S1: Margin of Safety is the excess of break-even sales over actual sales. S2: Margin of Safety is calculated as (Actual Sales - Break-Even Sales). Which statement(s) is/are correct? MCQ with Answer and Explanation
S1: Margin of Safety is the excess of break-even sales over actual sales. S2: Margin of Safety is calculated as (Actual Sales - Break-Even Sales). Which statement(s) is/are correct?
A. Neither S1 nor S2
B. Both S1 and S2
C. S2 only
D. S1 only
Answer: Option C
Solution (By JKSSB Mock Tests)
Margin of Safety is the excess of *actual* or *budgeted* sales over the break-even sales, not the other way around. S1 is incorrect. S2 correctly states the formula: Actual Sales - Break-Even Sales.
Explanation:
GST is a destination-based consumption tax. The revenue goes to the state where the goods or services are *consumed*, not where they are manufactured (which was the case under the origin-based CST). S1 is correct, S2 is incorrect.
Explanation:
ZBB requires managers to justify every item of expenditure from scratch. This is because it starts with a 'zero base' for each new period, rather than using the previous year's budget as a baseline. R correctly explains A.
S1: Ind AS 1 deals with Presentation of Financial Statements. S2: Ind AS 101 deals with First-time Adoption of Ind AS. Which statement(s) is/are correct?
Explanation:
Ind AS 1 prescribes the basis for presentation of general purpose financial statements. Ind AS 101 provides the procedures for an entity adopting Ind AS for the first time. Both statements correctly identify the standards.
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