All MCQs

141. Systematic way of linking group of indirect cost to a cost object is classified as

A) linked allocation base

B) direct allocation base

C) indirect allocation base

D) cost allocation base

✅ ANSWER: D
Systematic way of linking group of indirect cost to a cost object is classified as cost allocation base. An allocation base is the basis upon which an entity allocates its overhead costs.

138. Under GST, Insurance is taxed _______ percent.

A) 0%

B) 5%

C) 12%

D) 18%

✅ ANSWER: D

135. Which of the following is correct? Statement A – Insurance reduces burdens Statement B – Insurance is a system of mutual support. Statement C – Insurance the only method to manage risks.

A) A is correct

B) B is correct

C) A, B & C correct

D) A & B correct

✅ ANSWER: D
Insurance reduces burdens and Insurance is a system of mutual support. Insurance is a means of protection from financial loss. It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss.

102. In the case of a policy under the provision of M.W.P. ACT who can make the death claim?

A) Beneficiary

B) Life insured Heirs

C) Trustee

D) Any of the above

✅ ANSWER: A
In the case of a policy under the provision of M.W.P. ACT, Beneficiary can make the death claim. A policy covered under the MWP Act will give a clear title to the beneficiary.

13. A company purchased a vehicle for Rs.6000. It will be used for 5 years and its residual value is expected to be Rs.1000. What is the annual amount of depreciation using straight line method of depreciation?

A) Rs. 1000

B) Rs. 2000

C) Rs. 3000

D) Rs. 5000

✅ ANSWER: A
Cost of the asset = Rs. 6,000
Salvage Value = Rs. 1,000
Total Depreciation Cost = Cost of asset – Salvage Value = 6000 – 1000 = Rs. 5000
Useful life of the asset = 5 years
Thus, annual depreciation cost = (Cost of asset – Salvage Cost)/Useful Life = 5000/5 = Rs. 1000.

94. A materials requirements planning (MRP) system is an example of ______.

A) spot purchasing

B) a multi-tier supply chain

C) a legacy computer system

D) electronic data interchange

✅ ANSWER: C
A materials requirements planning (MRP) system is an example of a legacy computer system. Material requirements planning (MRP) is a system for calculating the materials and components needed to manufacture a product. It consists of three primary steps: taking inventory of the materials and components on hand, identifying which additional ones are needed and then scheduling their production or purchase.

91. A loan-cum revival would mean –

A) Granting a loan

B) Revival of the policy

C) Both A & B

D) None of the above

✅ ANSWER: C
A loan-cum revival would mean Granting a loan and Revival of the policy. If a policy acquires the surrender value, the date of the policy can be revived by a policy loan. The loan amount will be calculated and treated as premiums paid upto the date of the revival. If a loan amount is more than the required revival, the excess will be paid to the policyholder.

12. Net Profit = Gross Profit minus

A) Operating expenses

B) Product cost

C) Deferred expenses

D) Direct cost

✅ ANSWER: A
Net Profit = Gross Profit minus Operating expenses.

85. Value of stock is Rs 400 and required rate of return is 20% then preferred dividend would be

A) Rs 80.00

B) Rs 8,000.00

C) Rs 20.00

D) Rs 50.00

✅ ANSWER: A
Preferred Dividend = Value of stock * Required rate of return
= 400 * 20% = Rs. 80.00

82. Guarantee for employer for the loss out of employee’s dishonest is__________.

A) Burglary insurance

B) Fidelity insurance

C) third party insurance

D) medical insurance

✅ ANSWER: B
Guarantee for employer for the loss out of employee’s dishonest is Fidelity insurance. A Fidelity Insurance policy covers losses sustained by the employer as a result of an act of forgery, fraud or dishonesty from an employee.