JAIIB AFM - Module D - Questions

JAIIB OCTOBER | 2100 MCQs | AFM Module A | Class 4
Module D 01 : Class - 1/5
By - Mahesh Sir
Q. Section 80C is one of the most popular and favourite
sections amongst taxpayers as it allows them to reduce
taxable income by making tax-saving investments or
incurring eligible expenses. What are the Eligible
investments for tax deductions u/s 80C?
A. Life insurance premium

B. Public Provident Fund
C. Equity Linked Saving Schemes
D. All the above
ANS : D
Deductions U/S 80C
Investments in Provident Funds such as EPF, PPF, etc.,

payment made towards life insurance premiums, Equity
Linked Saving Schemes, payment made towards the
principal sum of a home loan, NSC, etc.
Q. The deduction is covered under 80QQB of the Income Tax
Act,1961 included in Royalty Income is_______.
A. Any Income earned by an author for practicing his profession

B. Any Income earned as a lump sum payment for assignment of
any of his interests in the copyright of any book based on
literary, artistic or scientific in nature or of royalty or copyright
fees for author’s book
C. Any Income received as advance payment of royalties/
copyright fees
D. All the above
ANS : D
Amounts Included in Royalty Income
 Any Income earned by an author for practicing his

profession
 Any Income earned as a lump sum payment for
assignment (or grant) of any of his interests in the
copyright of any book based on literary, artistic or
scientific in nature or of royalty or copyright fees for
author’s book
 Any Income received as advance payment of
royalties/ copyright fees (amount which is non-
refundable)
Under section 194A, the rate of TDS on premature deduction
(amount of withdrawal is more than 50,000) from Employees
Provident Fund is ______.
A. 5%
B. 10%
C. 15%
D. 20%
ANS : B
TDS needs to be deducted @ 10% in case of premature
withdrawal from EPF before the expiry of 5 years of
service (except termination case, ill health) or where he
fails to apply for transfer of account to new employer.
What is the threshold limit to deduct TDS @10% U/s 194A
(interest earned on fixed deposits) for individuals other
than senior citizens?
A. 10000
B. 20000
C. 30000
D. 40000
ANS : D
The threshold limit is 40,000. Means if an individual earns
MORE THAN 40,000 from interest on FD, then TDS @10%
will be deducted.
50,000 is the limit for senior citizens.

Q. What are the maximum exemptions limit under
section 80C of the Income Tax Act,1961?
A. Rs 50,000
B. Rs 1,00,000
C. Rs 1,50,000
D. Rs 5,00,000
ANS : C
Deductions U/S 80C
 It allows a maximum deduction of Rs 1.5 lakh

every year from the taxpayer's total income.
 The benefit of this deduction can be availed by

Individuals and HUFs.
 Companies, partnership firms, and LLPs
cannot avail the benefit of this deduction.
section 80QQB of the Income Tax Act,1961?
A. Rs 50,000
B. Rs 1,00,000
C. Rs 3,00,000
D. Rs 5,00,000
ANS : C
Deduction available will be lower of the following;
 Rs 3 lakhs or
 The amount of royalty income received

Which of the following statements about direct and
indirect taxes is correct?
A. Direct taxes can be shifted from one individual to

another, while indirect taxes are paid directly by the
taxpayer.
B. Indirect taxes are imposed only on goods and services,
while direct taxes are imposed on income, profit, or
revenue.
C. Direct taxes can be assigned to another person for
payment, while indirect taxes cannot.
D. With the implementation of goods and services tax
(GST), direct taxes have replaced all forms of indirect
taxes.
ANS : B
 Direct taxes are taxes imposed directly on a taxpayer and are
required to be paid to the government. These taxes are not
transferable, meaning an individual cannot pass or assign
another person to pay the taxes on their behalf. Examples of
direct taxes include income tax, corporate tax, and property tax.
 Indirect taxes, on the other hand, are taxes levied on goods and
services rendered by the taxpayer. Unlike direct taxes, indirect
taxes can be shifted from one individual to another. The burden
of these taxes can be passed on to the consumer or another
party involved in the supply chain. Examples of indirect taxes
prior to the implementation of goods and services tax (GST)
included service tax, sales tax, value-added tax (VAT), central
excise duty, and customs duty.
Q. Which of the following conditions to be satisfied for tax
benefits earned under 80QQB of the Income Tax Act,1961 in
Royalty Income is/are_______.
A. Individual claiming the deduction must be a resident in

India or resident but not ordinarily resident in India.
B. Individual must have authored or co-authored a book that
falls under the category of literary.
C. Individual must file his income tax return to claim the
deduction.
D. All the above
ANS : D
Q. Section 80U offers tax benefits if an individual suffers a
disability, while Section ________ offers tax benefits if an
individual taxpayer’s dependent family member(s) suffers
from a disability.
A. Section 80 UA
B. Section 80 UD
C. Section 80 DD
D. Section 80 DU
ANS : C
Section 80U & 80DD
 Section 80U offers tax benefits if an individual

suffers a disability, while Section 80DD offers tax
benefits if an individual taxpayer’s dependent
family member(s) suffers from a disability.
 A deduction of Rs. 75,000 is allowed for people

with disabilities, and Rs. 1,25,000 deduction for
people with severe disability.
What is the key difference between the financial year (FY)
and assessment year (AY)?
A. The financial year is the year in which income is

assessed and taxed, while the assessment year is the
year in which income is earned.
B. The financial year is the year in which income is
earned, while the assessment year is the year in which
income is assessed and taxed.
C. The financial year and assessment year are the same
and can be used interchangeably.
D. The financial year and assessment year are unrelated
to income taxation.
ANS : B
The financial year is indeed the year in which income is
earned, expenses are incurred, and financial transactions
take place.
On the other hand, the assessment year is the year

following the financial year, in which the income earned
during the financial year is assessed and taxed.
Q. Under Section 80U, disability has been defined as
one of the following:
A. Blindness
B. Hearing impairment
C. Mental illness
D. All the above
ANS : D
Q. Which of the following is/are requirements to claim
deductions Under Section 80U?
A. There isn’t any documentation requirement apart from the certificate

certifying the disability from a recognized medical authority in Form 10-IA
B. There’s no need of producing bills for the cost incurred for the pursuance
of treatment or such other expenses.
C. One must submit the medical certificate indicating the disability together
with the income tax returns as per Section 139 for the relevant AY.
D. All the above
ANS : D
Q. Royalties received against a Patent comes under which
section of the Income Tax Act 1961?
A. Sec 80 QQB
B. Sec 80 U
C. Sec 80 RRB
D. Sec 80 TTA
ANS : C
Deductions under Sec 80RRB
 One can claim a deduction of up to Rs. 3.00 Lakhs

against royalty payments.
 Only original patent holders can claim the deduction
under Section 80RRB.
 This deduction is only available for resident individuals
i.e. HUF or Non-residents cannot claim this
Q. Section 80TTA of the Income Tax Act, 1961 provides a
deduction of Rs _______ on interest received on saving
account.
A. Rs 5,000
B. Rs 10,000
C. Rs 20,000
D. Rs 50,000
ANS : B
Deductions under Sec 80TTA
Section 80TTA of the Income Tax Act, 1961 provides a

deduction of up to Rs 10,000 on the income earned from
interest on savings account made in a bank, co-operative
society or post office.
Q. Interest income is allowed as deduction Under Section
80TTA;
A. Interest from fixed deposits

B. Interest from recurring deposits
C. Any other time deposits
D. All the above
ANS : D
Which of the following statements regarding Tax Deducted at
Source (TDS) is correct?
A. TDS is a system where the individual or entity receiving the

payment deducts a certain amount of tax and sends it
directly to the Central Government.
B. TDS ensures that the payer receives the correct tax credit
for the amount already deducted from their income.
C. TDS is a system where the individual or entity responsible
for making the payment deducts a certain amount of tax
and sends it directly to the Central Government.
D. TDS is a system where the individual or entity receiving the
payment claims credit for the deducted amount.
ANS : C
Tax Deducted at Source (TDS) is a system where the individual
or entity responsible for making a payment deducts a certain
amount of tax from the payment and sends it directly to the
Central Government.
The recipient of the payment, whose income tax has been

deducted at the source, can claim credit for the deducted
amount. This ensures that the recipient receives the correct
tax credit for the amount already deducted from their income.
Under which head of income do we show income from
lotteries?
A. Income from house property

B. Income from capital gain
C. Income from salaries
D. Income from other sources
ANS : D
Income from lotteries ,winning from horse race and
crossword puzzles are shown in 5th head of income ie-”
income from other sources”.

When the supply of goods happens between two states,
what kind of sales will it be called and what kind of GST
would be applicable upon it?
A. Inter-state sales, IGST

B. Intra-state sales, CGST & SGST
C. Inter-state sales, CGST & SGST
D. Intra-state sales, IGST
ANS : A
When the supply of goods or services is between 2 states,
it is called Inter state sales transaction. IGST is collected in
case of inter-state sales.

Which tax is NOT clubbed in GST?
A. Central Excise duty

B. Central Sales tax
C. VAT
D. Corporation Tax
ANS : D
GST is the single tax applied on the product life cycle of
the goods and services, which are classified on the basis
of HSN codes. GST is an Indirect tax. Central Sales tax, VAT,
and Central excise duty are all included in GST.
Corporate tax is a direct tax, and hence not included in

GST.
By - Mahesh Sir
Q. What is the tax rate of GST applicable on
services offered by banking companies?
(1) 15%
(2) 12%
(3) 18%
(4) 5%
● Prior to the introduction of the GST, banking services were
subject to a 15% Service Tax. In contrast, under the GST, the
rate is now 18%. Due to the increased tax burdens, the
ultimate customers of these banking institutions must pay
the additional fees associated with banking services,
including:
● Transaction Costs: When one withdraws cash from an ATM,
we incur transaction fees that one must pay to the bank. It
was raised from 15% to 18%.
● Loans: Under GST, loans are subject to an 18% tax.
● Various services: The GST tax rate for banking services such
as locker facilities, tax payment, billing, and purchasing, etc.
is 18%.
Q. If the tax collector, a person who is responsible for
collecting tax, didn’t collect taxes and didn’t pay
taxes before or on the due dates, he is liable to pay
an interest of ______ per month.
(1) 1%
(2) 20%
(3) 15%
(4) 4%
● Tax Collected at Source represents the tax that is collected
from the buyer by the seller at the time of sale.
● The tax collector is responsible to pay an interest of 1%

per month if he/she didn’t collect taxes or didn’t pay it to
the government before the due date.
● A tax collector has to file a form of quarterly TCS return in

respect of taxes collected by him in that particular quarter.
Under section 194A, the rate of TDS on premature
deduction (amount of withdrawal is more than 50,000)
from Employees Provident Fund is ______.
A. 5%
B. 10%
C. 15%
D. 20%
ANS : B
TDS needs to be deducted @ 10% in case of
premature withdrawal from EPF before the expiry
of 5 years of service (except termination case, ill
health) or where he fails to apply for transfer of
account to new employer.

lotteries?

ANS : D

Q. Fill in the blanks:
Tax deduction for health insurance premiums can

be claimed for a policy bought by a person for
himself, his/her spouse, and their dependent
children under Section ___(I)___ of the Income Tax
Act upto a limit of ___(II)___ in a financial year.
(1) (I) - 80C; (II) - 50,000

(2) (I) - 80D; (II) - 50,000
(3) (I) - 80C; (II) - 25,000
(4) (I) - 80D; (II) - 25,000
Under Section 80D, Individuals/HUF taxpayers
can avail of the deduction for the insurance
premium payments made for:
● Self
● Spouse
● Dependant children
● Parents
This deduction is not available for other entities.

The maximum deduction allowed under Section
80D is Rs. 25,000 in a financial year, but the same
is Rs. 50,000 in the case of senior citizens.
For the business (of Sale of Goods) operating in
normal category states, the threshold limit for GST
registration is Rs. ______.
A. 5 Lakhs
B. 10 Lakhs
C. 20 Lakhs
D. 40 Lakhs
ANS : D
If the turnover of business (of sale of goods) exceeds Rs 40
lakhs then it would be mandatory to apply for GST
registration within 30 days.

A service provider who is serving within the same
state is required to apply for a GST number if his
turnover exceeds _______.
A. 5 Lakhs
B. 10 Lakhs
C. 20 Lakhs
D. 40 Lakhs
ANS : C
Every serviceman who is serving within the same state is
required to apply for a mandatory GST registration
number if his turnover exceeds Rs 20 lakhs (in normal
category states) and Rs 10 lakh (for special category
states).

C. VAT
D. Corporation Tax
ANS : D
GST is the single tax applied on the product life cycle of
the goods and services, which are classified on the basis
of HSN codes. GST is an Indirect tax. Central Sales tax, VAT,
and Central excise duty are all included in GST.
Corporate tax is a direct tax, and hence not included in

GST.
What will be the contribution margin if sales
price of one unit of product is 500 and the
variable cost is 350?
A. 850
B. 500
C. 350
D. 150
ANS : D
Contribution is quite significant in marginal costing. The
contribution margin can be expressed in either gross or
per-unit terms. After deducting the variable element of
the firm's costs, it indicates the extra money gained for
each product/unit. The contribution margin is computed
as the selling price per unit, minus the variable cost per
unit.
Therefore, contribution margin will be 500-350 = 150
Break-even analysis helps
A)The management to get a clear idea of the minimum level of

activity below which it cannot afford to operate.
B)To compare the relative profitability of different products.
C)The management to decide if a particular product or
component is to be outsourced.
D) All of the above
ANS : D
The estimated sales of Company XYZ during 2022-
2023 are 90 Lakhs and its break-even sales level is
40 lakhs. The margin of safety will be?
A. 47.25 %
B. 50%
C. 55.55%
D. 57.55%
ANS : C
The difference between the estimated/budgeted level of
operations and the break even level represents the cushion
available to the business to sustain operations in times of
difficulty. This is known as the Margin of Safety.
Margin of safety =[(Estimated sales-Break even

sales)/Estimated sales]*100
=[(90-40)/90]*100
=(50/90)*100
=55.55%
Hyundai India manufacturing cars has fixed costs of
Rs 2 Lakhs and variable cost of Rs 40,000 per car.
Sales price of the car is Rs 80,000. During the year,
it sold 30 cars. What is the profit of the company
during the year?
A. 3000000
B. 2000000
C. 1000000
D. 500000
ANS : C
Using Cost-volume-profit (CVP) analysis, profit will be
determined.
Profit=(S*N)-[F+(V*N)]
Where,
P=Profit
S=Sales value per unit
N=Number of units sold
F=Fixed costs
V=Variable cost per unit
P=(80000*30)-[2,00,000+(40000*30)]
=24,00,000-[2,00,000+12,00,000]
=24,00,000-14,00,000
=10,00,000
Q. Company X is a construction company specializing in commercial
building projects. They recently secured a contract to construct a
large office complex for a client. The contract is expected to span two
years and has a total estimated revenue of Rs. 10 crores.
The estimated total project cost is Rs. 8 crores. During the first year of
the project, Company X incurred costs of Rs. 4 crores, completing
significant portions of the construction work. At the end of the first
year, the company wants to determine the profit recognized on the
incomplete contract using the percentage of completion method.
(1) Rs. 2 crores (2) Rs. 4 crores

Solution (4)
𝐂𝐨𝐬𝐭 𝐨𝐟 𝐰𝐨𝐫𝐤 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐝

Profit till date= × Estimated contract profit
𝐓𝐨𝐭𝐚𝐥 𝐞𝐬𝐭𝐢𝐦𝐚𝐭𝐞𝐝 𝐜𝐨𝐧𝐭𝐫𝐚𝐜𝐭 𝐜𝐨𝐬𝐭
𝐑𝐬.𝟒 𝐜𝐫𝐨𝐫𝐞𝐬
Profit till date= × 10 crores = 5 crores
𝐑𝐬.𝟖 𝐜𝐫𝐨𝐫𝐞𝐬
Q. A company set the standard material cost per unit for a
product at Rs. 20. During a production run of 2,000 units, the
company used 40,000 units of material. The actual material
cost per unit was Rs. 19.50. Calculate the material cost
variance assuming that the total units of inputs were the
same as estimated.
(1) Rs. 10,000 (Profit)
(2) Rs. 10,000 (Loss)
(3) Rs. 20,000 (Profit)
(4) Rs. 20,000 (Loss)
Solution (3)
The standard cost estimate = 40,000 × Rs. 20 =
8,00,000
The actual cost = Rs. 19.50 × 40,000 = 7,80,000
Variance = 8,00,000 – 7,80,000 = 20,000
The variance is favourable as the actual cost is less
than the standard cost estimate.
Q. ABC Corporation reports the following
information on its balance sheet as of December 31,
2022:
Total Assets: Rs. 500,000

Total Liabilities: Rs. 200,000
What is the owner’s equity?
(1) Rs. 100,000

(2) Rs. 200,000
(3) Rs. 300,000
(4) Rs. 400,000
The Balance Sheet Equation is given by:
Assets = Liabilities + Owner's Equity
5,00,000=2,00,000+Owner's equity
Owner’s equity = 3,00,000
Q. Variance in costing refers to the difference between the standard
or expected costs and the actual costs incurred in the production or
manufacturing process. It is used as a measure to assess and analyze
the deviations or discrepancies between planned costs and the
actual costs realized in a given period.
Which of the following is an accounting treatment of variances?
I. Transferring to costing P&L A/c

II. Transferring to reserve A/c
III. Reporting the variances as extraordinary items on the income
statement
(1) Only I (2) I & II

(3) I & III (4) I, II & III
Variance in costing refers to the difference between
the standard or expected costs and the actual costs
incurred in the production or manufacturing
process. Normally, the cost accounting method
differs from company to company, however, some
ways through which variance can be dealt with in
any one of the following ways:
(1) Transferring to costing P&L A/c

(2) Transferring to reserve A/c
(3) Allocating of variances to finished goods, WIP,
and cost of sales account
Q. Process costing is a method of cost accounting used to
determine the cost of producing a product or service in
industries where production occurs in a continuous
flow or through a series of sequential processes.
Which of the following is NOT a type of process costing?
(1) LIFO costs

(2) FIFO costs
(3) Weighted Average Costs
(4) Standard Costs
There are three types of process costing:
(1) Weighted Average Costs – It is the simplest method as
it involves adding together all costs and assigning them
to the product.
(2) Standard Costs – Instead of assigning actual costs,
standard costs are assigned to the goods and services.
(3) FIFO costs – In the FIFO method, the costs incurred
during the current period are treated separately from
the costs carried over from the previous period. It is
much more complex in calculation than other methods.
Q. A manufacturing company produces a single
product, Product X, using a single production
process. The following information is available for
the company's production and cost data:
Total fixed costs: Rs. 50,000

Variable costs per unit: Rs. 20
Total units produced: 2,000 units
Which of the following methods of costing will be
appropriate in this case?
(1) Job Costing (2) Batch Costing

(3) Process Costing (4) Unit Costing
● If a company produces a single type of product
through continuous production activity, the
appropriate method of costing will be Unit
Costing or Single-output costing.
● In this case, a company only produces a single

product, Product X, and hence unit costing
method will be appropriate.
process. The following information is available
for the company's production and cost data:

If the selling price per unit of Product X is Rs. 40,

what is the total profit earned from producing
and selling 2,000 units?
(1) 5000 (2) 10,000

(3) 12,000 (4) 15,000
Total Cost = 50,000 + 2000 × 10 = 50,000 + 20,000 = 70,000
Total Revenue from sales = 2000 × 40 = 80,000
Total Profit = 80,000 – 70,000 = 10,000

Q. The ________ is a buffer amount below
which a business will no longer remain
profitable.
(1) margin of safety

(2) profit margin
(3) gross profit
(4) variable cost
● The margin of safety refers to the cushion or buffer
amount below which a business's profitability is at risk.
● It signifies the level of sales or revenues above the break-
even point, ensuring that the business remains profitable.
● This financial measure is crucial for management as it helps
assess the potential risks associated with fluctuations in
sales.
● By monitoring the margin of safety, management can
proactively adjust marketing and promotional strategies to
boost sales and maintain a comfortable margin above the
break-even point.
By - Mahesh Sir
Q. Calculate the cost of equity from the
following information:
Proportion of equity = 50%

WACC = 17.5%
Cost of debt = 12%
(1) 20%
(2) 19%
(3) 25%
(4) 23%
Cost of equity
WACC – Cost of debt × proportion of debt
=
proportion of equity
17.5 − (0.5×12)
= = 23%
0.5
Q. ABC Corporation reports the following
information on its balance sheet as of
December 31, 2022:
Total Assets: Rs. 500,000

Total Liabilities: Rs. 200,000
What is the owner’s equity?
(1) Rs. 100,000

(2) Rs. 200,000
(3) Rs. 300,000
(4) Rs. 400,000
The Balance Sheet Equation is given by:
Assets = Liabilities + Owner's Equity
5,00,000=2,00,000+Owner's equity
Owner’s equity = 3,00,000

If the selling price per unit of Product X is Rs. 40,

what is the total profit earned from producing
and selling 2,000 units?
(1) 5000 (2) 10,000

(3) 12,000 (4) 15,000
Total Cost = 50,000 + 2000 × 10 = 50,000 + 20,000 = 70,000
Total Revenue from sales = 2000 × 40 = 80,000
Total Profit = 80,000 – 70,000 = 10,000

Q. Process costing is a method of cost accounting used to
determine the cost of producing a product or service in
industries where production occurs in a continuous
flow or through a series of sequential processes.
Which of the following is NOT a type of process costing?
(1) LIFO costs

(2) FIFO costs
(3) Weighted Average Costs
(4) Standard Costs
There are three types of process costing:
(1) Weighted Average Costs – It is the simplest method as
it involves adding together all costs and assigning them
to the product.
(2) Standard Costs – Instead of assigning actual costs,
standard costs are assigned to the goods and services.
(3) FIFO costs – In the FIFO method, the costs incurred
during the current period are treated separately from
the costs carried over from the previous period. It is
much more complex in calculation than other methods.
Q. The Board of Financial Supervision (BFS) was established in
November 1994 as a committee of the Central Board of
Directors. Its purpose is to conduct comprehensive supervision
of the financial sector, which includes commercial banks,
financial institutions, and non-banking finance companies.
Which of the following statements is correct in this context?
(1) BFS meets once in every three months.

(2) BFS meets once every year.
(3) BFS meets once in every six months.
(4) BFS meets once in every month.
● The Board typically holds monthly meetings where it
discusses inspection reports and other matters related to
supervision presented by the supervisory departments.
● The BFS, with the involvement of the Audit Sub-
Committee, strives to enhance the effectiveness of
statutory audits and internal audits in banks and financial
institutions. The Audit Sub-Committee is composed of the
Deputy Governor as the chairperson and two Directors of
the Central Board as members.
Q. Calculate the cost of debt if a company has
issued 10% debentures at par and the tax
rate is 50%.
(1) 10%
(2) 20%
(3) 2%
(4) 5%
The formula for calculating cost of Long
Term debt at par is:
Kd=(1-t)R
Kd - Cost of long-term debt
t - Marginal Tax Rate
R - Debenture Interest Rate
Kd=(1-0.5)10=5%
Q. Company X produces and sells widgets. During a specific
period, the company incurred the following costs:
Direct materials: Rs. 50,000

Direct labour: Rs. 30,000
Variable manufacturing overhead: Rs. 20,000
Fixed manufacturing overhead: Rs. 15,000
Units produced: 1,000 widgets
Units sold: 800 widgets
Using absorption costing, what is the cost per unit for the
widgets produced?
(1) Rs. 115 (2) Rs. 105
(3) Rs. 125 (4) Rs. 135
Under absorption costing, all the costs (fixed and
variable) are allocated to the goods.
Total Manufacturing Costs = 50,000 + 30,000 +
20,000 + 15,000 = 1,15,000
Cost per unit is decided after dividing the total
manufacturing costs by the total units produced.
𝟏,𝟏𝟓,𝟎𝟎𝟎
Cost per unit = = 𝟏𝟏𝟓
𝟏𝟎𝟎𝟎

Which of the following methods of costing will be
appropriate in this case?
(1) Job Costing (2) Batch Costing

(3) Process Costing (4) Unit Costing
● If a company produces a single type of product
through continuous production activity, the
appropriate method of costing will be Unit
Costing or Single-output costing.
● In this case, a company only produces a single

product, Product X, and hence unit costing
method will be appropriate.
Q. The ________ is a buffer amount below
which a business will no longer remain
profitable.
(1) margin of safety

(2) profit margin
(3) gross profit
(4) variable cost
● The margin of safety refers to the cushion or buffer
amount below which a business's profitability is at risk.
● It signifies the level of sales or revenues above the break-
even point, ensuring that the business remains profitable.
● By monitoring the margin of safety, management can
proactively adjust marketing and promotional strategies to
boost sales and maintain a comfortable margin above the
break-even point.
Q. The Board of Financial Supervision (BFS) was established in
November 1994 as a committee of the Central Board of Directors. Its
purpose is to conduct comprehensive supervision of the financial
sector, which includes commercial banks, financial institutions, and
non-banking finance companies.
The BFS is chaired by the _______.
(1) Governor of the Reserve Bank of India (RBI)

(2) Finance Minister of India
(3) Chairman of the Central Board of Directors
(4) CEO of the Securities and Exchange Board of India (SEBI)
● BFS is chaired by the Governor of the Reserve Bank of India,
who leads the discussions and decision-making processes
regarding financial supervision policies and practices.
● The BFS is responsible for formulating policies related to
financial supervision, monitoring the financial health and
performance of regulated entities, assessing risks, and
implementing measures to mitigate those risks.
● It collaborates closely with the Reserve Bank of India (RBI)
and provides guidance to the RBI on matters related to
financial supervision.
The Cost Accounting Standards Board(CASB) has
issued how many cost accounting standards as of
now?
A. 9
B. 24
C. 32
D. 104
In developing Cost Accounting Standards (CAS), the IcoAI
benchmarked Indian practices against worldwide practices and
chose the finest practices from a wide range of practices
accessible globally. As a result, the CASs boost cost accounting
practises and knowledge in India. To achieve uniformity and
consistency in the classification, measurement, and assignment
of cost to products and services, the ICoAI established the Cost
Accounting Standards Board (CASB) with the goal of developing
cost accounting standards. Till date, the Institute/Board has
released 24 Cost Accounting Standards.
Q. ABC Construction Company is considering the construction of a new
highway project that connects major cities. The project involves
significant investment in land acquisition, construction equipment, labor,
and materials. The company expects the highway to generate toll revenues
over a period of 10 years
To assess the financial feasibility of the project, ABC Construction

Company performs an analysis, which will help identify the impact of
changes in key variables such as construction costs, traffic volume, toll
rates, and economic factors on the project. The goal is to evaluate the
project's viability under different scenarios and mitigate risks associated
with uncertain factors.
This analysis is termed as _________.

(1) Cost-Benefit Analysis (2) Risk Analysis
(3) Feasibility Analysis (4) Sensitivity Analysis
Sensitivity analysis helps in understanding the project's
sensitivity to variations in variables such as construction costs,
traffic volume, toll rates, and economic factors. It provides
valuable insights into the project's financial performance and
aids decision-making.
Q. The production budget of a factory contains
the following information:
I. 1000 units of a product need to be produced in

the next month (within 24 working days)
II. Each product takes 2 hours to manufacture
III. Each worker works for 8 hours in a day
Calculate the number of workers required to

complete the job.
(1) 08
(2) 11
(3) 12
(4) 13
Total labour hours required to manufacture 1000
units of product = 1000 × 2 = 2000
𝟐𝟎𝟎𝟎
Number of workers required = = 𝟏𝟎. 𝟒𝟏 ≈ 𝟏𝟏
𝟖 × 𝟐𝟒
Which of the following items are not recorded in
cost sheet:
A)Taxes and Interest

B)Direct Expenses
C)Profit/Loss on sale of assets
A. A & B
B. A & C
C. Only B
D. A, B & C
The cost sheet is a periodic statement that is kept under the
single-output/unit cost. The frequency with which this
statement is prepared is determined by the nature of the
organisation and the costing objectives. It includes details on
material, labour, and direct expenses spent.
Taxes/interest/dividends paid, provisions and write offs, cash

discounts, profit or loss on asset sale, and other factors are
not reflected on the cost sheet.
What are the benefits of cost accounting?
A. Creates strategies during a recession or a period of

high competition.
B. evaluating actual costs against cost benchmarks or

projections
C. determining the cost of goods and services
D. All of the above

Cost accounting offers managers with decision-making
information in a variety of domains.
These are:
1)Creates strategies during a recession or a period of high
competition.
2)evaluating actual costs against cost benchmarks or projections
3)Determining the cost of goods and services
4)Management of the inventory
5)Reducing wastages of materials and other resources
6)Cost accounting helps to eliminate or reduce production of
certain products while increasing production of others.
The cost that is directly proportional to the volume of
production or the degree of activity is referred to as
A. Fixed Cost
B. Marginal Cost
C. Variable Cost
D. Historical Cost
The cost that is directly proportional to the volume
of production or the degree of activity is referred to
as variable cost.
For example: Cost of goods sold, wages, raw

materials and inputs to production.
The process costing method is suitable for which
industry?
A. Banking Industry
B. Transport Industry
C. Cement Industry
D. All the above

Process costing is more suitable for industry
producing homogeneous products and where
production is on continuous flow.
It is not suitable for industry producing

heterogeneous products like hand made articles,
because every item is unique.
Mr Ram Kumar is an accountant in a manufacturing
unit. How will you classify the salary of office staff-
Ram Kumar?
A. Factory Overhead
B. Production Overhead
C. Distribution Overhead
D. Office & administrative Overhead

Salary of office staff is not directly related to
production. It will not be classified neither in factory
overhead nor in production overheads. It will be
classified as office and administrative overhead.

If the total cost of a contract is 750 Lakhs and the
estimated profit from the contract is 150 Lakhs, the profit
on completion of work ,where cost already incurred is
250 lakhs will be?
A. 20 Lakhs
B. 50 Lakhs
C. 70 Lakhs
D. 90 Lakhs
Profit to date=(Cost of work completed/Total estimated
contract cost)*Estimated contract profit.
(250/750)*150=50 Lakhs
Note: The profit of Rs 50 Lakhs is cumulative profit to

date and not the profit for that accounting period.
Therefore, if the profit booked on this contract in the
earlier accounting period is 30 Lakhs, profit for only 20
Lakhs should be taken during the current accounting
period.
A pharmaceutical company can use which type of
costing?
A. Process Costing
B. Unit Costing
C. Job Costing
D. Batch Costing
A pharmaceutical company should use batch costing
which is a kind of job costing. In this identical
products are taken as cost unit. Batch cost is
accumulated and ascertained for each batch.
Cost per unit= Total cost of batch/ total units in

batch
Financial planning helps to determine
A)Optimum level of investment and operations
B)Capital requirement for the proposed investment
C)Channels of Distribution and product pricing
D)Mix of Equity and Debt for executing the project
A. B & C Only
B. A, B & D Only
C. All are correct
D. All are incorrect
Every corporate organisation has specific goals that it strives to
achieve. Financial planning refers to the practise of determining in
advance the financial activities required to achieve these desired
goals.
Financial planning included both short term and long term
planning. Some of these are:
a)To determine optimum level of investment and operations
b)To determine capital requirement for the proposed investment
c)To determine Channels of Distribution and product pricing
d)To determine mix of Equity and Debt for executing the project
c)Estimating income and its distribution
What are the primary distinctions between cost and
management accounting?
A. Cost accounting focuses on short-term planning, whereas

management accounting focuses on both short-term and long-term
planning.
B. Cost accounting uses historical data while management
accounting uses futuristic data.
C. Scope of Cost accounting is narrow while scope of management
accounting is wider.
D. All are incorrect
Difference between cost and management accounting
1.Cost accounting is concerned with short term planning while

management accounting is concerned with both short term and
long term planning
2.Cost accounting uses historical data while management

accounting uses futuristic data
3.Scope of Cost accounting is narrow while scope of
management accounting is wider.
What are the benefits of cost accounting?
A. Creates strategies during a recession or a period of

high competition.
B. evaluating actual costs against cost benchmarks or

projections
C. determining the cost of goods and services
D. All of the above

Cost accounting offers managers with decision-making
information in a variety of domains.
These are:
1)Creates strategies during a recession or a period of high
competition.
2)evaluating actual costs against cost benchmarks or projections
3)Determining the cost of goods and services
4)Management of the inventory
5)Reducing wastages of materials and other resources
6)Cost accounting helps to eliminate or reduce production of
certain products while increasing production of others.
A. Fixed Cost
B. Marginal Cost
C. Variable Cost
D. Historical Cost
as variable cost.

Mr Ram Kumar is an accountant in a manufacturing
unit. How will you classify the salary of office staff-
Ram Kumar?
A. Factory Overhead

Salary of office staff is not directly related to
production. It will not be classified neither in factory
overhead nor in production overheads. It will be
classified as office and administrative overhead.

250 lakhs will be?
A. 20 Lakhs
B. 50 Lakhs
C. 70 Lakhs
D. 90 Lakhs
(250/750)*150=50 Lakhs

period.
costing?
A. Process Costing
B. Unit Costing
C. Job Costing
D. Batch Costing

batch
A furniture manufacturer has received order for supplying 500
wooden cupboards. The company estimates requirements of
materials at Rs 50000,labour at Rs 25000, and manufacturing
overheads at Rs 5000. As per company’s policy, the fixed/non-
manufacturing overheads are allocated at 25%of material cost.
What will be the cost of one cupboard?(Using batch costing
system)
A. Rs 350
B. Rs 225
C. Rs 150
D. Rs 185
Total variable cost of of the batch of 500 cupboards is
50000+25000+5000=Rs 80000.
Fixed overheads=25% of 50000=Rs 12500
Therefore total cost of batch is Rs 92500
Cost of one cupboard=92500/500= Rs 185

_________ is a type of job costing that is used for
relatively large jobs that take a long time to
complete.
A. Contract Costing
B. Service Costing
C. Process Costing
D. Batch Costing
Contract costing is a type of job costing that is
used for relatively large jobs that take a long
time to complete(Usually 1 year or more).
Contract costing is the major responsibility of the

accounting department in some sectors and
government contracting. Proper contract costing
is critical to earning appropriate profits, hence
this department is normally staffed by expert
accountants.
Which of the following are the features of service
costing:
A) Relates to costing of services and not goods
B) Used for performing services both internally and
externally
C) A cost unit is used to measure services provided, such
as cost per unit or cost per km.
A. Both A & B
B. Only B
C. Both B & C
D. All A, B & C
Features of service costing:
1)Relates to costing of services and not goods
2)Used for performing services both internally and
externally
3)A cost unit is used to measure services provided, such
as cost per unit or cost per km.
4)The cost of per unit of service is calculated by dividing
the total cost of a period by the number of units of
service supplied during that period.
The Manufacturing company pays Rs 500,000 to a
Chartered Accountant for doing audit of financials.
How would you classify the audit fees in costing?
A. Selling & Distribution Overhead

Audit fees is Not directly related to the production process. It
will be classified as office and administrative expenses.

When we calculate the cost after it has been
incurred, the method is popularly known as:
A. Fixed Cost
B. Standard Cost
C. Historical Cost
D. Marginal Cost
A. Only A What are the major differences between Financial
B. Only B & C Accounting and Cost Accounting?
C. Both A & C A) Financial accounting aims to provide information
D. All A, B & C to stakeholders while management accounting aims
to provide information to the management.
B) Most Transactions covered under financial
accounting are internal while in cost accounting
most transactions are external
C) Financial accounting is concerned with profits and
losses of the organization as a whole while cost
accounting is concerned with unit costs and
profitability of the organization
Some of the main differences between financial accounting and
management accounting are:
1)Financial accounting aims to provide information to stakeholders while
management accounting aims to provide information to the management.
2)Most Transactions covered under financial accounting are external while in
cost accounting most transactions are internal
3)Financial accounting is concerned with profits and losses of the
organization as a whole while cost accounting is concerned with unit costs
and profitability of the organization
4)Statements are typically prepared quarterly, semi-annually, or annually in
financial accounting.There is no such standard in cost accounting, and
reports might be issued on a daily basis.
Q. Royalties received against a Patent comes under which
section of the Income Tax Act 1961?
A. Sec 80 QQB
B. Sec 80 U
C. Sec 80 RRB
D. Sec 80 TTA
ANS : C
Deductions under Sec 80RRB
✓ One can claim a deduction of up to Rs. 3.00 Lakhs against

royalty payments.
✓ Only original patent holders can claim the deduction under
Section 80RRB.
✓ This deduction is only available for resident individuals i.e.
HUF or Non-residents cannot claim this
section 80QQB of the Income Tax Act,1961?
A. Rs 50,000
B. Rs 1,00,000
C. Rs 3,00,000
D. Rs 5,00,000
ANS : C
Deduction available will be lower of the following;
➢ Rs 3 lakhs or
➢ The amount of royalty income received

Q. The deduction is covered under 80QQB of the Income Tax
Act,1961 included in Royalty Income is_______.
A. Any Income earned by an author for practicing his profession

B. Any Income earned as a lump sum payment for assignment of
any of his interests in the copyright of any book based on
literary, artistic or scientific in nature or of royalty or copyright
fees for author’s book
C. Any Income received as advance payment of royalties/
copyright fees
D. All the above
ANS : D
➢ Any Income earned by an author for practicing his profession

➢ Any Income earned as a lump sum payment for assignment
(or grant) of any of his interests in the copyright of any book
based on literary, artistic or scientific in nature or of royalty or
copyright fees for author’s book
➢ Any Income received as advance payment of royalties/
copyright fees (amount which is non- refundable)
Under section 194A, the rate of TDS on premature deduction
(amount of withdrawal is more than 50,000) from Employees
Provident Fund is ______.
A. 5%
B. 10%
C. 15%
D. 20%
ANS : B
TDS needs to be deducted @ 10% in case of premature
withdrawal from EPF before the expiry of 5 years of
service (except termination case, ill health) or where he
fails to apply for transfer of account to new employer.
Q. Company X is a construction company specializing in commercial
building projects. They recently secured a contract to construct a
large office complex for a client. The contract is expected to span two
years and has a total estimated revenue of Rs. 10 crores.
The estimated total project cost is Rs. 8 crores. During the first year of
the project, Company X incurred costs of Rs. 4 crores, completing
significant portions of the construction work. At the end of the first
year, the company wants to determine the profit recognized on the
incomplete contract using the percentage of completion method.

Solution (4)
𝐂𝐨𝐬𝐭 𝐨𝐟 𝐰𝐨𝐫𝐤 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐝

Profit till date= × Estimated contract profit
𝐓𝐨𝐭𝐚𝐥 𝐞𝐬𝐭𝐢𝐦𝐚𝐭𝐞𝐝 𝐜𝐨𝐧𝐭𝐫𝐚𝐜𝐭 𝐜𝐨𝐬𝐭
𝐑𝐬.𝟒 𝐜𝐫𝐨𝐫𝐞𝐬
Profit till date= × 10 crores = 5 crores
𝐑𝐬.𝟖 𝐜𝐫𝐨𝐫𝐞𝐬
What is the threshold limit to deduct TDS @10% U/s 194A
(interest earned on fixed deposits) for individuals other
than senior citizens?
A. 10000
B. 20000
C. 30000
D. 40000
ANS : D
The threshold limit is 40,000. Means if an individual earns
MORE THAN 40,000 from interest on FD, then TDS @10%
will be deducted.
50,000 is the limit for senior citizens.

Q. Section 80U offers tax benefits if an individual suffers a
disability, while Section ________ offers tax benefits if an
from a disability.
A. Section 80 UA
B. Section 80 UD
C. Section 80 DD
D. Section 80 DU
ANS : C
Section 80U & 80DD
➢ Section 80U offers tax benefits if an individual suffers a

disability, while Section 80DD offers tax benefits if an
from a disability.
➢ A deduction of Rs. 75,000 is allowed for people with

disabilities, and Rs. 1,25,000 deduction for people with
severe disability.
What is the key difference between the financial year (FY)
and assessment year (AY)?
A. The financial year is the year in which income is

assessed and taxed, while the assessment year is the
year in which income is earned.
B. The financial year is the year in which income is
earned, while the assessment year is the year in which
income is assessed and taxed.
C. The financial year and assessment year are the same
and can be used interchangeably.
D. The financial year and assessment year are unrelated
to income taxation.
ANS : B
Q. Which of the following is/are requirements to claim
deductions Under Section 80U?
A. There isn’t any documentation requirement apart from the certificate

certifying the disability from a recognized medical authority in Form 10-IA
B. There’s no need of producing bills for the cost incurred for the pursuance
of treatment or such other expenses.
C. One must submit the medical certificate indicating the disability together
with the income tax returns as per Section 139 for the relevant AY.
D. All the above
ANS : D
Q. Section 80TTA of the Income Tax Act, 1961 provides a
deduction of Rs _______ on interest received on saving
account.
A. Rs 5,000
B. Rs 10,000
C. Rs 20,000
D. Rs 50,000
ANS : B
Deductions under Sec 80TTA
Section 80TTA of the Income Tax Act, 1961 provides a deduction

of up to Rs 10,000 on the income earned from interest on
savings account made in a bank, co-operative society or post
office.
Q. ABC Construction Company is considering the construction of a new
highway project that connects major cities. The project involves
significant investment in land acquisition, construction equipment, labor,
and materials. The company expects the highway to generate toll revenues
over a period of 10 years
To assess the financial feasibility of the project, ABC Construction

Company performs an analysis, which will help identify the impact of
changes in key variables such as construction costs, traffic volume, toll
rates, and economic factors on the project. The goal is to evaluate the
project's viability under different scenarios and mitigate risks associated
with uncertain factors.
This analysis is termed as _________.

(1) Cost-Benefit Analysis (2) Risk Analysis
(3) Feasibility Analysis (4) Sensitivity Analysis
Which of the following statements regarding Tax Deducted at
Source (TDS) is correct?
A. TDS is a system where the individual or entity receiving the

payment deducts a certain amount of tax and sends it
directly to the Central Government.
B. TDS ensures that the payer receives the correct tax credit
for the amount already deducted from their income.
C. TDS is a system where the individual or entity responsible
for making the payment deducts a certain amount of tax
and sends it directly to the Central Government.
D. TDS is a system where the individual or entity receiving the
payment claims credit for the deducted amount.
ANS : C
When the supply of goods happens between two states,
what kind of sales will it be called and what kind of GST
would be applicable upon it?
A. Inter-state sales, IGST

B. Intra-state sales, CGST & SGST
C. Inter-state sales, CGST & SGST
D. Intra-state sales, IGST
ANS : A
When the supply of goods or services is between 2 states,
it is called Inter state sales transaction. IGST is collected in
case of inter-state sales.


C. VAT
D. Gift Tax
ANS : D
Q. What is the tax rate of GST applicable on
services offered by banking companies?
(1) 15%
(2) 12%
(3) 18%
(4) 5%
● Prior to the introduction of the GST, banking services were
subject to a 15% Service Tax. In contrast, under the GST, the
rate is now 18%. Due to the increased tax burdens, the
ultimate customers of these banking institutions must pay
the additional fees associated with banking services,
including:
● Transaction Costs: When one withdraws cash from an ATM,
we incur transaction fees that one must pay to the bank. It
was raised from 15% to 18%.
● Loans: Under GST, loans are subject to an 18% tax.
● Various services: The GST tax rate for banking services such
as locker facilities, tax payment, billing, and purchasing, etc.
is 18%.
Q. If the tax collector, a person who is responsible for
collecting tax, didn’t collect taxes and didn’t pay
taxes before or on the due dates, he is liable to pay
an interest of ______ per month.
(1) 1%
(2) 20%
(3) 15%
(4) 4%
● Tax Collected at Source represents the tax that is collected
from the buyer by the seller at the time of sale.
● The tax collector is responsible to pay an interest of 1%

per month if he/she didn’t collect taxes or didn’t pay it to
the government before the due date.
● A tax collector has to file a form of quarterly TCS return in

respect of taxes collected by him in that particular quarter.
lotteries?

ANS : D

Q. Fill in the blanks:
Tax deduction for health insurance premiums can

be claimed for a policy bought by a person for
himself, his/her spouse, and their dependent
children under Section ___(I)___ of the Income Tax
Act upto a limit of ___(II)___ in a financial year.
(1) (I) - 80C; (II) - 50,000

(2) (I) - 80D; (II) - 50,000
(3) (I) - 80C; (II) - 25,000
(4) (I) - 80D; (II) - 25,000
Under Section 80D, Individuals/HUF taxpayers
can avail of the deduction for the insurance
premium payments made for:
● Self
● Spouse
● Dependant children
● Parents
This deduction is not available for other entities.

The maximum deduction allowed under Section
80D is Rs. 25,000 in a financial year, but the same
is Rs. 50,000 in the case of senior citizens.
For the business (of Sale of Goods) operating in
normal category states, the threshold limit for GST
registration is Rs. ______.
A. 5 Lakhs
B. 10 Lakhs
C. 20 Lakhs
D. 40 Lakhs
ANS : D
If the turnover of business (of sale of goods) exceeds Rs 40
lakhs then it would be mandatory to apply for GST
registration within 30 days.

What will be the contribution margin if sales
price of one unit of product is 500 and the
variable cost is 350?
A. 850
B. 500
C. 350
D. 150
ANS : D
Contribution is quite significant in marginal costing. The
contribution margin can be expressed in either gross or
per-unit terms. After deducting the variable element of
the firm's costs, it indicates the extra money gained for
each product/unit. The contribution margin is computed
as the selling price per unit, minus the variable cost per
unit.
Therefore, contribution margin will be 500-350 = 150
A. Fixed Cost
B. Marginal Cost
C. Variable Cost
D. Historical Cost
as variable cost.

Hyundai India manufacturing cars has fixed costs of
Rs 2 Lakhs and variable cost of Rs 40,000 per car.
Sales price of the car is Rs 80,000. During the year,
it sold 30 cars. What is the profit of the company
during the year?
A. 3000000
B. 2000000
C. 1000000
D. 500000
ANS : C
Using Cost-volume-profit (CVP) analysis, profit will be
determined.
Profit=(S*N)-[F+(V*N)]
Where,
P=Profit
S=Sales value per unit
N=Number of units sold
F=Fixed costs
V=Variable cost per unit
P=(80000*30)-[2,00,000+(40000*30)]
=24,00,000-[2,00,000+12,00,000]
=24,00,000-14,00,000
=10,00,000
250 lakhs will be?
A. 20 Lakhs
B. 50 Lakhs
C. 70 Lakhs
D. 90 Lakhs
(250/750)*150=50 Lakhs

period.
costing?
A. Process Costing
B. Unit Costing
C. Job Costing
D. Batch Costing

batch
The Manufacturing company pays Rs 500,000 to a
Chartered Accountant for doing audit of financials.
How would you classify the audit fees in costing?
A. Selling & Distribution Overhead

Audit fees is Not directly related to the production process. It
will be classified as office and administrative expenses.

When we calculate the cost after it has been
incurred, the method is popularly known as:
A. Fixed Cost
B. Standard Cost
C. Historical Cost
D. Marginal Cost

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JAIIB OCTOBER | 2100 MCQs | AFM Module A | Class 4

Module D 01 : Class - 1/5

A. Life insurance premium

Investments in Provident Funds such as EPF, PPF, etc.,

A. Any Income earned by an author for practicing his profession

 Any Income earned by an author for practicing his

50,000 is the limit for senior citizens.

 It allows a maximum deduction of Rs 1.5 lakh

 The benefit of this deduction can be availed by

Deduction available will be lower of the following;

 The amount of royalty income received

A. Direct taxes can be shifted from one individual to

A. Individual claiming the deduction must be a resident in

 Section 80U offers tax benefits if an individual

 A deduction of Rs. 75,000 is allowed for people

A. The financial year is the year in which income is

On the other hand, the assessment year is the year

A. There isn’t any documentation requirement apart from the certificate

 One can claim a deduction of up to Rs. 3.00 Lakhs

Section 80TTA of the Income Tax Act, 1961 provides a

A. Interest from fixed deposits

A. TDS is a system where the individual or entity receiving the

The recipient of the payment, whose income tax has been

A. Income from house property

crossword puzzles are shown in 5th head of income ie-”

income from other sources”.

A. Inter-state sales, IGST

it is called Inter state sales transaction. IGST is collected in

case of inter-state sales.

A. Central Excise duty

Corporate tax is a direct tax, and hence not included in

● The tax collector is responsible to pay an interest of 1%

● A tax collector has to file a form of quarterly TCS return in

premature withdrawal from EPF before the expiry

of 5 years of service (except termination case, ill

health) or where he fails to apply for transfer of

account to new employer.

A. Income from house property

crossword puzzles are shown in 5th head of income ie-”

income from other sources”.

Tax deduction for health insurance premiums can

(1) (I) - 80C; (II) - 50,000

This deduction is not available for other entities.

lakhs then it would be mandatory to apply for GST

registration within 30 days.

required to apply for a mandatory GST registration

number if his turnover exceeds Rs 20 lakhs (in normal

category states) and Rs 10 lakh (for special category

A. Central Excise duty

Corporate tax is a direct tax, and hence not included in

price of one unit of product is 500 and the

variable cost is 350?

A)The management to get a clear idea of the minimum level of

D) All of the above

Margin of safety =[(Estimated sales-Break even

(1) Rs. 2 crores (2) Rs. 4 crores

𝐂𝐨𝐬𝐭 𝐨𝐟 𝐰𝐨𝐫𝐤 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐝

Total Assets: Rs. 500,000

What is the owner’s equity?