Deck 7: Financial Accounting and Cost Management

Question 1

Cash from operations is equal to------------------

A)net profit afer tax
B)net profit plus increase in current asset
C)net profit plus decrease in current liabilities
D)net profit plus non-cash expenses plus decrease in current assets.

Answer 1

net profit plus non-cash expenses plus decrease in current assets.

Question 2

Increase in the amount of bills receivable results in--------------

A)decrease in cash
B)increase in cash
C)no change in cash
D)none of these

Answer 2

decrease in cash

Question 3

Increase in the amount of bills payable results in----------

A)Decrease in cash
B)Increase in cash
C)No change in cash
D)None of these

Answer 3

Increase in cash

Question 4

Which of the following is not an inflow of cash

A)Sale of fixed asset
B)Issue of debentures for cash
C)Funds from operation
D)Acquisition of assets

Question 5

Dividend paid under AS- 3 is----------

A)Cash flow from financing activity
B)Cash flow from operating activity
C)Cash flow from investing activity
D)None of these

Question 6

Cash flows include

A)Cash payments only
B)Cash receipts only
C)Cash receipts and payments
D)Cash and noncash incomes and expenses.

Question 7

Cash flow statement is based on----------

A)Cash basis of accounting
B)Accounting equation
C)Accrual basis of accounting
D)None of these

Question 8

Proposed dividend is classified as-----------

A)Investing activity
B)Financing activity
C)Operating activity
D)Cash equivalent

Question 9

Profit on sale of machinery comes under------------

A)Investing activity
B)Financing activity
C)Operating activity
D)None of these

Question 10

Sale of patent is classified under---------

A)Investing activity
B)Financing activity
C)Operating activity
D)None of these

Question 11

Rent received by a company (whose main business is real estate) is classified as

A)Investing activity
B)Financing activity
C)Operating activity
D)Cash equivalent

Question 12

AS-3 is related to

A)Cash flow statement
B)Funds flow statement
C)Balance sheet
D)Income statements

Question 13

A system of control where persons are made responsible for control of cost

A)Cost control
B)Production control
C)Responsibility accounting
D)Budgeting

Question 14

A system where accounting is established with responsibility

A)Responsibility accounting
B)Financial accounting
C)Cost accounting
D)Budgeting

Question 15

A segment of activity for which cost is accumulated

A)Service centre
B)Cost centre
C)Profit centre
D)Investment centre

Question 16

A segment of activity for which both revenue and cost are accumulated

A)Investment centre
B)Project centre
C)Cost centre
D)Responsibility centre

Question 17

A centre at which proper utilization of asset used in the centre

A)Investment centre
B)Profit centre
C)Cost centre
D)Responsibility centre

Question 18

A segment of activity for which revenues are accumulated

A)investment centre
B)profit centre
C)revenue centre
D)Responsibility

Question 19

A segment of activity or area of operation for which cost is collected is known as -----------------

A)Cost centre
B)Profit centre
C)Investment centre
D)Responsibility centre

Question 20

A segment of activity or area of operation for which revenues are accumulated is known as ------

A)Cost centre
B)Profit centre
C)Revenue centre
D)Investment centre

Question 21

A control system where accountability is established with responsibility is known as --------------

A)Cost accounting
B)Responsibility accounting
C)Financial accounting
D)None of the above

Question 22

--------- is a system where persons are made responsible for control of cost

A)Cost accounting
B)Financial accounting
C)Responsibility accounting
D)None of these

Question 23

------------- centre is one for which both revenue and cost are accumulated

A)Cost centre
B)Revenue centre
C)Service centre
D)Profit centre

Question 24

A firm's investment in current asset is known as ----------------

A)Net working capital
B)Gross working capital
C)Average working capital
D)None of these

Question 25

A transaction that doesn't make any change in working capital position is ---------

A)Inflow of fund
B)Out flow of fund
C)Non fund transaction
D)Fund transaction