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871. Economic development of a country requires

Skilled labour

Diplomacy

Abundant natural resources

a’ and ‘c’ both

✅ The correct answer is D.
Economic development of a country requires Skilled labour and Abundant natural resources.

872. In normal costing, manufacturing overhead allocated is also called

manufacturing overhead applied

labour overhead applied

cost overhead applied

budget overhead applied

✅ The correct answer is A.
In normal costing, manufacturing overhead allocated is also called manufacturing overhead applied. Manufacturing overhead is all indirect costs incurred during the production process. This overhead is applied to the units produced within a reporting period.

873. In capital budgeting, term of bond which has great sensitivity to interest rates is

long-term bonds

short-term bonds

internal term bonds

external term bonds

✅ The correct answer is A.
In capital budgeting, term of bond which has great sensitivity to interest rates is long-term bonds. Bond with a maturity period of more than 15 years. Long bonds pay higher interest rates but have greater credit and inflation risk. Also called long bond

874. Under absorption of overhead expenses in cost accounting results in _________.

decrease in costing profit

decrease in financial accounts profit

increase in costing profit

increase in financial accounts profit

✅ The correct answer is C.
Under absorption of overhead expenses in cost accounting results in increase in costing profit. If overhead is under absorbed, this means that more actual overhead costs were incurred than expected, with the difference being charged to expense as incurred. This usually means that the recognition of expense is accelerated into the current period, so that the amount of profit recognized declines.

875. Cost of common stock is 15% and bond yield is 10.5% then bond risk premium will be

1.43%

8.50%

25.50%

4.50%

✅ The correct answer is D.
Bond risk premium = Cost of common stock – Bond yeild
= 15% – 10.5% = 4.5%.

876. _________ is an annuity with an infinite life and continuous annual payments.

APR

Amortized loan

Perpetuity

Principal

✅ The correct answer is C.
Perpetuity is an annuity with an infinite life and continuous annual payments. As the name suggests, perpetuity is a bond or security with no fixed maturity date.

858. Factor which provides hedge to managers in adverse and unexpected circumstances is known as

budgetary slack

costly slack

influential slack

target slack

✅ The correct answer is A.
Factor which provides hedge to managers in adverse and unexpected circumstances is known as budgetary slack. Budgetary slack is the deliberate under-estimation of budgeted revenue or over-estimation of budgeted expenses.

859. Public deposits obtained by a company means __________.

deposits received from government

deposits received from public at large

deposits received from stockiest and agent as advance

deposit received from share holders

✅ The correct answer is B.
Public deposits obtained by a company means deposits received from public at large. Any member of the public can fill up the prescribed form and deposit the money with the company.

861. A ________ is an acknowledgement of a debt.

debenture

equity share

preference share

✅ The correct answer is B.
A debenture is an acknowledgement of a debt. An undertaking to repay a sum of money as a debt by a company which has been deposited with or lent to the body. They are usually secured by fixed charge and floating charge.

77. Goodwill is classified as which one of the following assets?

Fixed

Long term

Current

Intangible

✅ The correct answer is D.
Goodwill is classified as Intangible assets. The goodwill amounts to the excess of the “purchase consideration” (the money paid to purchase the asset or business) over the total value of the assets and liabilities. It is classified as an intangible asset on the balance sheet, since it can neither be seen nor touched.

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