Tag: commercial applications

Questions Related to commercial applications

One of the items is not related with e-banking ___________.

commercial applications bases of accounting cash and mercantile system basis of accounting basis of accounting system

  1. Demand draft

  2. SPMS

  3. ECS

  4. ATM

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Correct Option: A

The correct sequence of following will be :
1. Policies           2. Objective
3. Programmes   4. Procedures.

commercial applications bases of accounting cash and mercantile system basis of accounting basis of accounting system

  1. 1, 2, 3, 4

  2. 1, 2, 4, 3

  3. 2, 1, 4, 3

  4. 2, 1, 3, 4

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Correct Option: D

In the comparative financial statement, comparison of financial data is done in the form of ___________ .

commercial applications bases of accounting cash and mercantile system basis of accounting basis of accounting system

  1. Absolute data of each year in terms of Rupees of the same firm

  2. Increase or decrease in data over the years of the same firm

  3. Increase or decrease in data of different firms

  4. Any of the above

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Correct Option: D

Cash account normally has _________________.

commercial applications bases of accounting cash and mercantile system basis of accounting basis of accounting system

  1. Debit balance or credit balance

  2. Credit balance

  3. Debit balance

  4. None of these

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Correct Option: C

Which of the following statements is 'True'?

commercial applications bases of accounting cash and mercantile system basis of accounting basis of accounting system

  1. Building Account is a nominal account

  2. Outstanding rent account is a non-personal account

  3. Every debit has a corresponding credit

  4. Income is debited

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Correct Option: C

If the Money Discount Rate is 19% and Inflation Rate is 12%, then the Real Discount Rate is __________.

commercial applications bases of accounting cash and mercantile system basis of accounting basis of accounting system

  1. 7%

  2. 5%

  3. 5.70%

  4. 6.25%

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Correct Option: D

Cash discount terms offered by trade creditors should never be accepted because __________________.

commercial applications bases of accounting cash and mercantile system basis of accounting basis of accounting system

  1. Benefit is very small

  2. Cost is very high

  3. No sense to pay earlier

  4. None of the above

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Correct Option: D
Explanation:

Cash discount is allowed by the firms to speed up the cash collections. 


If cash discount is allowed by the creditors, business have to make a trade off between the earning from cash discount verses the cost of repaying the amount. 

Interest on performing assets should be recognized on ___________ basis.

commercial applications bases of accounting cash and mercantile system basis of accounting basis of accounting system

  1. actually received

  2. standard

  3. accrual

  4. None of these

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Correct Option: C
Explanation:

Banks are to recognize their income on accrual basis in respect of income on performing assets and on cash basis in respect of income on non-performing assets (NPA). Any interest accrued and credited to income account must be cancelled by a reverse entry once the credit facility comes under the category of NPAs.

Income includes ______________.

commercial applications bases of accounting cash and mercantile system basis of accounting basis of accounting system

  1. Income earned

  2. Income received

  3. Income receivable

  4. All of the above

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Correct Option: D

Which of the following is not followed in capital budgeting?

commercial applications bases of accounting cash and mercantile system basis of accounting basis of accounting system

  1. Cash flows Principle

  2. Interest Exclusion Principle

  3. Accrual Principle

  4. Post-tax Principle

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Correct Option: C
Explanation:

Capital budgeting has five principles that plays a crucial role in the allocation of money and the process of capital budgeting.

The five principles are:-

(1) Decision are based on cash flows, not accounting income,

(2) Cash flow are based on opportunity cost,
(3) The timing of cash flows are important,
(4) Cash flows are analysed on an after tax basis
(5) Financing costs are reflected on projects required rate of return.
 
Accrual principle is not followed in capital budgeting.