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LIST OF ATTEMPTED QUESTIONS AND ANSWERS 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 education Your Answer Commitment of top management , Clearly defined objectives , Continous budget education Multiple Choice Multiple Answer Question Features of convention of consistency are . . . Correct Answer The accounting policies and procedures should be followed consistently , Facilitates the comparison of financial statements , It facilitates comparison of financial statements on period-to-period basis Your Answer The accounting policies and procedures should be followed consistently , It facilitates comparison of financial statements on period- to-period basis True/False Question The bin card and stores ledger, being independent records, comparison 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
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Page 1: MA1

  LIST OF ATTEMPTED QUESTIONS AND ANSWERS     

 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 education

  Your Answer   Commitment of top management , Clearly defined objectives , Continous budget education  

 Multiple Choice Multiple Answer  Question   Features of convention of consistency are . . .

  Correct Answer  

The accounting policies and procedures should be followed consistently , Facilitates the comparison of financial statements , It facilitates comparison of financial statements on period-to-period basis

  Your Answer   The accounting policies and procedures should be followed consistently , It facilitates comparison of financial statements on period-to-period basis  

 True/False  Question   The bin card and stores ledger, being independent records,

comparison of these two records should be avoided.  Correct Answer  

False

  Your Answer   False

 

 Match The FollowingQuestion 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.

 

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  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

listed 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 breakdowns , 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

the 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

preparation 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

account with a debit balance of Rs.6,300/-. It is given that this balance should be written off. Calculate its impact on profit of the company.

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  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 FollowingQuestion Correct Answer Your Answer

Increase in contribution will lead to

Increase in profits Increase in profit 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 relating

to which of the following courses of action?  Correct Answer  

Decision to drop a product line , Decision to accept a special offer at price lower than the normal selling price , Decision regarding temporary shut-downs

  Your Answer   Decision to drop a product line , Decision to accept a special offer at price lower than the normal selling price , Decision to accept a special offer at price higher than the normal selling price , Decision regarding temporary 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

maximum stock level.  Correct Answer  

Minimum level

  Your Answer   Minimum level

 

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 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 Account. 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 with 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 The net profit will not be affected

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Answer    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

September, 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 repaid 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 employer and employee 

 True/False  Question   The sum of indirect material cost, indirect labour cost and

indirect 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

consumption - 200 units; maximum delivery period - 12 days; average daily consumption - 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

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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 development budget

  Your Answer   Sales budget , Production budget , Research and development budget  

 Multiple Choice Single Answer  Question   With the help of the given information, find actual fixed

overheads 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 Rs.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

received note?  Correct Answer  

Date of receipt of material , Quantity received , Description of goods

  Your Answer   Date of receipt of material , Quantity received , Price of goods , Description of goods  

 Multiple Choice Multiple Answer

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  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 earning

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

profit 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 from 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 by all the employees  

 Multiple Choice Multiple Answer  Question   Labour efficiency variance Rs.1,000/- (favourable); labour mix

variance 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 yield variance -Rs.1,260/- , Labour yield variance is favourable

  Your Answer   Labour cost variance -Rs.700/- (Favourable) , Labour yield variance -Rs.1,260/-  

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

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  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

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 , 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

manner 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 not due account should be passed

  Your Answer   An entry for Rs.458.34, crediting interest accrued but not due account should be passed

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True/False  Question   A business is an activity carried out with the intention of

earning 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 &

calculation 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

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  Multiple Choice Multiple Answer  Question   Cost Accounting ______________.

  Correct Answer  

Concerned with specific activities. , Classified according to their nature. , It deals with both i.e. past & present.

  Your Answer   Concerned with specific activities. , Classified according to their nature. , It covers whole business  

 Multiple Choice Multiple Answer  Question   Management Accounting __________________.

  Correct Answer  

Designed particularly for internal use only. , Looks forward in estimating the future along with past period. , This furnishes the necessary information to management.

  Your Answer   Designed particularly for internal use only. , Looks forward in estimating the future along with past period. , This furnishes the necessary information to management. , Only a, b, c.  

 Multiple Choice Multiple Answer  Question   Accounting is the art of ______________,____________ and

____________ in a significant manner and in terms of money transactions and events which are of a financial character and interpreting the res

  Correct Answer  

Summarizing , Classifying , Recording

  Your Answer   Summarizing , Classifying , Recording

  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  

 Match The FollowingQuestion Correct Answer Your Answer

Personal A/C Debit the receiver, Credit the giver

Debit the receiver, Credit the giver

Real A/C Debit what comes in, Credit what goes out

Debit what comes in, Credit what goes out

Nominal A/C Debit all the expenses, Credit all the incomes

Debit all the expenses, Credit all the incomes

Tangible assets Building, Machinery Building, Machinery

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In tangible assets Patents, Trade marks Patents, Trade marks

  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   True

  True/False  Question   Amount invested in purchasing Fixed Asset is a revenue

expenditure.  Correct Answer  

False

  Your Answer   False

  True/False  Question   As per double entry system o accounting , total of all debits

should be equal to all credits.  Correct Answer  

True

  Your Answer   True

  Multiple Choice Multiple Answer  Question   Convention of Consistency Materiality ________________

  Correct Answer  

The accounting policies & procedures should follow consistently on period to period , It facilitates the comparison of financial statements on period to period , If any change the fact should be disclosed with its effects on profitability

  Your Answer   The accounting policies & procedures should follow consistently on period to period , It facilitates the comparison of financial statements on period to period , If any change the fact should be disclosed with its effects on profitability  

 Multiple Choice Multiple Answer  Question   Cash and---------------are the two systems of accounting.

  Correct Answer  

Mercantile

  Your Answer   Mercantile

  Multiple Choice Single Answer

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  Question   The opening balance of cash account is Rs. 25,000, cash received from debtors Rs. 30,000, sold goods amounted to Rs. 50,000, paid to creditors Rs. 20,000, purchase furniture Rs. 5000. What is the clos

  Correct Answer  

80,000

  Your Answer   80,000

  Multiple Choice Single Answer  Question   Bank Reconciliation statement is required in case of

  Correct Answer  

difference between the bank balance as per the bank book and as per pass book

  Your Answer   difference between the bank balance as per the bank book and as per pass book 

 Match The FollowingQuestion Correct Answer Your Answer

Error of Principle Trial Balance does not get affected

Wrong Posting

Error of Omission The transaction is totally omitted

The transaction is totally omitted

Error of commission Wrong Posting Wrong classification

Compensating Error Wrong classification Trial Balance does not get affected

Difference in trial balance Transferred to suspense account

Transferred to suspense account

  Multiple Choice Multiple Answer  Question   Direct Cost includes

  Correct Answer  

Direct material , Direct labour , Direct expenses

  Your Answer   Direct material , Direct labour , Direct expenses

  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 engaged in the manufacturing process but only assist i

  Correct Answer  

Remuneration

  Your Answer   Indirect

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  Multiple Choice Multiple Answer  Question   The Prime Cost includes the aggregate of

  Correct Answer  

Direct Material Cost , Direct Labour Cost , Direct Expenses

  Your Answer   Direct Material Cost , Direct Labour Cost , Direct Expenses

  Multiple Choice Multiple Answer  Question   From the following particulars what must appear in purchase

requisition   Correct Answer  

Material to be purchased should be cleanly specified , Material should purchase whenever the market for the same is favorable , Purchase requisition should state the quantity of material required.

  Your Answer   Material to be purchased should be cleanly specified , Purchase requisition should state the quantity of material required.  

 Multiple Choice Multiple Answer  Question   Following points are taking into consideration for evaluation of

receipts   Correct Answer  

The Price , The trade discount is to be deducted , Other amounts such as sales tax, excise duty, octroi duty

  Your Answer   The Price , The trade discount is to be deducted , Other amounts such as sales tax, excise duty, octroi duty  

 Multiple Choice Multiple Answer  Question   While fixing the maximum level following factors are

considered   Correct Answer  

Maximum usage , Storage facilities , Availability of funds

  Your Answer   Maximum usage , Rate of consumption

  True/False  Question   Fixed cost tends to vary with time rather than with level of

activity.  Correct Answer  

True

  Your Answer   True

  True/False  Question   To take make or buy decision under the marginal costing , if

purchase price of the product is less than its variable cost it is advisable to go for manufacturing proposition.

Page 14: MA1

  Correct Answer  

False

  Your Answer   False

  Multiple Choice Single Answer  Question   Find out the break even point and profit if sales are Rs.

50,00,000 and P/V Ratio is 50% and margin of safety is 40%   Correct Answer  

Rs.30,00,000 and Rs.10,00,000

  Your Answer   Rs.30,00,000 and Rs.10,00,000

  True/False  Question   For better control, variances of a period may be compare with

the previous period.  Correct Answer  

True

  Your Answer   True

  True/False  Question   Expected standards are more realistic and useful for cost

control.  Correct Answer  

True

  Your Answer   True

  True/False  Question   The difference between standard cost and actual cost is

termed as Variance.  Correct Answer  

True

  Your Answer   True

  Multiple Choice Multiple Answer  Question   For reporting of variance, following propositions should be

considered   Correct Answer  

Responsibility of each individual should be defined , Reporting should be simple, clear and quick , Analysis of variance should be accurate.

  Your Answer   Responsibility of each individual should be defined , Reporting should be simple, clear and quick , Analysis of variance should be accurate.  

 Multiple Choice Multiple Answer

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  Question   Basic three steps in Standard Costing are

  Correct Answer  

Setting standards , Comparing actuals with standards , Measurement of variance

  Your Answer   Setting standards , Comparing actuals with standards , Measurement of variance  

 Multiple Choice Single Answer  Question   Find out Labour Efficiency Variance, if Standard Rate is

Rs.1.50/- per hour, Standard hours are 12,000 and Actual hours are 12,600.

  Correct Answer  

Rs.900/- ( Adverse )

  Your Answer   Rs.900/- ( Adverse )

  Multiple Choice Single Answer  Question   Standard costs are the targets to be attained by the actual

performance.   Correct Answer  

Minimum

  Your Answer   Minimum

  Multiple Choice Single Answer  Question   Standard Costs are used as tool for

  Correct Answer  

Cost Control

  Your Answer   Cost Control

  Select The Blank  Question   Accounting to the matching principles of accounting, the

________ incurred during an accounting period are required to be match with ________ during that period

  Correct Answer  

cost

  Your Answer   cost

  Correct Answer  

revenues

  Your Answer   revenues

  Select The Blank  Question   Along with financial accounting, ________ and ________ are

the other streams of accounting  Correct Cost Accounting

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Answer    Your Answer   Management Accounting

  Correct Answer  

Management Accounting

  Your Answer   Cost Accounting

  Select The Blank  Question   If the revenue expenditure is treated as ________

expenditure , it will not affect the agreement of ________ balance

  Correct Answer  

capital

  Your Answer   capital

  Correct Answer  

trial

  Your Answer   trial

  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   After material is received from the supplier, quantity actually

received is compared with quantity ________-and ________-if any, are taken up with the supplier

  Correct Answer  

ordered

  Your Answer   ordered

  Correct Answer  

variation

  Your Answer   variation

  Select The Blank  Question   Under the daily ________ sheets method, each worker is

provided with a daily time sheet on which time ________ by

Page 17: MA1

him on various jobs is expected to be mentioned  Correct Answer  

time

  Your Answer   work

  Correct Answer  

spent

  Your Answer   spent

  Select The Blank  Question   4.Under the differential time rate method the wages are paid at

Rs. 1.50 per hour between ________ efficiency and Rs.1.25 per hour between ________ efficiency

  Correct Answer  

101% to 125 %

  Your Answer   90-100

  Correct Answer  

80% to90%

  Your Answer   101% to 125 %

  Select The Blank  Question   Under Gannt Task bonus system where the output is

________ payment is made as per minimum time rate, output is ________ payment is made as per time wages plus some increase in wage rates

  Correct Answer  

below standard

  Your Answer   below standard

  Correct Answer  

at standard

  Your Answer   at standard

  Select The Blank  Question   ________ and ________ are examples of element wise

classification ofoverhead costs  Correct Answer  

Idirect material

  Your Answer   Idirect material

  Correct Answer  

indirect labour

  Your Answer   selling overheads

 

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 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

  Select The Blank  Question   The process of Allocation & apportionment can followed to

decide the ________ of overheads to each budget center  Correct Answer  

Allocation & apportionment

  Your Answer   Distribution

  Correct Answer  

Loading

  Your Answer  

  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.

 

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  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 incurred 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

operations 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

 

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 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 , Budget 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 products : Year 2003 Total sales Rs.22,23,000/- and total cost Rs.19,83,600/-. Year 2004 : Total sales Rs.24,51,000/- and Total cost Rs.21,43,200/-. Assuming stability 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 production 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.35,000/-, closing stock Rs.2,00,000/-, direct wages Rs.2,35,000/-. Calculate the prime 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 organizational structure

  Your Answer   Its wide scope , Possibility of intuitive decision , Requires elaborate organizational structure  

 Select The Blank  Question   Indirect Cost is termed as ________.

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  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 product 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 and 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 units 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

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  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 using linear programming technique

  Your Answer   More than one key factors , Refers to a complex situation , Can be resolved by using 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 appropriation 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 produced if it can be sold for more than its:

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  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 estimates.  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 , Promotes 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 the material cost component of the finished product.  Correct Answer  

True

  Your Answer   True

 

 True/False

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  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   Material price variance for a job is Rs.800/- (Favourable). Actual quantity

of material used is 100 kg whereasthe standard quantity of material is 120% of actual quantity. Actual price paid for the material is 80% of the standard price. Calculate 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 is referred to as ________.  Correct Answer  

Balance sheet

  Your Answer   Profit and Loss Account

 

 Match The FollowingQuestion 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

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significant manner.  Correct Answer  

True

  Your Answer   True

 

 Match The FollowingQuestion 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 like 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 would you proceed ?  Correct Answer  

Collecting data from all units of your industry , Ensuring that the data collected is complete and correct , Maintaining secrecy of the data collected

  Your Answer   Collecting data from all units of your industry , Ensuring that the data collected is complete and correct , Allowing free access to all the units to the collected data  

 True/False  Question   All costs are controllable.

  Correct Answer  

False

  Your Answer   False