Author name: Administrator

207. Which, among the following, are common misconceptions about cost of capital?

A) Depreciation-generated funds have no cost
B) Cost of capital is low if a project is heavily debt-financed
C) Cost of equity is equal to the dividend rate
D) All of the above
✅ ANSWER: D
Depreciation-generated funds have no cost, Cost of capital is low if a project is heavily debt-financed and Cost of equity is equal to the dividend rate are common misconceptions about cost of capital.

209. What is a separate and fully equipped facility where the company can move immediately after the disaster and resume business?

A) Disaster recovery plan
B) Hot site
C) Cold site
D) Disaster recovery cost curve
✅ ANSWER: B
Hot site is a separate and fully equipped facility where the company can move immediately after the disaster and resume business. A hot site is a commercial disaster recovery service that allows a business to continue computer and network operations in the event of a computer or equipment disaster.

211. Which of these is not a Material control technique:

A) ABC Analysis
B) Fixation of raw material levels
C) Maintaining stores ledger
D) Control over slow moving and non moving items
✅ ANSWER: C
Maintaining stores ledger is not a Material control technique. A stores ledger is a manual or computer record of the raw materials and production supplies stored in a production facility. It is maintained by the person responsible for these assets, such as the warehouse manager.

27. Noting charges are paid at the time of

A) Renewal of the bill
B) Retirement of the bill
C) Dishonor of the bill
D) None of the above
✅ ANSWER: C
Noting charges are paid at the time of Dishonor of the bill. When a Bill of Exchange is dishonoured, in order to prove the fact, the drawer (or holder) may get the bill of exchange noted and protested through a public official known as “Notary Public” Noting is the recording of the fact of dishonour by a Notary public which becomes an evidence of dishonour.

217. Bonds issued by corporations and exposed to default risk are classified as

A) corporation bonds
B) default bonds
C) risk bonds
D) zero risk bonds
✅ ANSWER: A
Bonds issued by corporations and exposed to default risk are classified as corporation bonds. A corporate bond is a debt security issued by a corporation and sold to investors. The backing for the bond is usually the payment ability of the company, which is typically money to be earned from future operations. In some cases, the company’s physical assets may be used as collateral for bonds.

226. starting point in operating budget is

A) cost budget
B) material list
C) revenue budget
D) list of investors
✅ ANSWER: C
Starting point in operating budget is revenue budget. Revenue budgets are forecasts of a company’s sales revenues and expenditures, including capital-related expenditures.

232. What are the reason(s) for increase in health insurance in India?

A) Health consciousness
B) Increased longevity
C) Increase in income
D) All of the above
✅ ANSWER: D
Health insurance provides people with a much needed financial backup at times of medical emergencies. Health risks and uncertainties are a part of life. Health insurance can reimburse the insured for expenses incurred from illness or injury, or pay the care provider directly. Increased income, health consciousness, price liberalization and the introduction of private healthcare financing is bringing the change.
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