Which of the following is an example of a fixed cost? MCQ with Answer and Explanation

Question
Which of the following is an example of a fixed cost?
A. Direct material
B. Factory rent
C. Carriage outward
D. Direct labour (piece rate)
Answer: Option B
Solution (By JKSSB Mock Tests)
Factory rent remains constant irrespective of production volume, hence fixed cost.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Practice More Accountancy and Book Keeping Questions

Question #1
Which of the following is a feature of a company as per Companies Act?
A. Perpetual succession
B. Unlimited liability
C. No separate legal entity
D. Cannot own property
Discuss
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Correct Answer: Option A

Explanation:
A company has perpetual succession, separate legal entity, limited liability, and can own property.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
According to the Companies Act, which financial statement details cash inflows and outflows?
A. Statement of Profit and Loss
B. Cash Flow Statement
C. Statement of Changes in Equity
D. Balance Sheet
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Correct Answer: Option B

Explanation:
The Cash Flow Statement provides historical information about changes in cash and cash equivalents, categorized into operating, investing, and financing activities.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
The 'Current Service Cost' and 'Net Interest' on defined benefit liability/asset are recognised in:
A. Balance Sheet directly
B. OCI
C. Profit or Loss
D. Both P&L and OCI
Discuss
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Correct Answer: Option C

Explanation:
Service cost and net interest are recognised in P&L; re-measurements in OCI.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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