenues.

Answer: False (The Consolidated Fund is used to meet government expenditures)

1. True or False: The Public Account is used to account for government transactions included in the Consolidated Fund.

Answer: False (The Public Account is used to account for government transactions not included in the Consolidated Fund)

1. True or False: Appropriation Accounts are prepared on a cash basis.

Answer: False (Appropriation Accounts are prepared on an accrual basis)

1. True or False: Finance Accounts provide a detailed breakdown of government expenditures.

Answer: False (Finance Accounts provide a summary of government expenditures)

-----the end----

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January 24, 2025

Incentive Exam, MSO(A&E)-II

IT Audit Manual (Volume-III) -1000 MCQs

 IT Audit Manual (Volume-III) Audit Programmed for Specific Applications (Page 70 to 93): MCQs 

Question 1

What is the primary objective of auditing a payroll system?

A) To ensure compliance with tax laws

B) To verify the accuracy of employee data

C) To evaluate the effectiveness of internal controls

D) To assess the system's reliability and integrity

Answer: D) To assess the system's reliability and integrity

Question 2

Which of the following is a key audit step in reviewing a payroll system?

A) Verifying employee data against HR records

B) Testing payroll calculations for accuracy

C) Evaluating the system's access controls

D) All of the above

Answer: D) All of the above

Question 3

What is the purpose of auditing a general ledger system?

A) To ensure compliance with accounting standards

B) To verify the accuracy of financial data

C) To evaluate the effectiveness of internal controls

D) To assess the system's reliability and integrity

Answer: D) To assess the system's reliability and integrity

Question 4

Which of the following is a key audit step in reviewing a general ledger system?

A) Verifying account balances against financial statements

B) Testing journal entries for accuracy

C) Evaluating the system's reconciliation processes

D) All of the above

Answer: D) All of the above

Question 5

What is the primary objective of auditing a treasury management system?

A) To ensure compliance with regulatory requirements

B) To verify the accuracy of financial data

C) To evaluate the effectiveness of internal controls

D) To assess the system's reliability and integrity

Answer: D) To assess the system's reliability and integrity

Question 6

Which of the following is a key audit step in reviewing a treasury management system?

A) Verifying cash balances against bank statements

B) Testing investment transactions for accuracy

C) Evaluating the system's cash forecasting processes

D) All of the above

Answer: D) All of the above

Question 7

What is the purpose of auditing a procurement system?

A) To ensure compliance with purchasing policies

B) To verify the accuracy of vendor data

C) To evaluate the effectiveness of internal controls

D) To assess the system's reliability and integrity

Answer: D) To assess the system's reliability and integrity

Question 8

Which of the following is a key audit step in reviewing a procurement system?

A) Verifying purchase orders against vendor contracts

B) Testing invoice payments for accuracy

C) Evaluating the system's requisition processes

D) All of the above

Answer: D) All of the above

Question 9

What is the primary objective of auditing a sales and distribution system?

A) To ensure compliance with sales tax laws

B) To verify the accuracy of customer data

C) To evaluate the effectiveness of internal controls

D) To assess the system's reliability and integrity

Answer: D) To assess the system's reliability and integrity

Question 10

Which of the following is a key audit step in reviewing a sales and distribution system?

A) Verifying sales orders against customer contracts

B) Testing shipment transactions for accuracy

C) Evaluating the system's inventory management processes

D) All of the above

Answer: D) All of the above

Question 11

What is the purpose of auditing a fixed asset management system?

A) To ensure compliance with accounting standards

B) To verify the accuracy of asset data

C) To evaluate the effectiveness of internal controls

D) To assess the system's reliability and integrity

Answer: D) To assess the system's reliability and integrity

Question 12

Which of the following is a key audit step in reviewing a fixed asset management system?

A) Verifying asset additions against purchase invoices

B) Testing asset depreciation calculations for accuracy

C) Evaluating the system's asset disposal processes

D) All of the above

Answer: D) All of the above

Question 13

What is the primary objective of auditing a human resource management system?

A) To ensure compliance with labor laws

B) To verify the accuracy of employee data

C) To evaluate the effectiveness of internal controls

D) To assess the system's reliability and integrity

Answer: D) To assess the system's reliability and integrity

Question 14

Which of the following is a key audit step in reviewing a human resource management system?

A) Verifying employee data against HR records

B) Testing payroll calculations for accuracy

C) Evaluating the system's recruitment processes

D) All of the above

Answer: D) All of the above

Question 15

What is the purpose of auditing a customer relationship management system?

A) To ensure compliance with customer data protection laws

B) To verify the accuracy of customer data

C)

Question 16

What is the primary objective of auditing a supply chain management system?

A) To ensure compliance with logistics regulations

B) To verify the accuracy of inventory data

C) To evaluate the effectiveness of internal controls

D) To assess the system's reliability and integrity

Answer: D) To assess the system's reliability and integrity

Question 17

Which of the following is a key audit step in reviewing a supply chain management system?

A) Verifying inventory levels against physical counts

B) Testing shipment transactions for accuracy

C) Evaluating the system's procurement processes

D) All of the above

Answer: D) All of the above

Question 18

What is the purpose of auditing a business intelligence system?

A) To ensure compliance with data analytics regulations

B) To verify the accuracy of business data

C) To evaluate the effectiveness of internal controls

D) To assess the system's reliability and integrity

Answer: D) To assess the system's reliability and integrity

Question 19

Which of the following is a key audit step in reviewing a business intelligence system?

A) Verifying data sources against business requirements

B) Testing data analytics for accuracy

C) Evaluating the system's data governance processes

D) All of the above

Answer: D) All of the above

Question 20

What is the primary objective of auditing a data warehouse system?

A) To ensure compliance with data storage regulations

B) To verify the accuracy of data warehouse data

C) To evaluate the effectiveness of internal controls

D) To assess the system's reliability and integrity

Answer: D) To assess the system's reliability and integrity

Question 21

Which of the following is a key audit step in reviewing a data warehouse system?

A) Verifying data sources against business requirements

B) Testing data transformation processes for accuracy

C) Evaluating the system's data quality processes

D) All of the above

Answer: D) All of the above

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January 12, 2025

Incentive Exam, IT Act, IT Audit

MCQ ON MSO AUDIT IE-2 & PC-22

 

MSO Audit

1. The Comptroller and Auditor General of India derives his authority and functions mainly from the provisions of ________.
1. Articles 148 to 151 of the Constitution of India
2. Articles 147 to 150 of the Constitution of India
3. Articles 150to 154 of the Constitution of India
4. Articles 150 to 155 of the COnstitution of India
2. Accounts which relate to the expenditure brought to account during a financial year, to the several items specified in the law made in accordance with the provisions of the Constitution or of the Government of Union Territories Act, 1963 (20 of 1963) for the appropriation of moneys out of the Consolidated Fund of India or of a State, or of a Union Territory having a Legislative Assembly, as the case may be is called
1. Appropriation Accounts
2. Finance Accounts
3. Balance Sheet
4. Annual Financial Statement
3. In audit of revenue receipts, Audit has to examine the judicial decisions or judgements with a view to:
1. check whether the judgement was sound and in the accordance with the provisions of the respective acts
2. check whether the judgement was onsistent with the previous judgement or judgement of a higher court
3. check whether the revenue authorities has submitted appeals to ensure that no loss of revenue occurred due to erroneous judgements
4. check the effectiveness of the assessment procedures and recovery procedures in the light of the judgement
4. Tax audits are primarily legality and regularity audit, when auditing the application of tax laws, Audit should examine the system and efficiency of tax collection. Which of the following statement would be appropriate in case of a tax audit?
1. The Audit is empowered to audit the ollection of taxes as extensively as possible and to examine individual tax files
2. The Audit is not empowered to audit the colletion of taxes extensively
3. The Audit is not empowered to examine individual tax files
4. The Audit is empowered to audit the collection of taxes but not empowered to examine individual tax files
5. Which of the following procedure could be adopted, according to the MSO (Audit) issued by CAG, while auditing the accounts of furniture in the residences of high officials?
1. The high official can be asked to vacate the house during a specified day during the audit period and the audit staff along with the department staff could verify the furniture stock with actual stock.
2. The high official can be asked to certify to the effect that he uses the furniture in the residence only for his official purpose and no furniture is used for his personal purpose.
3. Audit may require, where necessary, the furnishing by the executive authority nominated for the purpose of an annual certificate of verification incorporating the details of verification.
4. The furniture supplied to the residence of a high level officer need not be audited.
6. Which of the following statements is NOT correct with regard to the submission of utilisation certifiate for a grant?
1. Ministries and departments of the Central Government are not required to furnish utilisation certificate
2. State Governments directly incurring expenditure out of Central grants are also not required to furnish utilisation certificates
3. In respect of expenditure out of central grants incurred by the state government through local bodies and co-operative institutions , there is no need of furnishing the utilisation certifiates
4. All of the above
7. In public works department, the position responsible for undertaking preliminary check in works transaction is called:
1. PWD Auditor
2. Divisional Accountant
3. Subordinate Accountant
4. State Acountant
8. Conmtroller and Auditor General of India's Manual of Standing Order is issued under:
1. Section 23 of the CAG's DPC Act
2. Section 24 of the CAG's DPC Act
3. Chapter 4 of the Manual of Office Procedure
4. Chapter 3 of the Manual of Office Procedure
9. Which of the following agency is entrusted with the responsibility of ensuring a uniform policy of accounting and audit in the government sector as a whole in India?
1. Institute of Chartered Accountants of India
2. The Comptroller and Auditor General of India
3. The Controller General of Accounts
4. The Ministry of Finance, Government of India
10. Which of the following entities can be treated as entities managing public money?    1) Central Government     2) State government     3) Government companies established under companies act     4) Government autonomous bodies
1. 1 and 2
2. 1,2,3 and 4
3. 1 and 3
4. 1,2 and 4
11. An auditor and audit institution should maintain independence. This include independence from:       1) The Legislature      2) The Audited Entity      3) The Executive.
1. Only 2
2. Both 2 and 3
3. Only 3
4. 1,2 and 3
12. Which of the following are considered quality assurance activities?
1. Report to management on progress against budget
2. Report to management on progress against schedule
3. Supervision
4. Allocation of responsibilities
1. only 1, 3 and 4
2. only 1 and 4
3. only 3 and 4
4. all of the above
13. Selection of audit topics for performance audits should be determined on which of the following stages of the audit?
1. pre-study
2. research and evaluation
3. main study
4. none of the above

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November 07, 2020

Incentive Exam, SAS-Group-II

MCQ ON PUBLIC FINANCE IE-1

 MCQ ON PUBLIC FINANCE IE-1

FOR ONLINE PRACTISE PLEASE FOLLOW THE LINKS

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November 07, 2020

Finance, Incentive Exam

MCQ ON PUBLIC FINANCE WITH ANSWER IE-1

 

 

PUBLIC  FINANCE

 

MULTIPLE CHOICE QUESTIONS

 

1.       Scope of public finance includes :

 

(a)    Public revenue (b) Public debt (c) Public expenditure (d) All of these

 

2.       Public Authorities Include:

 

(a)    Central Government (b) State Government (c) Local Government (d) All of these

 

3.       Which is the main point on the basis of which public finance can be separated from private finance:

 

(a)    Price policy (b) Borrowings (c) Secrecy (d) Elasticity in income

 

4.       The principle of Maximum Social Advantage have been suggested by

 

(a)    Pigou (b) Dalton (c) Musgrave (d) Adam Smith

 

5.       In the following which is the characterstic of a tax

 

(a)    Compulsory (b) optional (c) forced (d) nationality

 

6.       Which is the main objective of a tax:

 

(a)    Increase in consumption (b) increase in production (c) Raising public revenue (d) reduction in capital formation

 

7.       Among the following canons of taxation which one has been given by Adam Smith:

 

(a)    Canon of Uniformity (b) Canon of productivity (c) canon of diversity (d) canon of equity

 

8.       The Indian tax system is:

 

(a)    Proportional (b) Progressive (c) Regressive (d) Degressive

 

9.       The burden of direct taxes is borne by :

 

(a)    Rich person (b) poor person (c) on whom it is levied (d) none of these

 

10.   Indirect taxes have an element of :

 

(a)    Equitable (b) certainity (c) economical (d) encourage honesty

 

11.   Direct taxes have the element of :

 

(a)    Evasion (b) convenient (c) progressive (d) economy

 

12.   In proportional tax system, the rates of tax remain:

 

(a)    Constant (B) increasing (c) decreasing (d) zero

 

13.   Expenditure Tax for India was recommended by:

 

(a)    Kaldor (b) Colin Clarke (c) Adam Smith (d) Adolph Wagnor

 

14.   Corporate Income tax is the tax levied on:

 

(a)    Corporations (b) Municipalities (c) Co –operative societies (d) Companies

 

15.   Which of the following is the major source of revenue in India:

 

(a)    Direct tax (b) Capital Levy (c) Grants in aid (d) Indirect tax

 

16.   Which of the following is not a Commodity Tax:

 

(a)    Excise duty (b) Customs Duty (c) Coporation Tax (d) Octroi

 

17.   A duty levied on goods when they entering a town

 

(a)    Income tax (b) Octroi (c) Agricultural tax (d) Professional tax

 

18.   Special Assessment means:

 

(a)    A tax on special benefits (b) General tax on all people (c) A periodical tax (d) Gift tax

 

19.   Non-exclusion principle is related to:

 

(a)    Private goods (b) Public goods (c) Merit goods (d) Mixed goods

 

20.   Education is an example of:

 

(a)    Public good (b) Merit good (c) Social good (d) Club good

 

21.   Public Goods are:

 

(a)    Excludable (b) Non – excludable (c) Marketable (d) All of these

22.   Who is the father of Public Finance:

 

(a)    Dalton (b) Pigou (c) Smith (d) Musgrave

 

23.   Incidence of tax means:

 

(a)    Direct money burden (b) indirect money burden (c) actual tax burden (d) none of these

 

24.   Which is the tax shifting

 

(a)    To bear the tax burden himself (b) to shift the tax burden on others 9c) to bear some part of the tax himself and shift the rest on others (d) none of these

 

25.   The equity principle of taxation was propounded by: A) Adam Smith B) Dalton C) J.B. Say D) Marshall

 

26.   “The government which taxes the least is the best”, is the belief of:

 

A)  Mercantilists B) Physiocrates C) Modern D) Classical

 

27.   According to Laffer, when the tax rate is 100 per cent , the tax revenuewill be: A) 100% B) 50% C) Zero D) 10%

 

28.   Incidence of a tax refers to the--------------burden of tax: A) Initial B) Ultimate C) Intermediate D) None

 

29.   In the case of regressive tax, the rate of tax---------------------as income increases: A) increases B)remains constant C) Decreases D) None

 

30.   Advolorum duties are levied on:

 

A)  Length B) Weight C) Utilities D) Value

 

31.   Tax avoidance is:

 

A)  Illegitimate B) Legitimate C) Punishable D) None

 

32.   The VAT was first introduced in:

 

A)  India B) Britain C) USA D) France

 

33.   Customs duties are imposed on commodities as they cross:

 

A) State boundaries B) District boundaries C) National boundaries D) Muncipal boundaries

 

34.   Contra-cyclical fiscal policy was popularised by: A) Adam Smith B) Dalton C) J.B. Say D) Keynes

 

35.   Deficit financing as a tool of fiscal policy was suggested by: A) Keynes B) Dalton C) J.B. Say D) Marshall

 

36.   Keynes popularised:

 

A)  Monetary policy B) Fiscal Policy C) Income policy D) Price policy

 

37.   A budget where there is excess of expenditure over revenue is called: A) Surplus B) Deficit C) Balanced D) Zero-based

 

38.   The balanced budget principle was advocated by:

 

A)  Keynesians B) Mercantilists C) Classical school D) Neo-Classical school

 

39.   Which one of the following is not a tax base? A) Income B) wealth C) Utility D) Consumption

 

40.   Equals treated equally in taxation leads to:

 

A)  Vertical equity B) Real equity C) Horizontal equity D) None

 

41.   Which one of the following is not a public utility?

 

A)  Electricity B) Water supply C) Gas service D) Tourism

 

42.   The largest component of revenue expenditure in India is: A) Pension B) Interest payments C) Education D) Health

 

43.   The Classical economists asserted that public expenditure is: A) Unproductive B) Productive C) stagnant D) All of these

 

44.   Wagner’s Law is related to:

A)      Public revenue B) Public expenditure C) Public debt D) Budget

 

45.   The largest component of revenue expenditure in India is:

 

A)      Pension B) Interest payments C) Education D) Health

 

46. .Adolph Wagner was a-----------------Economist:

 

A)      French B) German C) Indian D) American

 

47.   Who is the exponent of Law of Increasing State Activities?

 

A)      Dalton B) Pigou C) Smith D) Wagner

 

48.   The Displacement effect hypothesis was formulated by:

 

A)      Peacock and Wiseman B) Pigou C) Smith D) Musgrave

 

49.   The financial year in India starts from:

 

A)     1st January B) 31st March C) 1st April D) 1st July

 

50.   Salaries and pensions paid by governments are called:

 

A)      Capital expenditure B) Development expenditure C) Revenue expenditure D)Plan expenditure

 

51.   The fiscal deficit excluding the interest liabilities for a year is called as

 

A)      Revenue deficit B) Capital deficit C) Budget deficit D) Primary deficit

 

52.   The FRBM Act was passed in:

 

A)      1991 B) 2001 C) 2003 D) 2011

 

53.   The Zero-based budgeting was first adopted in:

 

A)      India B) France C) Germany D) USA

 

54.   Who proposed the Zero-based budgeting for the first time:

 

A)      David Ricardo B) Alfred marshall C) Adam Smith D) Peter Phyrr

 

55.   Gender budgeting started in India with the Union budget of:

 

A)      1991-92 B) 2001-02 C) 2006-07 D) 2010-11

 

56.   Grants recommended by the Finance Commission are known as:

 

A)      Plan grants B) Conditional Grants C) Statutory grants D) Conditional grants

 

57.   Which one of the following is not a method for redeeming public debt?

 

A)      Sinking fund B) Capital levy C) Terminal annuities D)Grants in aid

 

58.   The Finance Commission in India is appointed by:

 

A)      President B) Prime Minister C) Chief Minister D) Finance Minister

 

59.   The Theory of Maximum Social Advantage was given by:

 

A)      Marshal B) Dalton C) Musgrave D) Mill

 

60.   Which of the following is a Statutory Body?

 

A)      Finance Commission B) Planning Commission C) State Planning Board D) None of these

 

61.   Author of ‘General Theory of Employment, Interest and Money’:

 

A)      Dalton B) Marshal C) Keynes D) Musgrave

 

62.   Functional Finance concept was introduced by:

 

A)      Marx and Angels B) Keynes and Lerner C) Dalton and Pigou D) J.S. Mill

 

63.   Formation of---------------is the actual method of debt redemption:

 

A)      Sinking fund B) Capital levy C) Conversion D) Repudiation

 

64.   Chairman of the first Finance Commission:

 

A)      Chadha B) K.C. Neogi C) Santhanam D) Y.V. Chavan

 

65.   Redemption of public debt means:

 

A)      Repayment of debt B) Repayment of FDI C) Additional borrowing D) Deficit financing

 

66.   The Annual Account of both the income and expenditure is called:

 

A)      Plan B) Budget C) Manifesto D)Accounts

 

67.   Equals treated equally in taxation leads to:

A)      Vertical equity B) Real equity C) Horizontal equity D) None

 

68.   Modified Value Added Tax was introduced in India in:

 

A)  1951 B) 1986 C) 1991 D) 1976

 

69.   Agricultural Holding Tax was recommended by:

 

A)  Adam Smith B) K.N. Raj C) Chelliah D) Marshall

 

70.   The burden of long-term public debt fall on:

 

A)  Present generation B)Past generation C) Future generation D) All

 

71.   The Great Depression occurred during:

 

A)  1919-23 B) 1929-33 C) 1949-53 D) 1901-05

 

72.   Pump Priming is related with:

 

A)  Monetary policy B) Income policy C) Price policy D) Fiscal policy

 

73.   Deficit financing may lead to:

 

A)  Poverty B) Unemployment C) Inflation D) Deflation

 

74.   The debts which the government promises to pay off at a specified date are called

 

A)  Irredeemable debts B) Funded debts C) Redeemable debts D) unfunded debts

 

75.   Short-period debts are called as:

 

A)  Unfunded debts B)Funded debts C) Redeemable debts D) None

 

76.   Unfunded debts are also known as

 

A)  Funded debts B) Floating debts C) Irredeemable debts D) None

 

77.   Treasury bills issued by the Government are in the nature of:

 

A)  Funded debts B) Floating debts C) Irredeemable debts D) None

 

78.   A tax that can be shifted is called:

 

A)  Direct tax B) Progressive tax C) Indirect tax D) None

 

79.   Service tax in India was introduced in:

 

A)  1991-92 B) 2001-02 C) 2006-07 D) 1994-95

 

80.   The chairman of the 15^th Finance Commission of India is

A)      A.M. Khusro B) K. C. Pant C) N.K. Singh D) Arun Jaitley

 

81.   The basic principle of public finance is:

 

a)      Maximum Social Advanatage b) welfare of the Govt. c) welfare of the Individual d) all of the above

 

82.   The finance commission is appointed every : A) 3 years B) 5 years C) 6 years D0 7 years

 

83.   Which of the following is not a fiscal instrument?

 

a) Open market operations       b) Public expenditure c) Taxation        d) budget

 

84. Which of the following is a measure of fiscal policy?

 

a) Public expenditure       b) C.R.R. c) S.L.R.       d) Bank rate

 

85.   The First Finance Commission was appointed in the year:

 

A)      1949 B) 1950 C) 1951 D) 1952

 

86.   Modern Canons of taxation are propounded by:

 

	a)Bastable	b) Adam Smith
	c) Seligmon	d) Pigou
87.	In India, personal income tax is levied on individuals by:
	a) Central Government	b) State Government
	c) Local bodies	d) None of these
88.	Sound tax policy is devised mainly on the basis of:
	a) Maximum tax revenue	b) Elastic tax base
	c ) High income elasticity	d) High price elasticity
89.	The Kelkar Proposals are concerned with:

a)  Recommendations for re4forms in the power sector

 

b)  Recommendations for tax reforms

 

c)  Guidelines for the privatization of public sector undertakings

 

d)  None of the above

 

90.	In the case of direct tax, impact and incidence are on:
	a) Different person			b) Same person
	c) Sellers	d) None of these
91.	The direct violation of Tax law is called:
	a) Tax evasion		b) Tax avoidance
	c) Tax Rebate		d) None of these
92.	The final resting place of the burden of tax is called:
	a) Tax avoidance			b) Tax evasion
	c) Impact		d) Incidence
93.	Fiscal policy is the policy of:
	a) RBI	b) NABARD
	c) Government		d) All the above
94.	The principle of judging fiscal measures by the way they work is called:
	a) Personal Finance			b) Public Finance
	c) Functional Finance			d) Local Finance
95.	When individuals with unequal tax paying ability should be taxed unequally in order to
	equal sacrifice is called:
	a) Horizontal equity			b) Vertical Equity
	c) Tax paying ability			d) None of these
96.	Elastic revenue response to marginal tax rate reductions is called:
	a) Marginal tax curve			b) Functional curve
	c) Laffer curve		d) None of these
97.	The neo‐Keynesian approach to public finance is called
	a) Functional finance			b) Aggregate demand
	c ) Global finance			d) Federal finance

 

98.   “The best system of public finance is that which secures the maximum social advantage from the operations which it conducts” is the dictum of

 

A) Adam Smith B) Dalton C) J.B. Say D) Marshall

 

99.   Which is the method of financial adjustment between Centre and States?

 

a) Tax sharing       b) Grant‐in‐aid

 

c) Public debt      d) Federal Finance

 

100.           Merit goods means:

 

a) Public good      b) Free good

 

c ) Rare good       d) White good

 

101.           The modern state is:

 

a) Laissez –faire state      b) Welfare state

 

c) Aristocratic state        d) Police state

 

102.             According to Musgrave the major functions of public finance is:

 

a) Allocative function    b) Distributive function

 

c) Stabilisation function    d) All the above

 

103.             Who is the author of the book “The Theory of Public Finance”?

 

a) Dalton         b) R A Musgrave

 

c) A.R. Prest       d)Harvey Rosen

 

104.             A criterion by which public goods are distinguished from private goods:

a) Exclusion principle    b) Externality principle

 

c) Public choice principle   d) None of the above

 

105.           Non‐rivalray and non‐excludability are the characteristics of:

 

a) Normal goods      b) Demerit goods

 

c ) Inferior goods     d) Public goods

 

106.               Which one of the following taxes is levied by the State Government only?

 

a. Entertainment tax    b) Corporation tax

 

c ) Wealth tax      d) Income tax

 

107.             Laffer curve suggest that the

 

a)  Relationship between tax revenue and tax rates is U‐shaped

 

b)  Relationship between GDP growth rate and tax rates is U‐shaped

 

c)  Relationship between tax revenue and tax rates is inverted U‐shaped

 

d)  Relationship between savings rate and tax rate is inverted U‐shaped

 

108.             The controlling authority of Government expenditure is:

 

a) RBI                      b) Planning Commission

 

c) Ministry of Finance       d) Finance Commission

 

109.           The idea of ‘Democratic Decentralization’ in India was popularized by:

 

 

a) A.D. Gorwala Committee, 1951 b) B.R. Mehta Committee, 1957 c) Ashok Mehta Committee, 1978 d) None of these

 

110.             A tax levied upon a firm as a percentage of its value added

 

a) Merit tax      b) VAT

 

c) Turnover tax        d) Sales tax

 

111.             Which one of the following is the most acceptable theory of taxation:

 

a) Benefit theory                     b) Cost of service theory       c) Ability to pay theory

 

d) None of these

 

112.      The Kerala Panchayat Raj Act was passed in the  legislature in the year:

 

a) 1995         b) 1994  c ) 2000          d) 1999

 

113.             The concept of decentralized planning received renewed attention in India with the:

 

73rd and 74th Constitutional Amendment Acts of : a) 1993		b)1992
C) 1995	d)2000

 

114.           The Indian income tax is:

 

 

a) Direct and proportional b) Indirect and proportional c ) Indirect and progressive d) Direct and progressive

 

115.           The main objective of budgeting is:

 

a) Planning        b) Co‐ordination

 

c ) Control        d) All of these

 

116.           Which tax cannot be shifted to others?

 

a) Excise duty       b) Sales tax

 

c) Entertainment tax     d) Wealth tax

 

117.           Pump Priming is related with

 

A) Monetary policy B) Income policy C) Price policy D) Fiscal policy

 

118.           Wiseman‐Peacock hypotheses supports in a much stronger manner the possibility of

 

:

 

a) An upward trend in public expenditure  b) A downward trend in public expenditure

 

c ) A constancy of public expenditure   d) A mixed trend in public expenditure

 

119.      The theory of fiscal policy derives from                            (A) Principle of sound finance

 

(B) N.I. analysis  (C) Welfare economics (D) None of these

120.           Fiscal Federalism refers to

 

(A)  Sharing of political power between centre and states

 

(B)  Organising and implementing economic plans

 

(C)  Division of economic functions and resources among different layers of Govt.

 

(D)  None of these

 

121.             Which one of the following is an optional function of Government?  (A) Defense

 

(B) Old Age Security     (C) Law and Order      (D) None of these

 

122.      Principle of sound finance refers to                      (A) Maximum Government spending

 

(B)  Minimum Government spending

 

(C)  Revenue expenditure balanced at the minimum level

 

(D)  Balance between Tax and spending

 

123.      Private goods are characterized by                       (A) Application of exclusion principle

 

(B)  Rivalry in consumption (C) Payment of prices  (D) All the above

 

124.           The most important aim of fiscal policy in a developing country is

 

(A) economic stability                            (B) economic development     (C) regional balance

 

(D)  None of these

 

125.           Market failure refers to a situation when

 

(A) Market does not function                (B) market solution occurs if government

 

intervenes

 

(C) Social efficiency is not achieved      (D) perfectly competitive firm experiences P > MC

 

126.      Public                                                  goods are non‐rivial if

 

(A)  Some people cannot be prevented from consuming it

 

(B)  Consumption by one person reduces consumption of other individuals

 

(C) Some people are excluded from consuming it     (D) all the above

 

127.           The income of the government through all its sources is called

 

(A) Public expenditure  (B) public revenue    (C) Public finance (D) none of these

 

128.      The maximum effect of direct taxes is on            (A) Price of food              (B) Income

 

(C) Capital goods  (D) consumer goods

 

129.      The Wanchoo Committee (1971) probed into     (A) Direct taxes  (B) indirect taxes

 

(C) Agricultural holding tax    (D) non‐tax revenue

 

130.      Deficit financing means            (A) Public expenditure in excess of public revenue

 

(B) Public revenue in excess of public expenditure                    (C) Both (A) and (B)

 

(D) none of the above

 

131.      Modvat means         (A) Modified value added tax    (B) moderate value added tax

 

(C) Modest value added tax   (D) modern value added tax

 

132.

 

The revenue of the State Government is raised from the following sources except one, w hich is that? (A) Land revenue (B) agricultural income tax (C) Entertainment tax

 

(D)  expenditure tax

 

133.           The Finance Commission does all the following functions except one, which is that?

 

(A)  Works out allocation of taxes in the divisible pool

 

(B)  Looks into financial relations between the Centre and the States

 

(C)Allocates grants ‐ in – aid to the States and Union Territories

 

(D)  Assist the Planning Commission in making 5 year plans.

 

134.           The methods of restoring resource balance between different governments in a fede

 

ral            set‐up is based on (A) Tax sharing (B) Grants –in‐Aid (C) Loans (D) All the above

135.           Finance Commission determines

 

(A) The finances of Government of India           (B) The resources transfer to t he State

 

(C) The resources transfer to the various departments       (D) none of the above

 

136.      Federal Finance deals with              (A) State finances

 

(B)Finances of railways                                                                                           (C)Local bodies

 

(D) Centre‐State financial relations

 

137.      Primary deficit means:                                                                (A) Fiscal deficit‐ Interest

 

(B)Revenue deficit‐interest payments                             (C) Fiscal deficit+ revenue deficit

 

d) Budgetary deficit

 

138.      Non‐Plan Grants are determined by                                        (A) Planning Commission

 

(B) Finance Commission    (C)Central Government    (D) State Government

 

139.      Public Debt Management refers to                                             (A) Terms of new bonds

 

(B) Proportion of different components of public debt   (C) Maturity (D) All the above

 

140.      Public Expenditure increases        (A) Interest rate     (B) Employment                                                   (C) Exports

 

(D) Imports

 

141.      Central Assistance for State and UT plan is a part of                    (A) Plan Expenditure

 

(B) Revenue Expenditure    (C) Non‐Plan Expenditure (D) None of the above

 

142.      Defict financing includes                                      a) Borrowing from the Central Bank

 

b) Issues of new currency by the Government

 

C ) Withdrawal of past accumulated cash balance by the government

 

d)  All the above

 

143.           The ……. had recommended certain reforms on the devolution of Grant – in –

 

Aid (Plan  fund) to LsGs from 2006‐07 to 2010‐11   (A) 3rd State Finance Commission (B) 2rd State   Finance Commission       (C) 1rd State Finance Commission

 

(D)  None of the above

 

144.           There is a view that reduced rates on income tax would lead to a significant rise in in

 

come          tax revenue. This view has been attributed to                    (A) Herbert Simon

 

(B) Arthur Laffer   (C) Robert Lucas   (D) J.B. Say

 

145.       Functional Finance functions through    (A) Buying and selling  (B) giving and taking

 

(C) Lending and borrowing  (D) All the above

 

146.      The ideal system of public Finance is one where the net benefit is              (A) Maximum

 

(B)  Minimum  (C) Zero  (D) Infinity

 

147.           The burden of long term public debt is on:

 

(a)    Present generation (b) past generation (c) future generation (d) none of these

 

148.           Public debt leads to extravagance, encouraged resort to war and induced bad economic conditions. This statement is of :

 

(a)    Dalton (b) Adam Smith (C) J.K. Mehta (d) Findley Shirras

 

149.           The main objective of taking private loan is :

 

(a)    To achieve public objectives (b) to achieve personal objectives (c) to achieve long term objectives (d) none of these

 

150.           Shortcoming of public debt is :

 

(a)    Political slavery (b) danger of insolvency (c) danger to countrys freedom (d) all of the above

 

151.           Dalton has divided debt redemption fund into:

 

(a)    Two parts (b) three parts (c) Four parts (d) Five parts

 

152.           ------------ refers to refusal to repay the debt

 

(a)    Repudiation (b) Capital levy (c) Sinking fund (d) none of the above

 

153.           Marginal cost of providing the public goods to additional consumers is :

(a) 0             (b) 1      (c) 2       (d) 3

 

154.           Mixed goods are those goods having benefits which are:

 

(a) rival (b) Non – rival (c) both a &b (d) none of these

 

155.           Critical Limit Hypothesis was associated with the name of

 

(a)    Dalton (b) Colin Clarke (c) J.M. Keynes (d) Musgrave

 

156.           Escheat is an example of

 

(a)    Direct tax (b) Indirect tax (c) Both a & b (d) none of these

 

157.           Taxes which are based on specific qualities or attributes of goods are called

 

(a)    Specific tax (b) Advalorem tax (c) customs duty (d) Excise duty

 

158.           The item or economic activity on which tax is imposed is known as

 

(a)    Tax buoyancy (b) tax rate (c) Excess burden (d) tax base

 

159.           Gift tax was introduced in the year

 

(a)    1958 (b) 1959 (c) 1960 (d) 1961

 

160.           -------------------- is a broad based and a single comprehensive tax levied on goods and services consumed in an economy

 

(a)    VAT (b) CENVAT (c) GST (d) None of these

 

161.           In India GST was introduced in the year

 

(a)    2016 (b) 2017 (c) 2018 (d) 2019

 

162.           -------------------- is the first country to implement GST

 

(a)    USA (b) U K (c) Canada (d) France

 

163.           In which year GST was first introduced

 

(a)    1952 (b) 1953 (c) 1954 (d) 1955

 

164.           ---------------- is the debt which is paid any legal enforcement.

 

(a)    Voluntary debt (b) compulsory Debt (c) internal debt (d) external debt

 

165.           When the government raises revenue by borrowing from within the country is known as

 

(a)    Voluntary debt (b) compulsory Debt (c) internal debt (d) external debt

 

166.           free rider problem is one of the characteristics of

 

(a)    Private good (b) Public good (c) merit good (d) mixed good

 

167.           Those goods whose consumption and use are to be encouraged are called

 

(a)    Private good (b) Public good (c) merit good (d) mixed good

 

168.           The concept of Merit good was introduced by

 

(a)    Dalton (b) Keynes (c) R A Musgrave (d) none of these

 

169.           The concept of merit good was introduced in the year

 

(a) 1959 (b) 1960 (c) 1961 (d) 1962

 

170.           Education is an example of

 

(a) Private good (b) Public good (c) merit good (d) mixed good

 

171.           The movement from older level of expenditure and taxation to a new and higher level is called

 

(a)    Concentration effect (b) inspection effect (c) Displacement effect (d) none of these

 

172.           According to Colin Clark maximum limit of the tolerance level is ------ of GNP

 

(a)    24% (b) 25 % (c) 26%  (d) 27%

 

173.           A proportional tax is one in which the rate of tax remains ------- irrespective of the level of income.

 

(a)    Zero (b) One (c) Two (d) Constant

 

174.           The modern theory of tax incidence was developed by

 

(a)    Dalton (b) Keynes (c) R A Musgrave (d) none of these

 

175.           The diffusion theory was associated with the name of

(a)    Dalton (b) Keynes (c) R A Musgrave (d) Mansfield

 

176.           The Concentration theory of tax shifting and incidence was developed by

 

(a)    Mercantilist (b) Physiocrats (c) Austraian School (d) Keynesians

 

177.           When Ed=∞or Es=0, the whole incidence is on

 

(a)    Buyers (b) Sellers (c) Govt. (d) none of these

 

178.           When Es=∞or Ed=0, the whole incidence is on

 

(a)    Buyers (b) Sellers (c) Govt. (d) none of these

 

179.           When Ed=Es, the burden is divided between

 

(a) Buyers (b) Sellers (c) both a & b  (d) Govt.

 

 

 

180.           When Es> Ed, more incidence is on

 

(a)    Buyers (b) Sellers (c) Govt. (d) none of these

 

181.           When Ed>Es, more incidence is on

 

(a)    Buyers (b) Sellers (c) Govt. (d) none of these

 

182.           Securities Transactions Tax(STT) was introduced in the year

 

(a)    2004-05 (b) 2005-06 (c) 2006-07 (d) 2007-08

 

183.           The first state to introduce VAT was

 

(a)    Bihar (b) Orissa (c) Haryana (d) Kerala

 

184.           The VAT was first introduced in the year

 

(a)    2003 (b) 2004 (c) 2005 (d) 2006

 

185.           ----------- is the process of replacing maturing securities with new securities.

 

(a)    Repudiation (b) Refunding (c) Conversion (d) Capital levy

 

186.           ---------- is a special type of “once for all” tax on capital imposed to repay war debts.

 

(a)    Repudiation (b) Refunding (c) Conversion (d) Capital levy

 

187.           Capital Levy method has been advocated by

 

(a)    Keyenes (b) Musgrave (c) Ricardo (d) none of these

 

188.           The Current financial transactions of the government which are of recurring in nature is known as

 

(a)    Revenue budget (b) Capital budget (c) Surplus Budget (d) Deficit budget

 

189.           --------------- is a statement of estimated capital receipts and payments of the government over fiscal year.

 

(a)    Revenue budget (b) Capital budget (c) Surplus Budget (d) Deficit budget

 

190.           Keynes has suggested compensatory fiscal policy to counter

 

(a)    Recession (b) Boom (c) inflation (d) none of these

 

191.           Unemployment insurance is an example of

 

(a)    Built in flexibility (b) Formula Flexibility (c) Discretionary Action (d) none of these

 

192.           Integration of discretion and automation into a hybrid form of fiscal policy called

 

(a)    Built in flexibility (b) Formula Flexibility (c) Discretionary Action (d) none of these

 

193.           The existence of economic inequalities among the states is known as

 

(a)    Vertical imbalance (b) Horizontal Imbalance (c) parallel imbalance (d) none of these

 

194.           Existence of Centre State economic inequalities is known as

 

(a)    Vertical imbalance (b) Horizontal Imbalance (c) parallel imbalance (d) none of these

 

195.           When expenditure exceeds total tax revenue, it is called:

 

a) Surplus budget        b) Balanced budget

 

c) Deficit budget         d) None of these

196.             A tax levied at 5 percent on the first Rs. 10,000 of income, 10 percent on the next Rs

 

20,000 and 12 percent on the next Rs 30,000 would be:

 

a) Progressive          b) Degressive

 

c) Regressive         d) Proportional

 

197.           Which of the following taxes is the most likely to be regressive?

 

a) Sales tax on mobile phone b) Excise duties on Kerosene c) Import duties on electronic goods d) Entrainment tax

 

198.           The Benefit Principle of taxation states that tax should be paid in proportion to: [C]

 

A)  Income B) Expenditure C) Benefit D) Utility

 

199.           The most accepted theory of taxation in modern times:[D]

 

A)  Benefit theory B) Cost of service C) Financial Theory D)Ability theory

 

200.           Which one of the following is a tax base

 

(a) Income (b) utility (c) Intelligence (d) No of these

 

PUBLIC ECONOMICS

 

MULTIPLE CHOICE QUESTIONS

 

Answer Key

 

1.       (d) All of these

 

2.       (d) All of these

 

3.       © Secrecy

 

4.       (b) Dalton

 

5.       (a) Compulsory

 

6.       (c) Raising public revenue

 

7.       (d) canon of equity

 

8.       (c) Regressive

 

9.       (c) on whom it is levied

 

10.   (a) Equitable

 

11.   (c) progressive

 

12.   (a) Constant

 

13.   (a) Kaldor

 

14.   (d) Companies

 

15.   (d) Indirect tax

 

16.   (c) Corporation Tax

 

17.   (b) Octroi

 

18.   (a) A tax on special benefits

 

19.   (b) Public goods

 

20.   (b) Merit good

 

21.   (b) Non – excludable

 

22.   (a) Dalton

 

23.   (b) indirect money burden

 

24.   (b) to shift the tax burden on others

 

25.   (a) Adam Smith

 

26.   D) Classical

 

27.   C) Zero

 

28.   B) Ultimate

 

29.   C) Decreases

 

30.   D) Value

 

31.   B) Legitimate

 

32.   D) France

 

33.   C) National boundaries

 

34.   D) Keynes

 

35.   (a) Keynes

 

36.   B) Fiscal Policy

 

37.   B) Deficit

 

38.   C) Classical school

 

39.   C) Utility

 

40.   C) Horizontal

 

41.   D) Tourism

 

42.   B) Interest payments

 

43.   A) Unproductive

44.   B) Public expenditure

 

45.   B) Interest payments

 

46.   B) German

 

47.   D) Wagner

 

48.   A) Peacock and Wiseman

 

49.   C) 1st April

 

50.   C) Revenue expenditure

 

51.   D) Primary deficit

 

52.   C) 2003

 

53.   D) USA

 

54.   D) Peter Phyrr

 

55.   C) 2006-07

 

56.   C) Statutory grants

 

57.   D)Grants in aid

 

58.   President

 

59.   B) Dalton

 

60.   A) Finance Commission

 

61.   C) Keynes

 

62.   B) Keynes and Lerner

 

63.   A) Sinking fund

 

64.   B) K.C. Neogi

 

65.   A) Repayment of debt

 

66.   B) Budget

 

67.   C) Horizontal equity

 

68.   B) 1986

 

69.   B) K.N. Raj

 

70.   C) Future generation

 

71.   B) 1929-33

 

72.   D) Fiscal policy

 

73.   C) Inflation

 

74.   C) Redeemable debts

 

75.   A) Unfunded debts

 

76.   B) Floating debts

 

77.   B) Floating debts

 

78.   C) Indirect tax

 

79.   D) 1994-95

 

80.   C) N.K. Singh

 

81.   a) Maximum Social Advanatage

 

82.   B) 5 years

 

83.   a) Open market operations

 

84.   a) Public expenditure

 

85.   C) 1951

 

86.   b) Adam Smith

 

87.   a) Central Government

 

88.   a) Maximum tax revenue

 

89.   b) Recommendations for tax reforms

 

90.   b) Same person

 

91.   a) Tax evasion

92.   d) Incidence

 

93.   c) Government

 

94.   c) Functional Finance

 

95.   b) Vertical Equity

 

96.   c) Laffer curve

 

97.   a) Functional finance

 

98.   a) Adam Smith

 

99.   a) Tax sharing

 

100.                       b) Free good

 

101.                       b) Welfare state

 

102.                       d) All the above

 

103.                       b) R A Musgrave

 

104.                       a) Exclusion principle

 

105.                       d) Public goods

 

106.                       a. Entertainment tax

 

107.                       a) Relationship between tax revenue and tax rates is U‐shaped

 

108.                       c) Ministry of Finance

 

109.                       c) Ashok Mehta Committee, 1978

 

110.                       b) VAT

 

111.                       c) Ability to pay theory

 

112.                       b) 1994

 

113.                       b)1992

 

114.                       d) Direct and progressive

 

115.                       d) All of these

 

116.                       d) Wealth tax

 

117.                       D) Fiscal policy

 

118.                       a) An upward trend in public expenditure

 

119.                       (A) Principle of sound finance

 

120.                       (C) Division of economic functions and resources among different layers of Govt.

 

121.                       (B) Old Age Security

 

122.                       (C) Revenue expenditure balanced at the minimum level

 

123.                       (D) All the above

 

124.                       (B) economic development

 

125.                       (C) Social efficiency is not achieved

 

126.                       (A) Some people cannot be prevented from consuming it

 

127.                       (B) public revenue

 

128.                       (B) Income

 

129.                       (A) Direct taxes

 

130.                       (A) Public expenditure in excess of public revenue

 

131.                       (A) Modified value added tax

 

132.                       (D) expenditure tax

 

133.                       (D) Assist the Planning Commission in making 5 year plans

 

134.                       (D) All the above

 

135.                       (B) The resources transfer to the State

 

136.                       (D) Centre‐State financial relations

 

137.                       (A) Fiscal deficit‐ Interest

 

138.                       (C)Central Government

 

139.                       (D) All the above

140.                       (B) Employment

 

141.                       (C) Non‐Plan Expenditure

 

142.                       d) All the above

 

143.                       (A) 3rd State Finance Commission

 

144.                       B) Arthur Laffer

 

145.                       (D) All the above

 

146.                       (A) Maximum

 

147.                       (c) future generation

 

148.                       (d) Findley Shirras

 

149.                       (b) to achieve personal objectives

 

150.                       (d) all of the above

 

151.                       (d) Five parts

 

152.                       A) Repudiation

 

153.                       A) 0

 

154.                       (c) both a &b

 

155.                       (b) Colin Clarke

 

156.                       (d) none of these

 

157.                       (d) none of these

 

158.                       (a) Specific tax

 

159.                       (d) tax base

 

160.                       (c) GST

 

161.                       (b) 2017

 

162.                       (d) France

 

163.                       (c) 1954

 

164.                       (b) compulsory

 

165.                       (a) Voluntary debt

 

166.                       (c) internal debt

 

167.                       (b) Public good

 

168.                       (c) Merit good

 

169.                       (c) R A Musgrave

 

170.                       (a) 1959

 

171.                       (c) Merit good

 

172.                       (c) Displacement effect

 

173.                       (b) 25 %

 

174.                       (d) Constant

 

175.                       (d) Mansfield

 

176.                       (b) Physiocrats

 

177.                       (b) Sellers

 

178.                       (a) Buyers

 

179.                       (c) both a & b

 

180.                       (a) Buyers

 

181.                       (b) Sellers

 

182.                       (a) 2004-05

 

183.                       (c) Haryana

 

184.                       (a) 2003

 

185.                       (b) Refunding

 

186.                       (d) Capital levy

 

187.                       (c) Ricardo

188.                       (a) Revenue budget

 

189.                       (b) Capital budget

 

190.                       (A) Recession

 

191.                       (a) Built in flexibility

 

192.                       (b) Formula Flexibility

 

193.                       (b) Horizontal Imbalance

 

194.                       (a) Vertical imbalance

 

195.                       (a) Surplus budget

 

196.                       (a) Progressive

 

197.                        b) Excise duties on Kerosene

 

198.                       C) Benefit

 

199.                       D)Ability theory

 

200.                       (a) Income

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November 07, 2020

Finance, Incentive Exam