Art Archives

101. Which of the following financial reports shows the profitability of a business?

A) Income statement

B) Balance sheet

C) Cash flow statement

D) Statement of changes in equity

✅ ANSWER: A
Income statement shows the profitability of a business. The income statement is the most important report for many analysts. It shows the company’s operating results for an entire year.

102. In the case of a policy under the provision of M.W.P. ACT who can make the death claim?

A) Beneficiary

B) Life insured Heirs

C) Trustee

D) Any of the above

✅ ANSWER: A
In the case of a policy under the provision of M.W.P. ACT, Beneficiary can make the death claim. A policy covered under the MWP Act will give a clear title to the beneficiary.

103. Miller- Orr Model is suitable in those circumstances when the ________.

A) Demand for cash is steady

B) Demand for cash is not steady

C) Carry cost and transaction cost are to be kept at minimum

D) Demand for cash is variable

✅ ANSWER: D
The Miller-Orr model of cash management is developed for businesses with uncertain cash inflows and outflows. This approach allows lower and upper limits of cash balance to be set and determine the return point (target cash balance).

104. Savings can be considered as a composite of two decisions. Choose them from the list below.

A) Risk retention and reduced consumption

B) Gifting and accumulation

C) Spending and accumulation

D) Postponement of consumption and parting with liquidity

✅ ANSWER: D
Savings can be considered as a composite of Postponement of consumption and parting with liquidity.
Postponement of consumption: an allocation of resources between present and future consumption.
Parting with liquidity (or ready purchasing power) in exchange for less liquid assets. For instance, purchase of a life insurance policy implies exchanging money for a contract which is less liquid.

105. Cost incurred for the maintenance of shop is considered as

A) Deffered expense

B) Capital expenditure

C) Revenue expenditure

D) Preliminary expense

✅ ANSWER: C
Cost incurred for the maintenance of shop is considered as Revenue expenditure. A revenue expenditure is a cost that will be an expense in the accounting period when the expenditure takes place.

106. What is a model of a proposed product, service, or system?

A) Prototyping

B) Prototype

C) Proof‐of‐concept prototype

D) Selling prototype

✅ ANSWER: B
Prototype is a model of a proposed product, service, or system. A prototype is an original model, form or an instance that serves as a basis for other processes.

107. Under which plan efficiency is shared by employee and employer equally?

A) Time rate

B) Gantts task and bonus plan

C) Halsey plan

D) Rowan plan

✅ ANSWER: C
Under Halsey plan efficiency is shared by employee and employer equally.

108. Promissory note is prepared by

A) Drawer

B) Endorsee

C) Drawee

D) All of the above

✅ ANSWER: A
Promissory note is prepared by Drawer. Promissory note is prepared and signed by the a person / organisation ( borrower) while borrowing money from a lender.

109. When ____, we know that the firms must be producing at the minimum point of the average cost curve and so there will be productive efficiency.

A) AC = AR

B) MC = AC

C) MC = MR

D) AR = MR

✅ ANSWER: B
When MC = AC, we know that the firms must be producing at the minimum point of the average cost curve and so there will be productive efficiency.

110. Market risk premium is 8% and risk free return is 7% then market required return would be

A) 15.00%

B) 1.00%

C) 5.60%

D) 1.14%

✅ ANSWER: A
Required market return = Market risk premium + Risk free return
= 8% + 7% = 15%.