Tag: commercial studies

Questions Related to commercial studies

Horizontal merger is a combination of ____________ in the same business and as the production process.

commercial studies marketing and sales difference between products and services product marketing

  1. single firm

  2. single or two firm

  3. two or more firms

  4. all of these

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Correct Option: C

_____________ specifies the estimated quantity and cost of material during different volumes of production.

commercial studies marketing and sales difference between products and services product marketing

  1. Case budget

  2. Material budget

  3. Production budget

  4. Sales budget

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Correct Option: B
Explanation:

Material budget specifies the estimated quality and cost of material during different volumes of production.

It is the budget prepared to show the quality of direct material and raw materials required to manufacture a product.

Sell _________ and not ______ is the statement given by steve is...

commercial studies marketing and sales difference between products and services product marketing

  1. Company, customers

  2. Desire, wants

  3. Products,dreams

  4. Dreams, product

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Correct Option: D

A company engaged in a cohol manufacturing merged with a cigarette manufacturing firm. What type of merger is this?

commercial studies marketing and sales difference between products and services product marketing

  1. Horizontal merger

  2. Product extension merger

  3. Market extension merger

  4. Vertical merger.

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Correct Option: B
Explanation:

Horizontal merger is merger of two competition firms doing same business Vertical merger is merger of two companies which are at different level of production operating in same industry. Product extension merger is the merger of two companies which have the same customers with related products and services. The objective is to complement the portfolio and cross-sell products and services and is often driven by economies of scale upstream in sales and marketing.

A bank reconciliation statement is prepared with the balance of __________.

commercial studies cash book and bank related transactions objectives and importance of bank reconciliation statement meaning of petty cash book bank balance, bank overdraft, meaning, and bank reconciliation statement

  1. Pass book

  2. Cash book

  3. Both pass book and cash book

  4. None of the above

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Correct Option: C
Explanation:

To reconcile means to find out the differences if any between two or more things and eliminate it. Now, in case of any banking transactions for each deposit or withdrawal the entry is recorded at two places.

  • The pass book maintained by the bank and
  • The cash book maintained by the account holder.

These two books are opposites of each other which means if one shows credit balance then the other would reflect a debit balance of the exact same amount. But due to reasons like timing differences the balances of both these books do not match. 

So, to reconcile the same a bank reconciliation statement is prepared. The aim while preparing a bank reconciliation statement is to take either pass book or cash book  balance as the starting point, to add or deduct certain entries and reach the balance of the other book ie, if cash book balance is the starting point then after reconciling we should reach at pass book balance.

A bank reconciliation statement is prepared by_________.

commercial studies cash book and bank related transactions objectives and importance of bank reconciliation statement meaning of petty cash book bank balance, bank overdraft, meaning, and bank reconciliation statement

  1. Creditors

  2. Bank

  3. Account holder in a bank

  4. Debtors

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Correct Option: C
Explanation:

Whenever money is deposited in bank  or withdrawn from bank it is recorded in two places.

  • The pass book maintained by the bank
  • The cash book (bank column ) maintained by the account holder.
These two books are opposites of each other which means if one shows credit balance then the other would reflect a debit balance of the exact same amount. But due to reasons like timing differences the balances of both these books do not match. Now, it is not practical and feasible for the bank to reconcile the account balances of each and every account holder so, the account holder prepares a bank reconciliation statement for his account maintained in the bank.

When a banker collects the bills and credits the amount, pass book overdraft shows ______ balance than before.

commercial studies cash book and bank related transactions objectives and importance of bank reconciliation statement meaning of petty cash book bank balance, bank overdraft, meaning, and bank reconciliation statement

  1. lower

  2. profit

  3. higher

  4. None of the Above

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Correct Option: A
Explanation:

Pass book overdraft can be simply stated as debit/negative balance in the pass book. Which means the account holder has overdrawn from his account . So when a banker collects bills and credits the amount what happens is that the amount of bill is being received into the account and as a result the liability of the account holder is being reduced. Therefore, after the credit of the bill into the account the pass book overdraft would get reduced and show a lower debit balance than before.

Passbook is the statement of account of the customer maintained by the bank. 

commercial studies cash book and bank related transactions objectives and importance of bank reconciliation statement meaning of petty cash book bank balance, bank overdraft, meaning, and bank reconciliation statement

  1. True

  2. False

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Correct Option: A
Explanation:

True. Pass book is a copy of customer's account in the books of the bank. It shows all the transactions of a customer with the bank from the point of view of the bank as it is prepared by the bank.

Favourable bank balance as per the cash book will be less than the bank pass book balance when there are unpresented cheques for payment. 

commercial studies cash book and bank related transactions objectives and importance of bank reconciliation statement meaning of petty cash book bank balance, bank overdraft, meaning, and bank reconciliation statement

  1. True

  2. False

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Correct Option: A
Explanation:

True. 

Unpresented cheques are cheques issued by the business, but not yet presented for payment at the bank. This reduces the balance in cash book as compared to balance as per pass book. Balance in pass book is effected by the bank only when such cheques are cleared by the bank. 

So, favourable bank balance as per cash book will be less than the bank pass book balance when there are in unpresented cheques for payment.

Cheques deposited but not collected will result in increasing the balance of the cash book when compared to pass book. 

commercial studies cash book and bank related transactions objectives and importance of bank reconciliation statement meaning of petty cash book bank balance, bank overdraft, meaning, and bank reconciliation statement

  1. True

  2. False

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Correct Option: A
Explanation:

True. Cheques deposited but not collected are those cheques which are received by the business from its customers or debtors. The business records such cheques in its books by debiting the cash book, which increases the cash book balance and then deposits them into the bank for collection. However, the bank credits the pass book only when such cheques are cleared.