Which one of the following statements is correct ? When creditors' velocity or creditors' turnover is higher as compared to debtors' velocity, it would (A) improve liquidity (B) reduce liquidity (C) have no effect on liquidity (D) improve financial position

Which one of the following statements is correct ? When creditors' velocity or creditors' turnover is higher as compared to debtors' velocity, it would (A) improve liquidity (B) reduce liquidity (C) have no effect on liquidity (D) improve financial position  
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Answer: have no effect on liquidity
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Sundry Debtors – Rs.15,000 Bills Receivable (B/R) – Rs.12,500 Cash at Bank – Rs.17,500 Stock – Rs.15,000 Profit – Rs.20,000 Creditors – Rs.25,000 Bills Payable (B/P) – Rs.15,000 Sales – Rs.1,00,000 What is the Acid Test Ratio ? (A) 1•5 : 1 (B) 1•125 : 1 (C) 16 2/3% (D) 50%

Description : Sundry Debtors – Rs.15,000 Bills Receivable (B/R) – Rs.12,500 Cash at Bank – Rs.17,500 Stock – Rs.15,000 Profit – Rs.20,000 Creditors – Rs.25,000 Bills Payable (B/P) – Rs.15,000 Sales – Rs.1,00,000 What is the Acid Test Ratio ? (A) 1•5 : 1 (B) 1•125 : 1 (C) 16 2/3% (D) 50%

Last Answer : Answer: 1•125 : 1

Which one of the following ratios is likely to be affected the most on account of price level changes ? (A) Current Ratio (B) Inventory Turnover Ratio (C) Debtors’ Turnover Ratio (D) Fixed Assets Turnover Ratio

Description : Which one of the following ratios is likely to be affected the most on account of price level changes ? (A) Current Ratio (B) Inventory Turnover Ratio (C) Debtors’ Turnover Ratio (D) Fixed Assets Turnover Ratio

Last Answer : Answer: Debtors’ Turnover Ratio

The ratio which indicates how quickly debtors are converted into cash is--------- a) Receivable turnover ratio b) Inventory turnover ratio c) Working capital turnover ratio d) Creditors turnover ratio

Description : The ratio which indicates how quickly debtors are converted into cash is--------- a) Receivable turnover ratio b) Inventory turnover ratio c) Working capital turnover ratio d) Creditors turnover ratio

Last Answer : a) Receivable turnover ratio

Debtors turnover ratio is used to calculate------ a) efficiency b) solvency c) liquidity d) profitability

Description : Debtors turnover ratio is used to calculate------ a) efficiency b) solvency c) liquidity d) profitability

Last Answer : a) efficiency

With regard to the rate of return on investment (ROI), which one of the following statements is not valid ? (A) It is an overall indicator of the profitability of an enterprise (B) It is a triangular relationship in the sense that ROI = Profit margin ×Asset turnover (C) It is a superior measure compared to the cash flow generated per share (D) It was first developed by Dupont, USA

Description : With regard to the rate of return on investment (ROI), which one of the following statements is not valid ? (A) It is an overall indicator of the profitability of an enterprise (B) It is a ... superior measure compared to the cash flow generated per share (D) It was first developed by Dupont, USA

Last Answer : Answer: It is a superior measure compared to the cash flow generated per share

Which one of the following statements is false ? (A) The Open Market Operations involve the sale or purchase of govt. securities by the Central Bank (B) The RBI manages longterm liquidity through rapos (C) The RBI manages longterm liquidity through Open Market Operations (D) Open Market Operations do not alter the total stock of govt. securities but change the proportion of govt. securities held by the RBI, Commercial Banks and Co-operative Banks

Description : Which one of the following statements is false ? (A) The Open Market Operations involve the sale or purchase of govt. securities by the Central Bank (B) The RBI manages longterm liquidity through ... change the proportion of govt. securities held by the RBI, Commercial Banks and Co-operative Banks

Last Answer : Answer: The RBI manages longterm liquidity through rapos

The return on capital employed shows the combined effect of– (A) net profit ratio and inventory turnover ratio (B) operating ratio and net profit ratio (C) net profit ratio and capital turnover ratio (D) gross profit ratio and capital turnover ratio

Description : The return on capital employed shows the combined effect of– (A) net profit ratio and inventory turnover ratio (B) operating ratio and net profit ratio (C) net profit ratio and capital turnover ratio (D) gross profit ratio and capital turnover ratio

Last Answer : Answer: operating ratio and net profit ratio

Debtors Turnover ratio is also known as (i) Receivables turnover ratio (ii) Debtors velocity (iii) Stock velocity (iv) Payable turnover ratio A. (i) and (ii) B. (i) and (iii) C. (ii) and (iii) D. (iii) and (iv)

Description : Debtors Turnover ratio is also known as (i) Receivables turnover ratio (ii) Debtors velocity (iii) Stock velocity (iv) Payable turnover ratio A. (i) and (ii) B. (i) and (iii) C. (ii) and (iii) D. (iii) and (iv)

Last Answer : A. (i) and (ii)

Debtors turnover ratio also known as---------- a) Payable turnover b) Receivable turnover ratio c) Creators turnover ratio d) Debtors velocity

Description : Debtors turnover ratio also known as---------- a) Payable turnover b) Receivable turnover ratio c) Creators turnover ratio d) Debtors velocity

Last Answer : b) Receivable turnover ratio

Example of leverage ratio a) Debtors velocity b) Stock turnover ratio c) Current ratio d) Solvency ratio

Description : Example of leverage ratio a) Debtors velocity b) Stock turnover ratio c) Current ratio d) Solvency ratio

Last Answer : d) Solvency ratio

Suppliers and creditors of a firm are interested in A. Profitability position B. Liquidity position C. Market share position D. Debt position

Description : Suppliers and creditors of a firm are interested in A. Profitability position B. Liquidity position C. Market share position D. Debt position

Last Answer : B. Liquidity position

Total sales is Rs. 7,60,000, cash sales Rs. 30,000 collection period is 25 days, debtors at Balance Sheet date will be– (A) Rs. 80,000 (B) Rs. 70,000 (C) Rs. 60,000 (D) Rs. 50,000

Description : Total sales is Rs. 7,60,000, cash sales Rs. 30,000 collection period is 25 days, debtors at Balance Sheet date will be– (A) Rs. 80,000 (B) Rs. 70,000 (C) Rs. 60,000 (D) Rs. 50,000

Last Answer : Answer: Rs. 50,000

Bonus Shares are issued to– (A) Equity Shareholders (B) Preference Shareholders (C) Debenture Holders (D) Secured Creditors

Description : Bonus Shares are issued to– (A) Equity Shareholders (B) Preference Shareholders (C) Debenture Holders (D) Secured Creditors

Last Answer : Answer: Equity Shareholders

A meeting of the shareholders held only once during the life time of the company is known as– (A) Meeting of the Directors (B) Meeting of the Creditors (C) Extraordinary General Meeting (D) Statutory Meeting

Description : A meeting of the shareholders held only once during the life time of the company is known as– (A) Meeting of the Directors (B) Meeting of the Creditors (C) Extraordinary General Meeting (D) Statutory Meeting

Last Answer : Answer: Statutory Meeting

The Open Market Operations [OMOs] is an important tool of– (A) Forex management (B) Liquidity management (C) Inventory management (D) Marketing management

Description : The Open Market Operations [OMOs] is an important tool of– (A) Forex management (B) Liquidity management (C) Inventory management (D) Marketing management

Last Answer : Answer: Liquidity management

Rate of Gross Profit on cost is 25%. Total sales is Rs. 1,00,000 and Average Stock is Rs. 1,60,000. Stock Turnover Ratio will be– (A) 0•5 times (B) 0•8 times (C) 0•10 times (D) 0•4 times

Description : Rate of Gross Profit on cost is 25%. Total sales is Rs. 1,00,000 and Average Stock is Rs. 1,60,000. Stock Turnover Ratio will be– (A) 0•5 times (B) 0•8 times (C) 0•10 times (D) 0•4 times

Last Answer : Answer: 0•5 times

Which one of the following statements about preparation of financial statements of a limited liability company is correct ? (A) Financial statements should be prepared according to the cash basis of accounting only (B) Financial statements should be prepared according to the accrual basis of accounting only (C) Financial statements should be prepared according to either the cash basis or accrual basis of accounting (D) Financial statements should be prepared according to both the accrual and cash basis of accounting

Description : Which one of the following statements about preparation of financial statements of a limited liability company is correct ? (A) Financial statements should be prepared according to the cash basis ... Financial statements should be prepared according to both the accrual and cash basis of accounting

Last Answer : Answer: Financial statements should be prepared according to the accrual basis of accounting only

(i) In __________ Book-keeping system, only Cash/Bank A/c and Personal accounts of Debtors and Creditors are opened.

Description : (i) In __________ Book-keeping system, only Cash/Bank A/c and Personal accounts of Debtors and Creditors are opened.

Last Answer : Fill in the Blanks : (i) In __________ Book-keeping system, only Cash/Bank A/c ... ____________ accuracy is not guaranteed under Single Entry System.

1 Pass opening entries: Debtors ₹ 20,000; Creditors ₹ 30,000; Computer ₹ 50,000 and Capital ₹ 40,000. 

Description : 1 Pass opening entries: Debtors ₹ 20,000; Creditors ₹ 30,000; Computer ₹ 50,000 and Capital ₹ 40,000. 

Last Answer : Journalise the following transactions in the Journal Proper of Mr. Mahadev. 1 Pass opening entries: ... Allowed cash discount of ₹ 1,000 to Ajay.

Would have made it easier for debtors to pay their creditors?

Description : Would have made it easier for debtors to pay their creditors?

Last Answer : Paper Money

Debenture holders of a company are its - (1) Shareholders (2) Creditors (3) Debtors (4) Directors

Description : Debenture holders of a company are its - (1) Shareholders (2) Creditors (3) Debtors (4) Directors

Last Answer : (2) Creditors Explanation: Companies issue debentures instead of shares to extend their business. These debentures are issue to borrow loan from general public; interest is paid on the borrowed money ... holders. So a debenture holder is essentially a creditor who simply gives loan to the company.

Which of the following is not a cash inflow? a) Decrease in debtors b) Issue of shares c) Decrease in creditors d) Sale of fixed assets

Description : Which of the following is not a cash inflow? a) Decrease in debtors b) Issue of shares c) Decrease in creditors d) Sale of fixed assets

Last Answer : c) Decrease in creditors

Which of the following is not a cash inflow? A. Decrease in debtors B. Issue of shares C. Decrease in creditors D. Sale of fixed assets

Description : Which of the following is not a cash inflow? A. Decrease in debtors B. Issue of shares C. Decrease in creditors D. Sale of fixed assets

Last Answer : C. Decrease in creditors

Which of the following is not a cash outflow? A. Increase in Prepaid expenses B. Increase in debtors C. Increase in stock D. Increase in creditors

Description : Which of the following is not a cash outflow? A. Increase in Prepaid expenses B. Increase in debtors C. Increase in stock D. Increase in creditors

Last Answer : D. Increase in creditors

Debenture holders of a company are its (1) Shareholders (2) Creditors (3) Debtors (4) Directors

Description : Debenture holders of a company are its (1) Shareholders (2) Creditors (3) Debtors (4) Directors

Last Answer : Creditors

Which of the following statements about the role of the gut in shock and sepsis are true? A. Selective decontamination of the digestive tract with the use of oral antibiotics has been shown to reduce nosocomial pneumonias and to improve mortality rates. B. Enteral nutrition, as compared with parenteral nutrition, preserves the villus architecture of the gut. C. Gut dysfunction may be an effect of shock, but it may also contribute to the development of MODS by the mechanism of bacterial translocation. D. As compared with parenteral nutrition, enteral nutrition is associated with a reduction in septic morbidity.

Description : Which of the following statements about the role of the gut in shock and sepsis are true? A. Selective decontamination of the digestive tract with the use of oral antibiotics has been ... As compared with parenteral nutrition, enteral nutrition is associated with a reduction in septic morbidity.

Last Answer : Answer: BCD DISCUSSION: The gut has a vital role in the pathophysiology of shock. The splanchnic circulation is very vulnerable to the circulatory redistribution that occurs in shock, thus, gut ... , enteral feeding is more cost effective and is associated with a lower rate of septic morbidity

Debtors turnover ratio measures---------- a) Short term solvency b) Operating efficiency c) Long term solvency d) Credit policy

Description : Debtors turnover ratio measures---------- a) Short term solvency b) Operating efficiency c) Long term solvency d) Credit policy

Last Answer : a) Short term solvency

While auditing the financial statements of non-corporate enterprises, the auditor’s duties and scope of work would be governed by– (A) the statute passed by the Parliament (B) the Companies Act, 1956, and the client concerned jointly (C) the agreement with his client. (D) the provisions of the Income Tax Act, 1961

Description : While auditing the financial statements of non-corporate enterprises, the auditor's duties and scope of work would be governed by- (A) the statute passed by the Parliament (B) the Companies Act, 1956, and ... (C) the agreement with his client. (D) the provisions of the Income Tax Act, 1961

Last Answer : Answer: the agreement with his client.

Current ratio is an example of -------------------- a) Leverage ratio b) Liquidity ratio c) Activity ratio d) Turnover ratio

Description : Current ratio is an example of -------------------- a) Leverage ratio b) Liquidity ratio c) Activity ratio d) Turnover ratio

Last Answer : b) Liquidity ratio

Which of the following will improve a company's working capital management position? A. An increased level of bad debts B. An increase in the credit period allowed by suppliers C. An increased debtor collection period D. An increase in the stock turnover period E. An increase in the length of the production

Description : Which of the following will improve a company's working capital management position? A. An increased level of bad debts B. An increase in the credit period allowed by suppliers C. An increased debtor ... D. An increase in the stock turnover period E. An increase in the length of the production

Last Answer : B. An increase in the credit period allowed by suppliers

he ratio which is used to ascertain the soundness of the long term financial position is------------ a) Debt equity ratio b) Liquidity ratio c) Activity ratio d) Gross profit ratio

Description : he ratio which is used to ascertain the soundness of the long term financial position is------------ a) Debt equity ratio b) Liquidity ratio c) Activity ratio d) Gross profit ratio

Last Answer : a) Debt equity ratio

---------------- ratio studies the firm’s ability to meet its long term financial position a) Liquidity ratio b) Profitability c) Activity d) Leverage

Description : ---------------- ratio studies the firm’s ability to meet its long term financial position a) Liquidity ratio b) Profitability c) Activity d) Leverage

Last Answer : d) Leverage

Under the liquidity trap conditions, an increase in money supply will (a) increase investment (b) increase level of employment (c) reduce the rate of interest (d) have no effect on interest rate, investment and employment

Description : Under the liquidity trap conditions, an increase in money supply will (a) increase investment (b) increase level of employment (c) reduce the rate of interest (d) have no effect on interest rate, investment and employment

Last Answer : (c) reduce the rate of interest

Which one of the following functions is served most by information technology ? (A) Replacement of human labour (B) Provision for a handle to the management to improve industrial relations (C) Substitution of human information processing (D) Rationalisation of office work

Description : Which one of the following functions is served most by information technology ? (A) Replacement of human labour (B) Provision for a handle to the management to improve industrial relations (C) Substitution of human information processing (D) Rationalisation of office work

Last Answer : Answer: Rationalisation of office work

The most important advantage of centralization of office services is– (A) specialization (B) higher departmental loyalty (C) no delay in providing services (D) less burden of work

Description : The most important advantage of centralization of office services is– (A) specialization (B) higher departmental loyalty (C) no delay in providing services (D) less burden of work

Last Answer : Answer: less burden of work

The matrix management model is based on a matrix of values between 0 and 9 for two primary variables. Which of the statements given above is/are correct ? (A) 1 only (B) 2 only (C) Both 1 and 2 (D) Neither 1 nor 2

Description : The matrix management model is based on a matrix of values between 0 and 9 for two primary variables. Which of the statements given above is/are correct ? (A) 1 only (B) 2 only (C) Both 1 and 2 (D) Neither 1 nor 2

Last Answer : Answer: Both 1 and 2

Which one of the following statements is not correct ? (A) Business firms combine to avoid wasteful competition (B) Business combination is possible only among joint stock companies (C) Business firms may combine to take advantage of patent rights of individual firms (D) During economic depression, small firms are absorbed by financially sound large firms

Description : Which one of the following statements is not correct ? (A) Business firms combine to avoid wasteful competition (B) Business combination is possible only among joint stock companies (C) Business ... firms (D) During economic depression, small firms are absorbed by financially sound large firms

Last Answer : Answer: Business combination is possible only among joint stock companies

The scheme allows the transfer of scrip once the export obligation is complete. Which of the statements given above is/are correct ? (A) 1 only (B) 2 only (C) Both 1 and 2 (D) Neither 1 nor 2

Description : The scheme allows the transfer of scrip once the export obligation is complete. Which of the statements given above is/are correct ? (A) 1 only (B) 2 only (C) Both 1 and 2 (D) Neither 1 nor 2

Last Answer : Answer: Both 1 and 2

Legitimate power is the right to manage derived from delegation based on ownership or property rights. Which of the statements given above is/are correct ? (A) 1 only (B) 2 only (C) Both 1 and 2 (D) Neither 1 nor 2

Description : Legitimate power is the right to manage derived from delegation based on ownership or property rights. Which of the statements given above is/are correct ? (A) 1 only (B) 2 only (C) Both 1 and 2 (D) Neither 1 nor 2

Last Answer : Answer: Both 1 and 2

Which one of the following statements is correct ? (A) Audit of an educational institution is compulsory if it is run by a charitable trust (B) A club is treated as a commercial establishment (C) The accounts of a charitable trust can be audited by any person who belongs to accountancy profession (D) Audit of a charitable trust is not compulsory under law

Description : Which one of the following statements is correct ? (A) Audit of an educational institution is compulsory if it is run by a charitable trust (B) A club is treated as a commercial establishment ( ... who belongs to accountancy profession (D) Audit of a charitable trust is not compulsory under law

Last Answer : Answer: Audit of an educational institution is compulsory if it is run by a charitable trust Free

Which one of the following statements is correct ? (A) Internal audit and Management audit are the same (B) Internal audit and statutory audit are the same (C) Internal audit is compulsory in all cases (D) Statutory audit of company accounts is compulsory

Description : Which one of the following statements is correct ? (A) Internal audit and Management audit are the same (B) Internal audit and statutory audit are the same (C) Internal audit is compulsory in all cases (D) Statutory audit of company accounts is compulsory

Last Answer : Answer: Statutory audit of company accounts is compulsory

Which of the following characteristics most likely would heighten an auditor’s concern about the risk of intentional manipulation of financial statements? a. Turnover of senior accounting personnel is low. b. Insiders recently purchased additional shares of the entity’s stock. c. Management places substantial emphasis on meeting earnings projections. d. The rate of change in the entity’s industry is slow.

Description : Which of the following characteristics most likely would heighten an auditor's concern about the risk of intentional manipulation of financial statements? a. Turnover of senior accounting personnel is low. b ... meeting earnings projections. d. The rate of change in the entity's industry is slow.

Last Answer : Management places substantial emphasis on meeting earnings projections.

In order to reduce the risk of heavy insurance the insurer passes on some business to the other company, it is called– (A) Reinsurance (B) Double Insurance (C) Joint Insurance Policy (D) Separate Insurance

Description : In order to reduce the risk of heavy insurance the insurer passes on some business to the other company, it is called– (A) Reinsurance (B) Double Insurance (C) Joint Insurance Policy (D) Separate Insurance

Last Answer : Answer: Reinsurance

Sometimes an auditor is called upon to review the operations of an enterprise for evaluating their cost-effectiveness. What is this kind of audit generally known as ? (A) Cost Audit (B) Operations Audit (C) Tax Audit (D) Independent Financial Audit

Description : Sometimes an auditor is called upon to review the operations of an enterprise for evaluating their cost-effectiveness. What is this kind of audit generally known as ? (A) Cost Audit (B) Operations Audit (C) Tax Audit (D) Independent Financial Audit

Last Answer : Answer: Cost Audit

Direction involves– (A) Physical factors (B) Financial factors (C) Human factors (D) None of the above

Description : Direction involves– (A) Physical factors (B) Financial factors (C) Human factors (D) None of the above

Last Answer : Answer: Human factors

Which, institution is known as the ‘Soft Loan Window’ of World Bank ? (A) I.F.C. (International Financial Corporation) (B) I.D.A. (International Development Association) (C) I.M.F. (International Monetary Fund) (D) Indian Development Forum

Description : Which, institution is known as the ‘Soft Loan Window’ of World Bank ? (A) I.F.C. (International Financial Corporation) (B) I.D.A. (International Development Association) (C) I.M.F. (International Monetary Fund) (D) Indian Development Forum

Last Answer : Answer: I.D.A. (International Development Association)

Indian Accounting Standard – 28 is related to– (A) Accounting for taxes on income (B) Financial Reporting of Interests in Joint Venture (C) Impairment of Assets (D) Provisions, Contingent Liabilities and Contingent Assets

Description : Indian Accounting Standard – 28 is related to– (A) Accounting for taxes on income (B) Financial Reporting of Interests in Joint Venture (C) Impairment of Assets (D) Provisions, Contingent Liabilities and Contingent Assets

Last Answer : Answer: Impairment of Assets

Which is called a barometer of financial health of a country?

Description : Which is called a barometer of financial health of a country?

Last Answer : Stock-Exchange

“The position of a Company Secretary is like that of a hub in a bicycle wheel.” This statement shows the– (A) Importance of Company Secretary (B) Rights of Company Secretary (C) Duties of Company Secretary (D) Liabilities of Company Secretary

Description : “The position of a Company Secretary is like that of a hub in a bicycle wheel.” This statement shows the– (A) Importance of Company Secretary (B) Rights of Company Secretary (C) Duties of Company Secretary (D) Liabilities of Company Secretary

Last Answer : Answer: Importance of Company Secretary