Revenue expenditure refers to government expenditure which
A Creates assets
B Reduces liabilities
C Is recurring in nature
D Is incurred once
Revenue expenditure is incurred regularly for administration and welfare without creating assets.
Which of the following is a revenue expenditure?
A Construction of highways
B Purchase of machinery
C Payment of salaries to government employees
D Loans to states
Salaries are recurring expenses and do not create assets.
Capital expenditure is that expenditure which
A Is recurring
B Is non-recurring and creates assets
C Is used for subsidies
D Is used for interest payment
Capital expenditure leads to asset creation or reduction of liabilities.
Which of the following is a capital expenditure?
A Pension payments
B Interest on public debt
C Construction of dams
D Subsidies on food
Infrastructure projects create long-term assets.
Expenditure on defense equipment is treated as
A Revenue expenditure
B Capital expenditure
C Transfer expenditure
D Development expenditure
Defense equipment leads to asset creation.
Which expenditure does NOT create assets?
A Capital expenditure
B Development expenditure
C Revenue expenditure
D Infrastructure spending
Revenue expenditure does not result in asset creation.
Interest payment on public debt is classified as
A Capital expenditure
B Revenue expenditure
C Development expenditure
D Capital receipt
Interest payment is a recurring obligation.
Subsidies provided by government fall under
A Capital expenditure
B Revenue expenditure
C Capital receipt
D Public debt
Subsidies are recurring welfare expenses.
Capital expenditure contributes to
A Inflation only
B Consumption only
C Long-term economic growth
D Budget deficit only
Capital spending builds productive capacity.
Which of the following best distinguishes capital from revenue expenditure?
A Time period
B Asset creation
C Size of expenditure
D Source of finance
Asset creation is the key criterion.
Revenue receipts are government receipts which
A Create liabilities
B Reduce assets
C Do not create liabilities
D Are borrowed
Revenue receipts neither create liabilities nor reduce assets.
Which of the following is a revenue receipt?
A Market borrowing
B Recovery of loans
C Income tax
D Disinvestment
Tax income is a regular revenue receipt.
Capital receipts include
A Tax revenue
B Non-tax revenue
C Borrowings
D Fees
Borrowings create liabilities and are capital receipts.
Which of the following is NOT a capital receipt?
A Recovery of loans
B Borrowings
C Disinvestment proceeds
D Income tax
Income tax is a revenue receipt.
Capital receipts are those receipts which
A Are recurring
B Are non-recurring and create liabilities
C Are compulsory
D Are welfare-oriented
Capital receipts either create liabilities or reduce assets.
Disinvestment refers to
A Selling government bonds
B Selling government assets in PSUs
C Raising taxes
D Borrowing from RBI
Disinvestment means selling equity in public enterprises.
Which receipt reduces government assets?
A Tax revenue
B Fees
C Borrowings
D Recovery of loans
Recovery of loans reduces financial assets.
Capital receipts are generally used for
A Day-to-day administration
B Salary payments
C Creation of assets or repayment of debt
D Welfare subsidies
Capital receipts finance long-term activities.
Revenue receipts are important because they
A Create assets
B Finance recurring expenditure
C Reduce public debt
D Are borrowed funds
Regular income funds routine government functions.
Which of the following is a non-tax revenue receipt?
A Income tax
B Excise duty
C Fees
D GST
Fees are non-tax revenue.
Direct taxes are preferred because they are
A Inflationary
B Equitable
C Easy to evade
D Regressive
Direct taxes follow ability-to-pay principle.
Which tax burden cannot be shifted?
A GST
B Sales tax
C Excise duty
D Income tax
Income tax is borne by the taxpayer himself.
Indirect taxes are criticized because they are
A Progressive
B Transparent
C Regressive
D Elastic
Indirect taxes burden poor more proportionately.
Which tax is more inflationary?
A Direct tax
B Progressive tax
C Indirect tax
D Proportional tax
Indirect taxes raise prices of goods.
GST is considered an indirect tax because
A It is progressive
B It is levied on income
C Its burden is shifted to consumers
D It is levied annually
Sellers pass GST burden to buyers.
Which tax provides price stability?
A Indirect tax
B Direct tax
C Sales tax
D Customs duty
Direct taxes reduce purchasing power without raising prices.
Direct taxes affect consumption by
A Increasing prices
B Increasing income
C Reducing disposable income
D Increasing supply
Direct taxes reduce take-home income.
Which of the following is an advantage of indirect taxes?
A Equitable
B Certain
C Convenient to collect
D Progressive
Collected at production or sale point.
Which tax has wider coverage?
A Income tax
B Corporate tax
C Indirect tax
D Wealth tax
Indirect taxes cover all consumers.
Which tax is more elastic in revenue?
A Lump-sum tax
B Proportional tax
C Progressive tax
D Specific tax
Progressive tax yields more revenue as income rises.
Direct taxes help in reducing inequality because they are
A Regressive
B Progressive
C Proportional
D Indirect
Higher income groups pay higher rates.
Indirect taxes may cause
A Reduction in prices
B Increase in savings
C Cost-push inflation
D Deflation
Higher taxes increase production costs.
Which of the following is a merit of indirect taxes?
A Transparency
B Equity
C Ease of collection
D Certainty of burden
Indirect taxes are easy to administer.
Which tax is most suitable during inflation?
A Indirect tax
B Direct tax
C Sales tax
D Customs duty
Direct taxes reduce excess demand.
Which tax violates canon of certainty?
A Income tax
B GST
C Arbitrary tax
D Proportional tax
Arbitrary taxes lack clarity and certainty.
Revenue expenditure increases when government spends on
A Infrastructure
B Defense equipment
C Interest payments
D Asset creation
Interest payments are recurring revenue expenditure.
Capital expenditure is preferred in developing countries because it
A Raises consumption
B Increases assets and growth
C Reduces revenue deficit
D Increases subsidies
Capital spending supports long-term growth.
Revenue receipts are inadequate when
A Expenditure exceeds income
B Capital receipts rise
C Taxes increase
D Non-tax revenue rises
Revenue deficit occurs when revenue receipts fall short.
Which of the following is transfer expenditure?
A Infrastructure spending
B Salary payment
C Pension payment
D Loan recovery
Pensions involve transfer without goods/services.
Capital receipts do NOT include
A Borrowings
B Disinvestment
C Recovery of loans
D Grants
Grants are revenue receipts.
Which tax is based on ability-to-pay principle?
A Indirect tax
B Direct tax
C Sales tax
D Excise duty
Direct taxes depend on income level.
Which type of tax discourages consumption?
A Direct tax
B Progressive tax
C Indirect tax
D Lump-sum tax
Indirect taxes raise prices.
Which receipt increases government liabilities?
A Tax revenue
B Fees
C Borrowings
D Grants
Borrowings must be repaid.
Capital receipts are non-recurring because
A They occur every year
B They are permanent
C They occur occasionally
D They are compulsory
Borrowings and disinvestment are occasional.
Which receipt is shown below the line in budget?
A Tax revenue
B Non-tax revenue
C Borrowings
D Fees
Borrowings are capital receipts.
Revenue receipts help in maintaining
A Liquidity
B Solvency
C Day-to-day administration
D Asset base
Routine government functions depend on revenue receipts.
Which expenditure increases future production capacity?
A Revenue expenditure
B Capital expenditure
C Transfer expenditure
D Consumption expenditure
Capital expenditure builds productive assets.
Which tax is most suitable for redistribution of income?
A Indirect tax
B Proportional tax
C Progressive income tax
D Specific tax
Progressive income tax reduces inequality.
Indirect taxes are called indirect because
A Paid annually
B Paid by producers
C Burden is shifted
D Are compulsory
Final burden falls on consumers.
The main criterion to distinguish revenue and capital receipts is
A Time of receipt
B Regularity
C Asset or liability creation
D Source of receipt
Capital receipts affect assets or liabilities.