1) Capital brought by the owner in the business is ______ for business.
(a) Liability
(b) Drawing
(c) Assets
(d) A & B
Ans – (a) Liability
2) Which of the following is not the function of Accounting?
(a) interpreting
(b) Decision-making
(c) Forecasting
(d) Measurement
Ans – (b) Decision-making
3) What is the formula for calculating net income on a profit and loss account?
(a) Net Income = Revenues – Expenses
(b) Net Income = Expenses – Revenues
(c) Net Income = Revenues + Expenses
(d) Net Income = Revenues / Expenses
Ans – (a) Net Income = Revenues – Expenses
4) Which of the following items is not a cash inflow?
(a) Borrowing or incurring any liability
(b) Repayment of loans and Debenture
(c) Sale of Fixed assets or Investment.
(d) Earning Operating Profit.
Ans – (b) Repayment of loans and Debenture
5) Determining Optimum Capital Structure is –
(a) An investment decision
(b) A financing Decision
(c) A Dividend Decision
(d) A Liquidity Decision
Ans – (b) A financing Decision
6) When demand forecasting is difficult, budget is prepared:
(a) Production
(b) Sales
(c) Flexible
(d) None of above
Ans – (c) Flexible
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