art mcqs

Which one of the following statement is CORRECT about long term liabilities?

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These are due within one year
These consist of all debts, payabke after 12 months
In working capital, these are deducted from current assets
All of the above
✅ The correct answer is B.
Long term liabilities consist of all debts, payabke after 12 months. Long-term liabilities are obligations not due within the next 12 months or within the company’s operating cycle if it is longer than one year.

The basic consideration(s) in distinction between capital and revenue expenditure is/are

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Nature of business
Effect on revenue generating capacity of the business
Purpose of expenses
All of the above
✅ The correct answer is D.
The basic considerations in distinction between capital and revenue expenditure are Nature of business, Effect on revenue generating capacity of the business and Purpose of expenses.

_________ relate to one’s ability to interact effectively with other workers and customers, both at work and outside.

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Hard skills
Soft skills
Negotiating skills
Questioning skills
✅ The correct answer is B.
Soft skills relate to one’s ability to interact effectively with other workers and customers, both at work and outside. A soft skill is a personal attribute that supports situational awareness and enhances an individual’s ability to get a job done. The term soft skills is often used as a synonym for people skills or emotional intelligence.

Profit & Loss account is prepared for a period of one year by following

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Periodicity concept
Business entity concept
Accrual concept
None of the above
✅ The correct answer is A.
Profit & Loss account is prepared for a period of one year by following Periodicity concept. It is the concept that each accounting period has an economic activity associated with it, and that the activity can be measured, accounted for, and reported upon.

Joint cost allocation method for joint products, which is based on achievable value is known as

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joint products value at split off method
main product cost at split off method
Gross realizable value method
net realizable value method
✅ The correct answer is D.
Joint cost allocation method for joint products, which is based on achievable value is known as net realizable value method. The net realizable value method allocates joint costs on the basis of the final sales value less separable costs.

A stock which is hybrid and works as a cross between debt and common stock is considered as

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hybrid stock
common liabilities
debt liabilities
preferred stock
✅ The correct answer is D.
A stock which is hybrid and works as a cross between debt and common stock is considered as preferred stock. Preferred stockholders have a higher claim to dividends or asset distribution than common stockholders.

Rate of return which is asked by investors is classified as

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average cost of capital
mean cost of capital
weighted cost of capital
weighted average cost of capital
✅ The correct answer is D.
Rate of return which is asked by investors is classified as weighted average cost of capital. The weighted average cost of capital (WACC) is a calculation of a firm’s cost of capital in which each category of capital is proportionately weighted. All sources of capital, including common stock, preferred stock, bonds, and any other long-term debt, are included in a WACC calculation.