art mcqs

Narrations are given at the end of

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Final accounts
Trial Balance
Each Ledger account
Each journal entry
✅ The correct answer is D.
Narrations are given at the end of each journal entry. Each journal entry includes the date, the amount of the debit and credit, the titles of the accounts being debited and credited (with the title of the credited account being indented), and also a short narration of why the journal entry is being recorded.

In cause and effect relationship between cost level and cost driver, inflationary price effects are removed by dividing cost through

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price index
cost index
profit index
cost driver index
✅ The correct answer is A.
In cause and effect relationship between cost level and cost driver, inflationary price effects are removed by dividing cost through price index. A price index is a normalized average (typically a weighted average) of price relatives for a given class of goods or services in a given region, during a given interval of time.

Bonds issued to individuals by corporations are classified as

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municipal bonds
corporate bonds
U.S treasury bonds
mortgages
✅ The correct answer is B.
Bonds issued to individuals by corporations are classified as corporate bonds. A corporate bond is a debt security issued by a corporation and sold to investors. The backing for the bond is usually the payment ability of the company, which is typically money to be earned from future operations. In some cases, the company’s physical assets may be used as collateral for bonds.

The overall capitalization rate and the cost of debt remain constant for all degrees of leverage. This is pronounced by __________.

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Traditional approach
Net operating income approach
Net income approach
MM approach
✅ The correct answer is C.
The overall capitalization rate and the cost of debt remain constant for all degrees of leverage. This is pronounced by Net income approach. Net Income Approach suggests that value of the firm can be increased by decreasing the overall cost of capital (WACC) through higher debt proportion.

To whom does the Treasurer most likely report?

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Chief Financial Officer
Vice President of Operations
Chief Executive Officer
Board of Directors
✅ The correct answer is A.
To Chief Financial Officer, the Treasurer most likely report. The chief financial officer (CFO) is the officer of a company that has primary responsibility for managing the company’s finances, including financial planning, management of financial risks, record-keeping, and financial reporting.