Author name: Administrator

2331. Dividend declared by a company ________.

may be paid in kind
must be paid in cash
may be paid in cash or in kind
may be paid in cash only
✅ The correct answer is D.
Dividend declared by a company may be paid in cash only. On the date of payment, the company reverses the dividend payable with a debit entry and credits its cash account for the respective cash outflow. Cash dividends do not affect a company’s income statement. However, they shrink a company’s shareholders’ equity and cash balance by the same amount.

2333. Movement of price or rise or fall of prices of options is classified as

option lattice
pricing movement
price change
binomial lattice
✅ The correct answer is D.
Movement of price or rise or fall of prices of options is classified as binomial lattice. The binomial options pricing model provides a generalizable numerical method for the valuation of options. Essentially, the model uses a “discrete-time” model of the varying price over time of the underlying financial instrument, addressing cases where the closed-form Black–Scholes formula is wanting.

221. Commercial accounting is based on

Single entry book keeping
Double entry book keeping
Both single and double entry book keeping
Cash basis of book keeping
✅ The correct answer is B.
Commercial accounting is based on Double entry book keeping. Commercial accounting is something about providing right informatin to right people on right time. In commercial accounting, the system is maintained by the business organizations. The main objective of commercial accounting is to know the profit or loss and the financial position of any business.

2335. When Marginal Utility is zero, Total Utility is

Minimum
Maximum
Law of return
None of the above
✅ The correct answer is B.
When Marginal Utility is zero, Total Utility is maximum. It is based in the law of diminishing marginal utility which says ‘as more and more units of a good are consumed, MU i.e level of satisfaction derived from each successive unit goes on falling because desire for that commodity tend to fall.

2337. In May 2013, firm was supplying 500kg of sugar at market price of Rs.30/- per kg. During June 2013, firm’s supply of sugar had decreased to 450kg at price of Rs.20/- per kg. These changes show that supply of sugar is

Oerfectly elastic
Perfectly inelastic
Less elastic
More elastic
✅ The correct answer is C.
In May 2013, firm was supplying 500kg of sugar at market price of Rs.30/- per kg. During June 2013, firm’s supply of sugar had decreased to 450kg at price of Rs.20/- per kg. These changes show that supply of sugar is less elastic.

2338. Rate of return that an investment provides its investor is classified as

investment return rate
internal rate of return
international rate of return
intrinsic rate of return
✅ The correct answer is B.
Rate of return that an investment provides its investor is classified as internal rate of return. The internal rate of return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments.

2340. Which of these is not an objective of Cost Accounting?

Ascertainment of Cost
Determination of Selling Price
Cost Control and Cost reduction
Assisting Shareholders in decision making
✅ The correct answer is D.
Assisting Shareholders in decision making is not an objective of Cost Accounting. Objectives of cost accounting are ascertainment of cost, fixation of selling price, proper recording and presentation of cost data to management for measuring efficiency and for cost control and cost reduction, ascertaining the profit of each activity, assisting management in decision making and determination of break-even point.

2341. Market value of option which is out-of-money is

greater than zero
equal to zero
lesser than zero
equal to one
✅ The correct answer is A.
Market value of option which is out-of-money is greater than zero. The market price of the option is the price you pay when you buy the option and the price you get when you sell the option. The market price of the option consists of two parts, intrinsic value and time value.

2346. Rate of interest which is usually discussed by investors whenever rate of return is discussed is classified as

yield to maturity
yield to return
yield to earning
yield to investors
✅ The correct answer is A.
Rate of interest which is usually discussed by investors whenever rate of return is discussed is classified as yield to maturity. Yield to maturity (YTM) is the total return anticipated on a bond if the bond is held until it matures. Yield to maturity is considered a long-term bond yield but it is expressed as an annual rate.
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