McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Uncategorized topics .
Chapters
| 1. |
Inflation is the state in which .............................. |
| A. | The value of money decreases |
| B. | The value of money increases |
| C. | The value of the money increases first and then decreases |
| D. | The value of money decreases first and increases later |
| Answer» A. The value of money decreases | |
| 2. |
How inflation affects the price of the commodities? |
| A. | Price of the commodities decreases |
| B. | Price of the commodities increases |
| C. | No effect |
| D. | First the price decreases later on increases |
| Answer» B. Price of the commodities increases | |
| 3. |
When there is high inflation in the economy, how will it affect the supply of money in the economy? |
| A. | No effect on the money supply |
| B. | Supply of money decreases |
| C. | Supply of money increases |
| D. | None of the above |
| Answer» C. Supply of money increases | |
| 4. |
Which of the following class will not be negatively affected by the higher inflation? |
| A. | The consumer class |
| B. | The debtor class |
| C. | Pensioner class |
| D. | Business class |
| Answer» D. Business class | |
| 5. |
What is a stagflation? |
| A. | A situation in which the economy experiences recession. |
| B. | A situation in which the economy have inflation and recession altogether |
| C. | An economy where unemployment is high |
| D. | Both b and c |
| Answer» B. A situation in which the economy have inflation and recession altogether | |
| 6. |
Which of the following concept is just opposite to deflation? |
| A. | Stagflation |
| B. | Inflation |
| C. | Recession |
| D. | Disinflation |
| Answer» D. Disinflation | |
| 7. |
Which of the following measure is adopted to reduce inflation? |
| A. | Reduction in bank rate |
| B. | Reduction in Repo rate |
| C. | Increase in government expenditure |
| D. | Cuts in government spending |
| Answer» C. Increase in government expenditure | |
| 8. |
The cost reduction technique in comparison to the worth of a product is known as |
| A. | Reverse engineering |
| B. | Value engineering |
| C. | Material engineering |
| D. | Quality engineering |
| Answer» B. Value engineering | |
| 9. |
Value analysis examines the |
| A. | Design of every component |
| B. | Method of manufacturing |
| C. | Material used |
| D. | All of the above |
| Answer» D. All of the above | |
| 10. |
Value analysis is normally applied to |
| A. | New products |
| B. | Old products |
| C. | Future products |
| D. | Both (A) and (B) |
| Answer» B. Old products | |
| 11. |
Value can be defined as the combination of _______ which ensures the ultimate economy and satisfaction of the customer. |
| A. | Efficiency, quality, service and price |
| B. | Efficiency, quality, service and size |
| C. | Economy, quality, service and price |
| D. | Efficiency, material, service and price |
| Answer» A. Efficiency, quality, service and price | |
| 12. |
Value is the cost directly proportionate to |
| A. | Price |
| B. | Function |
| C. | Product Material |
| D. | All of the above |
| Answer» B. Function | |
| 13. |
The price paid by the buyer is |
| A. | Cost value |
| B. | Use value |
| C. | Esteem value |
| D. | Exchange value |
| Answer» B. Use value | |
| 14. |
The cost incurred by the manufacturer beyond use value is called |
| A. | Cost value |
| B. | Esteem value |
| C. | Exchange value |
| D. | None of the above |
| Answer» B. Esteem value | |
| 15. |
Value analysis is a ____ process |
| A. | Remedial |
| B. | Preventive |
| C. | Continuous |
| D. | None of the above |
| Answer» A. Remedial | |
| 16. |
Value analysis should be applied when the following symptom(s) is (are) present |
| A. | Rate of return on investment is reducing |
| B. | Reduction in sales of the product |
| C. | Firm is unable to meet delivery promises |
| D. | All of the above |
| Answer» D. All of the above | |
| 17. |
Who is named as Father of Value Analysis? |
| A. | Lawrence D. Miles |
| B. | George Terborgh |
| C. | Michael Jucius |
| D. | Edwin B. Flippo |
| Answer» A. Lawrence D. Miles | |
| 18. |
Important reason(s) for arising unnecessary costs are |
| A. | Poor design of product |
| B. | Too tight specifications |
| C. | Lack of standardization |
| D. | All of the above |
| Answer» D. All of the above | |
| 19. |
The costs those which neither contributes to function nor the appearance of the product is called |
| A. | Extra cost |
| B. | Unnecessary cost |
| C. | Esteem cost |
| D. | Exchange cost |
| Answer» B. Unnecessary cost | |
| 20. |
As per Accounting Standard-3, Cash Flow is classified into |
| A. | Operating activities and investing activities |
| B. | Investing activities and financing activities |
| C. | Operating activities and financing activities |
| D. | Operating activities, financing activities and investing activities |
| Answer» D. Operating activities, financing activities and investing activities | |
| 21. |
Cash Flow Statement is also known as |
| A. | Statement of Changes in Financial Position on Cash basis |
| B. | Statement accounting for variation in cash |
| C. | Both a and b |
| D. | None of the above. |
| Answer» C. Both a and b | |
| 22. |
The objectives of Cash Flow Statement are |
| A. | Analysis of cash position |
| B. | Short-term cash planning |
| C. | Evaluation of liquidity |
| D. | Comparison of operating Performance |
| Answer» D. Comparison of operating Performance | |
| 23. |
In cash flow statement, the item of interest is shown in A) Operating Activities B) Financing Activities C) Investing Activities |
| A. | Both A and B |
| B. | Both A and C |
| C. | Both B and C |
| D. | A, B, C |
| Answer» C. Both B and C | |
| 24. |
Cash Flow Statement is based upon |
| A. | Cash basis of accounting |
| B. | Accrual basis of accounting |
| C. | Credit basis of accounting |
| D. | None of the above |
| Answer» A. Cash basis of accounting | |
| 25. |
Which of the following statements are false? A) Cash Flow Statement is helpful in the formation of policies. B) Cash Flow Statement is useful for external analysis C) Cash Flow Statement is helpful in estimating future cash flow |
| A. | Both A and B |
| B. | Both A and C |
| C. | Both B and C |
| D. | None of the above |
| Answer» D. None of the above | |
| 26. |
Which of the following statements are true? |
| A. | Cash flow reveals only the inflow of cash |
| B. | Cash flow reveals only the outflow of cash |
| C. | Cash flow is a substitute for income statement |
| D. | Cash flow statement is not a replacement of funds flow statement. |
| Answer» D. Cash flow statement is not a replacement of funds flow statement. | |
| 27. |
Cash flow statement is based upon _________ while Funds Flow Statement recognizes _______. |
| A. | Cash basis of accounting, accrual basis of accounting |
| B. | Accrual basis of accounting, cash basis of accounting |
| C. | Both are based on cash basis of accounting |
| D. | None of the above |
| Answer» A. Cash basis of accounting, accrual basis of accounting | |
| 28. |
Statement of changes in working capital is prepared separately in |
| A. | Cash Flow Statement |
| B. | Funds Flow Statement |
| C. | Both a and b |
| D. | None of the above |
| Answer» B. Funds Flow Statement | |
| 29. |
Cash Flow Statement studies causes of change in working capital. |
| A. | True |
| B. | False |
| C. | none |
| D. | all |
| Answer» B. False | |
| 30. |
_________ reconciles the opening cash balance with the closing cash balance of a given period on the basis of net decrease or increase in cash during that period. |
| A. | Cash Flow Statement |
| B. | Funds Flow Statement |
| C. | Both a and b |
| D. | None of the above |
| Answer» A. Cash Flow Statement | |
| 31. |
Which of the following statements are true? A) Cash flow statement is more useful for short term cash planning. B) Funds Flow statement is more useful in planning medium term and long term financing. C) Cash Flow statement discloses the position of liquidity in a better way |
| A. | Only A |
| B. | Only B |
| C. | Only C |
| D. | A, B and C |
| Answer» D. A, B and C | |
| 32. |
_____ has/have accepted cash flow statement is more useful than funds flow statement, particularly from view of analysis of liquidity of a firm. |
| A. | Institute Of Chartered Accountants of India |
| B. | FASB, America |
| C. | SEBI |
| D. | All of the above |
| Answer» D. All of the above | |
| 33. |
Time value of money indicates that |
| A. | A unit of money obtained today is worth more than a unit of money obtained in future |
| B. | A unit of money obtained today is worth less than a unit of money obtained in future |
| C. | There is no difference in the value of money obtained today and tomorrow |
| D. | None of the above |
| Answer» A. A unit of money obtained today is worth more than a unit of money obtained in future | |
| 34. |
Time value of money supports the comparison of cash flows recorded at different time period by |
| A. | Discounting all cash flows to a common point of time |
| B. | Compounding all cash flows to a common point of time |
| C. | Using either a or b |
| D. | None of the above. |
| Answer» C. Using either a or b | |
| 35. |
If the nominal rate of interest is 10% per annum and there is quarterly compounding, the effective rate of interest will be: |
| A. | 10% per annum |
| B. | 10.10 per annum |
| C. | 10.25%per annum |
| D. | 10.38% per annum |
| Answer» D. 10.38% per annum | |
| 36. |
Relationship between annual nominal rate of interest and annual effective rate of interest, if frequency of compounding is greater than one: |
| A. | Effective rate > Nominal rate |
| B. | Effective rate < Nominal rate |
| C. | Effective rate = Nominal rate |
| D. | None of the above |
| Answer» A. Effective rate > Nominal rate | |
| 37. |
Mr. X takes a loan of Rs 50,000 from HDFC Bank. The rate of interest is 10% per annum. The first installment will be paid at the end of year 5. Determine the amount of equal annual installments if Mr. X wishes to repay the amount in five installments. |
| A. | Rs 19500 |
| B. | Rs 19400 |
| C. | Rs 19310 |
| D. | None of the above |
| Answer» C. Rs 19310 | |
| 38. |
If nominal rate of return is 10% per annum and annual effective rate of interest is 10.25% per annum, determine the frequency of compounding: |
| A. | 1 |
| B. | 2 |
| C. | 3 |
| D. | None of the above |
| Answer» B. 2 | |
| 39. |
Present value tables for annuity cannot be straight away applied to varied stream of cash flows. |
| A. | True |
| B. | False |
| C. | none |
| D. | all |
| Answer» A. True | |
| 40. |
Heterogeneous cash flows can be made comparable by |
| A. | Discounting technique |
| B. | Compounding technique |
| C. | Either a or b |
| D. | None of the above |
| Answer» C. Either a or b | |
| 41. |
The term marginal cost can be used as a substitute of variable cost while measuring Contribution. |
| A. | True |
| B. | False |
| C. | none |
| D. | all |
| Answer» A. True | |
| 42. |
Determine total as well as per unit contribution if Sales is Rs 40,000, Sales in units is 4,000 and variable cost is Rs 30,000. |
| A. | Rs 10,000 and Rs 2.5 |
| B. | Rs 70,000 and Rs 3.5 |
| C. | Rs 36,000 and Rs 3.6 |
| D. | None of the above |
| Answer» A. Rs 10,000 and Rs 2.5 | |
| 43. |
Determine Contribution if Sales is Rs 1,50,000 and P/V ratio is 40%. |
| A. | Rs 60,000 |
| B. | Rs 70,000 |
| C. | Rs 30,000 |
| D. | None of the above |
| Answer» A. Rs 60,000 | |
| 44. |
Determine Contribution if Fixed cost is Rs 40,000 and profit is Rs 30,000. |
| A. | Rs 60,000 |
| B. | Rs 70,000 |
| C. | Rs 30,000 |
| D. | None of the above |
| Answer» B. Rs 70,000 | |
| 45. |
Determine Contribution if Fixed cost is Rs 50,000 and loss is Rs 20,000. |
| A. | Rs 60,000 |
| B. | Rs 70,000 |
| C. | Rs 30,000 |
| D. | None of the above |
| Answer» C. Rs 30,000 | |
| 46. |
Contribution and profit both are same concepts. |
| A. | True |
| B. | False |
| C. | none |
| D. | all |
| Answer» B. False | |
| 47. |
Which of the following statements are true? |
| A. | Contribution doesn’t include fixed cost whereas profit includes fixed cost. |
| B. | Contribution is not based on the concept of marginal cost. |
| C. | Contribution above breakeven point becomes profit. |
| D. | All of the above |
| Answer» C. Contribution above breakeven point becomes profit. | |
| 48. |
Profit-Volume ratio is also known as |
| A. | Contribution ratio |
| B. | Contribution/Sales ratio |
| C. | Marginal Income percentage |
| D. | All of the above |
| Answer» D. All of the above | |
| 49. |
Which of the following statements are true? |
| A. | P/V Ratio can never be used to measure break-even point |
| B. | Higher the P/V ratio less will be the profit and vice versa |
| C. | Concept of P/V ratio is also used to determine profit at a given volume of sales |
| D. | All of the above |
| Answer» C. Concept of P/V ratio is also used to determine profit at a given volume of sales | |
| 50. |
The P/V ratio can be improved by |
| A. | Decreasing the selling price per unit |
| B. | Increasing variable cost |
| C. | Changing the sales mix |
| D. | None of the above |
| Answer» C. Changing the sales mix | |
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