Question 1

Simple Payback Method' is used in which kind of budgeting ?

Accepted Answer

The Simple Payback Method is used in capital budgeting to evaluate the time period required for an investment to generate cash flows sufficient to recover the initial investment cost.

Question 2

Cash sales of the company is Rs. 10,00,000 and Credit sales is Rs. 25,00,000. What would be Gross Prfit Ratio of the company if Gross profit amounts to Rs. 5,25,000 ?

Accepted Answer

Gross Profit Ratio is calculated as (Gross Profit / Net Sales) * 100. Net Sales = Cash Sales + Credit Sales = Rs. 10,00,000 + Rs. 25,00,000 = Rs. 35,00,000. Gross Profit Ratio = (Rs. 5,25,000 / Rs. 35,00,000) * 100 = 15.00%.

Question 3

By using the formula, [Opening Stock + Purchases - Closing Stock] what we get as a result ?

Accepted Answer

The formula [Opening Stock + Purchases - Closing Stock] calculates the Cost of Goods Sold (COGS), which represents the direct costs attributable to the production of the goods sold by a company.

Question 4

When Current Liabilities are deducted from Current Assets, we get ?

Accepted Answer

Working capital is calculated by subtracting current liabilities from current assets. This figure represents the short-term financial health and operational efficiency of a company.

Question 5

From the given alternatives, Which is the exmple of Owed Fund ?

Accepted Answer

Owed funds refer to the money that a company borrows and must repay, which includes instruments like debentures. 8% debentures are a form of debt financing, where the company owes money to the debenture holders, making it an example of owed funds.

Quiz 1: Finance and Accounting

Simple Payback Method' is used in which kind of budgeting ?

Cash sales of the company is Rs. 10,00,000 and Credit sales is Rs. 25,00,000. What would be Gross Prfit Ratio of the company if Gross profit amounts to Rs. 5,25,000 ?

By using the formula, [Opening Stock + Purchases - Closing Stock] what we get as a result ?

When Current Liabilities are deducted from Current Assets, we get ?

From the given alternatives, Which is the exmple of Owed Fund ?