Prev 1 2 3 4 5 Next
1. This ‘ Annual Financial Statement’ constitutes the main _________ document of the government.
A. Expenditure
B. Report
C. Economy
D. Budget
ANSWER: D.Budget
SOLUTION :Annual Financial Statement is the main Budget document and is commonly referred to as the Budget Statement.
2. The receipts and expenditure that relate to the current financial year only are included in the revenue account called ________.
A. Capital Budget
B. Revenue Budget
C. Static Budget
D. Variance Budget
ANSWER:B.Revenue Budget
SOLUTION:
A budget document that deals with the revenue receipts (income) and revenue expenditure (expenses) of the government for a specific financial year is called the “Revenue budget.”
3. The receipts and expenditure that concern the assets and liabilities of the government into the capital account is called _______.
A. Capital budget
B. Revenue budget
C. Static budget
D. Variance budget
ANSWER : A.Capital budget
SOLUTION:
All those receipts of the government which create liability or reduce financial assets are termed as capital receipts.
4. Which of the following statements is true about the primary deficit in a government’s budget?
A. The primary deficit is zero when the revenue deficit is zero
B. The primary deficit is zero when the net interest payments are zero
C. The primary deficit is zero when the fiscal deficit is zero
D. The primary deficit is zero when the fiscal deficit is equal to the interest payment
ANSWER: D.The primary deficit is zero when the fiscal deficit is equal to the interest payment
SOLUTION:
The primary deficit is zero when the fiscal deficit is equal to the interest payment.
5. What is the duration of a financial year?
A. October 1st to September 30th
B. April 1st to March 30th
C. January 1st to December 30th
D. None of the above
ANSWER: B.April 1st to March 30th
SOLUTION:
A Financial Year (FY) is the 12 month period between 1 April and 31 March – the accounting year in which you earn an income.
6. Which of the following statements about the capital budget is accurate?
A. The capital budget consists of direct and indirect tax
B. The capital budget consists of capital expenditure and capital receipts
C. The capital budget consists of revenue expenditure and revenue receipts
D. The capital budget consists of direct taxes
ANSWER: B.The capital budget consists of capital expenditure and capital receipts
SOLUTION:
The capital budget consists of capital expenditure and capital receipts
7. Which of the following statements describes the function of a budget?
A. It is a description of the income and expenditure of a government
B. It is a document containing details of the economic policy of a government
C. It is a description of the programs of the government
D. All of the above
ANSWER: D.All of the above
SOLUTION :
All of the above
8. Which of the following statements is true about an unbalanced budget?
A. In an unbalanced budget, the expenditure is relatively higher than income
B. In an unbalanced budget, the income is greater than the expenditure
C. In an unbalanced budget, the deficit gets covered either by loans or by printing notes
D. Only a and c are correct
ANSWER:D.Only a and c are correct
SOLUTION:
In an unbalanced budget, the expenditure is relatively higher than income & In an unbalanced budget, the deficit gets covered either by loans or by printing notes.
9. What is the name of the process under which the government starts to sell its securities to the private sector?
A. Disinvestment
B. Monetary expansion
C. Open market operations
D. All of the above
ANSWER: A.Disinvestment
SOLUTION:
When the government offers a stake in its enterprise to private investors, it is known as disinvestment.
10. Which of the following items is an example of capital expenditure undertaken by the government?
A. Subsidies and defence services expenditure
B. Construction of roads and repayment of loans
C. Both a and b are correct
D. Both a and b are incorrect
ANSWER: B.Construction of roads and repayment of loans
SOLUTION:
Construction of roads and repayment of loans