Bank charges debited by the bank will be ________ when starting with an overdraft balance as per Pass Book.
A. Deducted
B. Ignored
C. Multiplied
D. Added
Answer: Option A
Solution (By JKSSB Mock Tests)
Bank charges increase the overdraft in the pass book. To arrive at the cash book overdraft (which is lower since it missed the charge), it must be deducted.
A: Revenue is recognized when the significant risks and rewards of ownership are transferred. R: This is based on the Realization Concept. Choose the correct option.
A.Both A and R are true and R is the correct explanation of A
B.A is false but R is true
C.Both A and R are true but R is NOT the correct explanation of A
Explanation:
The Realization Concept dictates that revenue is recognized when the legal right to receive payment is established, typically upon transfer of risks and rewards. R correctly identifies the concept.
Explanation:
The Re-order Level is the level at which a new order is placed. To ensure stock doesn't run out during the maximum lead time, it is calculated as Maximum consumption rate multiplied by Maximum re-order period.
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