Practice Test: Question Set - 01
1. Which of the following is the cheapest material of construction for the storage of sodium hydroxide up to a concentration of 75%?
- (A) Stainless
steel
- (B) Plain carbon
steel
- (C) Nickel
- (D) Copper
2. Which of the following relationship is not correct is case of a chemical process plant?
- (A) Manufacturing
cost = direct product cost + fixed charges + plant overhead costs
- (B) General
expenses = administrative expenses + distribution & marketing expenses
- (C) Total
product cost = manufacturing cost + general expenses
- (D) Total
product cost = direct production cost + plant overhead cost
3. A balance sheet for a chemical plant shows its financial condition at any given date. It does not contain the __________ of the plant.
- (A) Current
asset
- (B) Current
liability
- (C) Long term
debt
- (D) Profit
4. Which of the following is a component of working capital investment?
- (A) Utilities
plants
- (B) Maintenance
and repair inventory
- (C) Process
equipments
- (D) Depreciation
5. Which of the following is the costliest source of getting hydrogen on commercial scale for the manufacture of nitrogenous fertilizer?
- (A) Coal
gasification
- (B) Steam
reforming of naphtha
- (C) Electrolysis
of water
- (D) Coke oven
gas
6. Pick out the wrong statement.
- (A) Longer
tubes are less expensive per unit heat transfer area as compared to shorter
tubes
- (B) A
cost index is merely a number for a given year showing the cost at that time relative
to a certain base year
- (C) Turnover
ratio of a chemical plant is the ratio of gross annual sales to the fixed
capital investment
- (D) Plates
with butt welded joints are less expensive compared to lap welded joints,
because squaring of plates is not necessary
7. 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
- (A) R
[{(1 + i)n -
1}/ i ]
- (B) R
[{(1 + i)n -
1}/ i (1 + i)n]
- (C) R (1
+ i)n
- (D) R/(1
+ i)n
8. Pick out the wrong statement.
- (A) The
annual depreciation rate for machinery and equipments in a chemical process
plant is about 10% of the fixed capital investment
- (B) Annual
depreciation rate of buildings in a chemical plant is about 3% of its initial
cost
- (C) Insurance
rates on annual basis in a chemical plant may be about 1% of the fixed capital
investment
- (D) In a
chemical industry, research and development cost amounts to about 15% of net
sales realisation (NSR)
9. Which of the following does not come under the sales expenses for a product of a chemical plant?
- (A) Advertising
- (B) Warehousing
- (C) Legal fees
- (D) Customer
service
10. Operating profit of a chemical plant is equal to
- (A) Profit
before interest and tax i.e., net profit + interest + tax
- (B) Profit after
tax plus depreciation
- (C) Net profit +
tax
- (D) Profit after
tax
11. Which of the following is not a current asset of a chemical company?
- (A) Inventories
- (B) Marketable
securities
- (C) Chemical
equipments
- (D) None of
these
12. _________ taxes are based on gross earnings.
- (A) Property
- (B) Excise
- (C) Income
- (D) Capital gain
13. A balance sheet for an industrial concern shows
- (A) The
financial condition at any given time
- (B) Only
current assets
- (C) Only
fixed assets
- (D) Only
current and fixed assets
14. Pick out the wrong statement.
- (A) Gross
revenue is that total amount of capital received as a result of the sale of goods
or service
- (B) Net
revenue is the total profit remaining after deducting all costs excluding taxes
- (C) The
ratio of immediately available cash to the total current liabilities is known
as the cash ratio
- (D) 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
15. Pick out the correct statement.
- (A) Difference
between income and expense is termed as gross revenue
- (B) Unamortised
cost is the difference between the original cost of a property and all the
depreciation charges made to date
- (C) Sum-of-the-years-digits
methods of depreciation calculation accounts for the interest on the investment
- (D) 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