In cost accounting, the 'Re-order Level' is calculated as:
A. Normal consumption rate x Normal re-order period
B. Maximum consumption rate x Maximum re-order period
C. Average consumption rate x Average re-order period
D. Minimum consumption rate x Minimum re-order period
Answer: Option B
Solution (By JKSSB Mock Tests)
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.
S1: In the case of admission of a partner, if the new partner brings his share of goodwill in cash, the existing partners' capital accounts are credited in their sacrificing ratio. S2: If the new partner is unable to bring his share of goodwill in cash, the goodwill account is opened in the books of the firm. Which statement(s) is/are correct?
Explanation:
S1 is correct. S2 is incorrect because AS 26 prohibits the recognition of self-generated goodwill in the books; hence, the goodwill account cannot be opened. Instead, the adjustment is passed through the partners' capital accounts.
Explanation:
Recording daily transactions is a function of financial accounting, not financial management. Financial management focuses on planning, organizing, and controlling funds.
Which working capital financing approach uses short-term funds to finance temporary current assets and long-term funds to finance permanent current assets?
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