1. State true or false.

i. Bonus is an ex - gratia payment.

a. True b. False

2. Which formula was given by labour appellate tribunal for the calculation of bonus?
a. Full bench formula b. Accrual formula
c. Rounding formula d. None of the above

3. In which year did the government set up the tripartite commission?

a. 1951 b. 1972 c. 1961 d. 1965

4. The bonus act is the outcome of the recommendation made by the _________.
a. State government b. Central government
c. Labour Court d. Tripartite commission

5. On which date was the bonus act implemented by the government?

a. 2nd September, 1980 b. 2nd September, 1965
c. 1st September, 1965 d. 3rd September, 1965

6. The act is not applicable to _______ except those operating in competition with similar other
private undertakings.
a. Public enterprises b. Private enterprises
c. Factories d. Banks except RBI and LIC

7. Which section in the act deals with the computation of available surplus?
a. Section 3 b. Section 3A
c. Section 5 d. Section 1

8. State true or false

i. Under section 32 of income tax act, any amount by way of depreciation admissible in
accordance is deductible from the gross profit calculation.
a. True b. False

9. Complete the formula used for calculating bonus for basic salary which is more than 3500.
Bonus = _______ * (Bonus Months)* 20%
a. Basic salary b. Ex gratia
c. 3500 d. 8400

10. As per the act what is the minimum number of days an employee must have worked in an
establishment to be eligible for bonus?
a. 240 working days b. 30 working days
c. 120 working days d. 365 working days
1B 2A 3C 4D 5B 6A 7C 8A 9A 10B

1. On what grounds an employee will be disqualified from getting bonus?

a. Fraud
b. Riotous or violent behaviour while on the premises
c. Theft, misappropriation or sabotage of any property of the establishment
d. All of the above

2. What is the minimum amount of bonus paid to an employee?

a. 8.33% b. 8.5% c. 8% d. 8.3%

3. The maximum amount of bonus to be paid in an accounting year as per section 10 of this
act is ____.
a. 8.33% b. 10% c. 20% d. 15%

4. State true or false

i. Where the salary or wages of an employee exceeds 2500 rupees per month the bonus payable
as per section 10 of the act shall be calculated on 2500 rupees per month only.
a. True b. False

5. Which section deals with the computation of number of working days?

a. Section 10 b. Section 11
c. Section 13 d. Section 14

6. State true or false

i. If any employee is found guilty of misconduct causing financial loss to the employer, then it is
lawful for the employer to deduct the amount of loss from the amount of bonus payable by him
to the employee.
a. True b. False

7. What is the mode of paying bonus to the employee’s as specified in the act?
a. Cash b. Cheque c. Account transfer d. In kind

8. The payment of bonus shall be made within ______ from the date on which the award
becomes enforceable or the settlement comes into operation where there is dispute regarding
payment of bonus.
a. 15 days b. On the day of settlement
c. 1 month d. None of the above

9. Match the following particulars with their respective sections in the Act.
1. Cognizance of offences ---- a. Section 28
2. Inspectors ---------------- b. Section 2
3. Penalty ------------------- c. section 30
4. Definitions -------------- d. section 27
a. 1-c, 2-d, 3-a, 4-b
b. 1-d, 2-c, 3-a, 4-b
c. 1-b, 2-a, 3-d, 4-c
d. 1-a, 2-d, 3-b, 4-c

10. The payment of bonus should be made within a period of _____ months from the close of
the accounting year.
a. 2 months b. 6 months
c. 8 months d. None of the above
1D 2A 3C 4A 5D 6A 7A 8C 9A 10C

1) When did The Payment of Bonus Act 1965, come into force?
A) 01 April 1965
B) 01 March 1965
C) 01 May 1965
D) 25 September, 1965
Answer –D) 25 September, 1965

2) Which section of The Payment of Bonus Act 1965 deals with Disqualification for bonus?
A. Section 12 B. Section 9 C. Section 14 D. Section 20
Answer B. Section 9 of the Payment of Bonus Act 1965
3.Which section of the Payment of Bonus Act 1965 deals with Set on and set off of allocable
surplus_?
A. Section 15 of the Payment of Bonus Act 1965
B. Section 14 of the Payment of Bonus Act 1965
C. Section 13 of the Payment of Bonus Act 1965
D. Section 18 of the Payment of Bonus Act 1965
Answer – A. Section 15 of the Payment of Bonus Act 1965

4.Section 25 of the Payment of Bonus Act 1965 deals with_______?

A. Recovery of bonus due from an employer
B. Audit of accounts of employers, not being corporations or companies
C..Eligibility for bonus
D. Set on and set off of allocable surplus
Ans- B. Audit of accounts of employers, not being corporations or companies

5.Payment of minimum bonus, is provided in section____ of the Payment of Bonus Act 1965
A. Section 24 of the Payment of Bonus Act 1965
B. Section 10 of the Payment of Bonus Act 1965
C. Section 21 of the Payment of Bonus Act 1965
D. Section 23 of the Payment of Bonus Act 1965
Ans- B. Section 10 of the Payment of Bonus Act 1965

6.Section 16 of the Payment of Bonus Act 1965 provides _?

A. Special provisions with respect to certain establishments
B. Offences by companies
C..Eligibility for bonus
D.Computation of gross profits
Ans A. Special provisions with respect to certain establishments

7.Which section of the Payment of Bonus Act 1965 deals withAudited accounts of banking
companies not to be questioned?
A. Section 27 of the Payment of Bonus Act 1965
B. Section 26 of the Payment of Bonus Act 1965
C. Section 24 of the Payment of Bonus Act 1965
D. Section 29 of the Payment of Bonus Act 1965
Answer – C. Section 24 of the Payment of Bonus Act 1965

8.Section 12 of the Payment of Bonus Act 1965 deals with_______?

A.Calculation of bonus with respect to certain employees
B. Computation of gross profits
C. Sums deductible from gross profits
D. Time-limit for payment of bonus
Ans- A.Calculation of bonus with respect to certain employees

9) Which section of the Payment of Bonus Act 1965 deals with Time-limit for payment of
bonus?
A. Section 17 of the Payment of Bonus Act 1965
B. Section 19 of the Payment of Bonus Act 1965
C. Section 14 of the Payment of Bonus Act 1965
D. Section 15 of the Payment of Bonus Act 1965
Answer B. Section 19 of the Payment of Bonus Act 1965

10) Section 3 of the Payment of Bonus Act 1965 deals with_______?

A. Computation of number of working days
B. Maintenance of registers, records, etc.
C. Establishments to include departments, undertakings, and branches
D. Eligibility for bonus
Answer- C. Establishments to include departments, undertakings and branches

1. Which of the following statements is not correct as per the Payment of Bonus Act, 1965?
(a) It is applicable to construction industry.
(b) It does not apply to employees in Life Insurance Corporation of India.
(c) Allocable surplus means 67% of the available surplus.
(d) Employee means any person including apprentice.
ANSWER - (d)

2. The ceiling on wage or salary for calculation of Bonus under the Payment of Bonus Act is
(a) Rs. 2,500
(b) Rs. 3,500
(c) Rs. 4,500
(d) Rs. 6,500
Answer - (b)

3. Under the payment of Bonus Act, 1965, the gross profits derived by an employer from an
establishment in respect of any accounting year shall be computed
(a) In case of Banking Company according to schedule II and in any other case schedule I.
(b) In case of Banking Company according to schedule I and in any other case schedule II.
(c) In case of Banking Company and in any other case schedule I.
(d) In case of Banking Company and in any other case schedule II.
Answer - (b)

4. The Payment of Bonus Act, 1965 is applicable to an employee who draws wage or salary of
(a) Rs. 3500 in case of apprentice
(b) Rs. 5000 in case of apprentice and employee
(c) Rs. 7500 in case of employee only
(d) Rs. 10,000 in case of employee only
Answer - (d)

5.Payment of Bonus Act 1965 is applicable to every factory and to every other establishment
where ---------- workmen are employed on any day during an accounting year
(a) 20 or more (b) 10 or more
(c) 50 or more (d) 30 or more
Answer - (a)

6.Every employee receiving salary or wages upto RS. 3,500 p.m. and engaged in any kind of
work whether skilled, unskilled, managerial, supervisory etc. is entitled to bonus for every
accounting year if he has worked for at least ---------- days in that year.
(a) 15 working days (b) 30 working days
(c) 60 working days (d) 90 working days
Answer - (b)

7. The minimum bonus which an employer is required to pay even if he suffers losses during the
accounting year or there is no allocable surplus is --------- % of the salary or wages during the
accounting year
(a) 10% (b) 20% (c) 8.33 % (d) 6.33%
Answer - (c)

8. If in an accounting year, the allocable surplus calculated after taking into account the amount
‘set on’ or the amount ‘set of’ exceeds the minimum bonus, the employer should pay bonus in
proportion to the salary or wages earned by the employee in that accounting year subject to a
maximum of ------- % of such salary or wages.
(a) 25% (b) 30% (c) 10% (d) 20%
Answer - (d)

9.The bonus should be paid in cash within ----------- months from the close of the accounting
year
(a) 8 months (b) 6 months
(c) 12 months (d) 3 months
Answer - (a)

10.An employer has the following rights:

1. Right to forfeit bonus of an employee, who has been dismissed from service for fraud,
riotous or violent behaviour, or theft, misappropriation or sabotage of any property of the
establishment.
2. Right to make permissible deductions from the bonus payable to an employee, such as,
festival/interim bonus paid and financial loss caused by misconduct of the employee.
3. Right to refer any disputes relating to application or interpretation of any provision of the
Act, to the Labour Court or Labour Tribunal.
(a) 1 & 2 (b) 1, 2 & 3 (c) 2 & 3 (d) 1 & 2
Answer - (b)

11. The employer has to submit an annul return of bonus paid to employees during the year, in
Form D, to the Inspector, within ---------- of the expiry of the time limit specified for payment of
bonus.
(a) 10 days (b) 20 days
(c) 30 days (d) 60 days
Answer - (c)

12.The contravention of the provisions of the Act or rules may attracts the punishment of
(a) imprisonment upto 3 months, or fine up to Rs.500, or both
(b) imprisonment upto 2 months, or fine up to Rs.1000, or both
(c) imprisonment upto 6 months, or fine up to Rs.10000, or both
(d) imprisonment upto 6 months, or fine up to Rs.1000, or both
Answer - (d)

13. Excess allocable surplus remain after paying the maximum bonus of 20% on the wage or
salary of the employee, should be carried forward to the next following year for utilizing the
payment of bonus in case of the shortage of the allocable surplus or losses occur. This is called
as
(a) Set-On (b) Set-Off
(c) Take-On (d) Set-Off
Answer - (a)

14. Which section states about the classes of employees where Payment of Bonus Act is not
applicable?
(a) Section 16 (b) Section 32
(c) Section 22 (d) Section 30
Answer - (b)

15.When there are no profits or the amount falls short or deficiency for payment of minimum
bonus to employees, such deficiency amount should be adjusted to the current accounting year
from the Set-On amount which was carried forward in case of excess allocable surplus in the
previous year. This is called as .
(a) Set-On (b) Set-Off (c) Take -On (d) Take -Off
Answer - (b)

1. On which date was the bonus act implemented by the government?

1. 2nd September, 1980
2. 2nd September, 1965
3. 1st September, 1965
4. 3rd September, 1965
2. The bonus act is the outcome of the recommendation made by the _________.
 1. State government
2. Central government
3. Labour Court
4. Tripartite commission
3. In which year did the government set up the tripartite commission?
1. 1951
2. 1972
3. 1961
4. 1965
4. Which formula was given by labour appellate tribunal for the calculation of bonus?
1. Full bench formula
2. Accrual formula
3. Rounding formula
4. None of the above
5. Which of the following statements is not correct as per the Payment of Bonus Act, 1965?
1. It does not apply to employees in Life Insurance Corporation of India.
2. Allocable surplus means 67% of the available surplus.
3. Employee means any person including apprentice.
4. It is applicable to construction industry.
6. Payment of Bonus Act, 1965 is applicable to every factory and to every other
establishment where _______ workmen are employed on any day during an accounting
year
1. 20 or more
2. 10 or more
3. 50 or more
4. 30 or more
7. Which section states about the classes of employees where Payment of Bonus Act is
not applicable?
1. Section 16
2. Section 32
3. Section 22
4. Section 30
8. What is the minimum amount of bonus paid to an employee?
1. 8.33%
2. 8.5%
3. 8%
4. 8.3%
9. The maximum amount of bonus to be paid in an accounting year as per section 10 of
this act is ____.
1. 8.33%
2. 10%
3. 20%
 4. 15%
10. Which section deals with the computation of number of working days?
1. Section 10
2. Section 11
3. Section 13
4. Section 14
11. The act is not applicable to _______ except those operating in competition with similar
other private undertakings.
1. Public enterprises
2. Private enterprises
3. Factories
4. Banks except RBI and LIC
12. As per the act what is the minimum number of days an employee must have worked in
an establishment to be eligible for bonus?
1. 240 working days
2. 30 working days
3. 120 working days
4. 365 working days
13. On what grounds an employee will be disqualified from getting bonus?
1. Fraud
2. Riotous or violent behaviour while on the premises
3. Theft, misappropriation or sabotage of any property of the establishment
4. All of the above
14. Which section in the act deals with the computation of available surplus?
1. Section 3
2. Section 3A
3. Section 5
4. Section 1
15. Excess allocable surplus remain after paying the maximum bonus of 20% on the wage or
salary of the employee, should be carried forward to the next following year for utilizing
the payment of bonus in case of the shortage of the allocable surplus or losses occur.
This is called as
1. Set-On
2. Set-Off
3. Take-On
4. Set-Off
16. When there are no profits or the amount falls short or deficiency for payment of
minimum bonus to employees, such deficiency amount should be adjusted to the current
accounting year from the Set-On amount which was carried forward in case of excess
allocable surplus in the previous year. This is called as
1. Set-On
2. Set-Off
 3. Take -On
4. Take -Off
17. The payment of bonus should be made within a period of _____ months from the close of
the accounting year.
1. 2 months
2. 6 months
3. 8 months
4. None of the above
18. The contravention of the provisions of the Act or rules may attracts the punishment of
1. imprisonment upto 3 months, or fine up to Rs.500, or both
2. imprisonment upto 2 months, or fine up to Rs.1000, or both
3. imprisonment upto 6 months, or fine up to Rs.10000, or both
4. imprisonment upto 6 months, or fine up to Rs.1000, or both
19. The ceiling on wage or salary for calculation of Bonus under the Payment of Bonus Act
1965 is
1. Rs. 5,000
2. Rs. 7,000
3. Rs. 9,000
4. Rs. 6,500
20. Where the salary or wages of an employee exceeds 2500 rupees per month the bonus
payable as per section 10 of the act shall be calculated on 2500 rupees per month only.
1. True
2. False
21. Match the following particulars with their respective sections in the Act.
22. 1. Cognizance of offences ---- a. Section 28
2. Inspectors ---------------- b. Section 2
3. Penalty ------------------- c. section 30
4. Definitions -------------- d. section 27
1. 1-c, 2-d, 3-a, 4-b
2. 1-d, 2-c, 3-a, 4-b
3. 1-b, 2-a, 3-d, 4-c
4. 1-a, 2-d, 3-b, 4-c
1. A Temporary workman will be entitled to bonus.
(a) Yes (b) No
Ans. (a)

2. A Temporary workman entitled to bonus on the basis of

(a) Total No. of days worked (b) All working days
(c) No bonus will be allowable (d) None of the above.
Ans. (a)
 3. Where any employee dismissed because of Riotous/ Violent behaviour in the premises
whether he is eligible for bonus.
(a) Yes (b) No
Ans. (b)

4. Where an employee dismissed but reinstated with back wages will be entitled to bonus.
(a) Yes (b) No
Ans. (a)

5. What is maximum Bonus u/s 11 of the payment of Bonus Act

(a) 20% of wages (b) 15% of wages
(c) 17.5% of wages (d) None of the above
Ans. (a)

6. While calculating Direct tax payable u/s 7 of the payment of Bonus Act. Which of the
following should not be considered?
(a) Exemption under I.T. Act (b) Deduction under I.T. Act
(c) Loss carried forward (d) All of the above
Ans. (d)

7. In general cases Bonus shall be paid with in

(a) 6 months (b) 7 months
(c) 8 months (d) None of these
Ans. c

8. While calculating Direct tax payable u/s 7 of the payment of Bonus Act which of the
following should not be considered?
(a) Profits (b) Capital gains
(c) Speculation loss (d) Unabsorbed depreciation
Ans. (d)

9. When Maximum Bonus should be paid?

(a) AS > Min Bonus (b) AS = Min Bonus
(c) AS < Min Bonus (d) None of the above
Ans. (a)

10. Where any employee committed any fraud in that accounting year. Mention whether he is
eligible for Bonus, who has been dismissed from service?
(a) Yes (b) No
Ans. (b)
 11. Employees employed under any financial corporation established under state financial
corporation Act will not cover under payment of Bonus Act.
(a) Yes (b) No
Ans. (a)

12. Bonus shall be paid by employer in cash. If there is any dispute and settlement has been
done then employer should pay bonus within
(a) 2 months (b) 1 month (c) 3 months (d) None of these
Ans. (b)

13. An employee of a Seasonal factory will be given minimum bonus if he had not worked
for sufficient days
(a) Yes (b) No
Ans. (b)

14. Employees employed under IFCI will not cover under payment of Bonus Act.
(a) Yes (b) No
Ans. (a)

15. Maximum period that can be extended by appropriate Government for payment of Bonus
(a) 1 year (b) 2 years (c) 3 years (d) None of these
Ans. (b)

16. Employees of every factory will cover under payment of Bonus Act 1956.
(a) Yes (b) No.
Ans. (a)

17. Every other establishment other than factory in which there are more than _____
employees must be to come under payment of Bonus Act.
(a) 15 (b) 20 (c) 25 (d) 30
Ans. (b)

18. Employee of a Seasonal factory will be eligible for bonus.

(a) Yes
(b) No
Ans. (a)
19. Gross Profit of an employer in case of banking company will calculated as per ___ under
payment of Bonus Act,
(a) Schedule I
(b) Schedule IV
(c) Schedule III
(d) None of these
Ans. (a)

20. Employees employed through contractors on building operations. Will cover under
payment of Bonus Act 1956
(a) Yes (b) No
Ans. (b)

21. For recovery of Bonus due application shall be made with __ from the bonus payable
becomes due
(a) 2 years (b) 1 year
(c) 3 years (d) None of these
Ans. (b)

22. Employees employed under Seamen as defined in the Merchant Shipping Act, 1958. Will
not cover under payment of Bonus Act 1956.
(a) Yes (b) No
Ans. (a)

23. Gross profit of an employer in case of any other company other than banking company
will be calculated as per __ under payment of Bonus Act.
(a) Schedule I (b) Schedule II
(c) Schedule III (d) None of these
Ans. (b)

24. Employees employed under educational institutions they will cover under payment of
Bonus Act
(a) Yes (b) No
Ans. (b)

25. Bonus can be paid by cheque

(a) Yes (b) No
Ans. (b)