Author name: Administrator

153. Interest on drawings is ___ for the business

Loss
Expense
Gain
None of the above
✅ The correct answer is C.
Interest on drawings is gain for the business. Interest on drawings is an income to the firm, and hence it is credited to the profit and loss appropriation account. On the other hand, interest on drawings is an expense to the partners, and hence it is debited to their capital accounts.

1657. Variability for expected returns for projects is classified as

expected risk
stand-alone risk
variable risk
returning risk
✅ The correct answer is B.
Variability for expected returns for projects is classified as stand-alone risk. Standalone risk measures the dangers associated with a single facet of a company’s operations or by holding a specific asset, such as a closely-held corporations. In portfolio management, standalone risk measures the undiversified risk of an individual asset.

1659. A method of inventory recording which produces high inventories in balance sheet is classified as

First out receivable
First in first out
Last in first out
last out receivable
✅ The correct answer is B.
A method of inventory recording which produces high inventories in balance sheet is classified as First in first out. First in, first out (FIFO) is an asset-management and valuation method in which the assets produced or acquired first are sold, used or disposed of first and may be used by an individual or a corporation.

1661. An office routine _________.

is a system
is an operation
stands in between a system and an operation
stands in between a process and an operation
✅ The correct answer is A.
An office routine is a system. Routine is “a series of steps in performance of work, each step in the series being performed in the same order and in the same way every time.”

1663. Insurance and garage rent is ________.

fixed charges
maintenance charges
operating charges
running charges
✅ The correct answer is A.
Insurance and garage rent is fixed charges. A fixed charge is any type of expense that recurs on a regular basis, regardless of the volume of business.

1644. Revival would be subject to –

No increase in risk cover
Creation of reserve
Satisfactory evidence of insurability
All of the above
✅ The correct answer is D.
Revival would be subject to No increase in risk cover, Creation of reserve and Satisfactory evidence of insurability.

1645. Pick out the incorrect statement from the below mentioned statements.

Insurance agent represents his client in the first place
Insurance agent represents his company in the first place and always
There is a difference between an agent and a broker
Broker represents his client unlike an agent
✅ The correct answer is A.
Insurance agent does not represents his client in the first place. Insurance Agents enter into a contract to represent an insurer.

1647. First step in process costing system is to

summarize flow of output
compute output in units
summarize total costs
compute cost for each equivalent unit
✅ The correct answer is A.
First step in process costing system is to summarize flow of output. Flow is more inline with the concept of a function, that is, a Flow has both input and output parameters.

1648. The per-product price consumers are willing to pay for a bundle ____________ as the number of goods in the bundle increases.

decreases
increases
varies from product to product
stays the same
✅ The correct answer is B.
The per-product price consumers are willing to pay for a bundle increases as the number of goods in the bundle increases. The willingness of consumers to pay can, at times, be quite volatile. With bundle pricing, the seller lowers the variance on this willingness to pay and increases its profit by selling bundles of products instead of selling all products separately.
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