Question

    A company runs into losses due to cancellation of its

    export order. In company’s books of accounts, the source of funds will be-
    A higher than the use of the funds Correct Answer Incorrect Answer
    B higher than or equal to the use of the funds Correct Answer Incorrect Answer
    C lower than the use of the funds Correct Answer Incorrect Answer
    D lower than or equal to the use of the funds Correct Answer Incorrect Answer
    E equal to the use of the funds Correct Answer Incorrect Answer

    Solution

    Source and use of the funds has nothing to do with the profit or loss of the company. In case of losses, funds will be taken from sources like the reserves or borrowing and in case of profits extra funds will be kept in reserves or may be paid as dividend.

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