Correct Answer:
A. Non-rivalry and non-excludability
National defense is a classic example: one person's use does not reduce others' use and nobody can be excluded.
November 13, 2026 · Accounting and Finance MCQs, Public Finance & Budgeting MCQs
A pure public good is characterized by:
Related MCQs
Under the accrual basis of accounting in the public sector, transactions are recognized when:
A.
Cash is received only
B.
Cash is paid only
C.
They occur, regardless of when cash is received or paid
D.
The budget is approved
Correct answer is:
C. They occur, regardless of when cash is received or paid
Do you agree with this answer?
A long association of the same audit partner with a client mainly creates which threat?
A.
Self-review threat
B.
Advocacy threat
C.
Liquidity threat
D.
Familiarity threat
Correct answer is:
D. Familiarity threat
Do you agree with this answer?
Professional skepticism means the auditor:
A.
Maintains a questioning mind and critically assesses audit evidence
B.
Assumes management is dishonest
C.
Accepts management explanations without verification
D.
Avoids communicating with management
Correct answer is:
A. Maintains a questioning mind and critically assesses audit evidence
Do you agree with this answer?
During a period of rising prices, the FIFO method gives:
A.
Lower closing inventory value and lower profit
B.
The same profit as LIFO
C.
Higher closing inventory value and higher profit compared with weighted average
D.
No effect on profit
Correct answer is:
C. Higher closing inventory value and higher profit compared with weighted average
Do you agree with this answer?
Sensitivity analysis in capital budgeting examines:
A.
Only the best case scenario
B.
Past performance of the firm
C.
How changes in one input variable affect the project's NPV
D.
The effect of tax rates on dividends
Correct answer is:
C. How changes in one input variable affect the project's NPV
Do you agree with this answer?
The prudence (conservatism) concept suggests that a business should:
A.
Recognize all expected profits in advance
B.
Not overstate assets or income and not understate liabilities or expenses
C.
Ignore all expected losses
D.
Record assets at the highest possible value
Correct answer is:
B. Not overstate assets or income and not understate liabilities or expenses
Do you agree with this answer?
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