Art Archives

111. Methods used to allocate costs of reciprocal support departments include

A) direct method

B) step down

C) reciprocal method

D) all of above

✅ ANSWER: D
Methods used to allocate costs of reciprocal support departments include direct method, step down and reciprocal method.

112. Which of the following policy, survival benefits are payable?

A) Whole life

B) Moneyback

C) Endowment

D) Unit Linked

✅ ANSWER: B
Moneyback policy, survival benefits are payable. Money back policy provides accidental death and disability benefit riders.

113. Book index is also called as ___________ index.

A) Vowel

B) Abound

C) Loose leaf book

D) Card

✅ ANSWER: B
Book index is also called as Abound index. A book index is simply a key to locating information contained in a book. It is also known as back-of-the-book index, as it is mostly found at the end of the book. The words of the Index are sorted Alphabetically.

114. Which form of e‐marketplace brings together buyers and sellers from multiple industries, often for MRO materials?

A) horizontal

B) Vertical

C) Integrated

D) Inclined

✅ ANSWER: A
Horizontal form of e‐marketplace brings together buyers and sellers from multiple industries, often for MRO materials. Horizontal e-commerce outfits focus on the breadth of product offerings, while vertical ones concentrate on depth.

115. Statistical method used to measure average change in dependent variable, with respect to change of one unit in independent variable is called

A) times series method

B) time horizon method

C) aggression method

D) regression method

✅ ANSWER: D
Statistical method used to measure average change in dependent variable, with respect to change of one unit in independent variable is called regression method. Regression analysis is a set of statistical processes for estimating the relationships among variables.

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.

117. Term insurance is mainly suitable for which of the following needs?

A) Tax planning

B) Savings

C) Disease

D) Income replacement

✅ ANSWER: D
Term insurance is mainly suitable for income replacement.
Under regular term plans, the amount is paid as lump sum in the event of death of the policyholder. Under income replacement term plans, the sum assured is not paid in lump sum, but as monthly payout for a fixed number of years. This monthly payout takes away the pressure to generate income from your investment.

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.

119. Direct cost assignment for specific cost object is classified as

A) cost object line cost

B) cost tracing

C) cost object indirect cost

D) cost object staff cost

✅ ANSWER: B
Direct cost assignment for specific cost object is classified as cost tracing. Cost tracing is the process of directly matching a cost with a product being produced, where cost allocation uses estimates to apply costs to products.

120. A firm encounters its ‘shutdown point’ when

A) Average total cost equals price at the profit-maximizing level of output

B) Average variable cost equals price at the profit-maximizing level of output

C) Average fixed cost equals price at the profit-maximizing level of output

D) Marginal cost equals price at the profit-maximizing level of output

✅ ANSWER: B
A firm encounters its ‘shutdown point’ when average variable cost equals price at the profit-maximizing level of output.