A company has an operating cycle of 90 days. Its average daily cash outflow is ₹2,00,000. It maintains a minimum cash balance of 10% of its cash outflow during the operating cycle. What is the minimum cash balance it should maintain? MCQ with Answer and Explanation
A company has an operating cycle of 90 days. Its average daily cash outflow is ₹2,00,000. It maintains a minimum cash balance of 10% of its cash outflow during the operating cycle. What is the minimum cash balance it should maintain?
A. ₹1,62,00,000
B. ₹18,00,000
C. ₹18,000
D. ₹1,80,000
Answer: Option B
Solution (By JKSSB Mock Tests)
Total cash outflow during the operating cycle = 90 days * ₹2,00,000 = ₹1,80,00,000. Minimum cash balance = 10% of ₹1,80,00,000 = ₹18,00,000.
S1: Vouching is the examination of documentary evidence of transactions. R: Vouching ensures that transactions are authorized and properly recorded. Which statement(s) is/are correct?
Explanation:
Vouching is the primary audit procedure involving the inspection of vouchers (receipts, invoices) to verify the authenticity of transactions. It ensures transactions are authorized, accurate, and recorded. Both are correct.
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