The 'Recoverable Amount' of a cash-generating unit (CGU) is: MCQ with Answer and Explanation

Question
The 'Recoverable Amount' of a cash-generating unit (CGU) is:
A. Current market price
B. Lower of cost and net realisable value
C. Replacement cost
D. Higher of fair value less costs of disposal and value in use
Answer: Option D
Solution (By JKSSB Mock Tests)
As per Ind AS 36, recoverable amount is the higher of FVLCD and VIU.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Question #1
The 'Cost of Goods Sold' in a manufacturing company includes:
A. Selling expenses
B. Total manufacturing cost adjusted for WIP
C. Prime cost
D. Only direct material
Discuss
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Correct Answer: Option B

Explanation:
COGS for manufacturer = Opening finished goods + Cost of production - Closing finished goods. Cost of production = total manufacturing cost + opening WIP - closing WIP.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
Which of the following is typically maintained using the imprest system?
A. Petty Cash Book
B. Main Cash Book
C. Purchase Day Book
D. Sales Ledger
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Correct Answer: Option A

Explanation:
The Petty Cash Book uses the imprest system where a fixed float is maintained and actual expenses are reimbursed periodically.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
The term 'Debtors' represent:
A. Bills payable
B. Amounts owed by the business
C. Amounts owed to the business by customers
D. Outstanding expenses
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Correct Answer: Option C

Explanation:
Debtors are persons/entities who owe money to the business for goods/services provided on credit.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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