Classical

Financial and Management Accounting - Financial and Management Accounting Multiple Choice Questions

16:  
A, B and C were partners sharing profits and losses in the ratio of 2 : 2 : 1. A retires, Band C purchase share of A by paying Rs 30,000 and Rs 40,000. What is new profit sharing ratio
A.

4:3

B.

2:1

C.

3:4

D.

1:2

 
 

Option: A

Explanation :


17:  

Which of the following statements is correct?

A.
A decrease in current liabilities causes an increase in the working capital.
B.
An increase in current liabilities causes an increase in the working capital.
C.
A decrease in the current assets causes an increase in the working capital.
D.
An increase in the current assets causes a decrease in the working capital.
 
 

Option: A

Explanation :


18:  
Assertion (A). Management accounting provides management with information for decision making.
Reason (R). Management accounting is a branch of cost accounting.
A.
Both A and R are true and R is the correct explanation of A.
B.
Both A and R are true but R is not a correct explanation of A.
C.

A is true but R is false

D.

A is false but R is true.

 
 

Option: C

Explanation :


19:  
Match List-I with List-II and select the correct answer using the codes given below the lists:
    List-I                                                                                                   List-II
a. Balance of Debenture Redemption Fund account                 I. Realisation Account
b. Balance of Sinking Fund account for                                        II. Funds flow statement
     the replacement of an asset.
c. On dissolution of a firm, the provisions made for                  III. General Reserve
    doubtful debts appearing in Balance Sheet.
d. Financial consequences of business operations.                 IV. Asset account
 

 

A.

a     b      c      d  

IV    III      I      II

B.

a     b      c      d  

III    IV      I      II

C.

a     b      c      d  

I       II      IV    III

D.

a     b      c      d  

III    IV      II      I

 
 

Option: B

Explanation :


20:  
Which one of the following is correct about margin of safety ratio?
A.

Capital employ / Net worth

B.

Contribution / sales value

C.

Operating profit / contribution

D.

Contribution / Sales of BEP

 
 

Option: D

Explanation :




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