Top 150+ Solved Working Capital Management MCQ Questions Answer

From 106 to 120 of 143

Q. ABC Analysis is used in

a. inventory management

b. receivables management

c. accounting policies,

d. corporate governance.

  • a. inventory management

Q. If no information is available, the General Rule for valuation of stock forbalance sheet is

a. replacement cost,

b. realizable value,

c. historical cost,

d. standard cost.

  • c. historical cost,

Q. In ABC inventory management system, class A items may require

a. higher safety stock

b. frequent deliveries

c. periodic inventory system

d. updating of inventory records.

  • a. higher safety stock

Q. Inventory holding cost may include

a. material purchase cost,

b. penalty charge for default,

c. interest on loan,

d. none of the above.

  • d. none of the above.

Q. Use of safety stock by a firm would

a. increase inventory cost

b. decrease inventory cost,

c. no effect on cost

d. none of the above.

  • a. increase inventory cost

Q. Which of the following is true for a company which uses continuous reviewinventory system

a. order interval is fixed,

b. order interval varies,

c. order quantity is fixed,

d. both (a) and (c).

  • b. order interval varies,

Q. EOQ determines the order size when

a. total order cost is minimum

b. total number of order is least,

c. total inventory costs are minimum,

d. none of the above.

  • c. total inventory costs are minimum,

Q. ABC Analysis is useful for analyzing the inventories:

a. based on their quality,

b. based on their usage and value,

c. based on physical volume,

d. all of the above.

  • b. based on their usage and value,

Q. Inventory is generally valued as lower of

a. market price and replacement cost

b. cost and net realizable value

c. cost and sales value,

d. sales value and profit.

  • b. cost and net realizable value

Q. Which of the following is not included in cost of inventory?

a. purchase cost

b. transport in cost,

c. import duty,

d. selling costs.

  • d. selling costs.

Q. Cost of not carrying sufficient inventory is known as

a. carrying cost,

b. holding cost,

c. total cost

d. stock-out cost

  • d. stock-out cost

Q. Which of the following is not a benefit of carrying inventories

a. reduction in ordering cost,

b. avoiding lost sales,

c. reducing carrying cost,

d. avoiding production shortages.

  • c. reducing carrying cost,

Q. Which of the following is not a standard method of inventory valuation?

a. first in first out

b. standard cost,

c. average pricing,

d. realizable value.

  • c. average pricing,

Q. System of procuring goods when required, is known as,

a. free on board (fob),

b. always butter control (abc),

c. jest in time (jit)

d. economic order quantity.

  • c. jest in time (jit)
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