A 'Cash Generating Unit' is defined under: MCQ with Answer and Explanation

Question
A 'Cash Generating Unit' is defined under:
A. AS 10 Fixed Assets
B. AS 28 Impairment of Assets
C. AS 2 Inventories
D. AS 14 Amalgamation
Answer: Option B
Solution (By JKSSB Mock Tests)
CGU is a concept used in impairment testing under AS 28.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Practice More Accountancy and Book Keeping Questions

Question #1
The time value of money concept is a core element in which financial management decision?
A. Working Capital Management
B. Inventory Valuation
C. Capital Budgeting
D. Ratio Analysis
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Correct Answer: Option C

Explanation:
Capital budgeting techniques like Net Present Value (NPV) discount future cash flows, fundamentally relying on the time value of money.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
Which of the following is an example of a contingent liability?
A. Sundry Creditors
B. Outstanding salaries
C. Bills Payable
D. Bills Receivable discounted
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Correct Answer: Option D

Explanation:
Bills receivable discounted is a contingent liability because the firm is only liable to pay the bank if the drawee fails to pay the bill on maturity.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
An unearned income (income received in advance) appears in the Balance Sheet as a:
A. Current Liability
B. Contingent Liability
C. Non-Current Liability
D. Current Asset
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Correct Answer: Option A

Explanation:
Income received before the service is provided creates an obligation to deliver the service, making it a current liability.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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