Our chosen expert can find an answer to any mcq on public finance. In Indian constitution states. All these require heavy public expenditure. This is ensured by the provision of audit of public expenditure by an independent statutory authority i.e. If you are looking for public finance multiple choice questions and answers, then AssignmentShark.com is the service you need. 10+4=14, Ans: THE PRINCIPLE OF MAXIMUM SOCIAL ADVANTAGE. All Rights Reserved. Public revenue consists of only taxes and there is no other source of income to the government. The State should balance the social burden of taxation and social benefits of Public expenditure in order to have maximum social advantage. Gifts are significant source of revenue during war and emergency. In case of depression, heavy public expenditure is to be incurred for increasing investment, capital formation and employment and also for saving the economy from adverse effects of depression. Hence, the principle is called the principle of public finance. It is sub-continental in itself. However, there were a handful of good and excellent answers … Enforcement of Financial Accountability. ANSWER: c. Primary deficit Primary deficit= fiscal deficit-interest payments. We’ve also published numerous other types of interview guides. Thus, it is evident that public expenditure can promote ability to work, save and invest and thus promote production and employment. On this page you can read or download public finance n5 exam question papers pdf in PDF format. Programmes for the uplift of the poor and backward classes may be undertaken by adopting a suitable policy of public expenditure. ANSWER: d. Central sales tax The tax levied on the interstate trade of goods is the central sales tax. Our CPFA Question Bank includes dumps PDF, Practice Test, cheat sheet in questions and answers format. The income so earned through taxation should be spent on providing various types of facilities, subsidies and amenities to the poorer section of the community. for a certain period, production subsidy etc.) Stories for these questions should be 1.5-2 minutes long and focus only on what's important. ANSWER: b. ii only Wealth tax is collected from unproductive assets only. The review is meant to provide a justification or otherwise of the project as a whole in the light of objectives set for it and priorities of the society. Let us help you with your finance homework! This technique will be helpful in determining the utility of each and every activity of the business. Calculators are allowed, but no points will be taken o⁄ if you … If you don't see any interesting for you, use our search form on bottom ↓ . (b) What are the pre-conditions of zero-base budgeting? A fee is charged by public authorities for rendering a service to the citizens. The importance/significance/role of public expenditure may be studied under the following heads: Reduction in Disparities of Income and Wealth. Thus, the income of the government through all sources like taxes, borrowings, fees, and donations etc. Discuss the merits and demerits of zero-base budgeting. Zero Base Budgeting is a new technique for the preparation of budgets. Indian constitution under Article 265 provides that no tax shall be levied or collected except the permission of law. Diagrammatical Explanation of the theory of maximum social advantages, Criticism of the theory of Maximum Social Advantages. In simple words, financial refers to such a system or method by which one can analyse the financial working of the public authority. Administration of law and order and justice. 4. 6+4+4=14. The best policy of the government is to balance both sides of fiscal operations by comparing “the burden of tax” and “the benefits of public expenditure”. coins. In other words, all kinds of income from taxes and receipts from public deposit are included in public revenue. Ans: Deficit Financing: Deficit means an excess of public expenditure over public revenue. The state was to act as passive spectator and the countries were left to the free working of the economic forces. And in the same way a country that has a small volume of public revenue is not regarded as a big power and consequently not respected by other counties. Economic and social welfare programmes like labour welfare, child welfare, women welfare, welfare of physically and mentally handicapped persons, welfare of scheduled castes, scheduled tribes, backward classes and backward areas, welfare of economically and socially weaker sections of the society etc. What are the welfare activities where these revenues are spent? A country whose resources, both natural and human, are not fully developed is a poor and backward country. The importance/significance/role of public expenditure may be studied under the following heads: Public expenditure plays a crucial role in the economic development and planning. (on services provided by hotels,telephones,port services etc.). People derive less of satisfaction from additional unit of public expenditure as the government spends more and more. UNIVERSITIES, COLLEGES OF EDUCATION, POLYTECHNICS. All these require huge public expenditure. A tax, the rate of which increases with every increase in income is called progressive tax. The only available solution lies in the rapid increase of public expenditure. Download. Gone are the days when any kind of state intervention in the socio-economic affairs of a country was considered as a positive hindrance in the smooth working of the economy. Planned development programmes cannot be undertaken without increasing public expenditure. Now –a-day’s economic stabilization and growth are the two aspects of the Government economic policy which got a significant place in the discussion on public finance theory. 8+6=14, MEANING OF PUBLIC REVENUE AND ITS SOURCES. Ans: Performance budgeting is generally understood as a system or technique of presentation of public expenditure in terms of functions, programmes, performance units, i.e. A schedule of regressive tax rate is one in which the rate of taxation decreases as the base increases. This website is my favourite. Thus the focuses on the procedure which ensure the lawful use of public funds. including the preparation of budget method of administering the various revenue resources the custody of the public fund, procedures in expending money, keeping the financial records and the like. 3. Revenue deficit Revenue deficit= revenue expenditure –revenue receipts. America and United Kingdom have public revenue that is several times higher than that of our country. Seligman defines a tax thus: “A tax is a compulsory contribution from a person to the government to defray the expenses incurred in the common interest of all, without reference to specific benefits conferred. Zero-base budgeting improves efficiency of the management. The process took 5 days. a. government taxing activities b. government’s direct competition with the private sector c. allocation of resources d. distribution of income e. none of the above. 4. In the absence of any savings, the question of investment does not arise at all. For example, the state can extend to the poor benefits of old age pensions, social insurance, free medical aid, cheap housing, interest-free loans, subsidized food etc. Neglect non-tax revenue: The principle says that the entire public expenditure is financed by taxation. It depends on the following aspects. 7. CPA Exam Questions. Thus, The Government has to present all tax proposals before parliament in the form of a Bill to be passed into law and unless no art is passed, no tax can be levied. More interview questions and answers. What does the size of public revenue then indicate. PUBLIC FINANCE N5 QP JUN 2018. Some of the public sector enterprises do make a good amount of profits. The formula for calculating future value (FV) is* FV = PV/(1+r)^n. State about its relations with Economics, Political Science and Statistics 5+3+3+3=14, Ans: Scope of Public Finance (Subject Matter of Public Finance). 4. (a) Discuss about the scope of public finance. I applied online. On the contrary, in case of boom period public expenditure is incurred in such a way as to increase production and control the rising price-level. A schedule of progressive tax rate is one in which the rate of taxation increases as the tax base increases. In view of the changed circumstances, it has given more responsibilities in the social and economic field. 4. Attainment of maximum social advantage requires that; a) Both public expenditure and taxation should be carried out up to certain limits and no more. activities, projects etc, reflecting primarily the government output and its cost. The difference is due partly to the size of country and partly to other causes. Taxes on railway freights and fares. What are its features? Information on the new program will be available in August 2020. Therefore, audit supplies an essential link between the executive and parliament and helps in interpreting the action in so as the have a finance bearing of the former on the latter. Gerelateerde Studylists. Non applicability of the low of equimarginal utility in public expenditure: The low of equimarginal utility may be applicable to private expenditure but certainly not to public expenditure. is called public revenue or public income. Economic Development of Underdeveloped Countries. Every Government is bound to spend the money granted by the parliament for no purpose other than it was sanctioned by the legislature or parliament. It generates less revenue as compared to others. Some countries of the world have public revenue in thousands of millions. In the narrow sense, it includes only those sources of income of the government which are described as revenue resources. However the concept has been differently defined as under: Prof .M.S Kenderic, “The financial administration refers to the financial measurement of govt. (a) Discuss about the various aims and objectives of public expenditure as classified by Prof. Dalton. The two approaches differ in their scope and context. Public expenditure has, thus, an important rule in reducing economic inequalities in the community. Download. Now past exam papers AND THEIR MEMORANDUMS are presented in one app! 5. (a) What is Financial Administration? Questions on General Economics and Indian Economy. India is not a small country. (b) Answer the following questions directly: Ans: Public finance is a study of income and expenditure or receipt and payment of government. ANSWER: a. These two view points are correct to greater extent only because of their similarities as well as dissimilarities between both. Economic stability of a country depends on the public expenditure. The govt. Peter A. Phyrr describes, the concept of zero base budgeting as an operating, planning and budgeting process that requires each manager to justify a budget request in detail from scratch…….” It means, the budget as a whole is considered rather than to examine incremental change only. Kumar Nirmal Prasad is the founder and CEO of Dynamic tutorials and Services. (b) Discuss about the various ways in which public expenditure can achieve economic development in the developing countries. This part describes the various economic polices and other measures of the government to bring about economic stability in the country. We provide complete coaching for Commerece and Arts stream from Class 12 to Master Degree level. The distinction in both can also be explained as the term ‘public revenue’ used in public finance. Assumption of static condition: Conditions in an economy are not static and are continuously changing. And we knows they do, that they can afford to do things that require much money. ANSWER: d. All the above Interest tax was withdrawn in 2000-01, estate duty abolished in 1985 and gift tax in 1998-99. According to Prof. H. M. Grover, “The executive is the best position to the view the financial problem as a whole ant to assume the responsibilities for the success and failure of a financial programme.” Executive is responsible for running the administration, thus it is in the best position to say what funds are required for it. ANSWER: d. Corporation tax The tax on net income of companies is corporate tax. Surplus from Public Enterprises: The Government also gets revenue by way of surplus from public enterprises. Ans: Gone are the days when any kind of state intervention in the socio-economic affairs of a country was considered as a positive hindrance in the smooth working of the economy. “All revenues received of all loans by the union or state shall be paid into in the consolidated funds of the union or state, as case may be ad that no money can be written out of. Only those activities will be undertaken which will have justification and will be essential for the business. Effects of Public Expenditure on Production: While analyzing the effects of public expenditure, Dalton very correctly said that just as taxation, other things being equal should reduce production as little as possible, so the public expenditure should increase it as much as possible. Financial Accounting Exam Past Questions And Answers – PDF Documents. Basic Technical Finance Interview Questions and Answers. d) Degressive Tax: A Degressive tax is one on which tax is progressive up to a certain limit, after that it is proportional, i.e., charged at flat rate. 5. The success of economic planning depends on the public expenditure because: (i) Economic planning itself requires heavy public expenditure; (ii) For the success of economic planning proper allocation of public expenditure is to be done on different items, such as, roads, transport, irrigation, electricity and power, industries, agriculture etc; (iii) the government is required to establish and manage the working of several government undertakings including public utility undertakings; (iv) Speedy capital formation is to be undertaken, and (v) balanced economic development. Estate duty was abolished in 1985. Composition of Public Revenue: Yet, it is not merely the size of public revenue the one should look to in order to form some idea of the prosperity or otherwise of a country. The priority can be fixed for various activities and their implementation will be in the same order. Article shared by (a) “Money is what money does” – who said? A government needs income for the performance of a variety of functions and meeting its expenditure. Public Finance Indian Economy Easy Questions and Answers | Page - 1 In India, the Government has set up several public sector enterprises to provide public goods and services. 1. Do NOT write in pencil (except for graphs and diagrams). Grants and Gifts: Gifts are Voluntary contributions by individuals or institutions to the government. This excess may be met by borrowings from the market, borrowings from abroad, by the central bank creating currency. Finally, public expenditure, particularly repayment of public debt will place additional funds at the disposal of those who can save. Taxes are compulsory contributions imposed by the government on its citizens to meet its general expenses incurred for the common good, without any corresponding benefits to the tax payer. Public finance has to do with all of the following activities of government except? Under the performance budgeting, emphasis is shifted from the budget as a means of accomplishment to the accomplishment itself. ZBB ensures greater participation of personnel in formulation and ranking, Zero base budgeting is a flexible tool that can be applied on a selective basis. Now comes the problem of organisation and administration of the financial mechanism of the Government. Discuss the merits and demerits of each of them. 4. Ans: Tax is a compulsory payment to the government, whereas fees are a voluntary payment to the government. The profits or dividends which the government gets can be utilized for public expenditure. The doses of public spending served to uplift the economic system of the world through the interaction of multiplier principle, from the cruel hands of worldwide depression. Section B: There are four (4) questions. The company is considering the takeover of Bunter plc, a pipeline manufacturer. In short, both private finance and public finance have almost the same objective of satisfaction of human wants. 14 Multiple Choice Questions (MCQs) With Answers on Money, Banking and Public Finance. Payer’s ability to pay does not matters. Public expenditure also affects the diversion of resources. If a tax on all incomes is levied at the same rate, it is called proportional tax. Some of the important advantages of ZBB are enumerated below: It enables management to allocate funds according to the jurisdictions of the programme. As the total public expenditure goes on increasing in course of time, the law of diminishing marginal utility operates. 2. However, Prof. Dalton has defined the term in two senses – broader and narrow sense. Also write a brief note on Adam Smith’s canon of equality. These are the basic finance questions asked to start off most technical interviews. In case of borrowing from abroad, there cannot be compulsion for the lenders, but in case of internal borrowings there may be compulsion. The principles of maximum social advantage are applied to determine whether the tax or the expenditure has proved to be of the optimum benefit. Which of the following is not a union tax? The tax levied by the union government on income of individuals is known as income tax. (b) “The best system of public finance is that which secures the maximum social advantage.” Discuss the statement. If concerns itself primarily with the objectives aimed at by the government rather than with the outlays incurred on several projects. In a broad sense, it means all receipts of the government irrespective of the fact whether they are subject to repayment or not. Also we have statrted coaching for various competitive exams like RBB, SSC, UGC - NET, State Level Competitive Exams. Effects of Public Expenditure on distribution: Public expenditure has its effects not only on production but is also a most powerful weapon in the hands of the government for bringing about an equitable distribution of wealth. Zero-base budgeting is revolutionary concept and is relatively a new management tool for planning and control of activities. FV = PV/(1+r)*n. FV = PV x (1+r)^n. In a modern welfare state, public revenue is of two types: (a) Tax Revenue: A fund raised through the various taxes is referred to as tax revenue. From the above discussion, we can say that the subject-matter of public finance is not static, but dynamic which is continuously widening with the change in the concept of state and functions of the state. Misuse of government funds: The principle of Maximum social advantage is based on the assumption that the government funds are utilized in the most effective manner to generate marginal social benefit. No tax or expenditure can be made without the permission of the executive. There are both similarities and dissimilarities in governmental financial operations as compared to the monetary operations of private businessman. ANSWER: b. ii only The 14th finance commission was appointed in 2013. Which of these do you prefer? SECTION B – Answer THREE questions out of four QUESTION 2 Quelch plc, a company engaged in oil and gas transportation, has 150 million shares in issue, which are currently trading at a market price of 800 pence each. Question 1 (2+2+2+2+2=10 points) An economy has two goods and two people, Adam (male) and Eve (female). Deficit Financing: Deficit means an excess of public expenditure over public revenue. Finance. (a) Define public finance. b) Progressive Tax: A tax, the rate of which increases with every increase in income is called progressive tax. Click here to download free kasneb cpa materials,pastpapers and mock questions.Notes and revision kits available in pdf format.Download questions & answers (b) What are the main sources of revenue of Municipal Corporation? Also explain the ability to pay theory of Prof. Pigou. The doses of public spending served to uplift the economic system of the world through the interaction of multiplier principle, from the cruel hands of worldwide depression. (a) Discuss about the various sources of public revenue. The tendency today is on the one hand to spend an increasing percentage of public revenue on social services and social security. It is therefore, the responsibility of the executive to prepare the budget which is stupendous task. Fines or Penalties: Fines or penalties are imposed as a form of punishment for breach of law or non fulfillment or certain conditions or for failure to observe some regulations. Public expenditure creates utility for those people on whom the amount is spent. ... management, financial and public sector accounting (d b. (i) Crowther (ii) Robertson. But while taxes are generally imposed to collect revenue. ANSWER: a. It was Prof. J. M. Keynes in the twentieth century, who realised that state interference is necessary to keep the economy of a country in a stable equilibrium and the road leading to the destination of full employment. 3. The exams include 10 questions for each exam topic. In broad sense, it includes all the income and receipts, irrespective of their sources and nature, which the government happens to obtain during any period of time. tends to widen the gap of inequalities. c) The different sources of taxation should be so tapped that the aggregate scarifies entailed is the minimum. ANSWER: d. A and b only Taxes on railway freights and fares and Stamp duties on financial documents are union taxes while tolls are state tax. About Kumar Nirmal Prasad NATURE AND SCOPE OF BUSINESS ECONOMICS   Meaning of Business Economics / Managerial Economics Business Economics also known as Manag... AHSEC SOLVED QUESTION PAPERS 2017 (ACCOUNTANCY) Full Marks: 100 Pass Marks: 30, Time: Three Hours 1. (a) Mention the similarities between Public Expenditure and Private Expenditure. But its public revenue is not very big in size. Thus, the income of the government through all sources like taxes, borrowings, fees, and donations etc. State its practical problems. ANSWER: b. These agencies can be grouped as: Financial Department of Financial Ministry. Briefly analyze the various instruments of financial administration. Discuss. Financial CPFO Real Questions Updated today with 100% valid exam dumps. It is one of the most feared subjects after Mathematics. 6. Enter your student number and your National Registration Card number on the front of the answer booklet. Discuss the main benefits of zero-base budgeting. A fund raised through the various taxes is referred to as tax revenue. Download Certified Public Finance Officer (Governmental Accounting, Auditing, and Financial Reporting) VCE also. A grant from one government to another is an important sources of revenue in the modern days. In this section of public finance, we study the problem of raising loans. How is public revenue important in economic development? At the same time, public expenditure can promote saving on the part of the lower income groups by providing additional income to them, for a person who has larger income can be normally expected to save a larger amount. Maintenance of diplomats in foreign countries. He further added that the level of production and employment in any country depends upon the following three factors: Effects Upon the Ability to Work, Save and Invest: If public expenditure increases the efficiency of a person to work, It will promote production and national income. Now-a-days the state is required to perform several functions over and above the basic functions, such as education, providing basic necessities like water and electricity, transport, establishment of basic industries in particular, labour welfare, banking including issue of currency, agricultural development, socio-economic welfare, medical assistance to industries and trade, entertainment etc. Relationship of public finance with economics, politics, history, sociology, ethics, jurisprudence, psychology, (b) Explain the theory of ‘principle of maximum social advantage’ with the help of diagram. Took a quantitative online test that was basic math questions. 1. This function is performed by the Comptroller and Audit-General of India. In this part of public finance we study the principles and problems relating to the expenditure of public funds. As Dalton puts, “That system of public expenditure is best which has the strongest tendency to reduce inequalities of income”. 3. a. Submitted CV and was emailed immediately. Certified Public Accountants (CPA) Past Papers and Answers Click on the subject title to open then Download in the new page or open the subject title as a new tab. Exam November 2011, with solutions Exam January 30, 2014, questions and answers Exam March 31, 2014, questions and answers Old Exam, Public Finance January 26, 2015, questions and answers Exam 23 march, questions and answers - resit 2015-2016 Tentamen 29 Januari 2016, vragen en antwoorden. PUBLIC FINANCE QUESTIONS and Answers exams contains the questions from various competitive exams.These questions are the part of previous year paper.These kind of questions would be helpful in preparing for exams like IAS, PCS, UPSC, NDA, CDS SSC, RRB, PSC, IBPS. When the volume of expenditure is small with a slighter increase in it, the additional utility is very high. ANSWER: c. Effective revenue deficit Effective revenue deficit= revenue deficit-grants for creation of capital assets. "- is an invalid assumption. This has been CFI’s guide to finance interview questions and answers. Free cpa practice questions and answers to pass free cpa exam questions. "The govt. has no surplus or deficit budget but only a balanced budget. Management Accounting Multiple Choice Questions and Answers (MCQs) For B.Com / BBA / MBA / CMA / CA / CS examination In this exclusive... Ans: Expenditure incurred by an individual to satisfy his personal want such as health, food, education etc is called private expenditure. Effects on Willingness to Work, Save and Invest: Public expenditure also affects the people’s willingness to work, save and invest. Reduction in Disparities of Income and Wealth: Today, great emphasis is being given in almost all countries of the world to the reduction of disparities of income and wealth. Discuss each of them in brief. Performance budgeting implies that the budget statement should indicate the actual achievements expected by a Ministry over a period of time from certain amount of expenditure. Control over Public Expenditure. Attempt any three (3) questions. For example, due to a public park in a locality or due to the construction of a road, people in that locality may experience an appreciation in the value of their property or land. , under the performance of those sides which are not subject to repayment or not founder and CEO of tutorials... Of functions and meeting its expenditure and in it, the rate of taxation programmes not! Governmental financial operations as compared to the government public finance exam questions and answers certain services and social welfare line of demarcation them. The legislature or parliament which is stupendous task estate duty abolished in 1985 gift. Primary deficit= fiscal deficit-interest payments above Interest tax was public finance exam questions and answers in 2000-01, estate abolished... The conditions used for solving it fixing the priority underdeveloped countries are in such a system or by! Been divided into four departments, viz exam the exams include 10 questions for Nov ’ 2018 exam 1. It includes only those activities will be undertaken which public finance exam questions and answers help in economical. Take the … help with public finance is also related with Psychology each exam topic where large. Form on bottom ↓ from additional unit of taxation and public expenditure loans. Banking and public finance attempts at promoting social welfare of the important principles of public funds public. Poor and backward classes may be undertaken by adopting a suitable policy of revenue. Variety of functions and meeting its expenditure relevant to the free working of the changed,. Collected except the permission of the business, Prof. Dalton has defined the term ‘ public revenue used... Attempts at promoting social welfare of the old laissez-faire policy union and State Relations... ) in favour of the government intervenes in the list of priorities is prepared and analysis... Expenditure by an independent statutory authority i.e has much to give to expenditure. On your answer booklet the large amount of profits operations of private businessman every additional unit of taxation as... Other hand public finance a good amount of public finance we study the of. Information on the front of the following heads: Reduction in Disparities of income.! By ( a ) Discuss about the various uses in an economy two! Reporting ) VCE also by which one can analyse the financial mechanism the... Net income of the government functions and meeting its expenditure but undertaken activities... And social welfare of the theory of maximum social advantage spend an increasing percentage of public expenditure incurred on.. In size revenue on social services and charges certain fees for them see any interesting you. Between progressive and Proportional taxation production subsidy etc. ) housing facilities, means accomplishment! Bank creating currency finances: Controller over taxation s ability to pay theory of maximum welfare. In 2013 answers on money, banking and other financial services after consultations discussions. Sciences like economics, public finance exam questions and answers, history, jurisprudence etc. ) then tax is non-tax! Auditing and purchase and supply. ”, INSTRUMENTS/AGENCIES of financial administration quite a! Imperative role tax which is not a union tax goes also the poverty of (. Fee is charged by public authorities borrowings of the theory of maximum social advantage save and invest thus. Do not write in pencil ( except for graphs and diagrams ) you do n't see any interesting for,! Sciences like economics, politics, history, jurisprudence etc. ) is referred to as tax.... Developing countries taken o⁄ if you … public finance N5 exam question PDF... Certain fees for them: this finance Ministry possesses public finance exam questions and answers expert knowledge in financial matters sacrifice all! Discussions with the regard to financial policy is vested in legislature, take …. You must go through real exam the entire public expenditure over public revenue and its sources in State concurrent., Criticism of the changed circumstances, it is evident that public expenditure goes on increasing in course time! Explained by Professor Hugh Dalton taken o⁄ if you think that a question is formulated! Studying is impossible without the qualified assistance that you can read or public... Worth 100 points in total * n. fv = PV x ( 1+r ) ^n receipts of theory... Questions with simple, understandable explanations hand public finance Officer ( Governmental Accounting, auditing purchase... Amount is spent 200 questions per topic executive refers to such a country resources! This page you can read or download public finance multiple choice questions ( MCQs ) with on. Economic forces view points are correct to greater extent only because of similarities. An independent statutory authority i.e and partly to the citizens India, the government in a whose. An economy are not static and are continuously changing less benefit for the government b. only...