Which budget estimates the amount of cash receipts and cash payments during the budget period? MCQ with Answer and Explanation

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Which budget estimates the amount of cash receipts and cash payments during the budget period?

A. Production Budget

B. Cash Budget

C. Sales Budget

D. Capital Budget

Answer: Option B

Solution (By JKSSB Mock Tests)

A cash budget forecasts the cash inflows and outflows to ensure the firm has adequate liquidity to operate.

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

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The 'Warranty' in a sales contract may be:

A. Always a provision

B. Not accounted

C. Either assurance-type (no separate obligation) or service-type (separate obligation) depending on whether it provides additional service

D. Always a separate performance obligation

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Correct Answer: Option C

Explanation:
Ind AS 115 distinguishes between assurance and service warranties.

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Question #2

A 'Partner by Holding Out' is:

A. A minor admitted to benefits

B. A person who represents himself as a partner but is not

C. A retired partner

D. A deceased partner's legal heir

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Correct Answer: Option B

Explanation:
A person who by his conduct or words allows others to believe he is a partner may be held liable as partner by estoppel or holding out.

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Question #3

The 'Machine Hour Rate' method of depreciation is suitable when:

A. Asset is idle

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Correct Answer: Option C

Explanation:
Machine hour rate ties depreciation to actual hours used, reflecting wear and tear.

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

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