A machine costing Rs. 200,000 is depreciated at 20% on the reducing balance method. Depreciation for the first year is:

Audit risk is the risk that the auditor:

A. Loses the client

B. Charges a lower audit fee

C. Gives an inappropriate opinion when the financial statements are materially misstated

D. Does not attend the physical inventory count

Net working capital is calculated as:

A. Total assets minus total liabilities

B. Current assets plus current liabilities

C. Current assets minus current liabilities

D. Fixed assets minus long-term debt

A tax expenditure is:

A. Money spent on collecting taxes

B. Salaries of tax officers

C. Tax refunds paid by mistake

D. Revenue forgone by government through exemptions, deductions and concessions

An investment of Rs. 100,000 generates equal annual cash inflows of Rs. 25,000. The payback period is:

A. 2.5 years

B. 5 years

C. 4 years

D. 0.25 years

Conversion cost is the sum of:

A. Direct materials and direct labor

B. Direct materials and factory overhead

C. Direct labor and factory overhead

D. Selling and administrative expenses

Under the imprest system of petty cash, the petty cash is:

A. Never reimbursed

B. Kept without a limit

C. Reimbursed periodically to restore it to a fixed amount

D. Recorded only in the ledger

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