Author name: Administrator

116. Real rate expected cash flows and nominal rate expected cash flows must be

A) accelerated
B) equal
C) different
D) inflated
✅ ANSWER: B
Real rate expected cash flows and nominal rate expected cash flows must be equal. Nominal cash flow is the true dollar amount of future revenues the company expects to receive and expenses it expects to pay out, without any adjustments for inflation. In the short term and under conditions of low inflation, the amounts attributed to nominal and real cash flows are nearly identical.

118. Method, which allocates cost of support department to operating and support departments is known as

A) indirect method
B) direct method
C) step down method
D) reciprocal method
✅ ANSWER: C
Method, which allocates cost of support department to operating and support departments is known as step down method. The step method (also known as step down method) allocates the cost of a service department to other service departments as well as to operating departments. The cost allocation under step method is a sequential process.

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.

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.

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.

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.

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.
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