S1: ABC analysis is a technique of inventory control. S2: In ABC analysis, 'A' items represent high value and low quantity. Which statement(s) is/are correct? MCQ with Answer and Explanation

S1: ABC analysis is a technique of inventory control. S2: In ABC analysis, 'A' items represent high value and low quantity. Which statement(s) is/are correct?
A. S1 only
B. Both S1 and S2
C. S2 only
D. Neither S1 nor S2
Answer: Option B
Solution (By JKSSB Mock Tests)
ABC analysis classifies inventory based on usage value. 'A' items are the most valuable, typically representing a small percentage of total quantity but a large percentage of total inventory cost. Both statements are correct.

Discuss this Question (0)

No comments yet. Be the first to start the discussion!

Practice More Accountancy and Book Keeping Questions

Question #1
The 'Special Economic Zone' (SEZ) units are considered:
A. Partially inside
B. Within the customs territory of India
C. Like DTA
D. Outside the customs territory of India

Correct Answer: Option D


Explanation:
SEZ is treated as foreign territory for customs purposes.

Question #2
The 'GST Audit' by a chartered accountant/cost accountant was abolished from:
A. Never existed
B. FY 2020-21
C. FY 2019-20
D. FY 2021-22

Correct Answer: Option B


Explanation:
Finance Act 2021 removed the requirement of GST audit by CA/CMA and self-certification was introduced from FY 2020-21.

Question #3
The 'Labour Efficiency Variance' is computed as:
A. Actual Hours × (Standard Rate - Actual Rate)
B. Standard Hours × (Standard Rate - Actual Rate)
C. Actual Rate × (Standard Hours - Actual Hours)
D. Standard Rate × (Standard Hours - Actual Hours)

Correct Answer: Option D


Explanation:
Labour efficiency variance = SR (SH - AH).