Correct Answer:
C. Elasticity
Smith's canons are equity (or equality), certainty, convenience and economy.
November 13, 2026 · Accounting and Finance MCQs, Public Finance & Budgeting MCQs
Which of the following is NOT one of Adam Smith’s canons of taxation?
Related MCQs
The Departmental Accounts Committee (DAC) meeting is held to:
A.
Prepare the national budget
B.
Discuss and settle audit paras between audit and the department's Principal Accounting Officer
C.
Select new auditors
D.
Approve foreign loans
Correct answer is:
B. Discuss and settle audit paras between audit and the department's Principal Accounting Officer
Do you agree with this answer?
Performance-based (results-oriented) budgeting:
A.
Lists expenditure by input only
B.
Links funding to outputs and outcomes
C.
Ignores results
D.
Is prepared after the fiscal year
Correct answer is:
B. Links funding to outputs and outcomes
Do you agree with this answer?
The cut-off assertion is concerned with whether:
A.
Assets are properly insured
B.
Transactions and events are recorded in the correct accounting period
C.
Employees are paid on time
D.
Taxes are paid before the deadline
Correct answer is:
B. Transactions and events are recorded in the correct accounting period
Do you agree with this answer?
Accounts receivable are Rs. 100,000 and annual credit sales are Rs. 730,000. Average collection period (365-day year) is:
A.
73 days
B.
50 days
C.
30 days
D.
7.3 days
Correct answer is:
B. 50 days
Do you agree with this answer?
Operating income is Rs. 200,000, invested assets are Rs. 1,000,000 and the required rate of return is 12%. Residual income is:
A.
Rs. 120,000
B.
Rs. 80,000
C.
Rs. 200,000
D.
Rs. 320,000
Correct answer is:
B. Rs. 80,000
Do you agree with this answer?
Which type of audit evidence is generally the most reliable?
A.
Photocopies of documents provided by management
B.
Original documents obtained directly from an independent external party
C.
Oral explanations given by management
D.
Documents prepared by the entity's own staff
Correct answer is:
B. Original documents obtained directly from an independent external party
Do you agree with this answer?
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