Accounting - Questions and Answers for Competitive Exams | GkSeries

37. In funds flow statement, outflow of funds on account of operations is

• [A] application of fund
• [B] source of cash
• [C] application of cash
• [D] source of fund

Answer: Option [A]

38. In funds flow statement, repayment of long-term loans is

• [A] application of fund
• [B] source of cash
• [C] application of cash
• [D] source of fund

Answer: Option [A]

39. In adjusted P & L account, depreciation on fixed assets will be

• [A] debited
• [B] credited
• [C] ignored
• [D] deducted

Answer: Option [A]

40. Cash flow analysis is based on the

• [A] capital
• [B] fixed assets
• [C] cash concept of funds
• [D] working capital

Answer: Option [C]

41. In cash flow statement, increase in current asset

• [A] increases cash
• [B] decreases cash
• [C] increases working capital
• [D] decreases working capital

Answer: Option [B]

42. In cash flow statement, opening balances of bank balance is posted in which side of the statement

• [A] sources of cash
• [B] application of cash
• [C] sources of funds
• [D] application of funds

Answer: Option [A]

43. In cash flow statement, closing balances of bank balance is posted in which side of the statement

• [A] sources of cash
• [B] application of cash
• [C] sources of funds
• [D] application of funds

Answer: Option [B]

44. Production cost under marginal costing includes

• [A] prime cost only
• [B] prime cost and fixed overhead
• [C] prime cost and variable overhead
• [D] prime cost, variable overhead and fixed overhead

Answer: Option [C]

45. Contribution margin is equal to

• [A] fixed cost - loss
• [B] profit + variable cost
• [C] sales - fixed cost - profit
• [D] sales - profit

Answer: Option [A]

46. P/V Ratio is an indicator of

• [A] the rate at which goods are sold
• [B] the volume of sales
• [C] the volume of profit
• [D] the rate of profit

Answer: Option [D]

47. An increase in variable costs

• [A] increases p/v ratio
• [B] increases the profit
• [C] reduces contribution
• [D] increases margin of safety

Answer: Option [C]

48. CVP analysis is most important for the determination of

• [A] sales revenue necessary to equal fixed costs
• [B] relationship between revenues and costs at various levels of operations
• [C] variable revenues necessary to equal fixed costs
• [D] volume of operations necessary to Break-even

Answer: Option [A]