Integrated Reporting (IR) differs from traditional financial reporting because it: MCQ with Answer and Explanation
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Question #1
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S1: In financial management, the 'Net Present Value' (NPV) method assumes that cash inflows are reinvested at the cost of capital. S2: The 'Internal Rate of Return' (IRR) method assumes that cash inflows are reinvested at the IRR itself. Which statement(s) is/are correct?
Correct Answer: Option A
Explanation:
Both statements correctly identify the reinvestment rate assumptions of the two capital budgeting techniques. NPV assumes reinvestment at the cost of capital (discount rate), while IRR assumes reinvestment at the IRR.
Both statements correctly identify the reinvestment rate assumptions of the two capital budgeting techniques. NPV assumes reinvestment at the cost of capital (discount rate), while IRR assumes reinvestment at the IRR.
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Accountancy and Statistics
Accountancy and Book Keeping
Question #2
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In a partnership, interest on drawings is charged to:
Correct Answer: Option A
Explanation:
Interest on drawings is a gain for the firm, credited to P&L Appropriation A/c and debited to partners' capital/current accounts.
Interest on drawings is a gain for the firm, credited to P&L Appropriation A/c and debited to partners' capital/current accounts.
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Accountancy and Statistics
Accountancy and Book Keeping
Question #3
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A 'Sleeping Partner' is one who:
Correct Answer: Option C
Explanation:
Sleeping or dormant partner contributes capital but does not participate in management.
Sleeping or dormant partner contributes capital but does not participate in management.
This question belongs to:
Accountancy and Statistics
Accountancy and Book Keeping
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