MCQ Bank
How “decreased in creditors” is treated in cash flow statement as per International Accounting Standard-7?
- A) It is treated as cash inflow in operating activity.
- B) It is treated as cash outflow in operating activity.
- C) It is treated as cash inflow in financing activity
- D) It is treated as cash outflow in financing activity.
Identify the Re-order level if there are 2,000 packets of paper are used in a manufacturing concern each year of 48 working weeks.
- A) None of the given option
- B) 500 packets
- C) 127 packets
- D) 154 packets
Economic order Quantity (EOQ) of ABC Company is 700 units, ordering cost of stock for one year is of Rs. 25,650 and demand for the year is of 70,000 units.
Required: Identify the number of orders should place in a year.
- A) 70,000 orders
- B) 100 orders
- C) Required more information to identify number of orders
- D) 700 orders
Following information has been extracted from the books of A & Co. to find the Economic Order Quantity (EOQ). Cost of placing an order Rs. 15 per order; Annual demand in units 10,000 units and Cost of holding one unit per annum Rs. 50 per annum.
- A) Required more information to find the value of EOQ
- B) 37 units
- C) 77 units
- D) 15 units
Which of the following component is subtracted while calculating the cost of factoring the accounts receivable?
- A) Cost of factoring on advances
- B) Factoring service fee
- C) Credit control savings
- D) None of the given options
Average days of inventory + average days of receivable - Average days of payable =?
- A) Business cycle
- B) Operating cycle
- C) Trade cycle
- D) Cash conversion cycle
In which of the given situation profitability of business will be decreased?
- A) If working capital is decreased.
- B) If working capital is increased.
- C) If working capital remains constant.
- D) There is no relation between liquidity and profitability.
Which of the following is not sources of Internal Control on Cash Receipts.
- A) Proceeds from the sale of non- current assets
- B) Collections on account from customers
- C) Payment to creditors
- D) Cash sales
Following information has been extracted from the books of AHB to find the Economic Order Quantity (EOQ). Cost of placing an order Rs. 25 per order; Annual demand in units 20,000 units and Cost of holding one unit per annum Rs. 70 per annum.
- A) 335 units
- B) 85 units
- C) 120 units
- D) Required more information to find the value of EOQ
How many days are required for inventory conversion of XYZ Company if it has average inventory, cost of goods sold and net profit are of Rs. 200,000; Rs. 800,000 and Rs. 100,000 respectively. Also it is assumed that there are 365 days.
- A) 46 days
- B) 91 days
- C) 183 days
- D) 104 days
Which of the following is (are) objective(s) of Internal control process?
- A) Reliability of financial reporting
- B) All of the given options
- C) Effectiveness and efficiency of operations
- D) Compliance with laws and regulations
Economic order quantity model decides the order size where total ordering costs _____________ carrying costs.
- A) Greater than
- B) Less than
- C) Greater than and equal to
- D) Equal to
How “accounts payable has been increased to Rs. 48,000 in year 2013 from Rs. 40,000 in year 2012” is treated in cash flow statement?
- A) It is treated as cash inflow in financing activity.
- B) It is treated as cash outflow in operating activity.
- C) It is treated as cash inflow in operating activity
- D) It is treated as cash outflow in financing activity.
Which of the following best describes the following statement “The issuance of Fraudulent Financial Statements intended to mislead investors and creditors”?
- A) Fraud Employee fraud
- B) Fraud
- C) Management Fraud
- D) None of the given terms
Trade credit is one of the feasible sources of funds to meet the additional amount for working capital immediately. Identify the cost of trade credit for FEL Company if company buys Rs.280, 000 of materials per month and avails discount on the terms of 3/30, net 90.
- A) 6.4%
- B) 12.41%
- C) 18.81%
- D) Required more information to find cost of trade credit