Classical

Financial and Management Accounting - Financial and Management Accounting Objective Type Questions

21:  
Accounting is generally understood as
1. Summarisation of business transactions.
2. Language of the business
3. Source of business information
4. Means of communication.
Select the correct answer using the codes given below:
A.

1 only

B.

1 and 2

C.

2 and 3

D.

1,2,3 and 4

 
 

Option: D

Explanation :


22:  

Which of the following statements is correct

A.
Whenever there is inflow of cash there will definitely be inflow of funds though reverse is not true.
B.
Cash from operations and funds from operations mean the same thing.
C.
Cash flow statement is a substitute of Cash Account
D.
Cash generated from trading operations is equal to the net profit as reported in the Profit and Loss Account.
 
 

Option: A

Explanation :


23:  
Cash flows denominated in foreign currency are reported in a manner consistent with
A.

AS-3

B.

AS-5

C.

AS-11

D.

AS-21

 
 

Option: C

Explanation :


24:  
When prices show a rising trend, which of the following methods of inventory valuation will result in lower income and lower valuation of inventory?
A.

FIFO

B.

LIFO

C.

Simple average method

D.

Weighted average method

 
 

Option: B

Explanation :


25:  
In case of disclosure of accounting policies, the following fundamental accounting assumptions may not be required to be stated if they are followed in the preparation of final accounts of a company
1. Materiality and accounting period
2. Going concern and consistency
3. Accrual basis of accounting
4. Conservatism and accounting period
Select the correct answer using the codes given below:
A.

2 and 3

B.

1 and 4

C.

1,2 and 3

D.

1,2,3, and 4

 
 

Option: B

Explanation :




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