Art Archives

71. Second step in developing operating budget is to

A) plan coordination

B) plan accounts

C) obtain information

D) coverage information

✅ ANSWER: C
Second step in developing operating budget is to obtain information. An operating budget is a forecast of the revenues and expenses expected for one or more future periods.

72. What is the primary purpose of a life insurance product?

A) Tax rebates

B) Safe investment avenue

C) Protection against the loss of economic value of an individual’s productive abilities

D) Wealth accumulation

✅ ANSWER: C
Protection against the loss of economic value of an individual’s productive abilities is the primary purpose of a life insurance product. The primary purpose for purchasing life insurance is to provide financial stability to beneficiaries in the event of the insured’s death.

73. Earned but not yet received income is treated as

A) Asset

B) Liability

C) Loss

D) Capital

✅ ANSWER: A
Earned but not yet received income is treated as Asset. It is income earned during a particular accounting period but not received until the end of that period. It is treated as an asset for the business.

74. _________ as a profession refers to the act of inducing a commercial transaction through inducing the purchase of a product or service. Such act is carried out with the intent of earning remuneration.

A) Marketing

B) Selling

C) Advertising

D) Promotion

✅ ANSWER: B
Selling as a profession refers to the act of inducing a commercial transaction through inducing the purchase of a product or service. Such act is carried out with the intent of earning remuneration.

75. Time and motion study is conducted by ________.

A) time keeping department

B) personnel department

C) payroll department

D) engineering department

✅ ANSWER: D
Time and motion study is conducted by engineering department. It is a major part of scientific management (Taylorism). After its first introduction, time study developed in the direction of establishing standard times, while motion study evolved into a technique for improving work methods.

76. Assignment involves transfer of _________ under the policy to another person/entity.

A) Rights

B) Title

C) Ownership

D) Any of the above

✅ ANSWER: D
Assignment involves transfer of Rights, Title, Ownership under the policy to another person/entity.

77. Which one of the following is the task of the Planning Commission?

A) Preparation of the plan

B) Implementation of the plan

C) Financing of the plan

D) None of the above

✅ ANSWER: A
Preparation of the plan is the task of the Planning Commission. The Planning Commission is charged with the responsibility of making assessment of all resources in the country, augmenting deficient resources, formulating plans for the most effective and balanced utilisation of resources and determining priorities.

78. ERP stands for.

A) Enterprise resolution planning

B) Enterprise reverse planning

C) Enterprise resource planning

D) None of the above

✅ ANSWER: C
ERP stands for Enterprise resource planning. It’s a business process management software that manages and integrates a company’s financials, supply chain, operations, reporting, manufacturing, and human resource activities.

79. During planning period, a marginal cost for raising a new debt is classified as

A) debt cost

B) relevant cost

C) borrowing cost

D) embedded cost

✅ ANSWER: B
During planning period, a marginal cost for raising a new debt is classified as relevant cost. Relevant cost is a managerial accounting term that describes avoidable costs that are incurred when making business decisions. The concept of relevant cost is used to eliminate unnecessary data that could complicate the decision-making process.

80. Depreciable amount + Residual value of a fixed asset = ?

A) Depreciation expenses

B) Accumulated depreciation

C) Cost of the fixed asset

D) Future economic benefits of a fixed asset

✅ ANSWER: C
Depreciable amount + Residual value of a fixed asset = Cost of the fixed asset. Fixed assets are depreciated only to the extent of their depreciable amount, which equals cost minus the salvage value.