Pick out the wrong statement.
Gross revenue is that total amount of capital received as a result of the sale of goods or service
Net revenue is the total profit remaining after deducting all costs excluding taxes
The ratio of immediately available cash to the total current liabilities is known as the cash ratio
Consolidated income statement based on a given time period indicates surplus capital and shows the relationship among total income, costs & profit over the time interval
Correct Answer :
B. Net revenue is the total profit remaining after deducting all costs excluding taxes
Related Questions
Pick out the wrong statement.
Gross margin = net income - net expenditure
Net sales realisation (NSR) = Gross sales - selling expenses
At breakeven point, NSR is more than the total production cost
Net profit = Gross margin - depreciation - interest
The depreciation during the year 'n', in diminishing balance method of depreciation calculation, is calculated by multiplying a fixed percentage 'N' to the
Initial cost
Book value at the end of (n - 1)th year
Depreciation during the (n - 1)th year
Difference between initial cost and salvage value
A balance sheet for a chemical plant shows its financial condition at any given date. It does not contain the __________ of the plant.
Current asset
Current liability
Long term debt
Profit
The amount of compounded interest during 'n' interest periods is
p[(1+i)n - 1)]
p(1 + i)n
p(1 - i)n
p(1 + in)
In a manufacturing industry, breakeven point occurs, when the
Total annual rate of production equals the assigned value
Total annual product cost equals the total annual sales
Annual profit equals the expected value
Annual sales equals the fixed cost
Operating profit of a chemical plant is equal to
Profit before interest and tax i.e., net profit + interest + tax
Profit after tax plus depreciation
Net profit + tax
Profit after tax
In financial accounting of a chemical plant, which of the following relationship is invalid?
Assets = equities
Assets = liabilities + net worth
Total income = costs + profits
Assets = capital
The total investment in a project is Rs. 10 lakhs and the annual profit is 1.5 lakhs. If the project life is 10 years, then the simple rate of return on investment is
15%
10%
1.5%
150%
Effluent treatment cost in a chemical plant is categorised as the __________ cost.
Fixed
Overhead
Utilities
Capital
__________ taxes are based on gross earnings.
Property
Excise
Income
Capital gain
Which of the following is not a component of the working capital for a chemical process plant?
Product inventory
In-process inventory
Minimum cash reserve
Storage facilities
Pick out the wrong statement.
Gross revenue is that total amount of capital received as a result of the sale of goods or service
Net revenue is the total profit remaining after deducting all costs excluding taxes
The ratio of immediately available cash to the total current liabilities is known as the cash ratio
Consolidated income statement based on a given time period indicates surplus capital and shows the relationship among total income, costs & profit over the time interval
The ratio of working capital to total capital investment for most chemical plants (except for nonseasonal based products) is in the range of __________ percent.
0.1 to 1
1 to 2
10 to 20
50 to 60
'Lang factor' is defined as the ratio of the capital investment to the delivered cost of major equipments. The value of 'Lang factor' for fixed capital investment, for a solid-fluid processing chemical plant ranges from
1.2 to 1.4
2.5 to 2.7
4.2 to 4.4
6.2 to 6.4
Pick out the correct statement.
Difference between income and expense is termed as gross revenue
Unamortised cost is the difference between the original cost of a property and all the depreciation charges made to date
Sum-of-the-years-digits methods of depreciation calculation accounts for the interest on the investment
Scrap value is the net amount of money obtainable from the sale of used property over and above any charges involved in its removal & sale
Cost of piping in a fluid processing unit (e.g., distillation) of a chemical process plant is about __________ percent of the fixed capital investment.
4
13
22
34
The inventory of raw materials included in the working capital is usually about __________ months supply of raw materials valued at delivery prices.
One
Three
Six
Twelve
Total product cost of a chemical plant does not include the __________ cost.
Market survey
Operating labour, supervision and supplies
Overhead and utilities
Depreciation, property tax and insurance
An investment of Rs. 1000 is carrying an interest of 10% compounded quarterly. The value of the investment at the end of five years will be
1000 (1 + 0.1/4)20
1000 (1 + 0.1)20
1000 (1 + 0.1/4)5
1000 (1 + 0.1/2)5
If an amount R is paid at the end of every year for 'n' years, then the net present value of the annuity at an interest rate of i is
R [{(1 + i)n - 1}/ i ]
R [{(1 + i)n - 1}/ i (1 + i)n]
R(1 + i)n
R/(1 + i)n
An investment of Rs. 100 lakhs is to be made for construction of a plant, which will take two years to start production. The annual profit from the operation of the plant is Rs. 20 lakhs. What will be the payback time?
5 years
7 years
12 years
10 years
The __________ of a chemical company can be obtained directly from the balance sheet as the difference between current assets and current liabilities.
Cash ratio
Net working capital
Current ratio
Liquids assets
With increase in the discounted cash flow rate of return, the ratio of the total present value to the initial investment of a given project
Decreases
Increases
Increases linearly
Remain constant
The ratio of gross annual sales to the fixed capital investment is termed as the __________ ratio.
Cash reserve
Capital
Turnover
Investment
Manufacturing cost in a chemical company does not include the
Fixed charges
Plant overheads
Direct products cost
Administrative expenses
Which of the following does not come under the sales expenses for a product of a chemical plant?
Advertising
Warehousing
Legal fees
Customer service
Equipment installation cost in a chemical process plant ranges from __________ percent of the purchased equipment cost.
10 to 20
35 to 45
55 to 65
70 to 80
Cost of instrumentation in a modern chemical plant ranges from __________ percent of the total plant cost.
5 to 10
20 to 30
40 to 50
60 to 70
Optimum economic pipe diameter for fluid is determined by the
Viscosity of the fluid
Density of the fluid
Total cost considerations (pumping cost plus fixed cost of the pipe)
None of these
Annual depreciation costs are constant, when the __________ method of depreciation calculation is used.
Declining balance
Straight line
Sum of the years digit
None of these