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Multiple Choice Multiple Answer

Question Essentials for effective implementation of budgetary control sys


tem are
Correct Answer Commitment of top management , Clearly defined objective
s , Continous budget education
Your Answer Commitment of top management , Clearly defined objectives , Cont
inous budget education

Multiple Choice Multiple Answer


Question Features of convention of consistency are . . .
Correct Answer The accounting policies and procedures should be followe
d consistently , Facilitates the comparison of financial statements , It facilit
ates comparison of financial statements on period-to-period basis
Your Answer The accounting policies and procedures should be followed consis
tently , It facilitates comparison of financial statements on period-to-period b
asis

True/False
Question The bin card and stores ledger, being independent records, compa
rison of these two records should be avoided.
Correct Answer False
Your Answer False

Match The Following


Question Correct Answer Your Answer
Dividend paid Profit and loss appropriation account Profit and loss account
Freight inwards Manufacturing account Manufacturing account
Sales Trading account Capital account
Freight outwards Profit and loss account Trading account

Select The Blank


Question Large angle of incidence indicates ________ amount of profits.
Correct Answer higher
Your Answer same

True/False
Question Error of commission refer to a situation where a transaction is
not recorded in the books of account.
Correct Answer False
Your Answer True

Multiple Choice Single Answer


Question Relevant costs in decision making are :
Correct Answer Those costs which will arise as a result of the proposed
action
Your Answer Those costs which will arise as a result of the proposed action

Select The Blank


Question ________is the summary of all the balances in all the accounts l
isted in ledger account of an organization at any given point of time.
Correct Answer Trial Balance
Your Answer Trial Balance

Multiple Choice Multiple Answer


Question Overhead capacity variance is the outcome of:
Correct Answer Shortage of labour , Enforced idle time, e.g.power break
downs , Customer demand being more or less than anticipated
Your Answer Shortage of labour , Enforced idle time, e.g.power breakdowns ,
Customer demand being more or less than anticipated

True/False
Question Factory overheads consist of all overhead costs incurred from th
e stage of procurement of material till the production of finished goods.
Correct Answer True
Your Answer True

True/False
Question Bank reconciliation statement must be prepared before the prepar
ation of profit and loss account and balance sheet.
Correct Answer True
Your Answer True

Multiple Choice Single Answer


Question Included in the trial balance is the sales promotion suspense ac
count with a debit balance of Rs.6,300/-. It is given that this balance should b
e written off. Calculate its impact on profit of the company.
Correct Answer The net profit will decrease by Rs.6,300/-
Your Answer The gross profit will increase by Rs.6,300/-

Select The Blank


Question In calculation of total sales margin variance, the ________cost
of sales is deducted from the actual sales revenue.
Correct Answer Standard
Your Answer Actual

Match The Following


Question Correct Answer Your Answer
Increase in contribution will lead to Increase in profits Increase in prof
it volume ratio
Increase in fixed cost will lead to Increase in break even point Decrease
in contribution
Decrease in variable cost will lead to Increase in profit volume ratio Increase
in profits
Decrease in selling price will lead to Decrease in contribution Increase
in break even point
Multiple Choice Multiple Answer
Question Marginal costing technique is useful in taking decisions relatin
g to which of the following courses of action?
Correct Answer Decision to drop a product line , Decision to accept a s
pecial offer at price lower than the normal selling price , Decision regarding t
emporary shut-downs
Your Answer Decision to drop a product line , Decision to accept a special o
ffer at price lower than the normal selling price , Decision to accept a special
offer at price higher than the normal selling price , Decision regarding tempor
ary shut-downs

Multiple Choice Single Answer


Question Basic objective of Uniform Costing is . . .
Correct Answer comparison
Your Answer To control cost

Select The Blank


Question Re-order level should be higher than ________ but lesser than ma
ximum stock level.
Correct Answer Minimum level
Your Answer Minimum level

True/False
Question The variable costs are controllable at the lower lever.
Correct Answer True
Your Answer False

Select The Blank


Question Economical use of labour, materials and facilities can achieved
with the help of ________.
Correct Answer Budgetary control
Your Answer Budgetary control

Select The Blank


Question Goods returned by Pawan worth Rs.1,000/- is debited to Pawan's A
ccount. In order to rectify the mistake, which account should be debited ? _____
___
Correct Answer Suspense account
Your Answer Personal account

True/False
Question The purchase account should be debited when an order is placed w
ith the supplier of material.
Correct Answer False
Your Answer False

True/False
Question Accounting refers to the process of analyzing & interpreting the
information already recorded in the books of accounts.
Correct Answer True
Your Answer True
Select The Blank
Question Interest receivable is a________ for the organisation.
Correct Answer Current sset
Your Answer Long term asset

Multiple Choice Single Answer


Question Purchases returns of Rs.18,000/- were wrongly transferred to the
sales returns account. Calculate its impact on net profit.
Correct Answer The net profit will not be affected
Your Answer The net profit will decrease by Rs.18,000/-

Multiple Choice Single Answer


Question Amit sold Goods to Atul for Rs. 50,000/- on cash & Rs. 50,000/-
on credit basis. Amit allowed 10% discount for on the spot transaction. What is
the amount that should be debited to the cash account?
Correct Answer Rs.45,000/-
Your Answer Rs.50,000/-

Multiple Choice Single Answer


Question Interest on bank loan, was paid till the quarter ending 30th Sep
tember, 2003, Rs.36,000/-. Find the amount to be debited to the profit and loss
account for the year ending on 31st March, 2004, assuming the loan is not yet re
paid as on this date.
Correct Answer Rs.72,000/-
Your Answer Rs.36,000/-

Multiple Choice Single Answer


Question The features of the Halsey Plan are:
Correct Answer The benefit of time saved is divided equally between the
employer and employee
Your Answer The benefit of time saved is divided equally between the employe
r and employee

True/False
Question The sum of indirect material cost, indirect labour cost and indi
rect expenses is termed as factory cost.
Correct Answer False
Your Answer True

Multiple Choice Single Answer


Question Determine re-order level from the following : Maximum daily cons
umption - 200 units; maximum delivery period - 12 days; average daily consumptio
n - 150 units and average delivery period - 8 days.
Correct Answer 2,400 units
Your Answer 2,400 units

Select The Blank


Question An error of partial omission can be rectified by either debiting
or crediting the ________ account, as the case maybe.
Correct Answer suspense
Your Answer adjusted profit and loss
Multiple Choice Multiple Answer
Question Select the examples of functional budgets:
Correct Answer Sales budget , Production budget , Research and developm
ent budget
Your Answer Sales budget , Production budget , Research and development budg
et

Multiple Choice Single Answer


Question With the help of the given information, find actual fixed overhe
ads for actual output. Fixed overheads volume variance -Rs.75,000/- (Favourable)
; fixed overheads efficiency variance -Rs.95,000/- (Favourable); fixed overheads
calendar variance Rs.20,000/- (Adverse); fixed voerheads expenditure variance R
s.100,000/- (Adverse) and standard fixed overheads for actual output -Rs.575,000
/-.
Correct Answer Rs.600,000/-
Your Answer Rs.525,000/-

Select The Blank


Question Furniture account will always have a ________ balance.
Correct Answer Debit
Your Answer Credit

Select The Blank


Question If the ordering cost ________s, then the economic order quantity
will Increase.
Correct Answer Increase
Your Answer Increase

Multiple Choice Multiple Answer


Question Which of the following information is included in the goods rece
ived note?
Correct Answer Date of receipt of material , Quantity received , Descri
ption of goods
Your Answer Date of receipt of material , Quantity received , Price of goods
, Description of goods

Multiple Choice Multiple Answer


Question Select the non-monetary incentives
Correct Answer Health and safety services , Canteen facility , Loans at
reduced rate of interest
Your Answer Health and safety services , Canteen facility

True/False
Question A business is an activity carried out with the intention of earn
ing the profit.
Correct Answer True
Your Answer True

True/False
Question Linking overhead to a cost unit is known as overhead absorption.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question The operating profit as per cost statement may differ from the p
rofit as per Profit and Loss Account due to existence of
Correct Answer Depreciation on plant and machinery , Interest on loans
taken from other , Interest on loans granted to others
Your Answer Depreciation on plant and machinery , Interest on loans taken fr
om other

Multiple Choice Multiple Answer


Question The main advantages of profit sharing are :
Correct Answer Employees try to increase productivity , Incentives are
shared by all the employees , Augments emplyees' efficiency
Your Answer Employees try to increase productivity , Incentives are shared b
y all the employees

Multiple Choice Multiple Answer


Question Labour efficiency variance Rs.1,000/- (favourable); labour mix v
ariance Rs.260/- (adverse) and labour rate variance Rs.300/- (adverse). Compute
labour cost variance and labour yield variance.
Correct Answer Labour cost variance -Rs.700/- (Favourable) , Labour yie
ld variance -Rs.1,260/- , Labour yield variance is favourable
Your Answer Labour cost variance -Rs.700/- (Favourable) , Labour yield varia
nce -Rs.1,260/-

True/False
Question The best way to reduce labour cost is to recruit cheap labour.
Correct Answer False
Your Answer False

True/False
Question Balance sheet indicates the financial status of the business at
given period.
Correct Answer True
Your Answer True

Multiple Choice Multiple Answer


Question Select the items which may be classified as selling and distribu
tion overheads.
Correct Answer Delivery van expenses , Rent of finished goods warehouse
, Sales research expenses
Your Answer Delivery van expenses , Rent of finished goods warehouse , Sales
research expenses

Select The Blank


Question In India the gas industry and electricity industry, and ________
industry are examples of industries using the uniform costing system.
Correct Answer fertilizer
Your Answer fertilizer

Multiple Choice Single Answer


Question The process of recording the costs in a formal and systematic ma
nner with the intention of preparing statistical data there from a ascertain the
cost, is known as . . .
Correct Answer Cost accounting
Your Answer Cost accounting

Multiple Choice Single Answer


Question Fixed deposit bearing interest @ 5.50%, for Rs.10,000/- was kept
with Bank of India on 1st June, 2003, for a period of one year. The type of the
fixed deposit is cumulative, i.e. interest shall be received only on maturity.
What treatment should be given in the books of accounts on 31st March, 2004, the
year ending date?
Correct Answer An entry for Rs.458.34, debiting interest accrued but no
t due account should be passed
Your Answer An entry for Rs.458.34, crediting interest accrued but not due a
ccount should be passed

True/False
Question A business is an activity carried out with the intention of earn
ing the profit.
Correct Answer True
Your Answer True

True/False
Question Balance sheet indicates the financial status of the business at
given period.
Correct Answer True
Your Answer True

True/False
Question Accounting refers to the process of analyzing & interpreting the
information already recorded in the books of accounts.
Correct Answer True
Your Answer False

True/False
Question Accounting is an art of recording, classifying & summarizing in
a significant manner.
Correct Answer True
Your Answer True

True/False
Question Financial accounting may deal with the ascertainment of cost & c
alculation of profitability of the individual product.
Correct Answer False
Your Answer False

True/False
Question The reports generated by financial accounting are meant for the
use by management for effective decisions.
Correct Answer True
Your Answer True
LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Multiple Choice Multiple Answer


Question The objects of cost accountancy are :-
Correct Answer To ascertain cost and profitability , Cost Control , Pre
sentation of Information
Your Answer To ascertain cost and profitability , Cost Control , Presentatio
n of Information

Multiple Choice Multiple Answer


Question Management accounting is concerned with the following activities
:-
Correct Answer Decision making , Safeguarding assets , Planning and con
trolling activities
Your Answer Decision making , Planning and controlling activities

Multiple Choice Multiple Answer


Question Features of material usage variance are :-
Correct Answer Measures the difference between the quantity of material
s actually used and that should have been used. , Considers standard price X act
ual quantity , Considers standard price X standard quantity
Your Answer Measures the difference between the quantity of materials actual
ly used and that should have been used. , Considers standard price X actual quan
tity , Considers standard price X standard quantity

True/False
Question Under the accelerating premium system incentive increases at a f
ast rate with the decrease in output.
Correct Answer False
Your Answer False

True/False
Question If the physical stock is less than the stock as per the stores l
edger, such shortage should be treated as an issue of material.
Correct Answer True
Your Answer False

Multiple Choice Single Answer


Question An analysis of the time card of a worker on a machine shows that
of the total 48 hours, he worked 45 hours (including 4 hours overtime) on produ
ction and that 3 hours was idle due to machine break-down. The rate of the worke
r is rupees ten per hour : but overtime is paid at 50 per cent extra. You are re
quired to calculate the earnings of the worker.
Correct Answer Rs.500/-
Your Answer Rs.500/-

True/False
Question Predetermined rate of absorption of overheads helps in quick pre
paration of cost estimates and quoting prices.
Correct Answer True
Your Answer True
Select The Blank
Question If overhead absorbed i.e. overheads charged to units during the
period is more than the overhead incurred, it is said that the overheads are ___
_____.
Correct Answer Over-absorbed
Your Answer Under-absorbed

Select The Blank


Question A worker is paid a monthly salary of Rs.500/- along with a bonus
of 50 paise per unit completed, this type of labour cost may be classified as _
_______ cost.
Correct Answer Semi-variable
Your Answer Semi-variable

Select The Blank


Question Goods purchased from A for Rs.2,020/- were passed through the sa
les book. The rectification of this error will result in ________.
Correct Answer Decrease in gross profit by Rs.2,020/-
Your Answer Increase in gross profit by Rs.2,020/-

True/False
Question High time wages means necessarily high cost of production.
Correct Answer False
Your Answer False

Multiple Choice Multiple Answer


Question The management of Dick Ltd. is deciding whether to buy component
Y from the supplier, since the purchase cost is less than the manufacturing cos
t. State the non-financial aspects that must be considered before arriving at a
decision :-
Correct Answer Reliability regarding quality of the material supplied b
y the supplier , Alternative use of labour of engaged in manufacturing component
Y , Regularity of material supplies from the supplier
Your Answer Reliability regarding quality of the material supplied by the su
pplier , Alternative use of labour of engaged in manufacturing component Y , Reg
ularity of material supplies from the supplier

Select The Blank


Question Loans which are borrowed from financial institutions are to be p
aid off in 8 years, should be disclosed as ________ in the balance sheet.
Correct Answer Long term liabilities
Your Answer Long term liabilities

Select The Blank


Question Interest receivable is a________ for the organization.
Correct Answer Current asset
Your Answer Current asset

True/False
Question Period cost is the cost assigned to the products.
Correct Answer False
Your Answer True
Multiple Choice Single Answer
Question A new computer worth Rs.35,000 was purchased on 18th June, 2003.
The company has 10 such computers costing Rs.20,000/- each. The depreciation is
charged @ 18% p.a. Find the depreciation on computers to be charged for the yea
r.
Correct Answer Rs.40,953.70
Your Answer Rs.40,953.70

Multiple Choice Single Answer


Question The direct material usage budget and direct material purchase bu
dget differ because of which of the following?
Correct Answer A planned change in the level of material stock
Your Answer The level of efficiency of men or machines

True/False
Question New companies can adopt Uniform costing system as a ready-made s
ystem.
Correct Answer True
Your Answer True

Multiple Choice Multiple Answer


Question Pre-requisites of Uniform Costing are :-
Correct Answer Spirit of mutual trust , Free Exchange of ideas , No riv
alry
Your Answer Free Exchange of ideas , No rivalry , Spirit of mutual trust

Multiple Choice Multiple Answer


Question The principal functions of the cost accounting department are :-
Correct Answer Classifying labour cost according to jobs, processes, et
c. , Preparation of different reports based on direct, indirect labour cost, etc
. , To focus on areas where labour cost may be reduced.
Your Answer Classifying labour cost according to jobs, processes, etc. , Pre
paration of different reports based on direct, indirect labour cost, etc. , To f
ocus on areas where labour cost may be reduced.

Multiple Choice Multiple Answer


Question In which of the following situations, the flexible budget should
be preferred?
Correct Answer Sales are too difficult to predict , Supply level of inp
ut cannot be predicted , Varying levels of production activity
Your Answer Sales are too difficult to predict , Supply level of input canno
t be predicted , Varying levels of production activity

Multiple Choice Single Answer


Question Select the information to be considered before installing a cost
ing system :-
Correct Answer Labour intensity of the product
Your Answer Number of workers required

Multiple Choice Single Answer


Question Tom company has sales of Rs.200,000/- with variable expenses of
Rs.150,000/-, fixed expenses of Rs.60,000/-, and an operating loss of Rs.10,000/
-. By how much would Tom have to increase its sales in order to achieve an opera
ting income of 10% of sales?
Correct Answer Rs.200,000/-
Your Answer Rs.231,000/-

Multiple Choice Single Answer


Question As on 31st March, 2004, it was decided to write off Rs.800/- of
debtors as bad debts. Also, provision for bad and doubtful debts is to be made @
5% and for discount on debtors @ 4%. Find the net amount of debtors to be discl
osed in the balance sheet, if the total debtors before the aforesaid adjustments
is Rs.98,623/-.
Correct Answer Rs.89,214.58
Your Answer Rs.88,285.26

Select The Blank


Question Payment by ________ method lowers the cost of production through
their impact on fixed costs.
Correct Answer Results
Your Answer Time

Multiple Choice Multiple Answer


Question Which of the following aspects are mainly responsible for diffic
ulty in application of Uniform costing system?
Correct Answer Capital investment , Plant size , Location
Your Answer Capital investment , Plant size , Location

Select The Blank


Question The most appropriate method for apportionment of overheads of th
e purchasing and stores department is percentage on ________.
Correct Answer Direct Material
Your Answer Direct Material

Multiple Choice Single Answer


Question Judge the given statement according to the given criteria :- 'Pr
ovision for doubtful debts account' and 'provision for discount on debtors accou
nt' mean same account can be maintained under two account-heads, since both are
related to debtors and indicate a loss to the organization.
Correct Answer The statement is incorrect but the reason is correct
Your Answer The statement and the reason both are incorrect

Multiple Choice Multiple Answer


Question Following errors affect the trial balance :-
Correct Answer Wrong totaling of subsidiary books , Posting on the wron
g side of an account , Omission of posting an account in the ledger
Your Answer Wrong totaling of subsidiary books , Posting on the wrong side o
f an account , Omission of posting an account in the ledger

Select The Blank


Question If the owner brings in personal calculator for office use, _____
___ account should be credited.
Correct Answer Capital
Your Answer Cash
Multiple Choice Multiple Answer
Question From the following select the examples of errors of commission :
-
Correct Answer Sales recorded in the sales register as Rs.2,020/- inste
ad of Rs.2,200/- , Received cash from Sham, credited to Ram's account , Paid tra
nsport charges, credited to transport charges account
Your Answer Sales recorded in the sales register as Rs.2,020/- instead of Rs
.2,200/- , Received cash from Sham, credited to Ram's account , Paid transport c
harges, credited to transport charges account

Select The Blank


Question A ________ can be defined as a part of the organization for whic
h separate budget can be prepared and implemented.
Correct Answer Budget centre
Your Answer Budget centre

Multiple Choice Single Answer


Question Net sales Rs,7,50,000/-, opening stock Rs.1,14,375/-, purchases
Rs.483,375/- and closing stock Rs.1,47,750/-. Calculate the Gross Profit.
Correct Answer Rs.3,00,000/-
Your Answer Rs.3,00,000/-

True/False
Question Profitability statement is a period statement & provides informa
tion about the results of operations.
Correct Answer True
Your Answer True

Select The Blank


Question The method of overhead apportionment which considers both the ma
terial cost as well as the labour cost, is known as ________ method.
Correct Answer Prime cost percentage rate
Your Answer Prime cost percentage rate

Multiple Choice Single Answer


Question Net profit for the year before charging commission to the manage
r, is Rs.111,775/-. The manager of the company is entitled to commission @ 8% on
net profits after charging commission. Find the amount of commission due to the
manager.
Correct Answer Rs.8,279.63
Your Answer Rs.8,942/-

Multiple Choice Single Answer


Question A manufacturer is producing alloy for which standard mix is 25%
copper and 75% iron. Standard price for copper is Rs.80/- per kg. and for iron R
s.20/- per kg. 20% of input is standard loss. Actual output is 8,000 kg. of allo
y using 2,000 kg of copper at Rs.90/- per kg. and 9,000 kg of iron at Rs.15/- pe
r kg. Calculate the standard cost of copper.
Correct Answer Rs.200,000/-
Your Answer Rs.150,000/-

True/False
Question Cheque received from a client on 28th September, 2004 must be en
tered in the bank book only after it is credited in the pass book.
Correct Answer False
Your Answer False

Multiple Choice Multiple Answer


Question The various areas in which uniform costing can be adopted are :-
Correct Answer Valuation of inventories , Charging of depreciation , Ap
portionment of overheads
Your Answer Valuation of inventories , Charging of depreciation , Apportionm
ent of overheads

Multiple Choice Single Answer


Question The gross profit for the year 2004 is Rs.184,326/-. The deprecia
tion on furniture for the year is Rs.24,561/-; dividend received amounted to Rs.
12,000/- and the director's remuneration worked out to be Rs.95,784/-. Find the
net profit for the year 2004.
Correct Answer Rs.75,981/-
Your Answer Rs.75,981/-

True/False
Question The purpose of the profit and loss account is to bring together
information which relates to gross profit and the expenses for running the busin
ess.
Correct Answer True
Your Answer True

Match The Following


Question Correct Answer Your Answer
Ledger Maintain all types of accounts Maintain all types of accounts
Audit Reviewing internal control system Reviewing internal control syste
m
Accounting Process of analyzing & interpretation Process of analyzing & i
nterpretation
Journal Book of original entry Book of original entry

Match The Following


Question Correct Answer Your Answer
Daily Time sheets Time spent by worker on job is recorded Time spent by wo
rker on job is recorded
Time Keeping Department Recording of workers time Recording of workers tim
e
Time booking department Jobwise booking of time. Jobwise booking of time.
Time Recording Clock Method Ticket number & clock card allotted to worker
Ticket number & clock card allotted to worker
Multiple Choice Multiple Answer
Question Items credited to Profit & Loss Account are :-
Correct Answer Gross profit , Commission received , Interested received
Your Answer Gross profit , Commission received , Interested received

True/False
Question For a manufacturing company, dividend received is a non-operatin
g income.
Correct Answer True
Your Answer False

Select The Blank


Question A standard that is never altered, after being established, is kn
own as ________ standard.
Correct Answer Ideal
Your Answer Basic

Multiple Choice Single Answer


Question Rs.2,650/- were paid to ABC Ltd. for maintenance of machine; whi
ch account should be debited for this transaction?
Correct Answer Maintenance of machine account
Your Answer ABC Ltd.'s Account
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple Answer
Question The management of Horngreen Ltd. is deciding whether to continue workin
g at loss or to temporarily shut down the factory. State the qualitative aspects
that must be considered before arriving at a decision.
Correct Answer Loss of trained personnel , Loss of regular customers , Expenditu
re required to restart the factory
Your Answer Expenditure required to restart the factory
Multiple Choice Single Answer
Question The purchase budget for October is Rs.12,500/- and November is Rs.15,00
0/-. If the materials are purchased for cash the supplier is offering a rebate o
f 5%. If the materials are purchased on credit of 30 days, no rebate is offered.
The company purchase
Correct Answer October- NIL, November- Rs.26,750/-
Your Answer October- Rs.14,250/-, November- Rs.11,875/-
True/False
Question Maintenance Department is a service cost centre.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question Ram and Laxman are partners of Kush & Bros. As on 1st April, 2003 Ram's
capital is Rs.50,000/- and Laxman's capital is Rs.80,000/-. If interest on capi
tal is to be provided @ 10% p.a., what will be amount of capital of each of the
partners as on 31st March, 2004, assuming there were no additions during this pe
riod? Also, state the treatment of this item in the Profit and loss account.
Correct Answer Ram's capital Rs.55,000/- , Laxman's capital Rs.88,000/- , Intere
st on capital should be debited to the Profit and loss account
Your Answer Laxman's capital Rs.88,000/- , Interest on capital should be debited
to the Profit and loss account
Multiple Choice Single Answer
Question Rs.2,650/- were paid to ABC Ltd. for maintenance of machine; which acco
unt should be debited for this transaction?
Correct Answer Maintenance of machine account
Your Answer ABC Ltd.'s Account
Match The Following
Question Correct Answer Your Answer
Advantageously applicable in similar industries Scope of uniform costing Fields
covered by uniform costing
Spirit of mutual trust Requisite for uniform costing Disadvantage of uniform cos
ting
Avoids cut throat competition Advantage of uniform costing Requisite for uniform
costing
Treatment given to research and development costs Fields covered by uniform cost
ing Advantage of uniform costing

Select The Blank


Question Under the AB________ analysis, nuts and bolts used as material will be
classified as category C.
Correct Answer C
Your Answer C
Select The Blank
Question If overhead absorbed i.e. overheads charged to units during the period
is more than the overhead incurred, it is said that the overheads are ________.
Correct Answer Over-absorbed
Your Answer True and fair
Multiple Choice Multiple Answer
Question Identify the causes due to which the cost of labour may be high:
Correct Answer Excess staffing , Lack of experienced and efficient personnel , H
igh labour turnover
Your Answer Lack of experienced and efficient personnel , High labour turnover ,
No idle time
Multiple Choice Multiple Answer
Question Identify the fixed expenses from the following.
Correct Answer Rent and taxes of the factory , Wages paid to indirect workers li
ke cleaners, helpers,etc. , Salary paid to factory supervisor
Your Answer Rent and taxes of the factory , Wages paid to indirect workers like
cleaners, helpers,etc. , Salary paid to factory supervisor
Multiple Choice Multiple Answer
Question From the following, select intangible assets:
Correct Answer Goodwill , Patents , Trade Marks
Your Answer Goodwill , Patents , Trade Marks
True/False
Question According to Reducing Balance Method, the depreciation is provided at a
predetermined percentage on the balance of cost of asset after deduction of the
depreciation previously charged.
Correct Answer True
Your Answer False
Select The Blank
Question Average stock = ________ + (Order size / 2)
Correct Answer Safety stock
Your Answer Reorder level
True/False
Question High time wages means necessarily high cost of production.
Correct Answer False
Your Answer True
Multiple Choice Single Answer
Question The integrated form of all functional budgets is known as :
Correct Answer Master budget
Your Answer Master budget
Select The Blank
Question Marginal costing is also known as ________.
Correct Answer Variable costing
Your Answer Indirect costing
Multiple Choice Single Answer
Question Purchased 200 shares of Bharat Forge Ltd. for Rs.850/- per share, which
account should be debited?
Correct Answer Investment account - Rs.170,000/-
Your Answer Investment account - Rs.170,000/-
Multiple Choice Single Answer
Question For a bought out material item the following are the relevant data : Or
dering cost Rs.512/- per order; holding cost is 40%; cost per item Rs.100/- and
annual demand 1,000 units. The Purchase manager places 5 orders of equal quantit
y in one year, in order to avail the discount of 5% on the cost of the item. Wor
k out the total cost to the organisation due to his ordering policy for this ite
m.
Correct Answer Rs.101,360/-
Your Answer Rs.101,360/-
True/False
Question Due to compensating errors the arithmetical accuracy of the trial balan
ce is affected.
Correct Answer False
Your Answer False
Multiple Choice Single Answer
Question From the given information compute the total cost variance. Material co
st variance -Rs.4,400/- (Favourable); labour cost variance -Rs.450/- (Adverse);
fixed overhead cost variance -Rs.22,000/- (Adverse); variable overhead cost vari
ance -Rs.6,000/- (adverse).
Correct Answer Rs.24,050/- (Adverse)
Your Answer Rs.32,850/- (Favourable)
Multiple Choice Single Answer
Question Advance tax account should appear in which of the final statement of ac
counts.
Correct Answer Asset side of the balance sheet
Your Answer Debit side of the profit and loss account
Match The Following
Question Correct Answer Your Answer
Operating income Cash Sales Cash Sales
Non-Operating income Issue of shares Issue of shares
Plan of investment in fixed assets Capital Expenditure Budget Cash Budget
Plan for surplus/shortage of cash Cash Budget Capital Expenditure Budget

Select The Blank


Question Furniture account will always have a ________ balance.
Correct Answer Debit
Your Answer Inflated
Select The Blank
Question Payment by ________ method lowers the cost of production through their
impact on fixed costs.
Correct Answer Results
Your Answer Cash
Multiple Choice Multiple Answer
Question The objects of cost accountancy are . .
Correct Answer To ascertain cost and profitability , Cost Control , Presentation
of Information
Your Answer To ascertain cost and profitability , Cost Control , To portray the
financial status
Multiple Choice Multiple Answer
Question Select the various methods adopted for treatment of under or over absor
bed overheads
Correct Answer Use of supplementary rates , Carrying over the amount to remainin
g period , Writing off to the Costing Profit and Loss Account
Your Answer Use of supplementary rates , Carrying over the amount to remaining p
eriod , Writing off to the Costing Profit and Loss Account
True/False
Question Absorption costing is more suitable for decision making than marginal c
osting
Correct Answer False
Your Answer True
Select The Blank
Question A low margin of safety indicates ________ fixed overheads.
Correct Answer higher
Your Answer higher
Multiple Choice Single Answer
Question Which of the following operations would normally be carried out first w
hen preparing a master budget?
Correct Answer Determining the budget period
Your Answer Identifying the principal budget factor
True/False
Question Period cost is the cost assigned to the products.
Correct Answer False
Your Answer True
Select The Blank
Question Profit = Contribution per unit X ________.
Correct Answer Margin of safety (units)
Your Answer Sales (units)
Multiple Choice Multiple Answer
Question Which of the following aspects are mainly responsible for difficulty in
application of Uniform costing system.
Correct Answer Capital investment , Plant size , Location
Your Answer Capital investment , Plant size , Loans taken
Select The Blank
Question As per the provisions of Section 209 of ________, all the company form
of organisation is legally required to follow the mercantile or accrual system o
f accounting.
Correct Answer The Companies Act, 1956
Your Answer The Companies Act, 1956
Multiple Choice Single Answer
Question ABC Ltd. produces 10,000 units at 100% capacity utilization and its cos
t structure is as follows : Fixed cost Rs.50,000/-; variable costs Rs.30,000/- a
nd semi-variable costs Rs.40,000/- (40% var
Correct Answer Rs.13.85
Your Answer Rs.11.85
Select The Blank
Question Loss of uninsured goods by fire was debited incorrectly to United India
Assurance Company's account instead of debiting it to ________ account.
Correct Answer Goods lost by fire
Your Answer Goods lost by fire
Multiple Choice Multiple Answer
Question Management Accounting isâ ¦
Correct Answer Designed particularly for internal use , Helpful in estimating th
e future along with past period , Useful in furnishing the necessary information
to the management
Your Answer Helpful in estimating the future along with past period , Useful in
furnishing the necessary information to the management , A legal requirement.
Multiple Choice Multiple Answer
Question The disadvantages of supplementary overhead rates are:
Correct Answer It can be determined only after the end of the accounting period
, Defeats the basic concept of normal cost , Involves lot of clerical activity
Your Answer Defeats the basic concept of normal cost , Involves lot of clerical
activity , It can be determined only in the beginning of the accounting period
True/False
Question GAIL having monopoly in the CNG (Compressed Natural Gas) market can imp
lement the Uniform costing system.
Correct Answer False
Your Answer True
True/False
Question One of the main objection to the contribution approach of costing is th
at it ignores fixed cost.
Correct Answer True
Your Answer False
Multiple Choice Multiple Answer
Question Pre-requisites of Uniform Costing are . . .
Correct Answer Spirit of mutual trust , Free Exchange of ideas , No rivalry
Your Answer Spirit of mutual trust , Free Exchange of ideas , Tendency of withho
lding information
Select The Blank
Question Uniform costing is not a separate method of ________.
Correct Answer cost accounting
Your Answer costing
Multiple Choice Single Answer
Question Tom company has sales of Rs.200,000/- with variable expenses of Rs.150,
000/-, fixed expenses of Rs.60,000/-, and an operating loss of Rs.10,000/-. By h
ow much would Tom have to increase its sales in order to achieve an operating in
come of 10% of sales?
Correct Answer Rs.200,000/-
Your Answer Rs.251,000/-
True/False
Question An entry in the stores ledger is required for transfer of material from
one job to another in the same department.
Correct Answer False
Your Answer False
Multiple Choice Multiple Answer
Question For the month of November, a firm has budgeted sales of 20,000 units of
X at a price of Rs.10/- and sale of 30,000 untis of Y at a price of Rs.6/- per
unit. Actual sale during the month was 35,000 units of X at Rs.9/- per unit and
25,000 units of Y at Rs.8/- per unit. Calculate sales volume variance, sales mix
variance and sales quantity variance.
Correct Answer Sales volume variance -Rs.120,000/- (Favourable) , Sales mix vari
ance -Rs.44,000/- (Favourable) , Sales Quantity variance-Rs.76,000/- (Favourable
)
Your Answer Sales volume variance -Rs.120,000/- (Favourable) , Sales mix varianc
e -Rs.44,000/- (Favourable) , Sales Quantity variance-Rs.76,000/- (Favourable)
True/False
Question The purpose of the profit and loss account is to bring togethre informa
tion which relates to gross profit and the expenses for running the business.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question A firm has purchased a plant to manufacture a new product, the cost dat
a for which is given below : Estimated annual sales 24,000 units. Estimated cost
s : Materials Rs.4/- per unit; labour Re.0.60 per unit; overheads Rs.24,000/- pe
r year; administrative expenses Rs.28,800/- per year and selling expenses are 15
% of sales; Calculate the selling price per unit if profit per unit is Rs.1.02.
Correct Answer Rs.9.20/-
Your Answer Rs.7.74/-
Multiple Choice Single Answer
Question A company wishes to earn a 15% profit margin on selling price when quot
ing for a job. Which of the following is the profit margin of cost which will ac
hieve the required profit margin ?
Correct Answer 0.1765
Your Answer 0.15
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/False
Question Purchased goods by paying Rs.35,000/-: In this case, the cash account s
hould be debited.
Correct Answer True
Your Answer False
True/False
Question The rates at which the depreciation is to be calculated are specified i
n the Income Tax Act 1961 and The Companies Act, 1956.
Correct Answer True
Your Answer True
Select The Blank
Question The various contents of a uniform cost manual are organisation, cost ac
counting system and ________.
Correct Answer presentation of information
Your Answer organisation structure
True/False
Question It is said that marginal costs are used primarily in guiding decisions
that are yet to be made.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question Select the examples of functional budgets:
Correct Answer Sales budget , Production budget , Research and development budge
t
Your Answer Sales budget , Production budget , Capital expenditure budget
Multiple Choice Single Answer
Question A business's telephone bill should nromally be classified into which on
e of the following categories?
Correct Answer Semi-variable cost
Your Answer Variable cost
Match The Following
Question Correct Answer Your Answer
Closed the account with State Bank of India Henceforth, there shall be no differ
ence in overdraft balances Henceforth, there shall be no difference in overdraft
balances
Debit side of bank book is overcast Overdraft as per bank book < Overdraft as pe
r pass book Overdraft as per bank book = Balanceas per pass book
Interest on debentures directly credited by bank Overdraft as per bank book > Ov
erdraft as per pass book Overdraft as per bank book = Overdraft as per pass book

Received sanction for a loan of Rs.10 lakhs Overdraft as per bank book = Overdra
ft as per pass book Overdraft as per bank book < Overdraft as per pass book

Multiple Choice Single Answer


Question The total production cost for making 20,000 units was Rs.21,000/- and t
he total production cost for making 50,000 units was Rs.34,000/-. Once productio
n exceeds 25,000 units, additional fixed costs of Rs.4,000/- are incurred. The f
ull production cost per unit of making 30,000 units is:
Correct Answer Re.0.98
Your Answer Re.0.68
Select The Blank
Question The process of finding the reasons for the difference in the balance as
per bank book and pass book is known as ________.
Correct Answer Reconciliation
Your Answer Reconciliation
Multiple Choice Multiple Answer
Question State the features of these transactions : (i) Commission paid Rs.250/-
was posted twice to Commission account (ii) Rs.5,000/- representing goods sold
to A, was posted to the credit to commission received account (iii) Sold machine
for Rs.8000/-, was credited to Sales account.
Correct Answer The debit side of the trial balance will be in excess by Rs.250/-
, Involves an error of principle , Involves an error of commission
Your Answer The debit side of the trial balance will be in excess by Rs.250/- ,
Involves an error of principle , Involves an error of commission
Multiple Choice Single Answer
Question It is difficult to apply Uniform costing system for an industry which h
as labour intensive companies as well as capital intensive companies, because :
Correct Answer The cost structure is different
Your Answer The cost structure is different
Multiple Choice Single Answer
Question Balance sheet is statement of
Correct Answer All Assets and Properties
Your Answer All Assets and Properties
Select The Blank
Question The closing stocks should ________ the cost of the goods which sent on
approval basis.
Correct Answer Be increased by
Your Answer Not get affected by
True/False
Question Under the Rowan plan bonus is a fixed percentage.
Correct Answer False
Your Answer True
True/False
Question Idle time variance is always favourable.
Correct Answer False
Your Answer False
Multiple Choice Multiple Answer
Question Select the items which may be classified as selling and distribution ov
erheads.
Correct Answer Delivery van expenses , Rent of finished goods warehouse , Sales
research expenses
Your Answer Delivery van expenses , Rent of finished goods warehouse , Rent of r
aw material godown
Select The Blank
Question Information as to the cost and profit / loss associated with the firm's
operations is provided to the ________ by Management accounting.
Correct Answer Management
Your Answer Cost
Multiple Choice Single Answer
Question Compute actual total cost based on the data given below: Total standard
cost (standard material cost + standard labour cost) -Rs.19,633.33; labour rate
variance-Rs.900/- (adverse); material price variance -Rs.90/- (Favourable); mat
erial yield variance -Rs.700/- (Favourable); labour yield variance -Rs.333.33 (F
avourable).
Correct Answer Rs.19,410/-
Your Answer Rs.17,610/-
Multiple Choice Single Answer
Question The standard production for a particular work order is 20 units per day
and piece rate wages is 60 paise per unit. Cost of material is 30 paise per uni
t. It is proposed to charge factory overheads equal to 100% of labour cost. Indi
cate the factory overhead per unit.
Correct Answer Rs.1.50/-
Your Answer Rs.1.30/-
Multiple Choice Multiple Answer
Question The suspense account has a debit balance of Rs.40,000/-. Select the tra
nsactions which are capable of nullifying this balance.
Correct Answer Conveyance expenses of Rs.25,000/- were posted on the wrong side
of the account. , Purchased computer worth Rs.28,000/- was recorded in the ledge
r as , The total of the purchase book was cast short by Rs.44,000/-
Your Answer Free samples worth Rs.40,000/- distributed during the year were cred
ited to sales account , Conveyance expenses of Rs.25,000/- were posted on the wr
ong side of the account. , Purchased computer worth Rs.28,000/- was recorded in
the ledger as
Multiple Choice Single Answer
Question Panna Ltd. temporarily has excess production capacity. The idle plant f
acilties can be used to manufacture a low-margin item. The low-margin item shoul
d be produced if it can be sold for more than its:
Correct Answer Variable costs
Your Answer Variable costs
Select The Blank
Question Contribution represents pool of resources available for meeting all cos
ts other than ________.
Correct Answer Variable costs
Your Answer Variable costs
Select The Blank
Question Goods returned to the suppliers from whom it was ________d is recorded
in thePurchasereturn register.
Correct Answer Purchase
Your Answer Purchase
Multiple Choice Multiple Answer
Question From the available information calculate sales value variance and budge
ted sales quantity of X.Actual sales of X -500 units; budgeted price per unit -R
s.12/-; actual price per unit-Rs.15/- and sales volume variance -Rs.1,200/- (Fav
ourable).
Correct Answer Budgeted sales - 400 units , Sales value variance -Rs.2,700/- , T
he sales value variance is favourable
Your Answer The sales value variance is adverse
True/False
Question Depreciation, interest and property tax continue even when the operatio
ns are discontinued.
Correct Answer True
Your Answer True
Select The Blank
Question The balance of the suspense account will ________ after all the errors
are
Correct Answer become zero
Your Answer become zero
Multiple Choice Multiple Answer
Question Management accounting is concerned with the following activities :
Correct Answer Decision making , Safeguarding assets , Planning and controlling
activities
Your Answer Decision making , Planning and controlling activities
True/False
Question It is said that the income statement represents wealth increase /decrea
se for the organisation.
Correct Answer True
Your Answer False
Select The Blank
Question The difference between sales and prime cost is known as ________.
Correct Answer Gross Profit
Your Answer Gross Profit
Multiple Choice Multiple Answer
Question In which of the following situations, the flexible budget should be pre
ferred?
Correct Answer Sales are too difficult to predict , Supply level of input cannot
be predicted , Varying levels of production activity
Your Answer Sales are too difficult to predict , Supply level of input cannot be
predicted , Varying levels of production activity
Multiple Choice Single Answer
Question Debtors as on 31st March, 2004 stood as Rs.75,400/-. Out of this amount
, Rs.15,884/- is receivable from ABC & Co. Also, Rs.21,555/- included in the cre
ditors, indicates amount due to ABC & Co. Total creditors as on 31st March, 2004
= Rs.88,466/-. Find the amount of debtors and creditors that should be disclose
d in the balance sheet as on 31st March, 2004.
Correct Answer Debtors - Rs.59,516/-; Creditors - Rs.66,911/-
Your Answer Debtors - Rs.53,845/-; Creditors - Rs.72,582/-
Match The Following
Question Correct Answer Your Answer
Sunk Cost Historical Cost Historical Cost
Cost Centre Facilitate the fixation of responsibility Facilitate the fixation of
responsibility
Cost Control Process of controlling costs of operations Process of controlling c
osts of operations
Differential Cost Increase or Decrease in cost Increase or Decrease in cost

Select The Blank


Question Cost volume profit analysis focuses attention on the ________ effect of
a particular course of action.
Correct Answer short run
Your Answer short and long run
Multiple Choice Multiple Answer
Question The balance as per bank book as on 30th June, 2004 is Rs.10,298/- while
the balance as per pass book as on the same date is Rs.10,123.60. Select the tr
ansactions representing the reasons for this difference.
Correct Answer Interest credited by bank, not entered in the bank book, Rs.125.6
0 , Cheques dishonoured not entered in the bank book Rs.200/- , Debit side of th
e cash book is overcast by Rs.100/-
Your Answer Interest credited by bank, not entered in the bank book, Rs.125.60
Multiple Choice Single Answer
Question Uniform costing system is useful in the following areas
Correct Answer Classification of cost accounts
Your Answer Preparing financial statements
True/False
Question Revenue expenditure indicates the amount of funds spent during a certai
n period with the intention to receive the returns in future.
Correct Answer False
Your Answer True
True/False
Question Price based on Uniform Costing may be taken to be reliable and represen
tative of the whole industry.
Correct Answer True
Your Answer True
True/False
Question Cheque received from a client on 28th September, 2004 must be entered i
n the bank book only after it is credited in the pass book.
Correct Answer False
Your Answer False
Multiple Choice Multiple Answer
Question The objectives of Uniform costing system are as follows :
Correct Answer To fix a common selling price for the industry as a whole , To co
mpare efficiency of each unit against industry's overall performance , To compil
e reliable cost data for inter-firm comparison of costs
Your Answer To fix a common selling price for the industry as a whole , To compa
re efficiency of each unit against industry's overall performance , To compile r
eliable cost data for inter-firm comparison of costs
Multiple Choice Multiple Answer
Question Purchased goods worth Rs.6,450/- on 10th March, 2004. However the goods
were delivered directly to the plant situated at Nagar and hence this transacti
on was not recorded in the purchase book, which is maintained at the corporate o
ffice. Analyse the impact of this transaction.
Correct Answer The gross profit will increase by Rs.6,450/-
Your Answer The purhases will increase by Rs.6,450/- , The closing stock will in
crease by Rs.6,450/- , The gross profit will increase by Rs.6,450/-
Select The Blank
Question Carriage charges paid for a new machine purchased if debited to carriag
e account would affect the ________
Correct Answer Machinery A/c and carriage A/c
Your Answer Carriage A/c
Multiple Choice Multiple Answer
Question Different types of tenders are :
Correct Answer Singly tender , Open tender , Global tender
Your Answer Multiple tender , Open tender , Global tender
Multiple Choice Single Answer
Question Purchased 200 shares of Bharat Forge Ltd. for Rs.850/- per share, which
account should be debited?
Correct Answer Investment account - Rs.170,000/-
Your Answer Investment account - Rs.170,000/-
Multiple Choice Single Answer
Question Basic objective of Uniform Costing is . . .
Correct Answer comparison
Your Answer To control cost
Multiple Choice Multiple Answer
Question Select the entries which need to be rectified
Correct Answer Purchase A/c ......... Dr. to Damodar's A/c (Being furniture purc
hased from Damodar) , Gopal's A/c ........... Dr. to cash A/c (Being entry for p
ayment of railway freight for goods purchased) , Cash A/c ............Dr. to Sur
esh's A/c (Being cash received from Suresh for goods sold to him for)
Your Answer Gopal's A/c ........... Dr. to cash A/c (Being entry for payment of
railway freight for goods purchased)
Multiple Choice Single Answer
Question A new computer worth Rs.35,000 was purchased on 18th June, 2003. The co
mpany has 10 such computers costing Rs.20,000/- each. The depreciation is charge
d @ 18% p.a. Find the depreciation on computers to be charged for the year.
Correct Answer Rs.40,953.70
Your Answer Rs.36,000/-
Select The Blank
Question The varinace that attempts to ascertain the effect of change in sales v
olume on the difference between actual and budgeted contribution is known as ___
_____ variance.
Correct Answer Sales margin volume
Your Answer Sales margin yield
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LIST OF ATTEMPTED QUESTIONS AND ANSWERS

True/False
Question Credit balances in all the Personal & Real accounts appear on as
set side.
Correct Answer False
Your Answer False

Multiple Choice Multiple Answer


Question Contents of Uniform Cost Manual are
Correct Answer Organization , Cost Accounting system , Presentation of
information
Your Answer Organization , Cost Accounting system , Presentation of informat
ion

Multiple Choice Multiple Answer


Question Uniform Costing Methods may be advantageously applied to . . .
Correct Answer Single organization having number of branches. , Number
of companies in same industry , Similar Industries such as cotton, jute etc.
Your Answer Single organization having number of branches. , Number of compa
nies in same industry , Similar Industries such as cotton, jute etc.
True/False
Question 1) Financial statements are basically in two forms i.e. profitab
ility statement and balance sheet.
Correct Answer True
Your Answer True

Multiple Choice Multiple Answer


Question The process of accounting has three streams of accounting ------
---------,--------and ----------------------.
Correct Answer Financial Accounting , Cost Accounting , Management Acco
unting
Your Answer Financial Accounting , Cost Accounting , Management Accounting

True/False
Question Long term loan borrowed from financial institution comes under t
he heading of long term liabilities.
Correct Answer True
Your Answer True

Match The Following


Question Correct Answer Your Answer
Book-Keeping Books of Accounts Books of Accounts
Financial statement Profitability statement & Balance-sheet Profitability st
atement & Balance-sheet
Accounting Process of analyzing & interpretation Process of analyzing & i
nterpretation
Profitability statement Indicates the amount of profit earned Indicates the am
ount of profit earned
Balance-sheet Financial status Financial status

Multiple Choice Single Answer


Question Judge the statement according to the criteria given : ' The acco
unting period for XYZ Ltd. ends on 31st December, 2003. It is noted that office
rent for the month of December, 2003 is paid on 15th January, 2004. "According t
o concept of matching expenses with the revenues, this expenditure should be rec
orded in the books of accounts in January,
Correct Answer The statement and its reason are both incorrect
Your Answer The statement is correct but its reason is incorrect

Multiple Choice Multiple Answer


Question Features of money measurement concept are . . .
Correct Answer Only those transactions and facts are included expressed
in terms of money are considered , Imposes severe restrictions on the kind of i
nformation available from financial statements , Works as a major drawback of fi
nancial accounting
Your Answer Only those transactions and facts are included expressed in term
s of money are considered , Imposes severe restrictions on the kind of informati
on available from financial statements , Works as a major drawback of financial
accounting

Multiple Choice Single Answer


Question The installation and operation of ___________ accounting require
s a very elaborate organizational structure and large number of rules & regulati
ons
Correct Answer Management
Your Answer Management

Select The Blank


Question ________account can be defined as the record of all the transact
ions pertaining to a person, asset, liability income or expenditure which have t
aken place in a specified period.
Correct Answer Ledger
Your Answer Trading

Match The Following


Question Correct Answer Your Answer
Sunk Cost Historical Cost Historical Cost
Cost Centre Facilitate the fixation of responsibility Facilitate the f
ixation of responsibility
Cost Control Process of controlling costs of operations Process of contr
olling costs of operations
Differential Cost Increase or Decrease in cost Increase or Decrease in
cost

Multiple Choice Multiple Answer


Question Which of the following transactions should be excluded while pre
paring a cost sheet ?
Correct Answer Interest on loan , Bad debts , Expenses on criminal law
suit
Your Answer Sale of scrap material , Interest on loan , Bad debts

True/False
Question In a Balance-Sheet right hand side is referred as assets side an
d left hand side is referred as liabilities.
Correct Answer True
Your Answer True

True/False
Question Credit note is an intimation send to person dealing with the bus
iness that his account being debited for the purpose indicated therein.
Correct Answer False
Your Answer False

True/False
Question Primary distribution is effected on the basis of service rendere
d to the service departments by the production departments.
Correct Answer False
Your Answer True

Multiple Choice Multiple Answer


Question Marginal costing is found to be unsuccessful in the following si
tuations :-
Correct Answer Impossible to distinguish costs into fixed and variable
component. , With respect to capital intensive industries where fixed costs are
very large and hence cannot be ignored , With respect to service industries wher
e employee costs are very large and almost fixed in nature
Your Answer Impossible to distinguish costs into fixed and variable componen
t. , With respect to capital intensive industries where fixed costs are very lar
ge and hence cannot be ignored , With respect to service industries where employ
ee costs are very large and almost fixed in nature

True/False
Question Debit Note is an intimation sent to person dealing with the busi
ness that his account is being credited for the purpose indicated therein.
Correct Answer False
Your Answer True

Multiple Choice Multiple Answer


Question Labour efficiency variance arises due to:
Correct Answer Inefficient supervisor , Poor working conditions , Use o
f sub-standard quality of material
Your Answer Inefficient supervisor , Poor working conditions , Use of sub-st
andard quality of material

True/False
Question Financial Accounting discloses the financial performance & finan
cial statements of the business as a whole.
Correct Answer True
Your Answer True

True/False
Question Balance sheet indicates the expenditure & income from the busine
ss.
Correct Answer False
Your Answer True

Select The Blank


Question The indirect material cost, indirect labour cost and indirect ex
penses cost, collectively are termed as ________.
Correct Answer Overhead
Your Answer Overhead

Select The Blank


Question A person in charge of a ________ may be held responsible for its
proper functioning and cost control.
Correct Answer Cost centre
Your Answer Cost centre
Multiple Choice Multiple Answer
Question The organization chart shows the following aspects :
Correct Answer Functional responsibility of different functional manage
rs , Delegation of authority to various managers , Inter-functional relationship
s of these managers
Your Answer Functional responsibility of different functional managers , Del
egation of authority to various managers , Inter-functional relationships of the
se managers

True/False
Question Uniform costing system is a pre-requisite to an inter-firm compa
rison of firms belonging to the different industries.
Correct Answer False
Your Answer False

True/False
Question P&L statement which is a period statement & relates to a certain
period tells about results of operations.
Correct Answer True
Your Answer False

Select The Blank


Question Depreciation charged on office furniture on straight line basis
is an example of ________.
Correct Answer Administration overheads
Your Answer Administration overheads

True/False
Question Under time rate system a worker is paid on the basis of producti
on achieved by him in a given time.
Correct Answer False
Your Answer False

Select The Blank


Question Information as to the cost and profit / loss associated with the
firm's operations is provided to the ________ by Management accounting.
Correct Answer Management
Your Answer Management

True/False
Question Danger level for inventory of materials means the safety stock o
f inventory.
Correct Answer False
Your Answer True

True/False
Question The role of the budget committee may be taken as an advisory rol
e to the Chief Executive.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question The main advantages of profit sharing are :
Correct Answer Employees try to increase productivity , Incentives are
shared by all the employees , Augments emplyees' efficiency
Your Answer Employees try to increase productivity , Incentives are shared b
y all the employees , Augments emplyees' efficiency

Select The Blank


Question ________ Accounting assists the management in establishing the p
lans to attain the economic objectives and take proper decisions for the attainm
ent of its objectives.
Correct Answer Management
Your Answer Management

Multiple Choice Multiple Answer


Question Which of the following is likely to be a contributory factor to
the incidence of excess expenditure on material cost?
Correct Answer The level of control of the used of material in the prod
uction cycle , The incorrect choice of purchase order quantity , Failure to cont
rol the issue of materials from stores
Your Answer An increase in the maximum material inventory level , The incorr
ect choice of purchase order quantity , Failure to control the issue of material
s from stores

Multiple Choice Multiple Answer


Question Management accounting is concerned with the following activities
:
Correct Answer Decision making , Safeguarding assets , Planning and con
trolling activities
Your Answer Decision making , Safeguarding assets , Planning and controlling
activities

Multiple Choice Multiple Answer


Question Features of double entry accounting system are . . .
Correct Answer Every business transaction has two elements , When busin
ess receives something, it has to pay something , Every debit has a correspondin
g credit
Your Answer Every business transaction has two elements , When business rece
ives something, it has to pay something , Every debit has a corresponding credit

Select The Blank


Question Under Differential Time Rate method payment is made at Rs. 1.40
per hour when the level of efficiency is between________.
Correct Answer 90% to 100%
Your Answer 90% to 100%

True/False
Question Maintenance Department is a service cost centre.
Correct Answer True
Your Answer True

True/False
Question The process of accounting split into three steams i.e. financial
, cost, management accounting.
Correct Answer True
Your Answer True

Select The Blank


Question The difference between sales and cost of sales is termed as ____
____.
Correct Answer Net Profit
Your Answer Net Profit

Select The Blank


Question The final result disclosed by trading account is the ________pro
fit earned by the organization.
Correct Answer Gross
Your Answer Gross

Multiple Choice Multiple Answer


Question Select the accounts to be disclosed on the liability side of the
Balance sheet.
Correct Answer Loan , Outstanding expenses , Creditors
Your Answer Loan , Outstanding expenses , Creditors

True/False
Question Penalty paid for delay in payment to creditors represents uncont
rollable cost.
Correct Answer False
Your Answer False

Multiple Choice Single Answer


Question Which document facilitates estimating material cost of a particu
lar job, before completion of that job?
Correct Answer Bill of material
Your Answer Material requisition note

Multiple Choice Single Answer


Question Purchases returns of Rs.18,000/- were wrongly transferred to the
sales returns account. Calculate its impact on net profit.
Correct Answer The net profit will not be affected
Your Answer The net profit will not be affected

Multiple Choice Single Answer


Question It is said that adoption of uniform costing creates customer con
fidence because . . .
Correct Answer Prices are reliable
Your Answer Prices are reliable

Multiple Choice Single Answer


Question An order for goods worth Rs.18,000/- was placed on 25th March, 2
004. The goods were received on 1st April, 2004. Calculate the impact of this tr
ansaction on the final statements of accounts for the year ended 31st March, 200
4.
Correct Answer The net profit will not be affected
Your Answer The net profit will not be affected
LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Select The Blank


Question Furniture account will always have a ________ balance.
Correct Answer Debit
Your Answer Nil

Multiple Choice Multiple Answer


Question Accounting is the art where transactions are â ¦
Correct Answer Summarized , Classified , Recorded
Your Answer Summarized , Classified , Recorded

True/False
Question The phrase 'By Balance c/d.' written on the credit side of the rent acc
ount, indicates credit balance for this account.
Correct Answer False
Your Answer False

Select The Blank


Question The ________ variance is the difference between the actual variable ove
rhead incurred and the standard variable overhead charged to production.
Correct Answer Total variable overhead
Your Answer Total variable overhead

True/False
Question Accounting refers to the process of analyzing & interpreting the inform
ation already recorded in the books of accounts.
Correct Answer True
Your Answer True

Select The Blank


Question The selection of ________ may depend upon the various factors like char
acteristics of the business organisation, tax considerations, statutory requirem
ents etc.
Correct Answer Accounting period
Your Answer Accounting period

True/False
Question Standard costs are used for external reporting.
Correct Answer False
Your Answer False

True/False
Question It is said that the income statement represents wealth increase /decrea
se for the organisation.
Correct Answer True
Your Answer False

Multiple Choice Single Answer


Question Mr. Oak, materials manager, spends 40% time in the factory and the rema
ining in office. If his annual salary is Rs.500,000/-, what amount should be cha
rged as office overheads ?
Correct Answer Rs.300,000/-
Your Answer Rs.200,000/-

Multiple Choice Multiple Answer


Question The factors to be considered while preparing the direct materials budge
t are :
Correct Answer Adequacy of material storing space , Availability of funds , Mate
rial in stores but reserved for specific purposes
Your Answer Adequacy of material storing space , Availability of funds , Materia
l in stores but reserved for specific purposes

Multiple Choice Multiple Answer


Question In which of the following situations, the flexible budget should be pre
ferred?
Correct Answer Sales are too difficult to predict , Supply level of input cannot
be predicted , Varying levels of production activity
Your Answer Sales are too difficult to predict , Supply level of input cannot be
predicted , Varying levels of production activity

Multiple Choice Multiple Answer


Question Techniques of management accounting include:
Correct Answer Marginal costing , Budgetary control , Standard costing
Your Answer Marginal costing , Cost control , Budgetary control , Standard costi
ng

Match The Following


Question Correct Answer Your Answer
Profit and loss account Commission received Dividend paid
Manufacturing account Work in Progress Land & Building
Balance Sheet Land & Building Closing stock of finished goods
Trading account Closing stock of finished goods Work in Progress

True/False
Question While preparing the labour cost budget, factors such as overtime workin
g or night shift working may be ignored.
Correct Answer False
Your Answer False

Multiple Choice Multiple Answer


Question If the sales forecast is less than the past sales but the top managemen
t insists upon a certain amount of additional profits, then following steps can
be taken to achieve the target profit
Correct Answer Increase the selling price , Reduce cost of sales , Increase the
selling efforts
Your Answer Increase the selling price , Increase the sales volume , Increase th
e selling efforts

Multiple Choice Multiple Answer


Question From the following, select intangible assets:
Correct Answer Goodwill , Patents , Trade Marks
Your Answer Patents , Trade Marks , Investments
True/False
Question Bank reconciliation statement must be prepared before the preparation o
f profit and loss account and balance sheet.
Correct Answer True
Your Answer False

Multiple Choice Single Answer


Question Find the budget which is inadequate as a cost control technique :
Correct Answer Fixed budget
Your Answer Fixed budget

True/False
Question Predetermined rate of absorption of overheads helps in quick preparatio
n of cost estimates and quoting prices.
Correct Answer True
Your Answer True

Multiple Choice Single Answer


Question Net sales Rs,7,50,000/-, opening stock Rs.1,14,375/-, purchases Rs.483,
375/- and closing stock Rs.1,47,750/-. Calculate the Gross Profit.
Correct Answer Rs.3,00,000/-
Your Answer Rs.3,00,000/-

Select The Blank


Question ________ is an example of intangible asset.
Correct Answer Goodwill
Your Answer Land

True/False
Question Accounting is an art of recording, classifying & summarizing in a signi
ficant manner.
Correct Answer True
Your Answer True

True/False
Question Goods sent to the customers on approval basis should be treated as sale
s.
Correct Answer False
Your Answer False

Multiple Choice Multiple Answer


Question Features of Sunk cost are . . .
Correct Answer Indicates historical cost , Not relevant in decision making proce
ss , Incurred in past
Your Answer Indicates historical cost , Incurred in past , Relevant in decision
making process

True/False
Question Profitability statement indicates the amount of assets & liabilities.
Correct Answer False
Your Answer True

True/False
Question A business is an activity carried out with the intention of earning the
profit.
Correct Answer True
Your Answer True

Multiple Choice Multiple Answer


Question Identify the steps involved in selecting the optimum product mix, when
the limiting factor is number of labour hours and sales demand.
Correct Answer For each product find the contribution per unit and per labour ho
ur , Award ranks to each of the products based on contribution per limiting fact
or , Priority is given to fulfill the market demand of the product which gives m
aximum contribution per labour hour.
Your Answer For each product find the contribution per unit and per labour hour
, Award ranks to each of the products based on contribution per limiting factor
, Priority is given to fulfill the market demand of the product which gives maxi
mum contribution per labour hour.

Multiple Choice Multiple Answer


Question Techniques of management accounting include:
Correct Answer Marginal costing , Budgetary control , Standard costing
Your Answer Marginal costing , Cost control , Budgetary control

True/False
Question The ideal budget period for a company engaged in generation and distrib
ution of electricity is one year.
Correct Answer False
Your Answer False

Select The Blank


Question The ________ adjustment is necessary to relfect the cost for the use of
fixed asset during the year.
Correct Answer Depreciation
Your Answer Depreciation

True/False
Question According to Reducing Balance Method, the depreciation is provided at a
predetermined percentage on the balance of cost of asset after deduction of the
depreciation previously charged.
Correct Answer True
Your Answer True

Select The Blank


Question Crane expenses should be apportioned on the basis of ________.
Correct Answer Number of hours crane worked in the department
Your Answer Number of hours crane worked in the department

Multiple Choice Multiple Answer


Question Essentials for effective implementation of budgetary control system are
Correct Answer Commitment of top management , Clearly defined objectives , Conti
nous budget education
Your Answer Commitment of top management , Clearly defined objectives , Continou
s budget education

Multiple Choice Single Answer


Question Commission payable to General Manager is 10 % of the net profits. If th
e net profit before charging commission is Rs.29,200/-, then what will be the am
ount of his net profit after commission?
Correct Answer Rs.26,545.45
Your Answer Rs.29,200/-

Select The Blank


Question A forecast is mere estimate of what is likely to happen, but ________ i
s the action plan to be followed.
Correct Answer Budget
Your Answer Budget

True/False
Question A very wide scope of Management Accounting is the limitation by itself.
Correct Answer True
Your Answer True

Select The Blank


Question The combination in which different products are sold by a company is kn
own as ________.
Correct Answer Sales mix
Your Answer Sales mix

Multiple Choice Single Answer


Question The reporting method used in the costing system should be based on the
principle of
Correct Answer Management by exception
Your Answer Management by objectives

True/False
Question Balance sheet indicates the financial status of the business at given p
eriod.
Correct Answer True
Your Answer True

Multiple Choice Single Answer


Question The wages paid to maintenance department workers who do repair work pri
ncipally for production departments but also on the vehicles in the distribuiton
department shoud be charged as:
Correct Answer Service costs
Your Answer Service costs

Multiple Choice Single Answer


Question M/s Vivek Enterprises has paid rent relating to the residence of Mr. Vi
vek, proprietor of Vivek Enterprises. This payment should be treated as
Correct Answer Drawings
Your Answer Capital
Select The Blank
Question Measurement of ________ gives an idea of the degree of mobility of labo
ur.
Correct Answer Labour turnover
Your Answer Labour turnover

Multiple Choice Single Answer


Question Net profit for the year before charging commission to the manager, is R
s.111,775/-. The manager of the company is entitled to commission @ 8% on net pr
ofits after charging commission. Find the amount of commission due to the manage
r.
Correct Answer Rs.8,279.63
Your Answer Rs.8,942/-

Match The Following


Question Correct Answer Your Answer
Total cost Cost of finished goods Cost of finished goods
Non operating income Profit on sale of investment Profit on sale of investment
Selling and distribution overheads Advertisement expenses Advertisement expenses

Factory overheads Repair for factory building Repair for factory building

True/False
Question Control on purchase of material is exercised by the storekeeper.
Correct Answer False
Your Answer True

Multiple Choice Single Answer


Question A company wishes to earn a 15% profit margin on selling price when quot
ing for a job. Which of the following is the profit margin of cost which will ac
hieve the required profit margin ?
Correct Answer 0.1765
Your Answer 0.15

Select The Blank


Question Economical use of labour, materials and facilities can achieved with th
e help of ________.
Correct Answer Budgetary control
Your Answer Cost control
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple Answer
Question
The selection of the supplier may depend upon the following aspects:
Correct Answer
Geographical location of the supplier , Price quoted by the supplier , Goodwill
of the supplier
Your Answer
Geographical location of the supplier , Price quoted by the supplier , Goodwill
of the supplier
Multiple Choice Single Answer
Question
Net book value of loose tools as on 1st April, 2003 was Rs.45,000/-. As on 31st
March, 2004 the management felt that the real worth of these loose tools is only
Rs.30,000/-. What can be done to achieve the desired reduction in the net book
value of loose tools?
Correct Answer
By providing depreciation to the extent of Rs.15,000/-
Your Answer
By providing depreciation to the extent of Rs.15,000/-
True/False
Question
Overhead absorption rate will be different at different capacity levels.
Correct Answer
True
Your Answer
True
Select The Blank
Question
The budget that represents the funds investment for expansion, diversification,
etc. is known as ________.
Correct Answer
Capital expenditure budget
Your Answer
Capital expenditure budget
Select The Blank
Question
The ________ variance is the difference between the actual variable overhead inc
urred and the standard variable overhead charged to production.
Correct Answer
Total variable overhead
Your Answer
Total variable overhead
Multiple Choice Single Answer
Question
The cost that indicates historical cost, which is incurred in past, is known as
Correct Answer
Sunk cost
Your Answer
Sunk cost
Select The Blank
Question
Information as to the cost and profit / loss associated with the firm's operatio
ns is provided to the ________ by Management accounting.
Correct Answer
Management
Your Answer
Management
Select The Blank
Question
Factory cost of a product is Rs.335,000/-, if the selling overheads are charged
@25% of factory cost, then the amount of selling overheads should be Rs.________
/-
Correct Answer
83750
Your Answer
83750
Select The Blank
Question
Uniform costing is not a separate method of ________.
Correct Answer
cost accounting
Your Answer
cost accounting
Multiple Choice Multiple Answer
Question
Which of the following budgets may be termed as a long term budget?
Correct Answer
Capital expenditure budget , Research and Development expenditure budget , Budge
t of a transportation company
Your Answer
Capital expenditure budget , Research and Development expenditure budget
Multiple Choice Single Answer
Question
The following figures relate to a company manufacturing a varied range of produc
ts : Year 2003 Total sales Rs.22,23,000/- and total cost Rs.19,83,600/-. Year 20
04 : Total sales Rs.24,51,000/- and Total cost Rs.21,43,200/-. Assuming stabilit
y in prices, calculate the profit volume ratio
Correct Answer
0.3
Your Answer
0.3
Multiple Choice Single Answer
Question
The cost of idle time incurred by employees that is considered normal for the pr
oduction process should be charged to :
Correct Answer
Factory overheads
Your Answer
Direct labour
Select The Blank
Question
Creche expenses may be appropriately approtioned on the basis of ________.
Correct Answer
Number of female workers
Your Answer
Number of female workers
Multiple Choice Single Answer
Question
Opening stock of Rs.1,80,000/-, purchases Rs.8,00,000/-, freight inward Rs.35,00
0/-, closing stock Rs.2,00,000/-, direct wages Rs.2,35,000/-. Calculate the prim
e cost.
Correct Answer
Rs.10,50,000/-
Your Answer
Rs.10,70,000/-
Multiple Choice Multiple Answer
Question
Limitations of Management Accounting includes-------------------
Correct Answer
Its wide scope , Possibility of intuitive decision , Requires elaborate organiza
tional structure
Your Answer
Its wide scope , Possibility of intuitive decision , Requires elaborate organiza
tional structure
Select The Blank
Question
Indirect Cost is termed as ________.
Correct Answer
Overhead
Your Answer
Overhead
Multiple Choice Multiple Answer
Question
Features of Financial Accounting includes-----------------
Correct Answer
It is a legal requirement , It protects the interest of outsiders , It considers
historical transactions
Your Answer
It is a legal requirement , It protects the interest of outsiders , It considers
historical transactions
Multiple Choice Multiple Answer
Question
Identify the budgets for which the production manager sould be held responsible
:
Correct Answer
Production budget , Production overheads budget , Plant utilisation budget
Your Answer
Production budget , Production overheads budget , Plant utilisation budget
Multiple Choice Single Answer
Question
A group of 10 men and 20 women workers were expected to produce 400 units of a p
roduct in an 8 hour day. The standard hourly rate was fixed at Rs.25/- and Rs.15
/-, respectively.Actually, a group of 15 men and 10 women workers was deployed a
nd paid for 8 hours a day at an hourly rate of Rs.22/- and Rs.18/-, respectively
. Two hours were wasted for the entire group due to power failure and only 300 u
nits were produced. Calculate labour rate variance.
Correct Answer
Rs.120/- (Favourable)
Your Answer
Rs.150/- (Favourable)
Multiple Choice Multiple Answer
Question
Techniques of management accounting include:
Correct Answer
Marginal costing , Budgetary control , Standard costing
Your Answer
Cost control , Budgetary control , Standard costing
True/False
Question
A grinding machine is an example of impersonal cost centre
Correct Answer
True
Your Answer
True
True/False
Question
Profitability statement indicates the amount of assets & liabilities.
Correct Answer
False
Your Answer
False
Multiple Choice Single Answer
Question
Uniform costing system is useful in the following areas
Correct Answer
Classification of cost accounts
Your Answer
Preparing financial statements
Multiple Choice Multiple Answer
Question
The features of multiplicity of key factors are as follows :
Correct Answer
More than one key factors , Refers to a complex situation , Can be resolved by u
sing linear programming technique
Your Answer
More than one key factors , Refers to a complex situation , Can be resolved by u
sing linear programming technique
True/False
Question
Balance sheet indicates the expenditure & income from the business.
Correct Answer
False
Your Answer
False
True/False
Question
Interim dividend paid by the company should be debited to the profit and loss ap
propriation account.
Correct Answer
True
Your Answer
True
Multiple Choice Multiple Answer
Question
A materials requisition form normally contains the following aspects:
Correct Answer
Quantity requisitioned , Per unit material cost , Job number
Your Answer
Quantity requisitioned , Job number
Multiple Choice Multiple Answer
Question
The production budget may be prepared in terms of :
Correct Answer
Units produced , Production cost , Material cost, labour cost and overheads
Your Answer
Units produced , Production cost , Material cost, labour cost and overheads
Multiple Choice Single Answer
Question
Panna Ltd. temporarily has excess production capacity. The idle plant facilties
can be used to manufacture a low-margin item. The low-margin item should be prod
uced if it can be sold for more than its:
Correct Answer
Variable costs
Your Answer
Variable costs
Multiple Choice Multiple Answer
Question
If the sales forecast is less than the past sales but the top management insists
upon a certain amount of additional profits, then following steps can be taken
to achieve the target profit
Correct Answer
Increase the selling price , Reduce cost of sales , Increase the selling efforts
Your Answer
Increase the selling price , Increase the sales volume , Reduce cost of sales
True/False
Question
Receipts and payments method of cash budget is useful for preparing long term es
timates.
Correct Answer
False
Your Answer
False
Multiple Choice Multiple Answer
Question
Select the advantages of standard cost system.
Correct Answer
Provides reliable basis for budgeting , Facilitates delegation of authority , Pr
omotes economy and efficiency
Your Answer
Provides reliable basis for budgeting , Facilitates delegation of authority
True/False
Question
The sales mix variance highlights the fact that the actual mix of sales has been
in the same ratio as budgeted.
Correct Answer
False
Your Answer
False
Select The Blank
Question
In case of seasonal industry, the budget period may be taken as ________.
Correct Answer
One season
Your Answer
One season
True/False
Question
Lack of efficient control on various aspects related to raw-material increases t
he material cost component of the finished product.
Correct Answer
True
Your Answer
True
True/False
Question
Due to compensating errors the arithmetical accuracy of the trial balance is aff
ected.
Correct Answer
False
Your Answer
False
Multiple Choice Single Answer
Question
Material price variance for a job is Rs.800/- (Favourable). Actual quantity of m
aterial used is 100 kg whereasthe standard quantity of material is 120% of actua
l quantity. Actual price paid for the material is 80% of the standard price. Cal
culate material cost variance.
Correct Answer
Rs.1,600/- (Favourable)
Your Answer
Rs.800/- (Favourable)
Select The Blank
Question
The process of recording the business transactions in a defined set of records i
s referred to as ________.
Correct Answer
Balance sheet
Your Answer
Profit and Loss Account
Match The Following
Question
Correct Answer
Your Answer
Daily Time sheets
Time spent by worker on job is recorded
Time spent by worker on job is recorded
Time Keeping Department
Recording of workers time
Recording of workers time
Time booking department
Jobwise booking of time.
Jobwise booking of time.
Time Recording Clock Method
Ticket number & clock card allotted to worker
Ticket number & clock card allotted to worker
True/False
Question
Purchased goods by paying Rs.35,000/-: In this case, the cash account should be
debited.
Correct Answer
True
Your Answer
True
Select The Blank
Question
If the customer is not likely to pay the amount receivable from him, this amount
should to be treated as ________.
Correct Answer
Bad debts
Your Answer
Bad debts
True/False
Question
Accounting is an art of recording, classifying & summarizing in a significant ma
nner.
Correct Answer
True
Your Answer
True
Match The Following
Question
Correct Answer
Your Answer
Book-Keeping
Books of Accounts
Books of Accounts
Financial statement
Profitability statement & Balance-sheet
Profitability statement & Balance-sheet
Accounting
Process of analyzing & interpretation
Process of analyzing & interpretation
Profitability statement
Indicates the amount of profit earned
Indicates the amount of profit earned
Balance-sheet
Financial status
Financial status
True/False
Question
The problem of multiple key factors can be solved with the help of techniques li
ke linear programming, operations research, etc.
Correct Answer
True
Your Answer
True
Select The Blank
Question
The ________ books are preferred when the volume of transactions is very large.
Correct Answer
Subsidiary
Your Answer
Journal
Multiple Choice Multiple Answer
Question
If you are required to enforce uniform costing system in your industry, how woul
d you proceed ?
Correct Answer
Collecting data from all units of your industry , Ensuring that the data collect
ed is complete and correct , Maintaining secrecy of the data collected
Your Answer
Collecting data from all units of your industry , Ensuring that the data collect
ed is complete and correct , Allowing free access to all the units to the collec
ted data
True/False
Question
All costs are controllable.
Correct Answer
False
Your Answer
False
LIST OF ATTEMPTED QUESTIONS AND ANSWERS

True/False
Question 1) Financial statements are basically in two forms i.e. profitability s
tatement and balance sheet.
Correct Answer True
Your Answer True
True/False
Question Financial Accounting discloses the financial performance & financial st
atements of the business as a whole.
Correct Answer True
Your Answer True
True/False
Question Management Accounting is the process of analysis and interpretation of
financial data collected with help of financial accounting and cost accounting
Correct Answer True
Your Answer True
True/False
Question P&L statement which is a period statement & relates to a certain period
tells about results of operations.
Correct Answer True
Your Answer True
True/False
Question Cost Accounting is concerned with calculation of the profitability and
state of affairs of the organization as a whole.
Correct Answer False
Your Answer False
True/False
Question Financial accounting may deal with the ascertainment of cost & calculat
ion of profitability of the individual product.
Correct Answer False
Your Answer False
True/False
Question Management Accounting aims at enabling the management to take the decis
ions about the future. It may consider future data as well as non-financial fact
ors.
Correct Answer True
Your Answer True
True/False
Question Financial Accounting primarily protects the interests of the outsiders
dealing with organization in various capacities.
Correct Answer True
Your Answer True
Match The Following
Question Correct Answer Your Answer
Financial Accounting Systematic recording of business transactions Systematic re
cording of business transactions
Cost Accounting Ascertainment of cost Ascertainment of cost
Management Accounting Analyzing & interpretation of financial data Analyzing & i
nterpretation of financial data
Accounting Art of interpreting & classifying business transaction Art of interpr
eting & classifying business transaction
Book Keeping Recording of business transactions Recording of business transactio
ns
Match The Following
Question Correct Answer Your Answer
Bills Payable Amount payable to supplier Amount payable to supplier
Bills Receivable Amount received from the customer Amount received from the cust
omer
Trade Discount Not accounted for in the books of Accounts Not accounted for in t
he books of Accounts
Cash Discount Accounted for in the books of Accounts Accounted for in the books
of Accounts
Bad debts Amount not received from customer Amount not received from customer
True/False
Question Amount invested in purchasing Fixed Asset is a revenue expenditure.
Correct Answer False
Your Answer True
Multiple Choice Multiple Answer
Question Going Concern Concept __________________
Correct Answer Indefinite longer period , Not likely to close down in shorter pe
riod , This affects the values of asset and liabilities
Your Answer Indefinite longer period , Not likely to close down in shorter perio
d , This affects the values of asset and liabilities
Multiple Choice Multiple Answer
Question Cost of asset is 1,20,000, estimated scrap value 20,000, cost of assets
subjected to depreciation 2,00,000, rate of depreciation is 10%. Calculate depr
eciation for 3 yrs as per the reducing balance m
Correct Answer 20,000,18,000,16,200
Your Answer 20,000,18,000,16,200
Multiple Choice Multiple Answer
Question Profit & Loss A/C credit side has
Correct Answer Gross profit , Commission received , Interested received
Your Answer Gross profit , Commission received , Interested received
Multiple Choice Single Answer
Question Juhi started business with Rs borrowed capital of Rs. 1,00,000 with 10%
interest per year. What is the total amount of the capital
Correct Answer 1,10,000
Your Answer 90,000
True/False
Question Cheques issued but not yet presented â the balance as per the bank pass boo
k will be higher.
Correct Answer True
Your Answer False
Multiple Choice Single Answer
Question This cost indicates historical cost which is incurred in past.
Correct Answer Sunk cost
Your Answer Sunk cost
Multiple Choice Single Answer
Question Labour cost is the cost of __________ paid to employees of the organiza
tion.
Correct Answer Remuneration
Your Answer Remuneration
Multiple Choice Single Answer
Question Company having opening stock of Rs. 1,80,000 purchase Rs. 8,00,000. Fre
ight Inward Rs, 35000 & closing stock Rs. 2,00,000, having direct wages Rs. 2,35
,000. What will be prime cost.
Correct Answer 10,50,000
Your Answer 10,50,000
Multiple Choice Multiple Answer
Question For the proper interpretation and presentation of cost the overhead fur
ther classified as
Correct Answer Factory overheads , Office and administration overheads , Selling
& distribution overhead
Your Answer Factory overheads , Office and administration overheads , Selling &
distribution overhead
True/False
Question Valuation of returns indicates the material returned by store departmen
t to production department
Correct Answer False
Your Answer False
True/False
Question The wage payment system should take into consideration the external obl
igations such as the Minimum wages Act and the agreement entered into by the org
anization with the workers.
Correct Answer True
Your Answer True
True/False
Question A good wage payment system will punish the workers for the matters beyo
nd the control of the workers.
Correct Answer False
Your Answer False
Multiple Choice Multiple Answer
Question These are the features of fixed overheads
Correct Answer total cost remains the same , per unit cost may vary , not depend
ent on volume of output
Your Answer total cost remains the same , per unit cost may vary , not dependent
on volume of output
True/False
Question Under marginal costing technique only fixed costs are considered as rel
evant for decision making.
Correct Answer False
Your Answer False
True/False
Question Product mix refers to the proportion in which various products of a com
pany can be sold.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question The cost that varies in direct proportion with the level of activity is
called
Correct Answer variable cost
Your Answer variable cost
Multiple Choice Multiple Answer
Question Basic assumptions made by marginal costing are
Correct Answer per unit selling price remains constant at all the levels of acti
vities. , whatever is produced by the organisation is sold off. , per unit varia
ble cost remain constant.
Your Answer per unit selling price remains constant at all the levels of activit
ies. , whatever is produced by the organisation is sold off. , per unit variable
cost remain constant.
Multiple Choice Single Answer
Question Calculate Volume Variance, If budgeted production is 20,000 units, actu
al production is 22,000 units and Standard rate per unit is Rs.1.5/-.
Correct Answer Rs.3,000/- ( Favorable )
Your Answer Rs.3,000/- ( Favorable )
Multiple Choice Single Answer
Question Calculate Sales Price Variance, If actual price is Rs.5.40/- per unit,
Standard price is Rs.5/- per unit and actual sales volume is 500 units.
Correct Answer Rs.200/- ( Favorable )
Your Answer Rs.200/- ( Favorable )
Multiple Choice Single Answer
Question Standard Costs are used as tool for
Correct Answer Cost Control
Your Answer Price fixation
Multiple Choice Single Answer
Question Standard Costing specifically relates to the function of
Correct Answer Production
Your Answer Production
True/False
Question Uniform Costing disturbs the healthy competition in the industry
Correct Answer False
Your Answer True
Multiple Choice Multiple Answer
Question Uniform Costing Methods may be advantageously applied
Correct Answer In single organization having number of branches. , Number of com
panies in same industry. , Similar Industries such as cotton, jute etc.
Your Answer In single organization having number of branches. , Number of compan
ies in same industry. , Similar Industries such as cotton, jute etc.
Multiple Choice Multiple Answer
Question The following factors affects the budgeted advertisement cost
Correct Answer Percentage of profits , Availability of funds , Competitors polic
y
Your Answer Percentage of profits , Availability of funds , Competitors policy
Multiple Choice Multiple Answer
Question In Cash budget , Operating cash outflow includes
Correct Answer Payment to Creditors , Cash purchases of raw material , Wages/sal
aries
Your Answer Payment to Creditors , Cash purchases of raw material , Wages/salari
es
Multiple Choice Multiple Answer
Question Characteristics of budget can be said to be
Correct Answer It may be prepared in terms of quantity or money or both , It is
prepared for a fixed period of time , It spells out objectives to be attained
Your Answer It may be prepared in terms of quantity or money or both , It is pre
pared for a fixed period of time , It spells out objectives to be attained
Select The Blank
Question Like initial formation expenses, ________ and R & D are the examples of
Deferred Revenue Expenditure
Correct Answer Initial Advertisement
Your Answer Purchase of an asset
Correct Answer R & D
Your Answer
Select The Blank
Question If ________ is not provided, the asset may appear in the Balance Sheet
at an ________ amount
Correct Answer depreciation
Your Answer depreciation
Correct Answer overstated
Your Answer overstated
Select The Blank
Question If ________ books are the books which record the transactions in the ch
ronological order, ________ is the book where transactions of a similar nature a
re pooled together
Correct Answer subsidiary
Your Answer jornal
Correct Answer ledger
Your Answer ledger
Select The Blank
Question While selecting source of supply ________ epartment may call for the __
______ from the prospective suppliers
Correct Answer purchase
Your Answer purchase
Correct Answer quotation
Your Answer quotation
Select The Blank
Question Preventive costs of labour turnover refers to all the costs which may b
e incurred by the organisation to keep workers happy and ________ them from ____
____ the job
Correct Answer discourage
Your Answer discourage
Correct Answer leaving
Your Answer leaving
Select The Blank
Question 4.Under the differential time rate method the wages are paid at Rs. 1.5
0 per hour between ________ efficiency and Rs.1.25 per hour between ________ eff
iciency
Correct Answer 101% to 125 %
Your Answer 101% to 125 %
Correct Answer 80% to90%
Your Answer 80% to90%
Select The Blank
Question Expenditure like general lighting are apportioned considering ________
as a base and expenditure like depreciation are apportioned considering ________
as a base.
Correct Answer number of light points
Your Answer number of light points
Correct Answer value of assets
Your Answer value of assets
Select The Blank
Question ________ and ________ are examples of element wise classification ofove
rhead costs
Correct Answer Idirect material
Your Answer Idirect material
Correct Answer indirect labour
Your Answer indirect labour
Select The Blank
Question Break even point is a situation of no ________ no ________
Correct Answer profit
Your Answer profit
Correct Answer loss
Your Answer loss
Select The Blank
Question A key factor is defined as the factor which, at a particular point of t
ime or over a period will ________ the volume of ________
Correct Answer limit
Your Answer limit
Correct Answer output
Your Answer output
LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Match The Following


Question Correct Answer Your Answer
Accounting Process of analyzing & interpretation Process of analyzing & interpre
tation
Profitability statement Indicates the amount of profit earned Indicates the amou
nt of profit earned
Balance-sheet Financial status Financial status
Book-Keeping Books of Accounts Books of Accounts
Financial statement Profitability statement & Balance-sheet Profitability statem
ent & Balance-sheet
Multiple Choice Single Answer
Question Salary paid to employee amounted Rs. 10,000, transferred to Trading A/C
is an example of_______
Correct Answer Error of Commission
Your Answer Error of Commission
Multiple Choice Single Answer
Question Labour cost indicates that labour cost which cannot be identified with
the individual cost centre and is incurred for those employees who are not engag
ed in the manufacturing process but only assist i
Correct Answer Remuneration
Your Answer Indirect
True/False
Question To take make or buy decision under the marginal costing , if purchase p
rice of the product is less than its variable cost it is advisable to go for man
ufacturing proposition.
Correct Answer False
Your Answer False
Select The Blank
Question Over absorption of overheads may take place due to the reasons like ___
_____ overheads being less than the ________ overheads
Correct Answer actual
Your Answer estimated
Correct Answer estimated
Your Answer actual
True/False
Question Income received in advance transfer to current liabilities
Correct Answer True
Your Answer True
Select The Blank
Question Bank reconciliation statement is the statement prepared to explain the
________ as to why the bank balance as per ________ and bank balance as per bank
book does not match
Correct Answer reasons
Your Answer reasons
Correct Answer pass book
Your Answer pass book
Select The Blank
Question Fixed cost is the cost that tend to remain ________ irrespective of ___
_____
Correct Answer constant
Your Answer constant
Correct Answer level of activity
Your Answer level of activity
True/False
Question A business is an activity carried out with the intention of earning the
profit.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question If wages for the month of January, February and March are Rs.4,000, Rs.
4,400 and Rs.4,600 respectively and if delay in payment of wages is ½ month , payme
nt of wages for the month of February is
Correct Answer 4,200
Your Answer 4,000
Select The Blank
Question Management Accounting has a very ________ scope and it requires _______
_ organizational structure
Correct Answer wide
Your Answer wide
Correct Answer elaborate
Your Answer elaborate
True/False
Question Accounting is an art of recording, classifying & summarizing in a signi
ficant manner.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question For a unit, if opening stock of raw material is 10,000 units, closing s
tock of raw material is 5,000 units and consumption is 3,20,000 units, what will
be the quantum of raw material to be purchased
Correct Answer 3,15,000
Your Answer 3,15,000
Multiple Choice Multiple Answer
Question Important advantages of Uniform Costing can be said to be
Correct Answer It is a useful tool for management control , It avoids cut throat
competition , Weaker units can take advantage of settled systems of better mana
ged units
Your Answer It is a useful tool for management control , It avoids cut throat co
mpetition , Weaker units can take advantage of settled systems of better managed
units
Multiple Choice Multiple Answer
Question P/L A/C debit side includes
Correct Answer salary , discount allowed , postage & telegram
Your Answer postage & telegram , salary , discount allowed
Multiple Choice Multiple Answer
Question Actual costs may be affected due to inefficient functioning such as
Correct Answer Abnormal expenses , In efficient use of labour , In efficient use
of material
Your Answer Abnormal expenses , In efficient use of labour , In efficient use of
material
Multiple Choice Single Answer
Question Calculate Labour Efficiency Variance, If actual rate per hour is Rs.3.5
0/- , Standard rate is Rs.3/- per unit and standard hours are 15,000 and Actual
hours are 13, 500.
Correct Answer Rs.4500/- ( Favorable )
Your Answer Rs.4500/- ( Favorable )
Multiple Choice Multiple Answer
Question Sales quantity may be forecasted after taking into consideration variou
s factors such as
Correct Answer Analysis of past trends , Market research , Reports by salesmen
Your Answer Analysis of past trends , Market research , Reports by salesmen
True/False
Question For taking make or buy decision marginal costing technique provide usef
ul assistance.
Correct Answer True
Your Answer True
True/False
Question Profitability statement indicates the amount of assets & liabilities.
Correct Answer False
Your Answer False
Multiple Choice Single Answer
Question It is an appropriate basis of apportionment of depreciation expenditure
Correct Answer value of assets
Your Answer value of assets
True/False
Question The variable costs are controllable at the lower level.
Correct Answer True
Your Answer True
True/False
Question Balance sheet indicates the expenditure & income from the business.
Correct Answer False
Your Answer False
Match The Following
Question Correct Answer Your Answer
Journal Book of original entry Book of original entry
Ledger Maintain all types of Accounts Maintain all types of Accounts
Assets All the properties owned by the business All the properties owned by the
business
Liabilities All the amount owed by the business All the amount owed by the busin
ess
Drawing Withdrawn for personal use Withdrawn for personal use
Select The Blank
Question A budget manual is a document setting out the ________ of the persons a
nd ________ required for the budget control.
Correct Answer Responsibilities
Your Answer Responsibilities
Correct Answer Forms and procedures
Your Answer Forms and procedures
True/False
Question Credit balances in all the Personal & Real accounts appear on asset sid
e.
Correct Answer False
Your Answer True
True/False
Question The process of accounting split into three steams i.e. financial, cost,
management accounting.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Omission of posting an amount in the ledger
Correct Answer Error of Omission
Your Answer Error of Omission
True/False
Question Non-operating / financial expenses are added while calculating net prof
it.
Correct Answer False
Your Answer True
True/False
Question Balance sheet indicates the financial status of the business at given p
eriod.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question A Budget Manual may contain the following particulars
Correct Answer Duties and responsibilities of various executives , Functions and
duties of Budget Officer , Scope of the Budget and area to be covered
Your Answer Duties and responsibilities of various executives , Functions and du
ties of Budget Officer , Scope of the Budget and area to be covered
Select The Blank
Question Semi ________ overheads are neither ________ nor variable in nature.
Correct Answer fixed
Your Answer variable
Correct Answer variable
Your Answer fixed
True/False
Question Due to errors of principle the arithmetical accuracy of the trial balan
ce does not get affected.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question Direct Cost includes
Correct Answer Direct material , Direct labour , Direct expenses
Your Answer Direct material , Direct labour , Direct expenses
Select The Blank
Question Financial Accounting protects the interest of outsiders . it considers
________ transaction and it is a ________ requirement
Correct Answer historical
Your Answer historical
Correct Answer legal
Your Answer legal
True/False
Question Bin Card is having all the information of item received and issued.
Correct Answer False
Your Answer True
Select The Blank
Question Budgetary Control is useful for ________-and ________-as a powerful too
l in the hands of management
Correct Answer Cost control
Your Answer Cost control
Correct Answer Maximization of profits
Your Answer Maximization of profits
True/False
Question Accounting refers to the process of analyzing & interpreting the inform
ation already recorded in the books of accounts.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question The material Requisition note contains
Correct Answer Number and date , Department demanding the material , Signature o
f the authority approving the demand
Your Answer Number and date , Department demanding the material , Signature of t
he authority approving the demand
Multiple Choice Multiple Answer
Question Following error affect the trial balance
Correct Answer Wrong totaling of subsidiary books , Posting on the wrong side of
an account , Omission of posting an account in the ledger
Your Answer Wrong totaling of subsidiary books , Posting on the wrong side of an
account , Omission of posting an account in the ledger
Select The Blank
Question Fixed overheads normally arise as a result of policy and are largely __
______ in nature at the ________ level of the management
Correct Answer uncontrollable
Your Answer controllable
Correct Answer lower
Your Answer top
True/False
Question Budget is prepared for a fixed period of time.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Sold Goods of Amitabh worth Rs. 15,000 against 15% Trade discount. The
Goods worth appear on account ___________
Correct Answer 12750
Your Answer 12750
Multiple Choice Single Answer
Question This is not the non monetary incentive.
Correct Answer Co-partnership
Your Answer Co-partnership
Multiple Choice Multiple Answer
Question P/L A/C debit side includes
Correct Answer salary , discount allowed , postage & telegram
Your Answer salary , discount allowed , postage & telegram
Select The Blank
Question Along with financial accounting, ________ and ________ are the other st
reams of accounting
Correct Answer Cost Accounting
Your Answer Cost Accounting
Correct Answer Management Accounting
Your Answer Management Accounting
True/False
Question A very wide scope of Management Accounting is the limitation by itself.
Correct Answer True
Your Answer True
True/False
Question
Credit balances in all the Personal & Real accounts appear on asset side.
Correct Answer
False
Your Answer
False
Multiple Choice Multiple Answer
Question
Contents of Uniform Cost Manual are
Correct Answer
Organization , Cost Accounting system , Presentation of information
Your Answer
Organization , Cost Accounting system , Presentation of information
Multiple Choice Multiple Answer
Question
Uniform Costing Methods may be advantageously applied to . . .
Correct Answer
Single organization having number of branches. , Number of companies in same ind
ustry , Similar Industries such as cotton, jute etc.
Your Answer
Single organization having number of branches. , Number of companies in same ind
ustry , Similar Industries such as cotton, jute etc.
True/False
Question
1) Financial statements are basically in two forms i.e. profitability statement
and balance sheet.
Correct Answer
True
Your Answer
True
Multiple Choice Multiple Answer
Question
The process of accounting has three streams of accounting ---------------,------
--and ----------------------.
Correct Answer
Financial Accounting , Cost Accounting , Management Accounting
Your Answer
Financial Accounting , Cost Accounting , Management Accounting
True/False
Question
Long term loan borrowed from financial institution comes under the heading of lo
ng term liabilities.
Correct Answer
True
Your Answer
True
Match The Following
Question
Correct Answer
Your Answer
Book-Keeping
Books of Accounts
Books of Accounts
Financial statement
Profitability statement & Balance-sheet
Profitability statement & Balance-sheet
Accounting
Process of analyzing & interpretation
Process of analyzing & interpretation
Profitability statement
Indicates the amount of profit earned
Indicates the amount of profit earned
Balance-sheet
Financial status
Financial status
Multiple Choice Single Answer
Question
Judge the statement according to the criteria given : ' The accounting period fo
r XYZ Ltd. ends on 31st December, 2003. It is noted that office rent for the mon
th of December, 2003 is paid on 15th January, 2004. "According to concept of mat
ching expenses with the revenues, this expenditure should be recorded in the boo
ks of accounts in January,
Correct Answer
The statement and its reason are both incorrect
Your Answer
The statement is correct but its reason is incorrect
Multiple Choice Multiple Answer
Question
Features of money measurement concept are . . .
Correct Answer
Only those transactions and facts are included expressed in terms of money are c
onsidered , Imposes severe restrictions on the kind of information available fro
m financial statements , Works as a major drawback of financial accounting
Your Answer
Only those transactions and facts are included expressed in terms of money are c
onsidered , Imposes severe restrictions on the kind of information available fro
m financial statements , Works as a major drawback of financial accounting
Multiple Choice Single Answer
Question
The installation and operation of ___________ accounting requires a very elabora
te organizational structure and large number of rules & regulations
Correct Answer
Management
Your Answer
Management
Select The Blank
Question
________account can be defined as the record of all the transactions pertaining
to a person, asset, liability income or expenditure which have taken place in a
specified period.
Correct Answer
Ledger
Your Answer
Trading
Match The Following
Question
Correct Answer
Your Answer
Sunk Cost
Historical Cost
Historical Cost
Cost Centre
Facilitate the fixation of responsibility
Facilitate the fixation of responsibility
Cost Control
Process of controlling costs of operations
Process of controlling costs of operations
Differential Cost
Increase or Decrease in cost
Increase or Decrease in cost
Multiple Choice Multiple Answer
Question
Which of the following transactions should be excluded while preparing a cost sh
eet ?
Correct Answer
Interest on loan , Bad debts , Expenses on criminal law suit
Your Answer
Sale of scrap material , Interest on loan , Bad debts
True/False
Question
In a Balance-Sheet right hand side is referred as assets side and left hand side
is referred as liabilities.
Correct Answer
True
Your Answer
True
True/False
Question
Credit note is an intimation send to person dealing with the business that his a
ccount being debited for the purpose indicated therein.
Correct Answer
False
Your Answer
False
True/False
Question
Primary distribution is effected on the basis of service rendered to the service
departments by the production departments.
Correct Answer
False
Your Answer
True
Multiple Choice Multiple Answer
Question
Marginal costing is found to be unsuccessful in the following situations :-
Correct Answer
Impossible to distinguish costs into fixed and variable component. , With respec
t to capital intensive industries where fixed costs are very large and hence can
not be ignored , With respect to service industries where employee costs are ver
y large and almost fixed in nature
Your Answer
Impossible to distinguish costs into fixed and variable component. , With respec
t to capital intensive industries where fixed costs are very large and hence can
not be ignored , With respect to service industries where employee costs are ver
y large and almost fixed in nature
True/False
Question
Debit Note is an intimation sent to person dealing with the business that his ac
count is being credited for the purpose indicated therein.
Correct Answer
False
Your Answer
True
Multiple Choice Multiple Answer
Question
Labour efficiency variance arises due to:
Correct Answer
Inefficient supervisor , Poor working conditions , Use of sub-standard quality o
f material
Your Answer
Inefficient supervisor , Poor working conditions , Use of sub-standard quality o
f material
True/False
Question
Financial Accounting discloses the financial performance & financial statements
of the business as a whole.
Correct Answer
True
Your Answer
True
True/False
Question
Balance sheet indicates the expenditure & income from the business.
Correct Answer
False
Your Answer
True
Select The Blank
Question
The indirect material cost, indirect labour cost and indirect expenses cost, col
lectively are termed as ________.
Correct Answer
Overhead
Your Answer
Overhead
Select The Blank
Question
A person in charge of a ________ may be held responsible for its proper function
ing and cost control.
Correct Answer
Cost centre
Your Answer
Cost centre
Multiple Choice Multiple Answer
Question
The organization chart shows the following aspects :
Correct Answer
Functional responsibility of different functional managers , Delegation of autho
rity to various managers , Inter-functional relationships of these managers
Your Answer
Functional responsibility of different functional managers , Delegation of autho
rity to various managers , Inter-functional relationships of these managers
True/False
Question
Uniform costing system is a pre-requisite to an inter-firm comparison of firms b
elonging to the different industries.
Correct Answer
False
Your Answer
False
True/False
Question
P&L statement which is a period statement & relates to a certain period tells ab
out results of operations.
Correct Answer
True
Your Answer
False
Select The Blank
Question
Depreciation charged on office furniture on straight line basis is an example of
________.
Correct Answer
Administration overheads
Your Answer
Administration overheads
True/False
Question
Under time rate system a worker is paid on the basis of production achieved by h
im in a given time.
Correct Answer
False
Your Answer
False
Select The Blank
Question
Information as to the cost and profit / loss associated with the firm's operatio
ns is provided to the ________ by Management accounting.
Correct Answer
Management
Your Answer
Management
True/False
Question
Danger level for inventory of materials means the safety stock of inventory.
Correct Answer
False
Your Answer
True
True/False
Question
The role of the budget committee may be taken as an advisory role to the Chief E
xecutive.
Correct Answer
True
Your Answer
True
Multiple Choice Multiple Answer
Question
The main advantages of profit sharing are :
Correct Answer
Employees try to increase productivity , Incentives are shared by all the employ
ees , Augments emplyees' efficiency
Your Answer
Employees try to increase productivity , Incentives are shared by all the employ
ees , Augments emplyees' efficiency
Select The Blank
Question
________ Accounting assists the management in establishing the plans to attain t
he economic objectives and take proper decisions for the attainment of its objec
tives.
Correct Answer
Management
Your Answer
Management
Multiple Choice Multiple Answer
Question
Which of the following is likely to be a contributory factor to the incidence of
excess expenditure on material cost?
Correct Answer
The level of control of the used of material in the production cycle , The incor
rect choice of purchase order quantity , Failure to control the issue of materia
ls from stores
Your Answer
An increase in the maximum material inventory level , The incorrect choice of pu
rchase order quantity , Failure to control the issue of materials from stores
Multiple Choice Multiple Answer
Question
Management accounting is concerned with the following activities :
Correct Answer
Decision making , Safeguarding assets , Planning and controlling activities
Your Answer
Decision making , Safeguarding assets , Planning and controlling activities
Multiple Choice Multiple Answer
Question
Features of double entry accounting system are . . .
Correct Answer
Every business transaction has two elements , When business receives something,
it has to pay something , Every debit has a corresponding credit
Your Answer
Every business transaction has two elements , When business receives something,
it has to pay something , Every debit has a corresponding credit
Select The Blank
Question
Under Differential Time Rate method payment is made at Rs. 1.40 per hour when th
e level of efficiency is between________.
Correct Answer
90% to 100%
Your Answer
90% to 100%
True/False
Question
Maintenance Department is a service cost centre.
Correct Answer
True
Your Answer
True
True/False
Question
The process of accounting split into three steams i.e. financial, cost, manageme
nt accounting.
Correct Answer
True
Your Answer
True
Select The Blank
Question
The difference between sales and cost of sales is termed as ________.
Correct Answer
Net Profit
Your Answer
Net Profit
Select The Blank
Question
The final result disclosed by trading account is the ________profit earned by th
e organization.
Correct Answer
Gross
Your Answer
Gross
Multiple Choice Multiple Answer
Question
Select the accounts to be disclosed on the liability side of the Balance sheet.
Correct Answer
Loan , Outstanding expenses , Creditors
Your Answer
Loan , Outstanding expenses , Creditors
True/False
Question
Penalty paid for delay in payment to creditors represents uncontrollable cost.
Correct Answer
False
Your Answer
False
Multiple Choice Single Answer
Question
Which document facilitates estimating material cost of a particular job, before
completion of that job?
Correct Answer
Bill of material
Your Answer
Material requisition note
Multiple Choice Single Answer
Question
Purchases returns of Rs.18,000/- were wrongly transferred to the sales returns a
ccount. Calculate its impact on net profit.
Correct Answer
The net profit will not be affected
Your Answer
The net profit will not be affected
Multiple Choice Single Answer
Question
It is said that adoption of uniform costing creates customer confidence because
. . .
Correct Answer
Prices are reliable
Your Answer
Prices are reliable
Multiple Choice Single Answer
Question
An order for goods worth Rs.18,000/- was placed on 25th March, 2004. The goods w
ere received on 1st April, 2004. Calculate the impact of this transaction on the
final statements of accounts for the year ended 31st March, 2004.
Correct Answer
The net profit will not be affected
Your Answer
The net profit will not be affected
Select The Blank
Question
Furniture account will always have a ________ balance.
Correct Answer
Debit
Your Answer
Nil
Multiple Choice Multiple Answer
Question
Accounting is the art where transactions are â ¦
Correct Answer
Summarized , Classified , Recorded
Your Answer
Summarized , Classified , Recorded
True/False
Question
The phrase 'By Balance c/d.' written on the credit side of the rent account, ind
icates credit balance for this account.
Correct Answer
False
Your Answer
False
Select The Blank
Question
The ________ variance is the difference between the actual variable overhead inc
urred and the standard variable overhead charged to production.
Correct Answer
Total variable overhead
Your Answer
Total variable overhead
True/False
Question
Accounting refers to the process of analyzing & interpreting the information alr
eady recorded in the books of accounts.
Correct Answer
True
Your Answer
True
Select The Blank
Question
The selection of ________ may depend upon the various factors like characteristi
cs of the business organisation, tax considerations, statutory requirements etc.
Correct Answer
Accounting period
Your Answer
Accounting period
True/False
Question
Standard costs are used for external reporting.
Correct Answer
False
Your Answer
False
True/False
Question
It is said that the income statement represents wealth increase /decrease for th
e organisation.
Correct Answer
True
Your Answer
False
Multiple Choice Single Answer
Question
Mr. Oak, materials manager, spends 40% time in the factory and the remaining in
office. If his annual salary is Rs.500,000/-, what amount should be charged as o
ffice overheads ?
Correct Answer
Rs.300,000/-
Your Answer
Rs.200,000/-
Multiple Choice Multiple Answer
Question
The factors to be considered while preparing the direct materials budget are :
Correct Answer
Adequacy of material storing space , Availability of funds , Material in stores
but reserved for specific purposes
Your Answer
Adequacy of material storing space , Availability of funds , Material in stores
but reserved for specific purposes
Multiple Choice Multiple Answer
Question
In which of the following situations, the flexible budget should be preferred?
Correct Answer
Sales are too difficult to predict , Supply level of input cannot be predicted ,
Varying levels of production activity
Your Answer
Sales are too difficult to predict , Supply level of input cannot be predicted ,
Varying levels of production activity
Multiple Choice Multiple Answer
Question
Techniques of management accounting include:
Correct Answer
Marginal costing , Budgetary control , Standard costing
Your Answer
Marginal costing , Cost control , Budgetary control , Standard costing
Match The Following
Question
Correct Answer
Your Answer
Profit and loss account
Commission received
Dividend paid
Manufacturing account
Work in Progress
Land & Building
Balance Sheet
Land & Building
Closing stock of finished goods
Trading account
Closing stock of finished goods
Work in Progress
True/False
Question
While preparing the labour cost budget, factors such as overtime working or nigh
t shift working may be ignored.
Correct Answer
False
Your Answer
False
Multiple Choice Multiple Answer
Question
If the sales forecast is less than the past sales but the top management insists
upon a certain amount of additional profits, then following steps can be taken
to achieve the target profit
Correct Answer
Increase the selling price , Reduce cost of sales , Increase the selling efforts
Your Answer
Increase the selling price , Increase the sales volume , Increase the selling ef
forts
Multiple Choice Multiple Answer
Question
From the following, select intangible assets:
Correct Answer
Goodwill , Patents , Trade Marks
Your Answer
Patents , Trade Marks , Investments
True/False
Question
Bank reconciliation statement must be prepared before the preparation of profit
and loss account and balance sheet.
Correct Answer
True
Your Answer
False
Multiple Choice Single Answer
Question
Find the budget which is inadequate as a cost control technique :
Correct Answer
Fixed budget
Your Answer
Fixed budget
True/False
Question
Predetermined rate of absorption of overheads helps in quick preparation of cost
estimates and quoting prices.
Correct Answer
True
Your Answer
True
Multiple Choice Single Answer
Question
Net sales Rs,7,50,000/-, opening stock Rs.1,14,375/-, purchases Rs.483,375/- and
closing stock Rs.1,47,750/-. Calculate the Gross Profit.
Correct Answer
Rs.3,00,000/-
Your Answer
Rs.3,00,000/-
Select The Blank
Question
________ is an example of intangible asset.
Correct Answer
Goodwill
Your Answer
Land
True/False
Question
Accounting is an art of recording, classifying & summarizing in a significant ma
nner.
Correct Answer
True
Your Answer
True
True/False
Question
Goods sent to the customers on approval basis should be treated as sales.
Correct Answer
False
Your Answer
False
Multiple Choice Multiple Answer
Question
Features of Sunk cost are . . .
Correct Answer
Indicates historical cost , Not relevant in decision making process , Incurred i
n past
Your Answer
Indicates historical cost , Incurred in past , Relevant in decision making proce
ss
True/False
Question
Profitability statement indicates the amount of assets & liabilities.
Correct Answer
False
Your Answer
True
True/False
Question
A business is an activity carried out with the intention of earning the profit.
Correct Answer
True
Your Answer
True
Multiple Choice Multiple Answer
Question
Identify the steps involved in selecting the optimum product mix, when the limit
ing factor is number of labour hours and sales demand.
Correct Answer
For each product find the contribution per unit and per labour hour , Award rank
s to each of the products based on contribution per limiting factor , Priority i
s given to fulfill the market demand of the product which gives maximum contribu
tion per labour hour.
Your Answer
For each product find the contribution per unit and per labour hour , Award rank
s to each of the products based on contribution per limiting factor , Priority i
s given to fulfill the market demand of the product which gives maximum contribu
tion per labour hour.
Multiple Choice Multiple Answer
Question
Techniques of management accounting include:
Correct Answer
Marginal costing , Budgetary control , Standard costing
Your Answer
Marginal costing , Cost control , Budgetary control
True/False
Question
The ideal budget period for a company engaged in generation and distribution of
electricity is one year.
Correct Answer
False
Your Answer
False
Select The Blank
Question
The ________ adjustment is necessary to relfect the cost for the use of fixed as
set during the year.
Correct Answer
Depreciation
Your Answer
Depreciation
True/False
Question
According to Reducing Balance Method, the depreciation is provided at a predeter
mined percentage on the balance of cost of asset after deduction of the deprecia
tion previously charged.
Correct Answer
True
Your Answer
True
Select The Blank
Question
Crane expenses should be apportioned on the basis of ________.
Correct Answer
Number of hours crane worked in the department
Your Answer
Number of hours crane worked in the department
Multiple Choice Multiple Answer
Question
Essentials for effective implementation of budgetary control system are
Correct Answer
Commitment of top management , Clearly defined objectives , Continous budget edu
cation
Your Answer
Commitment of top management , Clearly defined objectives , Continous budget edu
cation
Multiple Choice Single Answer
Question
Commission payable to General Manager is 10 % of the net profits. If the net pro
fit before charging commission is Rs.29,200/-, then what will be the amount of h
is net profit after commission?
Correct Answer
Rs.26,545.45
Your Answer
Rs.29,200/-
Select The Blank
Question
A forecast is mere estimate of what is likely to happen, but ________ is the act
ion plan to be followed.
Correct Answer
Budget
Your Answer
Budget
True/False
Question
A very wide scope of Management Accounting is the limitation by itself.
Correct Answer
True
Your Answer
True
Select The Blank
Question
The combination in which different products are sold by a company is known as __
______.
Correct Answer
Sales mix
Your Answer
Sales mix
Multiple Choice Single Answer
Question
The reporting method used in the costing system should be based on the principle
of
Correct Answer
Management by exception
Your Answer
Management by objectives
True/False
Question
Balance sheet indicates the financial status of the business at given period.
Correct Answer
True
Your Answer
True
Multiple Choice Single Answer
Question
The wages paid to maintenance department workers who do repair work principally
for production departments but also on the vehicles in the distribuiton departme
nt shoud be charged as:
Correct Answer
Service costs
Your Answer
Service costs
Multiple Choice Single Answer
Question
M/s Vivek Enterprises has paid rent relating to the residence of Mr. Vivek, prop
rietor of Vivek Enterprises. This payment should be treated as
Correct Answer
Drawings
Your Answer
Capital
Select The Blank
Question
Measurement of ________ gives an idea of the degree of mobility of labour.
Correct Answer
Labour turnover
Your Answer
Labour turnover
Multiple Choice Single Answer
Question
Net profit for the year before charging commission to the manager, is Rs.111,775
/-. The manager of the company is entitled to commission @ 8% on net profits aft
er charging commission. Find the amount of commission due to the manager.
Correct Answer
Rs.8,279.63
Your Answer
Rs.8,942/-
Match The Following
Question
Correct Answer
Your Answer
Total cost
Cost of finished goods
Cost of finished goods
Non operating income
Profit on sale of investment
Profit on sale of investment
Selling and distribution overheads
Advertisement expenses
Advertisement expenses
Factory overheads
Repair for factory building
Repair for factory building
True/False
Question
Control on purchase of material is exercised by the storekeeper.
Correct Answer
False
Your Answer
True
Multiple Choice Single Answer
Question
A company wishes to earn a 15% profit margin on selling price when quoting for a
job. Which of the following is the profit margin of cost which will achieve the
required profit margin ?
Correct Answer
0.1765
Your Answer
0.15
Select The Blank
Question
Economical use of labour, materials and facilities can achieved with the help of
________.
Correct Answer
Budgetary control
Your Answer
Cost control

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Match The Following


Question Correct Answer Your Answer
Accounting Process of analyzing & interpretation Process of analyzing & interpre
tation
Profitability statement Indicates the amount of profit earned Indicates the amou
nt of profit earned
Balance-sheet Financial status Financial status
Book-Keeping Books of Accounts Books of Accounts
Financial statement Profitability statement & Balance-sheet Profitability statem
ent & Balance-sheet
Multiple Choice Single Answer
Question Salary paid to employee amounted Rs. 10,000, transferred to Trading A/C
is an example of_______
Correct Answer Error of Commission
Your Answer Error of Commission
Multiple Choice Single Answer
Question Labour cost indicates that labour cost which cannot be identified with
the individual cost centre and is incurred for those employees who are not engag
ed in the manufacturing process but only assist i
Correct Answer Remuneration
Your Answer Indirect
True/False
Question To take make or buy decision under the marginal costing , if purchase p
rice of the product is less than its variable cost it is advisable to go for man
ufacturing proposition.
Correct Answer False
Your Answer False
Select The Blank
Question Over absorption of overheads may take place due to the reasons like ___
_____ overheads being less than the ________ overheads
Correct Answer actual
Your Answer estimated
Correct Answer estimated
Your Answer actual
True/False
Question Income received in advance transfer to current liabilities
Correct Answer True
Your Answer True
Select The Blank
Question Bank reconciliation statement is the statement prepared to explain the
________ as to why the bank balance as per ________ and bank balance as per bank
book does not match
Correct Answer reasons
Your Answer reasons
Correct Answer pass book
Your Answer pass book
Select The Blank
Question Fixed cost is the cost that tend to remain ________ irrespective of ___
_____
Correct Answer constant
Your Answer constant
Correct Answer level of activity
Your Answer level of activity
True/False
Question A business is an activity carried out with the intention of earning the
profit.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question If wages for the month of January, February and March are Rs.4,000, Rs.
4,400 and Rs.4,600 respectively and if delay in payment of wages is ½ month , payme
nt of wages for the month of February is
Correct Answer 4,200
Your Answer 4,000
Select The Blank
Question Management Accounting has a very ________ scope and it requires _______
_ organizational structure
Correct Answer wide
Your Answer wide
Correct Answer elaborate
Your Answer elaborate
True/False
Question Accounting is an art of recording, classifying & summarizing in a signi
ficant manner.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question For a unit, if opening stock of raw material is 10,000 units, closing s
tock of raw material is 5,000 units and consumption is 3,20,000 units, what will
be the quantum of raw material to be purchased
Correct Answer 3,15,000
Your Answer 3,15,000
Multiple Choice Multiple Answer
Question Important advantages of Uniform Costing can be said to be
Correct Answer It is a useful tool for management control , It avoids cut throat
competition , Weaker units can take advantage of settled systems of better mana
ged units
Your Answer It is a useful tool for management control , It avoids cut throat co
mpetition , Weaker units can take advantage of settled systems of better managed
units
Multiple Choice Multiple Answer
Question P/L A/C debit side includes
Correct Answer salary , discount allowed , postage & telegram
Your Answer postage & telegram , salary , discount allowed
Multiple Choice Multiple Answer
Question Actual costs may be affected due to inefficient functioning such as
Correct Answer Abnormal expenses , In efficient use of labour , In efficient use
of material
Your Answer Abnormal expenses , In efficient use of labour , In efficient use of
material
Multiple Choice Single Answer
Question Calculate Labour Efficiency Variance, If actual rate per hour is Rs.3.5
0/- , Standard rate is Rs.3/- per unit and standard hours are 15,000 and Actual
hours are 13, 500.
Correct Answer Rs.4500/- ( Favorable )
Your Answer Rs.4500/- ( Favorable )
Multiple Choice Multiple Answer
Question Sales quantity may be forecasted after taking into consideration variou
s factors such as
Correct Answer Analysis of past trends , Market research , Reports by salesmen
Your Answer Analysis of past trends , Market research , Reports by salesmen
True/False
Question For taking make or buy decision marginal costing technique provide usef
ul assistance.
Correct Answer True
Your Answer True
True/False
Question Profitability statement indicates the amount of assets & liabilities.
Correct Answer False
Your Answer False
Multiple Choice Single Answer
Question It is an appropriate basis of apportionment of depreciation expenditure
Correct Answer value of assets
Your Answer value of assets
True/False
Question The variable costs are controllable at the lower level.
Correct Answer True
Your Answer True
True/False
Question Balance sheet indicates the expenditure & income from the business.
Correct Answer False
Your Answer False
Match The Following
Question Correct Answer Your Answer
Journal Book of original entry Book of original entry
Ledger Maintain all types of Accounts Maintain all types of Accounts
Assets All the properties owned by the business All the properties owned by the
business
Liabilities All the amount owed by the business All the amount owed by the busin
ess
Drawing Withdrawn for personal use Withdrawn for personal use
Select The Blank
Question A budget manual is a document setting out the ________ of the persons a
nd ________ required for the budget control.
Correct Answer Responsibilities
Your Answer Responsibilities
Correct Answer Forms and procedures
Your Answer Forms and procedures
True/False
Question Credit balances in all the Personal & Real accounts appear on asset sid
e.
Correct Answer False
Your Answer True
True/False
Question The process of accounting split into three steams i.e. financial, cost,
management accounting.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Omission of posting an amount in the ledger
Correct Answer Error of Omission
Your Answer Error of Omission
True/False
Question Non-operating / financial expenses are added while calculating net prof
it.
Correct Answer False
Your Answer True
True/False
Question Balance sheet indicates the financial status of the business at given p
eriod.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question A Budget Manual may contain the following particulars
Correct Answer Duties and responsibilities of various executives , Functions and
duties of Budget Officer , Scope of the Budget and area to be covered
Your Answer Duties and responsibilities of various executives , Functions and du
ties of Budget Officer , Scope of the Budget and area to be covered
Select The Blank
Question Semi ________ overheads are neither ________ nor variable in nature.
Correct Answer fixed
Your Answer variable
Correct Answer variable
Your Answer fixed
True/False
Question Due to errors of principle the arithmetical accuracy of the trial balan
ce does not get affected.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question Direct Cost includes
Correct Answer Direct material , Direct labour , Direct expenses
Your Answer Direct material , Direct labour , Direct expenses
Select The Blank
Question Financial Accounting protects the interest of outsiders . it considers
________ transaction and it is a ________ requirement
Correct Answer historical
Your Answer historical
Correct Answer legal
Your Answer legal
True/False
Question Bin Card is having all the information of item received and issued.
Correct Answer False
Your Answer True
Select The Blank
Question Budgetary Control is useful for ________-and ________-as a powerful too
l in the hands of management
Correct Answer Cost control
Your Answer Cost control
Correct Answer Maximization of profits
Your Answer Maximization of profits
True/False
Question Accounting refers to the process of analyzing & interpreting the inform
ation already recorded in the books of accounts.
Correct Answer True
Your Answer True

Management Accounting Paper No2 of 1st Sem SCDL:


True/False
Question
Credit balances in all the Personal & Real accounts appear on asset side.
Correct Answer
False
Your Answer
False
Multiple Choice Multiple Answer
Question
Contents of Uniform Cost Manual are
Correct Answer
Organization , Cost Accounting system , Presentation of information
Your Answer
Organization , Cost Accounting system , Presentation of information
Multiple Choice Multiple Answer
Question
Uniform Costing Methods may be advantageously applied to . . .
Correct Answer
Single organization having number of branches. , Number of companies in same ind
ustry , Similar Industries such as cotton, jute etc.
Your Answer
Single organization having number of branches. , Number of companies in same ind
ustry , Similar Industries such as cotton, jute etc.
True/False
Question
1) Financial statements are basically in two forms i.e. profitability statement
and balance sheet.
Correct Answer
True
Your Answer
True
Multiple Choice Multiple Answer
Question
The process of accounting has three streams of accounting ---------------,------
--and ----------------------.
Correct Answer
Financial Accounting , Cost Accounting , Management Accounting
Your Answer
Financial Accounting , Cost Accounting , Management Accounting
True/False
Question
Long term loan borrowed from financial institution comes under the heading of lo
ng term liabilities.
Correct Answer
True
Your Answer
True
Match The Following
Question
Correct Answer
Your Answer
Book-Keeping
Books of Accounts
Books of Accounts
Financial statement
Profitability statement & Balance-sheet
Profitability statement & Balance-sheet
Accounting
Process of analyzing & interpretation
Process of analyzing & interpretation
Profitability statement
Indicates the amount of profit earned
Indicates the amount of profit earned
Balance-sheet
Financial status
Financial status
Multiple Choice Single Answer
Question
Judge the statement according to the criteria given : ' The accounting period fo
r XYZ Ltd. ends on 31st December, 2003. It is noted that office rent for the mon
th of December, 2003 is paid on 15th January, 2004. "According to concept of mat
ching expenses with the revenues, this expenditure should be recorded in the boo
ks of accounts in January,
Correct Answer
The statement and its reason are both incorrect
Your Answer
The statement is correct but its reason is incorrect
Multiple Choice Multiple Answer
Question
Features of money measurement concept are . . .
Correct Answer
Only those transactions and facts are included expressed in terms of money are c
onsidered , Imposes severe restrictions on the kind of information available fro
m financial statements , Works as a major drawback of financial accounting
Your Answer
Only those transactions and facts are included expressed in terms of money are c
onsidered , Imposes severe restrictions on the kind of information available fro
m financial statements , Works as a major drawback of financial accounting
Multiple Choice Single Answer
Question
The installation and operation of ___________ accounting requires a very elabora
te organizational structure and large number of rules & regulations
Correct Answer
Management
Your Answer
Management
Select The Blank
Question
________account can be defined as the record of all the transactions pertaining
to a person, asset, liability income or expenditure which have taken place in a
specified period.
Correct Answer
Ledger
Your Answer
Trading
Match The Following
Question
Correct Answer
Your Answer
Sunk Cost
Historical Cost
Historical Cost
Cost Centre
Facilitate the fixation of responsibility
Facilitate the fixation of responsibility
Cost Control
Process of controlling costs of operations
Process of controlling costs of operations
Differential Cost
Increase or Decrease in cost
Increase or Decrease in cost
Multiple Choice Multiple Answer
Question
Which of the following transactions should be excluded while preparing a cost sh
eet ?
Correct Answer
Interest on loan , Bad debts , Expenses on criminal law suit
Your Answer
Sale of scrap material , Interest on loan , Bad debts
True/False
Question
In a Balance-Sheet right hand side is referred as assets side and left hand side
is referred as liabilities.
Correct Answer
True
Your Answer
True
True/False
Question
Credit note is an intimation send to person dealing with the business that his a
ccount being debited for the purpose indicated therein.
Correct Answer
False
Your Answer
False
True/False
Question
Primary distribution is effected on the basis of service rendered to the service
departments by the production departments.
Correct Answer
False
Your Answer
True
Multiple Choice Multiple Answer
Question
Marginal costing is found to be unsuccessful in the following situations :-
Correct Answer
Impossible to distinguish costs into fixed and variable component. , With respec
t to capital intensive industries where fixed costs are very large and hence can
not be ignored , With respect to service industries where employee costs are ver
y large and almost fixed in nature
Your Answer
Impossible to distinguish costs into fixed and variable component. , With respec
t to capital intensive industries where fixed costs are very large and hence can
not be ignored , With respect to service industries where employee costs are ver
y large and almost fixed in nature
True/False
Question
Debit Note is an intimation sent to person dealing with the business that his ac
count is being credited for the purpose indicated therein.
Correct Answer
False
Your Answer
True
Multiple Choice Multiple Answer
Question
Labour efficiency variance arises due to:
Correct Answer
Inefficient supervisor , Poor working conditions , Use of sub-standard quality o
f material
Your Answer
Inefficient supervisor , Poor working conditions , Use of sub-standard quality o
f material
True/False
Question
Financial Accounting discloses the financial performance & financial statements
of the business as a whole.
Correct Answer
True
Your Answer
True
True/False
Question
Balance sheet indicates the expenditure & income from the business.
Correct Answer
False
Your Answer
True
Select The Blank
Question
The indirect material cost, indirect labour cost and indirect expenses cost, col
lectively are termed as ________.
Correct Answer
Overhead
Your Answer
Overhead
Select The Blank
Question
A person in charge of a ________ may be held responsible for its proper function
ing and cost control.
Correct Answer
Cost centre
Your Answer
Cost centre
Multiple Choice Multiple Answer
Question
The organization chart shows the following aspects :
Correct Answer
Functional responsibility of different functional managers , Delegation of autho
rity to various managers , Inter-functional relationships of these managers
Your Answer
Functional responsibility of different functional managers , Delegation of autho
rity to various managers , Inter-functional relationships of these managers
True/False
Question
Uniform costing system is a pre-requisite to an inter-firm comparison of firms b
elonging to the different industries.
Correct Answer
False
Your Answer
False
True/False
Question
P&L statement which is a period statement & relates to a certain period tells ab
out results of operations.
Correct Answer
True
Your Answer
False
Select The Blank
Question
Depreciation charged on office furniture on straight line basis is an example of
________.
Correct Answer
Administration overheads
Your Answer
Administration overheads
True/False
Question
Under time rate system a worker is paid on the basis of production achieved by h
im in a given time.
Correct Answer
False
Your Answer
False
Select The Blank
Question
Information as to the cost and profit / loss associated with the firm's operatio
ns is provided to the ________ by Management accounting.
Correct Answer
Management
Your Answer
Management
True/False
Question
Danger level for inventory of materials means the safety stock of inventory.
Correct Answer
False
Your Answer
True
True/False
Question
The role of the budget committee may be taken as an advisory role to the Chief E
xecutive.
Correct Answer
True
Your Answer
True
Multiple Choice Multiple Answer
Question
The main advantages of profit sharing are :
Correct Answer
Employees try to increase productivity , Incentives are shared by all the employ
ees , Augments emplyees' efficiency
Your Answer
Employees try to increase productivity , Incentives are shared by all the employ
ees , Augments emplyees' efficiency
Select The Blank
Question
________ Accounting assists the management in establishing the plans to attain t
he economic objectives and take proper decisions for the attainment of its objec
tives.
Correct Answer
Management
Your Answer
Management
Multiple Choice Multiple Answer
Question
Which of the following is likely to be a contributory factor to the incidence of
excess expenditure on material cost?
Correct Answer
The level of control of the used of material in the production cycle , The incor
rect choice of purchase order quantity , Failure to control the issue of materia
ls from stores
Your Answer
An increase in the maximum material inventory level , The incorrect choice of pu
rchase order quantity , Failure to control the issue of materials from stores
Multiple Choice Multiple Answer
Question
Management accounting is concerned with the following activities :
Correct Answer
Decision making , Safeguarding assets , Planning and controlling activities
Your Answer
Decision making , Safeguarding assets , Planning and controlling activities
Multiple Choice Multiple Answer
Question
Features of double entry accounting system are . . .
Correct Answer
Every business transaction has two elements , When business receives something,
it has to pay something , Every debit has a corresponding credit
Your Answer
Every business transaction has two elements , When business receives something,
it has to pay something , Every debit has a corresponding credit
Select The Blank
Question
Under Differential Time Rate method payment is made at Rs. 1.40 per hour when th
e level of efficiency is between________.
Correct Answer
90% to 100%
Your Answer
90% to 100%
True/False
Question
Maintenance Department is a service cost centre.
Correct Answer
True
Your Answer
True
True/False
Question
The process of accounting split into three steams i.e. financial, cost, manageme
nt accounting.
Correct Answer
True
Your Answer
True
Select The Blank
Question
The difference between sales and cost of sales is termed as ________.
Correct Answer
Net Profit
Your Answer
Net Profit
Select The Blank
Question
The final result disclosed by trading account is the ________profit earned by th
e organization.
Correct Answer
Gross
Your Answer
Gross
Multiple Choice Multiple Answer
Question
Select the accounts to be disclosed on the liability side of the Balance sheet.
Correct Answer
Loan , Outstanding expenses , Creditors
Your Answer
Loan , Outstanding expenses , Creditors
True/False
Question
Penalty paid for delay in payment to creditors represents uncontrollable cost.
Correct Answer
False
Your Answer
False
Multiple Choice Single Answer
Question
Which document facilitates estimating material cost of a particular job, before
completion of that job?
Correct Answer
Bill of material
Your Answer
Material requisition note
Multiple Choice Single Answer
Question
Purchases returns of Rs.18,000/- were wrongly transferred to the sales returns a
ccount. Calculate its impact on net profit.
Correct Answer
The net profit will not be affected
Your Answer
The net profit will not be affected
Management Accoutning
Question
________ system of wage payment is a combination of Halsey
system and Gantt system.
Correct Answer Diemer
Your Answer
Diemer
Multiple Choice Single Answer
Question
A cheque of Rs.400/- received and deposited into bank on 26th September, was cre
dited in the pass book but was omitted to be entered in the bank book: this erro
r will result in :
Correct Answer Difference in the balance as per bank book and as per pass
book
Your Answer
Difference in the trial balance
Multiple Choice Single Answer
Question
Presentation of information to enable managerial decision
making' is one of the objects of which of the following
Correct Answer Cost Accounting
Your Answer
Management Accounting
Multiple Choice Single Answer
Question
A good purchase system, for materials, prevents production
hold-ups due to:
Correct Answer Lack of material
Your Answer
Excess receipt of material
True/False
Question
A cash payment of Rs.1,000/- for traveling expenses has been
entered in the books but not debited to traveling A/c. The trial
balance will NOT agree.
Correct Answer True
Your Answer
True
Select The Blank
Question
Education facility to workers and their children, pension,
superannuation fund are examples of_____ ___ incentives.
Correct Answer Non-monetary
Your Answer
Non-monetary
Multiple Choice Single Answer
Question
The reporting method used in the costing system should be
based on the principle of
Correct Answer Management by exception
Your Answer
Management by exception
variance must be further investigated.
Correct Answer False
Your Answer
True
True/False
Question
An item of cost that is direct for one business organisation
may be indirect for another business organisation.
Correct Answer True
Your Answer
True
Multiple Choice Single Answer
Question
The cost of idle time incurred by employees that is
considered normal for the production process should be
charged to :
Correct Answer Factory overheads
Your Answer
Direct labour
Select The Blank
Question
Since the pass book and the bank book record the________ transactions, the bank
balance as per these books should be equal
Correct Answer Same
Your Answer
Same
Multiple Choice Multiple Answer
Question
The various areas in which uniform costing can be adopted
are . .
Correct Answer Valuation of inventories , Charging of depreciation ,
Apportionment of overheads
Your Answer
Valuation of inventories , Charging of depreciation
True/False
Question
A business is an activity carried out with the intention of
earning the profit.
Correct Answer True
Your Answer
True
Multiple Choice Single Answer
Question
With a 10% increase in the selling price and 10% decrease in
the physical sales volume, the profit volume ratio will:
Select The Blank
Question
If the firm is operating with zero margin of safety, decline of
even a single unit in sales will result in________.
Correct Answer Loss
Your Answer
Loss
Select The Blank
Question
Dividend received on amount invested in shares is an
example of________.
Correct Answer non-operating income
Your Answer
non-operating income
True/False
Question
If the storage cost of inventory increases, then the economic
order quantity also increases.
Correct Answer False
Your Answer
False
True/False
Question
Routing the purchase requisition through the purchase department entails unneces
sary delay in receiving the required materials.
Correct Answer False
Your Answer
True
Select The Blank
Question
The process of recording the business transactions in a
defined set of records is referred to as________.
Correct Answer Balance sheet
Your Answer
Trading account
True/False
Question
The rates at which the depreciation is to be calculated are specified in the Inc
ome Tax Act 1961 and The Companies Act, 1956.
Correct Answer True
Your Answer
True
True/False
Question
The effect of price reduction is always reduction in the