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Profits and Gains from Business or Profession Question 1.State with reason, whether the following statements are true, or false with regard to the provisions of the Income-tax Act, 1961 for the Assessment year 2021-22: [Nov. 2008, 2 Marks](a) Rural branches of the Cooperative banks are not allowed to claim provision for bad and doubtful debts.(b) […]
Budget and Budgetary Control 1. Budgetary Control: It is the system of management control and accounting in which all the operations are forecasted and planned in advance to the: extent possible and the actual results compared with the forecasted and planned results. 2. Types of Budget: Capacity wise – Fixed Budget, Flexible Budget, Functions wise […]
Marginal Costing Marginal Costing:It is a costing system where products or services and inventories are valued at variable costs only. It does not consider fixed costs. Total Contribution (C) = Sales Revenue (S) – Total Variable Cost (V)Contribution per unit = Sales price per unit – Variable cost per unit Profit = Contribution – Fixed […]
Standard Costing Standard Costing:A technique which uses standards for costs and revenues for the purposes of control through variance analysis. Variance:A divergence from the pre-determined rates. Process of Standard Costing: Setting standards Ascertaining actual costs Compare standard cost and actual cost Investigate the reasons for variances Disposed-off the variance Types of Variance: Controllable variances: Those […]
Joint Products and By Products Question 1.Narrate the terms ‘Joint Products’ and ‘By-Products’ with an example of each term. [CA Inter Dec. 2021, 5 Marks]Answer:Joint Products: Joint products represent two or more products separated in the course of the same processing operation usually requiring further processing, each product being in such proportion that no single […]
Process and Operation Costing Question 1.Explain the “Equivalent Production.” [CA Inter Nov. 2013, 4 Marks]Answer:Equivalent Production:When opening and closing stocks of work-in-process exist, unit costs cannot be computed by simply dividing the total cost by total number of units still in process. We can convert the work-in-process units into finished units called equivalent production units […]
Agency – MCQs with Answers 1. What is the primary role of an agent?a) To act on behalf of the principalb) To make independent decisionsc) To act for themselvesd) To supervise the principalAnswer: a) To act on behalf of the principal 2. Which of the following is NOT a type of agency?a) Agency by agreementb) […]
Company Accounts What is the minimum number of members required to form a private company?a) 1b) 2c) 7d) 10Answer: b) 2 What is the minimum number of members required to form a public company?a) 2b) 7c) 10d) 50Answer: b) 7 Which document contains the fundamental rules of a company?a) Prospectusb) Articles of Associationc) Memorandum of […]
Partnership and LLP Accounts Which document is created to outline the rights and duties of partners?a) Memorandum of Associationb) Articles of Associationc) Partnership Deed d) LLP Agreement In the absence of a partnership deed, partners share profits and losses:a) Equally b) In capital ratioc) Based on aged) Based on experience Which account is not prepared […]