LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple Answer
* Question The management of Horn green Ltd. is deciding whether to continue working 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 , Expenditure 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.15,000/-. If the materials are purchased for cash the supplier is offering a rebate of 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 on1st April, 2003 Ram's capital is Rs.50,000/- and Laxman's capital is Rs.80,000/-. If interest on capital 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 period? 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/- , Interest 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 account 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 costing
Avoids cut throat competition Advantage of uniform costing Requisite for uniform costing
Treatment given to research and development costs Fields covered by uniform costing 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, High 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 like 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 : Ordering 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 quantity in one year, in order to avail the discount of 5% on the cost of the item. Work out the total cost to the organisation due to his ordering policy for this item.
Correct Answer Rs.101,360/-
Your Answer Rs.101,360/-
True/False
* Question Due to compensating errors the arithmetical accuracy of the trial balance is affected.
Correct Answer False
Your Answer False
Multiple Choice Single Answer
* Question From the given information compute the total cost variance. Material cost variance -Rs.4, 400/- (Favorable); labor cost variance -Rs.450/- (Adverse); fixed overhead cost variance -Rs.22, 000/- (Adverse); variable overhead cost variance -Rs.6,000/- (adverse).
Correct Answer Rs.24,050/- (Adverse)
Your Answer Rs.32,850/- (Favorable)
Multiple Choice Single Answer
* Question Advance tax account should appear in which of the final statement of accounts.
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 absorbed overheads
Correct Answer Use of supplementary rates , Carrying over the amount to remaining period , Writing off to the Costing Profit and Loss Account
Your Answer Use of supplementary rates , Carrying over the amount to remaining period , Writing off to the Costing Profit and Loss Account
True/False
* Question Absorption costing is more suitable for decision making than marginal costing
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 when 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 of 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 cost structure is as follows : Fixed cost Rs.50,000/-; variable costs Rs.30,000/- and 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 is…
Correct Answer Designed particularly for internal use, Helpful in estimating the 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 implement 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 that 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 withholding 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 how much would Tom have to increase its sales in order to achieve an operating income 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 variance -Rs.44,000/- (Favourable) , Sales Quantity variance-Rs.76,000/- (Favourable)
Your Answer Sales volume variance -Rs.120,000/- (Favourable) , Sales mix variance -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 information 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 data for which is given below : Estimated annual sales 24,000 units. Estimated costs : Materials Rs.4/- per unit; labour Re.0.60 per unit; overheads Rs.24,000/- per 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 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
True/False
* Question Purchased goods by paying Rs.35,000/-: In this case, the cash account should be debited.
Correct Answer True
Your Answer False
True/False
* Question The rates at which the depreciation is to be calculated are specified in 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 accounting 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 budget
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 one 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 difference 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 per pass book Overdraft as per bank book = Balanceas per pass book
Interest on debentures directly credited by bank Overdraft as per bank book > Overdraft 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 = Overdraft 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 the total production cost for making 50,000 units was Rs.34,000/-. Once production exceeds 25,000 units, additional fixed costs of Rs.4,000/- are incurred. The full 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 has 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 overheads.
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 raw 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); material yield variance -Rs.700/- (Favourable); labour yield variance -Rs.333.33 (Favourable).
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 unit. It is proposed to charge factory overheads equal to 100% of labour cost. Indicate 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 transactions 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 ledger 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 credited to sales account , 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 ledger as
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 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 costs 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 the Purchase return register.
Correct Answer Purchase
Your Answer Purchase
Multiple Choice Multiple Answer
* Question From the available information calculate sales value variance and budgeted sales quantity of X.Actual sales of X -500 units; budgeted price per unit -Rs.12/-; actual price per unit-Rs.15/- and sales volume variance -Rs.1,200/- (Favourable).
Correct Answer Budgeted sales - 400 units , Sales value variance -Rs.2,700/- , The 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 operations 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 /decrease 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 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 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 creditors, 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 disclosed in the balance sheet as on31st 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 costs 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 on30th 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 transactions representing the reasons for this difference.
Correct Answer Interest credited by bank, not entered in the bank book, Rs.125.60 , Cheques dishonoured not entered in the bank book Rs.200/- , Debit side of the 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 certain 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 representative of the whole industry.
Correct Answer True
Your Answer True
True/False
* Question Cheque received from a client on28th September, 2004 must be entered 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 objectives of Uniform costing system are as follows :
Correct Answer To fix a common selling price for the industry as a whole , To compare efficiency of each unit against industry's overall performance , To compile reliable cost data for inter-firm comparison of costs
Your Answer To fix a common selling price for the industry as a whole , To compare efficiency of each unit against industry's overall performance , To compile reliable 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 transaction was not recorded in the purchase book, which is maintained at the corporate office. 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 increase 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 carriage 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 purchased from Damodar) , Gopal's A/c ........... Dr. to cash A/c (Being entry for payment of railway freight for goods purchased) , Cash A/c ............Dr. to Suresh'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 on18th 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 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 volume on the difference between actual and budgeted contribution is known as ________ variance.
Correct Answer Sales margin volume
Your Answer Sales margin yield
LIST OF ATTEMPTED * * QUESTION S AND ANSWERS
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 industry , Similar Industries such as cotton, jute etc.
Your Answer Single organization having number of branches. , Number of companies in same industry , 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 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 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 for XYZ Ltd. ends on 31st December, 2003. It is noted that office rent for the month of December, 2003 is paid on15th January, 2004 . "According to concept of matching expenses with the revenues, this expenditure should be recorded 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 information available from 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 considered , Imposes severe restrictions on the kind of information available from financial statements , Works as a major drawback of financial accounting
Multiple Choice Single Answer
* Question The installation and operation of ___________ accounting requires a very elaborate 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 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 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 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 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 respect to capital intensive industries where fixed costs are very large and hence cannot be ignored , With respect to service industries where employee costs are very large and almost fixed in nature
Your 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 where employee costs are very large and almost fixed in nature
True/False
* Question Debit Note is an intimation sent to person dealing with the business 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 of sub-standard quality of material
Your Answer Inefficient supervisor , Poor working conditions , Use of sub-standard quality of 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, 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 managers , Delegation of authority to various managers , Inter-functional relationships of these managers
Your Answer Functional responsibility of different functional managers , Delegation of authority 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 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 production 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 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 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 by all the employees , Augments emplyees' efficiency
Select The Blank
* Question ________ Accounting assists the management in establishing the plans to attain the economic objectives and take proper decisions for the attainment 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 production cycle , The incorrect choice of purchase order quantity , Failure to control the issue of materials from stores
Your Answer An increase in the maximum material inventory level , The incorrect choice of purchase 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 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 ________profit 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 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 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 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 were received on1st 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
Multiple Choice Multiple Answer
* Question The management of Horn green Ltd. is deciding whether to continue working 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 , Expenditure 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.15,000/-. If the materials are purchased for cash the supplier is offering a rebate of 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
Correct Answer Ram's capital Rs.55,000/- , Laxman's capital Rs.88,000/- , Interest 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 account 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 costing
Avoids cut throat competition Advantage of uniform costing Requisite for uniform costing
Treatment given to research and development costs Fields covered by uniform costing 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, High 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 like 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 : Ordering 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 quantity in one year, in order to avail the discount of 5% on the cost of the item. Work out the total cost to the organisation due to his ordering policy for this item.
Correct Answer Rs.101,360/-
Your Answer Rs.101,360/-
True/False
* Question Due to compensating errors the arithmetical accuracy of the trial balance is affected.
Correct Answer False
Your Answer False
Multiple Choice Single Answer
* Question From the given information compute the total cost variance. Material cost variance -Rs.4, 400/- (Favorable); labor cost variance -Rs.450/- (Adverse); fixed overhead cost variance -Rs.22, 000/- (Adverse); variable overhead cost variance -Rs.6,000/- (adverse).
Correct Answer Rs.24,050/- (Adverse)
Your Answer Rs.32,850/- (Favorable)
Multiple Choice Single Answer
* Question Advance tax account should appear in which of the final statement of accounts.
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 absorbed overheads
Correct Answer Use of supplementary rates , Carrying over the amount to remaining period , Writing off to the Costing Profit and Loss Account
Your Answer Use of supplementary rates , Carrying over the amount to remaining period , Writing off to the Costing Profit and Loss Account
True/False
* Question Absorption costing is more suitable for decision making than marginal costing
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 when 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 of 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 cost structure is as follows : Fixed cost Rs.50,000/-; variable costs Rs.30,000/- and 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 is…
Correct Answer Designed particularly for internal use, Helpful in estimating the 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 implement 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 that 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 withholding 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 how much would Tom have to increase its sales in order to achieve an operating income 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 variance -Rs.44,000/- (Favourable) , Sales Quantity variance-Rs.76,000/- (Favourable)
Your Answer Sales volume variance -Rs.120,000/- (Favourable) , Sales mix variance -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 information 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 data for which is given below : Estimated annual sales 24,000 units. Estimated costs : Materials Rs.4/- per unit; labour Re.0.60 per unit; overheads Rs.24,000/- per 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 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
Management Accounting - 8
LIST OF ATTEMPTED * * QUESTION S AND ANSWERSTrue/False
* Question Purchased goods by paying Rs.35,000/-: In this case, the cash account should be debited.
Correct Answer True
Your Answer False
True/False
* Question The rates at which the depreciation is to be calculated are specified in 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 accounting 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 budget
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 one 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 difference 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 per pass book Overdraft as per bank book = Balanceas per pass book
Interest on debentures directly credited by bank Overdraft as per bank book > Overdraft 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 = Overdraft 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 the total production cost for making 50,000 units was Rs.34,000/-. Once production exceeds 25,000 units, additional fixed costs of Rs.4,000/- are incurred. The full 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 has 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 overheads.
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 raw 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); material yield variance -Rs.700/- (Favourable); labour yield variance -Rs.333.33 (Favourable).
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 unit. It is proposed to charge factory overheads equal to 100% of labour cost. Indicate 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 transactions 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 ledger 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 credited to sales account , 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 ledger as
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 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 costs 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 the Purchase return register.
Correct Answer Purchase
Your Answer Purchase
Multiple Choice Multiple Answer
* Question From the available information calculate sales value variance and budgeted sales quantity of X.Actual sales of X -500 units; budgeted price per unit -Rs.12/-; actual price per unit-Rs.15/- and sales volume variance -Rs.1,200/- (Favourable).
Correct Answer Budgeted sales - 400 units , Sales value variance -Rs.2,700/- , The 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 operations 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 /decrease 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 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 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 creditors, 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 disclosed in the balance sheet as on
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 costs 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
Correct Answer Interest credited by bank, not entered in the bank book, Rs.125.60 , Cheques dishonoured not entered in the bank book Rs.200/- , Debit side of the 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 certain 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 representative of the whole industry.
Correct Answer True
Your Answer True
True/False
* Question Cheque received from a client on
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 compare efficiency of each unit against industry's overall performance , To compile reliable cost data for inter-firm comparison of costs
Your Answer To fix a common selling price for the industry as a whole , To compare efficiency of each unit against industry's overall performance , To compile reliable 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 transaction was not recorded in the purchase book, which is maintained at the corporate office. 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 increase 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 carriage 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 purchased from Damodar) , Gopal's A/c ........... Dr. to cash A/c (Being entry for payment of railway freight for goods purchased) , Cash A/c ............Dr. to Suresh'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
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 volume on the difference between actual and budgeted contribution is known as ________ variance.
Correct Answer Sales margin volume
Your Answer Sales margin yield
Wednesday, June 3, 2009
Management Accounting - 7
Join here for getting FREE discount coupons for restaurants, shopping etc...LIST OF ATTEMPTED * * QUESTION S AND ANSWERS
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 industry , Similar Industries such as cotton, jute etc.
Your Answer Single organization having number of branches. , Number of companies in same industry , 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 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 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 for XYZ Ltd. ends on 31st December, 2003. It is noted that office rent for the month of December, 2003 is paid on
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 information available from 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 considered , Imposes severe restrictions on the kind of information available from financial statements , Works as a major drawback of financial accounting
Multiple Choice Single Answer
* Question The installation and operation of ___________ accounting requires a very elaborate 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 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 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 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 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 respect to capital intensive industries where fixed costs are very large and hence cannot be ignored , With respect to service industries where employee costs are very large and almost fixed in nature
Your 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 where employee costs are very large and almost fixed in nature
True/False
* Question Debit Note is an intimation sent to person dealing with the business 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 of sub-standard quality of material
Your Answer Inefficient supervisor , Poor working conditions , Use of sub-standard quality of 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, 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 managers , Delegation of authority to various managers , Inter-functional relationships of these managers
Your Answer Functional responsibility of different functional managers , Delegation of authority 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 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 production 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 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 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 by all the employees , Augments emplyees' efficiency
Select The Blank
* Question ________ Accounting assists the management in establishing the plans to attain the economic objectives and take proper decisions for the attainment 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 production cycle , The incorrect choice of purchase order quantity , Failure to control the issue of materials from stores
Your Answer An increase in the maximum material inventory level , The incorrect choice of purchase 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 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 ________profit 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 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 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 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 were received on
Correct Answer The net profit will not be affected
Your Answer The net profit will not be affected
