Which of the following is a 'period cost'? MCQ with Answer and Explanation
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Question #1
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A credit balance in the bank column of a cash book signifies:
Correct Answer: Option B
Explanation:
Since bank is an asset (usually debit balance), a credit balance means the business has withdrawn more than deposited, creating an overdraft liability.
Since bank is an asset (usually debit balance), a credit balance means the business has withdrawn more than deposited, creating an overdraft liability.
This question belongs to:
Accountancy and Statistics
Accountancy and Book Keeping
Question #2
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S1: Zero-Based Budgeting (ZBB) starts with a zero base for every new period. S2: Flexible Budget is prepared for a single level of activity. Which statement(s) is/are correct?
Correct Answer: Option A
Explanation:
ZBB requires justifying all expenses from scratch (zero base) for each period. A Flexible Budget is designed to change with different levels of activity, not a single level (which is a Fixed Budget). S1 is correct, S2 is incorrect.
ZBB requires justifying all expenses from scratch (zero base) for each period. A Flexible Budget is designed to change with different levels of activity, not a single level (which is a Fixed Budget). S1 is correct, S2 is incorrect.
This question belongs to:
Accountancy and Statistics
Accountancy and Book Keeping
Question #3
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If a debtor becomes insolvent and only 60 paise in a rupee is recovered from his debt of Rs 5,000, the Bad Debts account is debited by:
Correct Answer: Option C
Explanation:
Amount recovered = 60% of 5,000 = Rs 3,000. The irrecoverable amount (Bad Debt) is 40% of 5,000 = Rs 2,000.
Amount recovered = 60% of 5,000 = Rs 3,000. The irrecoverable amount (Bad Debt) is 40% of 5,000 = Rs 2,000.
This question belongs to:
Accountancy and Statistics
Accountancy and Book Keeping
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