In Cost-Volume-Profit (CVP) analysis, 'Angle of Incidence' represents: MCQ with Answer and Explanation

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In Cost-Volume-Profit (CVP) analysis, 'Angle of Incidence' represents:

A. The point of zero profit

B. The percentage of variable cost to sales

C. The angle between total sales line and total cost line above the BEP

D. The angle of the fixed cost line

Answer: Option C

Solution (By JKSSB Mock Tests)

A wider angle of incidence on a break-even chart indicates a higher rate of profit generation once the break-even point is crossed.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

A compound journal entry is an entry that:

A. Corrects previous errors

B. Involves more than one debit or more than one credit account

C. Affects only two accounts

D. Is passed at the end of the year

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Correct Answer: Option B

Explanation:
A compound entry contains multiple debits and/or multiple credits, combining related transactions on the same date.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #2

A petty cash voucher is authorized by:

A. The payee

B. The bank manager

C. The external auditor

D. The petty cashier or an authorized manager

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Correct Answer: Option D

Explanation:
For internal control, petty cash vouchers must be authorized by a responsible official before disbursement is made.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #3

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?

A. S1 only

B. Neither S1 nor S2

C. Both S1 and S2

D. S2 only

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Correct Answer: Option A

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.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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