A-AS Level (CIE) Business Studies Paper-2: Specimen Questions with Answers 34 - 35 of 52

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Case Study: 10

On 1st January 1990 X Ltd. purchased a Plant and Machinery for $ 43,000. It was estimated that the effective life of the Plant and Machinery will be 10 years and after 10 years its scrap value will be $ 3,000.

On 1st January 1991 the Company purchased additional machine for $ . 25,000, of which the effective life will be 15 years and scrap value $ 2,500. value will be ₹ 2,000 and effective life 20 years. On 1st July 1992 a new machine was purchased for $ 12,000 of which the scrap value will be $ 2000 and effective life 20 years.

Question 34 (1 of 5 Based on Passage)

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Short Answer▾

What is a public limited company?

Explanation

Public Company is a company which is not defined as a private company. In other words, public company means a company which by its article does not limit the number of its members and does not prohibit any invitation to the public to subscribe for any share or debentures of the company. It has following features:

  • Its shares can be transferred easily
  • Has a minimum paid up capital of five lakh rupees or such higher paid up capital, as may be prescribed?
  • Whose members have limited liability
  • The number of shareholders can be up to the number of issued and subscribed shares or even more but the minimum number should not be less than seven.

Question 35 (2 of 5 Based on Passage)

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State the advantages of JIT.

Explanation

Just in Time is an inventory management system which aims at procuring raw material and labor as and when require without investing in storing it. It is the minimum amount of inventory necessary to keep a perfect system running smoothly. Objective is to reduce the stock of parts and components to deliver them just in time for production and to limit the inventory of finished goods by producing them just in time to fill demand.

Advantages are:

  • Reduces cost in storing material
  • Less investment in raw material
  • Speeds up manufacturing process as material is available readily
  • Eliminates lead time
  • Helps in shorter production runs
  • Eliminates wastage (in terms of time, inventory, transportation)

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