Correct Answer:
B. Rs. 80,000
RI = 200,000 - (12% x 1,000,000) = 200,000 - 120,000 = Rs. 80,000.
November 13, 2026 · Accounting and Finance MCQs, Cost & Management Accounting MCQs
Operating income is Rs. 200,000, invested assets are Rs. 1,000,000 and the required rate of return is 12%. Residual income is:
Related MCQs
In public sector internal control, the main purpose of segregation of duties is to:
A.
Increase the number of staff only
B.
Reduce the risk of error, fraud and misappropriation by dividing incompatible functions
C.
Avoid the need for budgets
D.
Speed up audits
Correct answer is:
B. Reduce the risk of error, fraud and misappropriation by dividing incompatible functions
Do you agree with this answer?
Fund accounting is commonly used in the public sector because:
A.
Government has no assets
B.
All money is treated as one pool
C.
It avoids the need for budgets
D.
Resources are separated into funds according to purposes or legal restrictions
Correct answer is:
D. Resources are separated into funds according to purposes or legal restrictions
Do you agree with this answer?
An unmodified (clean) audit opinion means that the financial statements:
A.
Are completely free of any error
B.
Prove that the entity is financially strong
C.
Give a true and fair view or present fairly, in all material respects
D.
Have been prepared by the auditor
Correct answer is:
C. Give a true and fair view or present fairly, in all material respects
Do you agree with this answer?
An impairment loss arises when:
A.
The asset's market price rises
B.
Depreciation is charged
C.
The carrying amount of an asset exceeds its recoverable amount
D.
An asset is fully depreciated
Correct answer is:
C. The carrying amount of an asset exceeds its recoverable amount
Do you agree with this answer?
Public debt is best described as:
A.
The accumulated stock of past government borrowing
B.
The annual budget deficit only
C.
The tax revenue of a year
D.
The money supply
Correct answer is:
A. The accumulated stock of past government borrowing
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Which of the following is a test of controls?
A.
Confirming receivable balances with customers
B.
Recalculating depreciation expense
C.
Inspecting purchase orders for evidence of authorization signatures
D.
Counting inventory at year end
Correct answer is:
C. Inspecting purchase orders for evidence of authorization signatures
Do you agree with this answer?
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