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.Management Sciences
Category: Accounting Mcqs
A company is currently operating at 80% capacity level. The production under normal capacity level is 1,50,000 units. The variable cost per unit is ` 14 and the total fixed costs are ` 8,00,000. If the company wants to earn a profit of ` 4,00,000, then the price of the product per unit should be
A. 37.50
B. 38.25
C. 24.00
D. 35.00
Cash received for services rendered will______________?
A. Increase cash and liability
B. Increase equity and liability
C. Increase fixed assets and cash
D. Increase cash and equity
The accounting process of gradually converting the unexpired cost of fixed assets into expenses over a series of accounting periods is_________?
A. Depreciation
B. Physical deterioration of the asset
C. Decrease in market value of the asset
D. Valuation of an asset at a point of time
Which of these types of expenditure would not be treated as a Capital Expenditure?
A. Acquisition of an Asset
B. Extension of an Asset
C. Improvement of the existing Asset
D. Maintenance of the Asset
The normal balance of liability account is____________?
A. Debit balance
B. Credit balance
C. Cash balance
D. Neither debit nor credit balance
Depreciation is a process of____________?
A. Valuation
B. Valuation and allocation
C. Allocation
D. Appropriation
Current assets – Current liabilities=?
A. Capital
B. Absorbed capital
C. Net assets
D. Net working capital
Auditing is what?
A. Reporting the financial information
B. Examination of financial statements
C. Preparation financial statements
D. maintaining the ledger records
Which of the following is known as the base for preparing trial balance?
A. Journal
B. Cash account
C. Ledger account
D. Balance sheet
Which of the following is the internal user of financial statements?
A. Creditor of the business
B. Government agency
C. Shareholder of the business
D. Manager of the business
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