Classical

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

26:  
Assertion (A).ROI is the index to study management efficiency.
Reason (R). Earning power in relation to total investment is measured by ROl.
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: B

Explanation :


27:  
If a particular current asset in the current year is more than what was in the previous year, then the change in the current assets results in of working capital.
A.

decrease

B.

increase

C.

zero

D.

none of these

 
 

Option: B

Explanation :


28:  
A firm earns a profit of Rs. 15,000 per year. In the same business a 10% return is generally expected. The total assets of the firm are Rs. 1,70,000. The value of other liabilities is Rs. 60,000. What is the value of goodwill?
A.

Rs. 20,000

B.

Rs. 30,000

C.

Rs. 40,000

D.

Rs. 50,000

 
 

Option: C

Explanation :


29:  

Which one of the following is capital expenditure?

A.

Cost of advertisement

B.

Purchase of a delivery van

C.

Purchase of raw material

D.

Purchase of machine oil

 
 

Option: B

Explanation :


30:  

EBIT /Total Assets Ratio is

A.

Liquidity Ratio

B.

Profitability Ratio

C.

Solvency Ratio

D.

Turnover Ratio

 
 

Option: B

Explanation :




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