Free Understanding the Budget 02 Practice Test - 12th Grade - Commerce
Question 1
Service tax is an example of
Direct tax
Indirect tax
Corporate tax
None of the above
SOLUTION
Solution : B
Service tax which is applied to the sales of services is an indirect tax.
Question 2
Economic services of Railway and Postal Services provided by the government are covered by
Plan Capital Expenditure
Non-Plan Capital Expenditure
Revenue Expenditure
Both A and B
SOLUTION
Solution : B
Economic services of Railway and Postal Services provided by the government are covered by Non-Plan Capital Expenditure.
Question 3
The non-tax revenue in the following is
Export duty
Import duty
Dividends
Excise
SOLUTION
Solution : C
Out of the given options, dividend falls under the non-tax revenue of the government.
Question 4
The direct tax is collected directly from
The producers on goods produced
The sellers on good sold
The buyers of goods
The income earners
SOLUTION
Solution : D
The direct tax is collected directly from the income earners.
Question 5
Which one of the following is a combination of direct taxes?
Excise duty and Wealth tax
Service tax and Income tax
Excise duty and Service tax
Wealth tax and Income tax
SOLUTION
Solution : D
Wealth tax and income tax is a combination of direct taxes. Other options consist of direct tax and indirect tax.
Question 6
Which of the following is not a revenue receipt?
Recovery of loans
Foreign grants
Profits of public enterprises
Wealth tax
SOLUTION
Solution : A
Recovery of loans either create a liability or cause a reduction in the assets of the government. Therefore, they are capital receipts. Other options are revenue receipts.
Question 7
Which of the following sources of receipts in government budget increases liabilities?
Direct taxes
Recovery of loans
Borrowing
Dividend from public sector undertakings
SOLUTION
Solution : C
Out of the given options, borrowings increase the liabilities as the government is obliged to repay the borrowed funds.
Question 8
Which of following is a direct tax?
Corporate tax
Entertainment tax
Excise duty
Service tax
SOLUTION
Solution : A
Corporate tax is a direct tax. Entertainment tax, excise duty and service tax are indirect taxes.
Question 9
Which of the following is a source of capital receipt?
Foreign donations
Dividends
Disinvestment
Indirect taxes
SOLUTION
Solution : C
The receipts obtained from the sale of shares in Public Sector Undertakings is referred to as disinvestment. It is a source of capital receipt.
Question 10
Which of the following is a non-tax receipt?
Gift tax
Sales tax
Donations
Excise duty
SOLUTION
Solution : C
Non-tax revenue or non-tax receipts refer to the government revenues which are not generated from taxes. Out of the given options, the donation is a non-tax receipt.