Accounting - Study Mode
[#2786] While determining the normal rate of return for the valuation of shares in market value method, which of the following should be taken into consideration?
Correct Answer
(D) All of the above
[#2787] Cash received from debtors Rs. 12,000 and furniture purchased Rs. 7,000 the net effect on fund flow will be
Correct Answer
(D) Net decrease in working captial is Rs. 7,000
[#2788] Which of the following is true when a debtor pays his dues?
Correct Answer
(D) There is no change in total assets or total liabilities
Explanation
Solution: When a debtor pays his dues there is no change in total assets or total liabilities because debtor in current assets decrease and cash & bank in current assets increase.
[#2789] Which of the following ratios indicate the short-term liquidity of a business?
Correct Answer
(C) Acid test ratio
Explanation
Solution: Acid test ratios indicate the short-term liquidity of a business. The acid-test ratio uses a firm's balance sheet data as an indicator of whether it has sufficient short-term assets to cover its short-term liabilities.
[#2790] The maximum amount beyond which a company is not allowed to raise funds by issue of shares is
Correct Answer
(C) Nominal capital
Explanation
Solution: The maximum amount beyond which a company is not allowed to raise funds by issue of shares is Nominal capital. Nominal capital, also known as authorized capital, represents the securities that are designated for shareholders.