Q. What is the main advantage of the Units of Production Method?
A.
Simplicity
B.
Accuracy in matching expenses to revenues
C.
Lower initial depreciation
D.
Higher tax benefits
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Solution
The main advantage of the Units of Production Method is its accuracy in matching expenses to revenues based on actual usage.
Correct Answer:
B
— Accuracy in matching expenses to revenues
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Q. What is the main advantage of using activity-based costing (ABC)?
A.
Simplicity in calculations
B.
More accurate product costing
C.
Lower administrative costs
D.
Easier to implement
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Solution
ABC provides more accurate product costing by assigning costs based on actual activities.
Correct Answer:
B
— More accurate product costing
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Q. What is the main advantage of using NPV over other capital budgeting techniques?
A.
It is easier to calculate
B.
It provides a clear dollar value of profitability
C.
It does not require cash flow estimates
D.
It is the only method that considers risk
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Solution
The main advantage of NPV is that it provides a clear dollar value of the profitability of a project.
Correct Answer:
B
— It provides a clear dollar value of profitability
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Q. What is the main advantage of using the Units of Production Method for depreciation?
A.
Simplicity
B.
Matching Expenses with Revenue
C.
Tax Benefits
D.
Consistency
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Solution
The Units of Production Method matches the expense of depreciation with the actual usage of the asset, providing a more accurate reflection of the asset's contribution to revenue.
Correct Answer:
B
— Matching Expenses with Revenue
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Q. What is the main advantage of using the units of production method?
A.
It simplifies accounting records.
B.
It matches expenses with actual usage.
C.
It provides a higher depreciation expense in early years.
D.
It is easier to calculate than other methods.
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Solution
The units of production method matches the depreciation expense with the actual usage of the asset, providing a more accurate reflection of its wear and tear.
Correct Answer:
B
— It matches expenses with actual usage.
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Q. What is the main advantage of using the weighted average method for inventory valuation?
A.
Simplicity
B.
Tax benefits
C.
Accuracy
D.
Compliance with GAAP
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Solution
The main advantage of the weighted average method is its simplicity in calculating the cost of goods sold and ending inventory.
Correct Answer:
A
— Simplicity
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Q. What is the main difference between direct and indirect costs?
A.
Direct costs are variable, indirect costs are fixed
B.
Direct costs can be traced to a specific cost object, indirect costs cannot
C.
Direct costs are always higher than indirect costs
D.
There is no difference
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Solution
Direct costs can be traced directly to a specific cost object, while indirect costs cannot.
Correct Answer:
B
— Direct costs can be traced to a specific cost object, indirect costs cannot
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Q. What is the main disadvantage of a partnership?
A.
Limited capital
B.
Shared profits
C.
Complexity in decision-making
D.
Unlimited liability
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Solution
Partners in a partnership typically face unlimited liability, meaning they are personally responsible for business debts.
Correct Answer:
D
— Unlimited liability
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Q. What is the main disadvantage of a sole proprietorship?
A.
Complex tax structure
B.
Limited capital raising ability
C.
Shared decision-making
D.
Limited liability
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Solution
The main disadvantage of a sole proprietorship is the limited ability to raise capital, as it relies solely on the owner's resources.
Correct Answer:
B
— Limited capital raising ability
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Q. What is the main disadvantage of using LIFO for inventory valuation?
A.
Lower net income
B.
Higher ending inventory
C.
Complexity in record-keeping
D.
All of the above
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Solution
The main disadvantages of using LIFO include lower net income, higher ending inventory values, and increased complexity in record-keeping.
Correct Answer:
D
— All of the above
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Q. What is the main focus of flexible budgeting?
A.
To compare actual costs with fixed costs
B.
To adjust budgets based on actual activity levels
C.
To eliminate all variances
D.
To set sales targets
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Solution
Flexible budgeting adjusts the budget based on the actual level of activity, allowing for better comparison of actual costs.
Correct Answer:
B
— To adjust budgets based on actual activity levels
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Q. What is the main focus of marginal costing?
A.
Total costs
B.
Variable costs
C.
Fixed costs
D.
Sunk costs
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Solution
Marginal costing focuses on variable costs, which are costs that change with the level of production.
Correct Answer:
B
— Variable costs
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Q. What is the main focus of marketing in a business?
A.
Product development
B.
Customer satisfaction
C.
Cost reduction
D.
Employee training
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Solution
The main focus of marketing is customer satisfaction, ensuring that products meet the needs and wants of consumers.
Correct Answer:
B
— Customer satisfaction
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Q. What is the main focus of marketing management?
A.
Product development
B.
Sales strategies
C.
Customer satisfaction
D.
Financial analysis
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Solution
The main focus of marketing management is customer satisfaction, ensuring that products and services meet the needs and desires of customers.
Correct Answer:
C
— Customer satisfaction
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Q. What is the main focus of marketing?
A.
Product development
B.
Customer satisfaction
C.
Financial management
D.
Human resources
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Solution
The main focus of marketing is to achieve customer satisfaction.
Correct Answer:
B
— Customer satisfaction
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Q. What is the main focus of relationship marketing?
A.
Maximizing short-term sales
B.
Building long-term customer loyalty
C.
Reducing marketing expenses
D.
Increasing product variety
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Solution
Relationship marketing focuses on building long-term customer loyalty and engagement rather than just maximizing short-term sales.
Correct Answer:
B
— Building long-term customer loyalty
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Q. What is the main focus of strategic management?
A.
Day-to-day operations
B.
Long-term goals and direction
C.
Employee performance evaluation
D.
Financial accounting
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Solution
Strategic management focuses on long-term goals and the overall direction of the organization.
Correct Answer:
B
— Long-term goals and direction
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Q. What is the main focus of strategic planning?
A.
Daily operations
B.
Long-term goals
C.
Employee management
D.
Financial forecasting
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Solution
Strategic planning focuses on setting long-term goals and determining the best approach to achieve them.
Correct Answer:
B
— Long-term goals
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Q. What is the main focus of variance analysis?
A.
To compare actual costs to budgeted costs
B.
To determine the break-even point
C.
To classify costs into fixed and variable
D.
To allocate overhead costs
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Solution
Variance analysis primarily focuses on comparing actual costs to budgeted costs to identify discrepancies.
Correct Answer:
A
— To compare actual costs to budgeted costs
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Q. What is the main goal of marketing management?
A.
To maximize production efficiency
B.
To create customer value and satisfaction
C.
To reduce operational costs
D.
To increase employee engagement
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Solution
The main goal of marketing management is to create customer value and satisfaction through effective marketing strategies.
Correct Answer:
B
— To create customer value and satisfaction
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Q. What is the main goal of marketing?
A.
To increase production efficiency
B.
To maximize customer satisfaction
C.
To enhance employee performance
D.
To reduce operational costs
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Solution
The main goal of marketing is to maximize customer satisfaction by understanding and meeting their needs.
Correct Answer:
B
— To maximize customer satisfaction
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Q. What is the main purpose of accounting ratios?
A.
To prepare journal entries
B.
To analyze financial performance
C.
To calculate tax liabilities
D.
To determine cash flow
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Solution
Accounting ratios are used to analyze financial performance and assess the financial health of a business.
Correct Answer:
B
— To analyze financial performance
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Q. What is the main purpose of forming a limited liability partnership (LLP)?
A.
To avoid double taxation
B.
To limit personal liability
C.
To simplify management
D.
To increase ownership control
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Solution
The primary purpose of an LLP is to provide limited liability protection to its partners while allowing them to participate in management.
Correct Answer:
B
— To limit personal liability
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Q. What is the margin of safety if the break-even sales are $100,000 and actual sales are $150,000?
A.
$50,000
B.
$100,000
C.
$150,000
D.
$200,000
Show solution
Solution
Margin of safety = Actual Sales - Break-even Sales = $150,000 - $100,000 = $50,000.
Correct Answer:
A
— $50,000
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Q. What is the margin of safety if the break-even sales are $200,000 and the actual sales are $300,000?
A.
$100,000
B.
$50,000
C.
$200,000
D.
$300,000
Show solution
Solution
Margin of Safety = Actual Sales - Break-even Sales = $300,000 - $200,000 = $100,000.
Correct Answer:
A
— $100,000
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Q. What is the marginal cost of producing one additional unit if the total cost of producing 100 units is $1,000 and the total cost of producing 101 units is $1,020?
A.
$20
B.
$10
C.
$30
D.
$15
Show solution
Solution
The marginal cost is the change in total cost divided by the change in quantity. Here, it is ($1,020 - $1,000) / (101 - 100) = $20.
Correct Answer:
A
— $20
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Q. What is the maximum amount of deduction available under Section 80C for individual taxpayers?
A.
Rs. 1,00,000
B.
Rs. 1,50,000
C.
Rs. 2,00,000
D.
Rs. 50,000
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Solution
As per the Income Tax Act, the maximum deduction available under Section 80C is Rs. 1,50,000.
Correct Answer:
B
— Rs. 1,50,000
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Q. What is the maximum amount of deduction available under Section 80C for the financial year 2022-23?
A.
Rs. 1,00,000
B.
Rs. 1,50,000
C.
Rs. 2,00,000
D.
Rs. 50,000
Show solution
Solution
The maximum deduction available under Section 80C for the financial year 2022-23 is Rs. 1,50,000.
Correct Answer:
B
— Rs. 1,50,000
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Q. What is the maximum amount of deduction available under Section 80D for health insurance premiums for senior citizens?
A.
Rs. 25,000
B.
Rs. 50,000
C.
Rs. 30,000
D.
Rs. 40,000
Show solution
Solution
The maximum deduction available under Section 80D for health insurance premiums for senior citizens is Rs. 50,000.
Correct Answer:
B
— Rs. 50,000
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Q. What is the maximum amount of deduction available under Section 80D for health insurance for a family including parents?
A.
25,000
B.
50,000
C.
75,000
D.
1,00,000
Show solution
Solution
The maximum deduction available under Section 80D for health insurance for a family including parents is 50,000.
Correct Answer:
B
— 50,000
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