When analyzing financial statements, the 'Window Dressing' practice refers to: MCQ with Answer and Explanation

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When analyzing financial statements, the 'Window Dressing' practice refers to:

A. Displaying financial results transparently

B. Repairing the office building

C. Manipulating accounts to show a better financial position than reality

D. Writing off bad debts

Answer: Option C

Solution (By JKSSB Mock Tests)

Window dressing involves accounting tricks (like delaying expense recording) to make financial statements look stronger to investors.

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

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Question #1

A 'Standard Cost' is:

A. Average cost

B. A predetermined cost based on technical estimates

C. Actual cost incurred

D. Historical cost

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Correct Answer: Option B

Explanation:
Standard cost is a scientifically predetermined cost used as a benchmark for performance evaluation.

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

Question #2

A 'Cost Centre' is:

A. A unit of product

B. A sales territory

C. A location, person, or item of equipment for which costs are accumulated

D. A method of pricing

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Correct Answer: Option C

Explanation:
Cost centre is a segment of the organization where costs are collected, e.g., department, machine.

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

Question #3

Which of the following is a revenue expenditure?

A. Extension of building

B. Legal expenses to acquire a building

C. Purchase of land for factory

D. Annual repairs of machinery

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Correct Answer: Option D

Explanation:
Annual repairs are recurring and maintain existing asset's earning capacity, hence revenue expenditure. Others are capital expenditures.

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

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