Tag: commercial studies

Questions Related to commercial studies

Forecasting done is based on the ______________.

commercial studies budgeting meaning, comparison, types, utility and limitations of budgets public finance, budget and fiscal policy public expenditure and public revenue

  1. Past figures

  2. Historical data

  3. Present (Existing) data

  4. Expected events

  5. All of the above

Show answer
Correct Option: E
Explanation:

Forecasting involves identification of past trend and projecting it into the future. It is based on the all the past figures, historical data ,existing data and expected events.

The meaning of 'fund' in funds flow statement is ___________.

commercial studies budgeting meaning, comparison, types, utility and limitations of budgets public finance, budget and fiscal policy public expenditure and public revenue

  1. Cash

  2. Net working capital

  3. Gross working capital

  4. Profit

Show answer
Correct Option: B
Explanation:

Fund flow statement shows that the flow of funds during the year. The meaning of funf in fund flow statement is net working capital.

Which of the following is not a motive for holding cash?

commercial studies budgeting meaning, comparison, types, utility and limitations of budgets public finance, budget and fiscal policy public expenditure and public revenue

  1. Transaction purposes

  2. Precaution against unexpected expenses

  3. Extending loans to group comanies

  4. Speculation purposes

  5. Mismatch between cash inflows and outflows.

Show answer
Correct Option: C
Explanation:

The following points highlight the five main motives for holding cash balances in a firm. The motives are: 1. Transaction Motive 

2. Precautionary Motive 
3. Speculative Motive 
4. Future Requirements 
5. Compensating Balances.

Arrange the following steps involved in capital budgeting in order of their occurrence:
i. Project selection
ii. Project appraisal
iii. Project generation
iv.Follow up
v. Project execution

commercial studies budgeting meaning, comparison, types, utility and limitations of budgets public finance, budget and fiscal policy public expenditure and public revenue

  1. $ii, iii, i, v, iv$

  2. $iii, ii, i, v, iv$

  3. $i, iii, ii, v, iv$

  4. $i, ii, iii, v, iv$

Show answer
Correct Option: B
Explanation:

Steps involved in capital budgeting in order of their occurrence:-

1. Identify and evaluate potential opportunities
2.Project appraisal

3.Project selection
4.Project execution
5.Follow up

Incremental cash flows in relation to capital budgeting decisions refer to the ____________.

commercial studies budgeting meaning, comparison, types, utility and limitations of budgets public finance, budget and fiscal policy public expenditure and public revenue

  1. Cash flows which are increasing over a period of time

  2. Incremental change in cash flows if the project is extended one year beyond its life period

  3. Cash flows which are directly attributable to the investment

  4. Difference between cash inflow streams and the initial outflow

  5. Comparision between any two cash outflows in a project's life period

Show answer
Correct Option: E
Explanation:

Incremental cash flows are the net additional cash flows generated by a company by undertaking a project. Capital budgeting decisions are based on comparison of a project's initial investment outlay to the future incremental cash flows of the project and its terminal cash flow.

Which of the following is not considered while preparing cash budget?

commercial studies budgeting meaning, comparison, types, utility and limitations of budgets public finance, budget and fiscal policy public expenditure and public revenue

  1. Accrual Principle

  2. Difference in Capital and Revenue items

  3. Conservation Principle

  4. All of the above

Show answer
Correct Option: D
Explanation:

A cash budget is an estimation of the cash inflows and outflows for business over a specific period of time. The budget is used to assess whether the entity has sufficient cash to operate. Companies use sales and production forecasts to create a cash budget, along with assumptions about necessary spending and accounts receivable. If a company does not have enough liquidity to operate, it must raise capital by issuing stock or by taking a debt.

A budget is frequently prepared to combine all other budgets in a summary form. It is known as _____________.

commercial studies budgeting meaning, comparison, types, utility and limitations of budgets public finance, budget and fiscal policy public expenditure and public revenue

  1. Sales Budget

  2. Purchase Budget

  3. Cash Budget

  4. Master Budget

Show answer
Correct Option: D
Explanation:

The master budget is the sum total of all the divisional budgets that is prepared by all the divisions. Further, it also includes the financial planning, cash-flow forecast and budgeted profit and loss account and balance sheet of the organization. 


Master Budget is the summary of the divisional budget.

Extinction of flora and fauna can be caused by 

commercial studies forests: our lifeline afforestation deforestation and its effect deforestation

  1. Aforestation

  2. Deforestation

  3. Reforestation

  4. None of the above

Show answer
Correct Option: B
Explanation:
1. Deforestation is the permanent destruction of forests in order to make the land available for other uses like farms, ranches, or urban. so that time of flora and fauna can face extinction. 
2. Reforestation is the process of replanting an area with trees.
3. Afforestation is the process of adding trees to an area.
So, the answer is "deforestation".

What would happen if forest disappears?

commercial studies forests: our lifeline afforestation deforestation and its effect deforestation

  1. Flood

  2. Global warming

  3. Extinction of animal

  4. All of the above

Show answer
Correct Option: D
Explanation:

Answer is option D i.e. "All of the above"
Deforestation(disappearance of the forest) is when humans remove or clear large areas of forest lands and related ecosystems for non-forest use.

  • Without trees, rain runs off soil into rivers and streams i.e soil erosion, raising the water level which leads to floods.
  • When deforestation takes place it results in an increase in carbon dioxide concentration in the atmosphere which results in global warming.
  • If forests are destroyed, animals and other creatures of the forests will come out to human settlements searching for a place to stay. They will be killed more, thus leading to their extinction.

The level of pollution increases due to whch of the following activity?

commercial studies forests: our lifeline afforestation deforestation and its effect deforestation

  1. Deforestation

  2. Aforestation

  3. Nitrogen cycle

  4. None of the above

Show answer
Correct Option: A