Page 1
Match The Following
Question Correct Answer Your Answer
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
Book-Keeping Books of Accounts Books of Accounts
Financial statement Profitability statement & Balance-sheet Profitability statement &
Balance-sheet
Multiple Choice Single Answer
Question Salary paid to employee amounted Rs. 10,000, transferred toTrading A/C is an
example of_______
Correct Answer Error of Commission
Your Answer Error of Commission
Multiple Choice Single Answer
Question Labour cost indicates that labour cost which cannot be identified with the
individual cost centre and is incurred for thoseemployees who are not engaged in the
manufacturing process but only assist i
Correct Answer Remuneration
Your Answer Indirect
True/False
Question To take make or buy decision under the marginal costing , if purchase price of the
product is less than its variable cost it is advisable to go for manufacturing proposition.
Correct Answer False
Your Answer False
Select The Blank
Question Over absorption of overheads may take place due to the reasons like ________
overheads being less than the ________ overheads
Correct Answer actual
Your Answer estimated
Correct Answer estimated
Your Answer actual
True/False
Question Income received in advance transfer to current liabilities
Correct Answer True
Your Answer True
Page 2
Select The Blank
Question Bank reconciliation statement is the statement prepared to explain the ________ as
to why the bank balance as per ________ and bank balance as per bank book does not match
Correct Answer reasons
Your Answer reasons
Correct Answer pass book
Your Answer pass book
Select The Blank
Question Fixed cost is the cost that tend to remain ________ irrespective of ________
Correct Answer constant
Your Answer constant
Correct Answer level of activity
Your Answer level of activity
True/False
Question A business is an activity carried out with the intention of earning the profit.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question If wages for the month of January, February and March are Rs.4,000, Rs.4,400 and
Rs.4,600 respectively and if delay in payment of wages is ½ month , payment of wages for
the month of February is
Correct Answer 4,200
Your Answer 4,000
Select The Blank
Question Management Accounting has a very ________ scope and it requires ________
organizational structure
Correct Answer wide
Your Answer wide
Correct Answer elaborate
Your Answer elaborate
True/False
Question Accounting is an art of recording, classifying & summarizing in a significant
manner.
Correct Answer True
Your Answer True
Page 3
Multiple Choice Single Answer
Question For a unit, if opening stock of raw material is 10,000 units, closing stock of raw
material is 5,000 units and consumption is 3,20,000 units, what will be the quantum of raw
material to be purchased
Correct Answer 3,15,000
Your Answer 3,15,000
Multiple Choice Multiple Answer
Question Important advantages of Uniform Costing can be said to be
Correct Answer It is a useful tool for management control , It avoids cut throat competition ,
Weaker units can take advantage of settled systems of better managed units
Your Answer It is a useful tool for management control , It avoids cut throat competition ,
Weaker units can take advantage of settled systems of better managed units
Multiple Choice Multiple Answer
Question P/L A/C debit side includes
Correct Answer salary , discount allowed , postage & telegram
Your Answer postage & telegram , salary , discount allowed
Multiple Choice Multiple Answer
Question Actual costs may be affected due to inefficient functioning such as
Correct Answer Abnormal expenses , In efficient use of labour , In efficient use of material
Your Answer Abnormal expenses , In efficient use of labour , In efficient use of material
Multiple Choice Single Answer
Question Calculate Labour Efficiency Variance, If actual rate per hour is Rs.3.50/- , Standard
rate is Rs.3/- per unit and standard hours are 15,000 and Actual hours are 13, 500.
Correct Answer Rs.4500/- ( Favorable )
Your Answer Rs.4500/- ( Favorable )
Multiple Choice Multiple Answer
Question Sales quantity may be forecasted after taking into consideration various factors
such as
Correct Answer Analysis of past trends , Market research , Reports by salesmen
Your Answer Analysis of past trends , Market research , Reports by salesmen
True/False
Question For taking make or buy decision marginal costing technique provide useful
assistance.
Correct Answer True
Page 4
Your Answer True
True/False
Question Profitability statement indicates the amount of assets & liabilities.
Correct Answer False
Your Answer False
Multiple Choice Single Answer
Question It is an appropriate basis of apportionment of depreciation expenditure
Correct Answer value of assets
Your Answer value of assets
True/False
Question The variable costs are controllable at the lower level.
Correct Answer True
Your Answer True
True/False
Question Balance sheet indicates the expenditure & income from the business.
Correct Answer False
Your Answer False
Match The Following
Question Correct Answer Your Answer
Journal Book of original entry Book of original entry
Ledger Maintain all types of Accounts Maintain all types of Accounts
Assets All the properties owned by the business All the properties owned by the business
Liabilities All the amount owed by the business All the amount owed by the business
Drawing Withdrawn for personal use Withdrawn for personal use
Select The Blank
Question A budget manual is a document setting out the ________ of the persons and
________ required for the budget control.
Correct Answer Responsibilities
Your Answer Responsibilities
Correct Answer Forms and procedures
Your Answer Forms and procedures
True/False
Question Credit balances in all the Personal & Real accounts appear on asset side.
Correct Answer False
Page 5
Your Answer True
True/False
Question The process of accounting split into three steams i.e. financial, cost, management
accounting.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Omission of posting an amount in the ledger
Correct Answer Error of Omission
Your Answer Error of Omission
True/False
Question Non-operating / financial expenses are added while calculating net profit.
Correct Answer False
Your Answer True
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 A Budget Manual may contain the following particulars
Correct Answer Duties and responsibilities of various executives , Functions and duties of
Budget Officer , Scope of the Budget and area to be covered
Your Answer Duties and responsibilities of various executives , Functions and duties of
Budget Officer , Scope of the Budget and area to be covered
Select The Blank
Question Semi ________ overheads are neither ________ nor variable in nature.
Correct Answer fixed
Your Answer variable
Correct Answer variable
Your Answer fixed
True/False
Question Due to errors of principle the arithmetical accuracy of the trial balance does not
get affected.
Correct Answer True
Page 6
Your Answer True
Multiple Choice Multiple Answer
Question Direct Cost includes
Correct Answer Direct material , Direct labour , Direct expenses
Your Answer Direct material , Direct labour , Direct expenses
Select The Blank
Question Financial Accounting protects the interest of outsiders . it considers ________
transaction and it is a ________ requirement
Correct Answer historical
Your Answer historical
Correct Answer legal
Your Answer legal
True/False
Question Bin Card is having all the information of item received and issued.
Correct Answer False
Your Answer True
Select The Blank
Question Budgetary Control is useful for ________-and ________-as a powerful tool in the
hands of management
Correct Answer Cost control
Your Answer Cost control
Correct Answer Maximization of profits
Your Answer Maximization of profits
True/False
Question Accounting refers to the process of analyzing & interpreting the information
already recorded in the books of accounts.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question The material Requisition note contains
Correct Answer Number and date , Department demanding the material , Signature of the
authority approving the demand
Your Answer Number and date , Department demanding the material , Signature of the
authority approving the demand
Page 7
Multiple Choice Multiple Answer
Question Following error affect the trial balance
Correct Answer Wrong totaling of subsidiary books , Posting on the wrong side of an account
, Omission of posting an account in the ledger
Your Answer Wrong totaling of subsidiary books , Posting on the wrong side of an account ,
Omission of posting an account in the ledger
Select The Blank
Question Fixed overheads normally arise as a result of policy and are largely ________ in
nature at the ________ level of the management
Correct Answer uncontrollable
Your Answer controllable
Correct Answer lower
Your Answer top
True/False
Question Budget is prepared for a fixed period of time.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Sold Goods of Amitabh worth Rs. 15,000 against 15% Trade discount. The Goods
worth appear on account ___________
Correct Answer 12750
Your Answer 12750
Multiple Choice Single Answer
Question This is not the non monetary incentive.
Correct Answer Co-partnership
Your Answer Co-partnership
Multiple Choice Multiple Answer
Question P/L A/C debit side includes
Correct Answer salary , discount allowed , postage & telegram
Your Answer salary , discount allowed , postage & telegram
Select The Blank
Question Along with financial accounting, ________ and ________ are the other streams of
accounting
Correct Answer Cost Accounting
Your Answer Cost Accounting
Page 8
Correct Answer Management Accounting
Your Answer Management Accounting
True/False
Question A very wide scope of Management Accounting is the limitation by itself.
Correct Answer True
Your Answer True
at 6:44 AM 1 comments Links to this post
Labels: Management Accounting
Wednesday, March 12, 2008Management Accounting - 2
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
Page 9
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
Page 10
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 15th 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.
Page 11
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
Page 12
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
Page 13
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
Page 14
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
Page 15
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.
Page 16
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
Page 17
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
Page 18
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 1st April, 2004. Calculate the impact of this transaction on the final statements
of accounts for the year ended 31st March, 2004.
Page 19
Correct Answer
The net profit will not be affected
Your Answer
The net profit will not be affected
at 6:35 AM 2 comments Links to this post
Labels: Management Accounting
Management Accounting - 1
Select The Blank
Question
Furniture account will always have a ________ balance.
Correct Answer
Debit
Your Answer
Nil
Multiple Choice Multiple Answer
Question
Accounting is the art where transactions are …
Correct Answer
Summarized , Classified , Recorded
Your Answer
Summarized , Classified , Recorded
True/False
Question
The phrase 'By Balance c/d.' written on the credit side of the rent account, indicates credit
balance for this account.
Correct Answer
False
Your Answer
False
Select The Blank
Question
The ________ variance is the difference between the actual variable overhead incurred and
the standard variable overhead charged to production.
Correct Answer
Page 20
Total variable overhead
Your Answer
Total variable overhead
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
The selection of ________ may depend upon the various factors like characteristics of the
business organisation, tax considerations, statutory requirements etc.
Correct Answer
Accounting period
Your Answer
Accounting period
True/False
Question
Standard costs are used for external reporting.
Correct Answer
False
Your Answer
False
True/False
Question
It is said that the income statement represents wealth increase /decrease for the
organisation.
Correct Answer
True
Your Answer
False
Multiple Choice Single Answer
Question
Page 21
Mr. Oak, materials manager, spends 40% time in the factory and the remaining in office. If
his annual salary is Rs.500,000/-, what amount should be charged as office overheads ?
Correct Answer
Rs.300,000/-
Your Answer
Rs.200,000/-
Multiple Choice Multiple Answer
Question
The factors to be considered while preparing the direct materials budget are :
Correct Answer
Adequacy of material storing space , Availability of funds , Material in stores but reserved for
specific purposes
Your Answer
Adequacy of material storing space , Availability of funds , Material in stores but reserved for
specific purposes
Multiple Choice Multiple Answer
Question
In which of the following situations, the flexible budget should be preferred?
Correct Answer
Sales are too difficult to predict , Supply level of input cannot be predicted , Varying levels of
production activity
Your Answer
Sales are too difficult to predict , Supply level of input cannot be predicted , Varying levels of
production activity
Multiple Choice Multiple Answer
Question
Techniques of management accounting include:
Correct Answer
Marginal costing , Budgetary control , Standard costing
Your Answer
Marginal costing , Cost control , Budgetary control , Standard costing
Match The Following
Question
Correct Answer
Your Answer
Profit and loss account
Commission received
Page 22
Dividend paid
Manufacturing account
Work in Progress
Land & Building
Balance Sheet
Land & Building
Closing stock of finished goods
Trading account
Closing stock of finished goods
Work in Progress
True/False
Question
While preparing the labour cost budget, factors such as overtime working or night shift
working may be ignored.
Correct Answer
False
Your Answer
False
Multiple Choice Multiple Answer
Question
If the sales forecast is less than the past sales but the top management insists upon a
certain amount of additional profits, then following steps can be taken to achieve the target
profit
Correct Answer
Increase the selling price , Reduce cost of sales , Increase the selling efforts
Your Answer
Increase the selling price , Increase the sales volume , Increase the selling efforts
Multiple Choice Multiple Answer
Question
From the following, select intangible assets:
Correct Answer
Goodwill , Patents , Trade Marks
Your Answer
Patents , Trade Marks , Investments
True/False
Question
Bank reconciliation statement must be prepared before the preparation of profit and loss
Page 23
account and balance sheet.
Correct Answer
True
Your Answer
False
Multiple Choice Single Answer
Question
Find the budget which is inadequate as a cost control technique :
Correct Answer
Fixed budget
Your Answer
Fixed budget
True/False
Question
Predetermined rate of absorption of overheads helps in quick preparation of cost estimates
and quoting prices.
Correct Answer
True
Your Answer
True
Multiple Choice Single Answer
Question
Net sales Rs,7,50,000/-, opening stock Rs.1,14,375/-, purchases Rs.483,375/- and closing
stock Rs.1,47,750/-. Calculate the Gross Profit.
Correct Answer
Rs.3,00,000/-
Your Answer
Rs.3,00,000/-
Select The Blank
Question
________ is an example of intangible asset.
Correct Answer
Goodwill
Your Answer
Land
True/False
Page 24
Question
Accounting is an art of recording, classifying & summarizing in a significant manner.
Correct Answer
True
Your Answer
True
True/False
Question
Goods sent to the customers on approval basis should be treated as sales.
Correct Answer
False
Your Answer
False
Multiple Choice Multiple Answer
Question
Features of Sunk cost are . . .
Correct Answer
Indicates historical cost , Not relevant in decision making process , Incurred in past
Your Answer
Indicates historical cost , Incurred in past , Relevant in decision making process
True/False
Question
Profitability statement indicates the amount of assets & liabilities.
Correct Answer
False
Your Answer
True
True/False
Question
A business is an activity carried out with the intention of earning the profit.
Correct Answer
True
Your Answer
True
Multiple Choice Multiple Answer
Question
Page 25
Identify the steps involved in selecting the optimum product mix, when the limiting factor is
number of labour hours and sales demand.
Correct Answer
For each product find the contribution per unit and per labour hour , Award ranks to each of
the products based on contribution per limiting factor , Priority is given to fulfill the market
demand of the product which gives maximum contribution per labour hour.
Your Answer
For each product find the contribution per unit and per labour hour , Award ranks to each of
the products based on contribution per limiting factor , Priority is given to fulfill the market
demand of the product which gives maximum contribution per labour hour.
Multiple Choice Multiple Answer
Question
Techniques of management accounting include:
Correct Answer
Marginal costing , Budgetary control , Standard costing
Your Answer
Marginal costing , Cost control , Budgetary control
True/False
Question
The ideal budget period for a company engaged in generation and distribution of electricity
is one year.
Correct Answer
False
Your Answer
False
Select The Blank
Question
The ________ adjustment is necessary to relfect the cost for the use of fixed asset during the
year.
Correct Answer
Depreciation
Your Answer
Depreciation
True/False
Question
According to Reducing Balance Method, the depreciation is provided at a predetermined
percentage on the balance of cost of asset after deduction of the depreciation previously
Page 26
charged.
Correct Answer
True
Your Answer
True
Select The Blank
Question
Crane expenses should be apportioned on the basis of ________.
Correct Answer
Number of hours crane worked in the department
Your Answer
Number of hours crane worked in the department
Multiple Choice Multiple Answer
Question
Essentials for effective implementation of budgetary control system are
Correct Answer
Commitment of top management , Clearly defined objectives , Continous budget education
Your Answer
Commitment of top management , Clearly defined objectives , Continous budget education
Multiple Choice Single Answer
Question
Commission payable to General Manager is 10 % of the net profits. If the net profit before
charging commission is Rs.29,200/-, then what will be the amount of his net profit after
commission?
Correct Answer
Rs.26,545.45
Your Answer
Rs.29,200/-
Select The Blank
Question
A forecast is mere estimate of what is likely to happen, but ________ is the action plan to be
followed.
Correct Answer
Budget
Your Answer
Budget
Page 27
True/False
Question
A very wide scope of Management Accounting is the limitation by itself.
Correct Answer
True
Your Answer
True
Select The Blank
Question
The combination in which different products are sold by a company is known as ________.
Correct Answer
Sales mix
Your Answer
Sales mix
Multiple Choice Single Answer
Question
The reporting method used in the costing system should be based on the principle of
Correct Answer
Management by exception
Your Answer
Management by objectives
True/False
Question
Balance sheet indicates the financial status of the business at given period.
Correct Answer
True
Your Answer
True
Multiple Choice Single Answer
Question
The wages paid to maintenance department workers who do repair work principally for
production departments but also on the vehicles in the distribuiton department shoud be
charged as:
Correct Answer
Service costs
Your Answer
Service costs
Page 28
Multiple Choice Single Answer
Question
M/s Vivek Enterprises has paid rent relating to the residence of Mr. Vivek, proprietor of Vivek
Enterprises. This payment should be treated as
Correct Answer
Drawings
Your Answer
Capital
Select The Blank
Question
Measurement of ________ gives an idea of the degree of mobility of labour.
Correct Answer
Labour turnover
Your Answer
Labour turnover
Multiple Choice Single Answer
Question
Net profit for the year before charging commission to the manager, is Rs.111,775/-. The
manager of the company is entitled to commission @ 8% on net profits after charging
commission. Find the amount of commission due to the manager.
Correct Answer
Rs.8,279.63
Your Answer
Rs.8,942/-
Match The Following
Question
Correct Answer
Your Answer
Total cost
Cost of finished goods
Cost of finished goods
Non operating income
Profit on sale of investment
Profit on sale of investment
Selling and distribution overheads
Advertisement expenses
Advertisement expenses
Page 29
Factory overheads
Repair for factory building
Repair for factory building
True/False
Question
Control on purchase of material is exercised by the storekeeper.
Correct Answer
False
Your Answer
True
Multiple Choice Single Answer
Question
A company wishes to earn a 15% profit margin on selling price when quoting for a job.
Which of the following is the profit margin of cost which will achieve the required profit
margin ?
Correct Answer
0.1765
Your Answer
0.15
Select The Blank
Question
Economical use of labour, materials and facilities can achieved with the help of ________.
Correct Answer
Budgetary control
Your Answer
Cost control
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The Blank
Question Furniture account will always have a ________ balance.
Correct Answer Debit
Your Answer Nil
Multiple Choice Multiple Answer
Page 30
Question Accounting is the art where transactions are …
Correct Answer Summarized , Classified , Recorded
Your Answer Summarized , Classified , Recorded
True/False
Question The phrase 'By Balance c/d.' written on the credit side of the rent account,
indicates credit balance for this account.
Correct Answer False
Your Answer False
Select The Blank
Question The ________ variance is the difference between the actual variable overhead
incurred and the standard variable overhead charged to production.
Correct Answer Total variable overhead
Your Answer Total variable overhead
True/False
Question Accounting refers to the process of analyzing & interpreting the information
already recorded in the books of accounts.
Correct Answer True
Your Answer True
Select The Blank
Question The selection of ________ may depend upon the various factors like characteristics
of the business organisation, tax considerations, statutory requirements etc.
Correct Answer Accounting period
Your Answer Accounting period
True/False
Question Standard costs are used for external reporting.
Correct Answer False
Your Answer False
True/False
Question It is said that the income statement represents wealth increase /decrease for the
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organisation.
Correct Answer True
Your Answer False
Multiple Choice Single Answer
Question Mr. Oak, materials manager, spends 40% time in the factory and the remaining in
office. If his annual salary is Rs.500,000/-, what amount should be charged as office
overheads ?
Correct Answer Rs.300,000/-
Your Answer Rs.200,000/-
Multiple Choice Multiple Answer
Question The factors to be considered while preparing the direct materials budget are :
Correct Answer Adequacy of material storing space , Availability of funds , Material in stores
but reserved for specific purposes
Your Answer Adequacy of material storing space , Availability of funds , Material in stores
but reserved for specific purposes
Multiple Choice Multiple Answer
Question In which of the following situations, the flexible budget should be preferred?
Correct Answer Sales are too difficult to predict , Supply level of inputcannot be predicted ,
Varying levels of production activity
Your Answer Sales are too difficult to predict , Supply level of input cannot be predicted ,
Varying levels of production activity
Multiple Choice Multiple Answer
Question Techniques of management accounting include:
Correct Answer Marginal costing , Budgetary control , Standard costing
Your Answer Marginal costing , Cost control , Budgetary control , Standard costing
Match The Following
Question Correct Answer Your Answer
Profit and loss account Commission received Dividend paid
Manufacturing account Work in Progress Land & Building
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Balance Sheet Land & Building Closing stock of finished goods
Trading account Closing stock of finished goods Work in Progress
True/False
Question While preparing the labour cost budget, factors such as overtime working or night
shift working may be ignored.
Correct Answer False
Your Answer False
Multiple Choice Multiple Answer
Question If the sales forecast is less than the past sales but the top management insists
upon a certain amount of additional profits, then following steps can be taken to achieve the
target profit
Correct Answer Increase the selling price , Reduce cost of sales , Increase the selling efforts
Your Answer Increase the selling price , Increase the sales volume , Increase the selling
efforts
Multiple Choice Multiple Answer
Question From the following, select intangible assets:
Correct Answer Goodwill , Patents , Trade Marks
Your Answer Patents , Trade Marks , Investments
True/False
Question Bank reconciliation statement must be prepared before the preparation of profit
and loss account and balance sheet.
Correct Answer True
Your Answer False
Multiple Choice Single Answer
Question Find the budget which is inadequate as a cost control technique :
Correct Answer Fixed budget
Your Answer Fixed budget
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True/False
Question Predetermined rate of absorption of overheads helps in quick preparation of cost
estimates and quoting prices.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Net sales Rs,7,50,000/-, opening stock Rs.1,14,375/-, purchases Rs.483,375/- and
closing stock Rs.1,47,750/-. Calculate theGross Profit .
Correct Answer Rs.3,00,000/-
Your Answer Rs.3,00,000/-
Select The Blank
Question ________ is an example of intangible asset.
Correct Answer Goodwill
Your Answer Land
True/False
Question Accounting is an art of recording, classifying & summarizing in a significant
manner.
Correct Answer True
Your Answer True
True/False
Question Goods sent to the customers on approval basis should be treated as sales.
Correct Answer False
Your Answer False
Multiple Choice Multiple Answer
Question Features of Sunk cost are . . .
Correct Answer Indicates historical cost , Not relevant in decision making process , Incurred
in past
Your Answer Indicates historical cost , Incurred in past , Relevant in decision making
process
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True/False
Question Profitability statement indicates the amount of assets & liabilities.
Correct Answer False
Your Answer True
True/False
Question A business is an activity carried out with the intention of earning the profit.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question Identify the steps involved in selecting the optimum product mix, when the limiting
factor is number of labour hours and sales demand.
Correct Answer For each product find the contribution per unit and per labour hour , Award
ranks to each of the products based on contribution per limiting factor , Priority is given to
fulfill the market demand of the product which gives maximum contribution per labour
hour.
Your Answer For each product find the contribution per unit and per labour hour , Award
ranks to each of the products based on contribution per limiting factor , Priority is given to
fulfill the market demand of the product which gives maximum contribution per labour
hour.
Multiple Choice Multiple Answer
Question Techniques of management accounting include:
Correct Answer Marginal costing , Budgetary control , Standard costing
Your Answer Marginal costing , Cost control , Budgetary control
True/False
Question The ideal budget period for a company engaged in generation and distribution of
electricity is one year.
Correct Answer False
Your Answer False
Select The Blank
Question The ________ adjustment is necessary to relfect the cost for the use of fixed asset
during the year.
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Correct Answer Depreciation
Your Answer Depreciation
True/False
Question According to Reducing Balance Method, the depreciation is provided at a
predetermined percentage on the balance of cost of asset after deduction of the
depreciation previously charged.
Correct Answer True
Your Answer True
Select The Blank
Question Crane expenses should be apportioned on the basis of ________.
Correct Answer Number of hours crane worked in the department
Your Answer Number of hours crane worked in the department
Multiple Choice Multiple Answer
Question Essentials for effective implementation of budgetary control system are
Correct Answer Commitment of top management , Clearly defined objectives , Continous
budget education
Your Answer Commitment of top management , Clearly defined objectives , Continous
budget education
Multiple Choice Single Answer
Question Commission payable to General Manager is 10 % of the net profits. If the net profit
before charging commission is Rs.29,200/-, then what will be the amount of his net profit
after commission?
Correct Answer Rs.26,545.45
Your Answer Rs.29,200/-
Select The Blank
Question A forecast is mere estimate of what is likely to happen, but ________ is the action
plan to be followed.
Correct Answer Budget
Your Answer Budget
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True/False
Question A very wide scope of Management Accounting is the limitation by itself.
Correct Answer True
Your Answer True
Select The Blank
Question The combination in which different products are sold by a company is known as
________.
Correct Answer Sales mix
Your Answer Sales mix
Multiple Choice Single Answer
Question The reporting method used in the costing system should be based on the principle
of
Correct Answer Management by exception
Your Answer Management by objectives
True/False
Question Balance sheet indicates the financial status of the business at given period.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question The wages paid to maintenance department workers who do repair work
principally for production departments but also on the vehicles in the distribuiton
department shoud be charged as:
Correct Answer Service costs
Your Answer Service costs
Multiple Choice Single Answer
Question M/s Vivek Enterprises has paid rent relating to the residence of Mr. Vivek,
proprietor of Vivek Enterprises. This payment should be treated as
Correct Answer Drawings
Your Answer Capital
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Select The Blank
Question Measurement of ________ gives an idea of the degree of mobility of labour.
Correct Answer Labour turnover
Your Answer Labour turnover
Multiple Choice Single Answer
Question Net profit for the year before charging commission to the manager, is Rs.111,775/-.
The manager of the company is entitled to commission @ 8% on net profits after charging
commission. Find the amount of commission due to the manager.
Correct Answer Rs.8,279.63
Your Answer Rs.8,942/-
Match The Following
Question Correct Answer Your Answer
Total cost Cost of finished goods Cost of finished goods
Non operating income Profit on sale of investment Profit on sale of investment
Selling and distribution overheads Advertisement expenses Advertisement expenses
Factory overheads Repair for factory building Repair for factory building
True/False
Question Control on purchase of material is exercised by the storekeeper.
Correct Answer False
Your Answer True
Multiple Choice Single Answer
Question A company wishes to earn a 15% profit margin on selling price when quoting for a
job. Which of the following is the profit margin of cost which will achieve the required profit
margin ?
Correct Answer 0.1765
Your Answer 0.15
Select The Blank
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Question Economical use of labour, materials and facilities can achieved with the help of
________.
Correct Answer Budgetary control
Your Answer Cost control
at 9:29 PM 0 comments Links to this post
Labels: Management Accounting (Set II)
Wednesday, April 8, 2009Management Accounting - 5LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple Answer
Question
The selection of the supplier may depend upon the following aspects:
Correct Answer
Geographical location of the supplier , Price quoted by the supplier , Goodwill of the supplier
Your Answer
Geographical location of the supplier , Price quoted by the supplier , Goodwill of the supplier
Multiple Choice Single Answer
Question
Net book value of loose tools as on 1st April, 2003 was Rs.45,000/-. As on 31st March, 2004
the management felt that the real worth of these loose tools is only Rs.30,000/-. What can
be done to achieve the desired reduction in the net book value of loose tools?
Correct Answer
By providing depreciation to the extent of Rs.15,000/-
Your Answer
By providing depreciation to the extent of Rs.15,000/-
True/False
Question
Overhead absorption rate will be different at different capacity levels.
Correct Answer
True
Your Answer
True
Select The Blank
Question
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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
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Select The Blank
Question
Uniform costing is not a separate method of ________.
Correct Answer
cost accounting
Your Answer
cost accounting
Multiple Choice Multiple Answer
Question
Which of the following budgets may be termed as a long term budget?
Correct Answer
Capital expenditure budget , Research and Development expenditure budget , 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 ________.
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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 ________.
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
Page 42
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
Page 43
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:
Page 44
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:
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
Page 45
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
Question
Due to compensating errors the arithmetical accuracy of the trial balance is affected.
Correct Answer
False
Your Answer
Page 46
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 Following
Question
Correct Answer
Your Answer
Daily Time sheets
Time spent by worker on job is recorded
Time spent by worker on job is recorded
Time Keeping Department
Recording of workers time
Recording of workers time
Time booking department
Jobwise booking of time.
Jobwise booking of time.
Time Recording Clock Method
Ticket number & clock card allotted to worker
Ticket number & clock card allotted to worker
True/False
Question
Purchased goods by paying Rs.35,000/-: In this case, the cash account should be debited.
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Correct Answer
True
Your Answer
True
Select The Blank
Question
If the customer is not likely to pay the amount receivable from him, this amount should to be
treated as ________.
Correct Answer
Bad debts
Your Answer
Bad debts
True/False
Question
Accounting is an art of recording, classifying & summarizing in a significant manner.
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
Page 48
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
at 6:03 AM 1 comments Links to this post
Labels: Management Accounting (Set II)
Page 49
Monday, August 11, 2008Management Accounting - 4
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/False
Question 1) Financial statements are basically in two forms i.e. profitability statement and
balance sheet.
Correct Answer True
Your Answer True
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 Management Accounting is the process of analysis and interpretation of financial
data collected with help of financial accounting and cost accounting
Correct Answer True
Your Answer True
True/False
Question P&L statement which is a period statement & relates to a certain period tells about
results of operations.
Correct Answer True
Your Answer True
True/False
Question Cost Accounting is concerned with calculation of the profitability and state of
affairs of the organization as a whole.
Correct Answer False
Your Answer False
True/False
Question Financial accounting may deal with the ascertainment of cost & calculation of
profitability of the individual product.
Correct Answer False
Your Answer False
Page 50
True/False
Question Management Accounting aims at enabling the management to take the decisions
about the future. It may consider future data as well as non-financial factors.
Correct Answer True
Your Answer True
True/False
Question Financial Accounting primarily protects the interests of the outsiders dealing with
organization in various capacities.
Correct Answer True
Your Answer True
Match The Following
Question Correct Answer Your Answer
Financial Accounting Systematic recording of business transactions Systematic recording of
business transactions
Cost Accounting Ascertainment of cost Ascertainment of cost
Management Accounting Analyzing & interpretation of financial data Analyzing &
interpretation of financial data
Accounting Art of interpreting & classifying business transaction Art of interpreting &
classifying business transaction
Book Keeping Recording of business transactions Recording of business transactions
Match The Following
Question Correct Answer Your Answer
Bills Payable Amount payable to supplier Amount payable to supplier
Bills Receivable Amount received from the customer Amount received from the customer
Trade Discount Not accounted for in the books of Accounts Not accounted for in the books of
Accounts
Cash Discount Accounted for in the books of Accounts Accounted for in the books of
Accounts
Bad debts Amount not received from customer Amount not received from customer
True/False
Question Amount invested in purchasing Fixed Asset is a revenue expenditure.
Correct Answer False
Your Answer True
Multiple Choice Multiple Answer
Question Going Concern Concept __________________
Page 51
Correct Answer Indefinite longer period , Not likely to close down in shorter period , This
affects the values of asset and liabilities
Your Answer Indefinite longer period , Not likely to close down in shorter period , This affects
the values of asset and liabilities
Multiple Choice Multiple Answer
Question Cost of asset is 1,20,000, estimated scrap value 20,000, cost of assets subjected to
depreciation 2,00,000, rate of depreciation is 10%. Calculate depreciation for 3 yrs as per
the reducing balance m
Correct Answer 20,000,18,000,16,200
Your Answer 20,000,18,000,16,200
Multiple Choice Multiple Answer
Question Profit & Loss A/C credit side has
Correct Answer Gross profit , Commission received , Interested received
Your Answer Gross profit , Commission received , Interested received
Multiple Choice Single Answer
Question Juhi started business with Rs borrowed capital of Rs. 1,00,000 with 10% interest
per year. What is the total amount of the capital
Correct Answer 1,10,000
Your Answer 90,000
True/False
Question Cheques issued but not yet presented – the balance as per the bank pass book will
be higher.
Correct Answer True
Your Answer False
Multiple Choice Single Answer
Question This cost indicates historical cost which is incurred in past.
Correct Answer Sunk cost
Your Answer Sunk cost
Multiple Choice Single Answer
Question Labour cost is the cost of __________ paid to employees of the organization.
Correct Answer Remuneration
Your Answer Remuneration
Multiple Choice Single Answer
Question Company having opening stock of Rs. 1,80,000 purchase Rs. 8,00,000. Freight
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Inward Rs, 35000 & closing stock Rs. 2,00,000, having direct wages Rs. 2,35,000. What will
be prime cost.
Correct Answer 10,50,000
Your Answer 10,50,000
Multiple Choice Multiple Answer
Question For the proper interpretation and presentation of cost the overhead further
classified as
Correct Answer Factory overheads , Office and administration overheads , Selling &
distribution overhead
Your Answer Factory overheads , Office and administration overheads , Selling & distribution
overhead
True/False
Question Valuation of returns indicates the material returned by store department to
production department
Correct Answer False
Your Answer False
True/False
Question The wage payment system should take into consideration the external obligations
such as the Minimum wages Act and the agreement entered into by the organization with
the workers.
Correct Answer True
Your Answer True
True/False
Question A good wage payment system will punish the workers for the matters beyond the
control of the workers.
Correct Answer False
Your Answer False
Multiple Choice Multiple Answer
Question These are the features of fixed overheads
Correct Answer total cost remains the same , per unit cost may vary , not dependent on
volume of output
Your Answer total cost remains the same , per unit cost may vary , not dependent on
volume of output
True/False
Question Under marginal costing technique only fixed costs are considered as relevant for
Page 53
decision making.
Correct Answer False
Your Answer False
True/False
Question Product mix refers to the proportion in which various products of a company can
be sold.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question The cost that varies in direct proportion with the level of activity is called
Correct Answer variable cost
Your Answer variable cost
Multiple Choice Multiple Answer
Question Basic assumptions made by marginal costing are
Correct Answer per unit selling price remains constant at all the levels of activities. ,
whatever is produced by the organisation is sold off. , per unit variable cost remain constant.
Your Answer per unit selling price remains constant at all the levels of activities. , whatever
is produced by the organisation is sold off. , per unit variable cost remain constant.
Multiple Choice Single Answer
Question Calculate Volume Variance, If budgeted production is 20,000 units, actual
production is 22,000 units and Standard rate per unit is Rs.1.5/-.
Correct Answer Rs.3,000/- ( Favorable )
Your Answer Rs.3,000/- ( Favorable )
Multiple Choice Single Answer
Question Calculate Sales Price Variance, If actual price is Rs.5.40/- per unit, Standard price is
Rs.5/- per unit and actual sales volume is 500 units.
Correct Answer Rs.200/- ( Favorable )
Your Answer Rs.200/- ( Favorable )
Multiple Choice Single Answer
Question Standard Costs are used as tool for
Correct Answer Cost Control
Your Answer Price fixation
Multiple Choice Single Answer
Question Standard Costing specifically relates to the function of
Page 54
Correct Answer Production
Your Answer Production
True/False
Question Uniform Costing disturbs the healthy competition in the industry
Correct Answer False
Your Answer True
Multiple Choice Multiple Answer
Question Uniform Costing Methods may be advantageously applied
Correct Answer In single organization having number of branches. , Number of companies in
same industry. , Similar Industries such as cotton, jute etc.
Your Answer In single organization having number of branches. , Number of companies in
same industry. , Similar Industries such as cotton, jute etc.
Multiple Choice Multiple Answer
Question The following factors affects the budgeted advertisement cost
Correct Answer Percentage of profits , Availability of funds , Competitors policy
Your Answer Percentage of profits , Availability of funds , Competitors policy
Multiple Choice Multiple Answer
Question In Cash budget , Operating cash outflow includes
Correct Answer Payment to Creditors , Cash purchases of raw material , Wages/salaries
Your Answer Payment to Creditors , Cash purchases of raw material , Wages/salaries
Multiple Choice Multiple Answer
Question Characteristics of budget can be said to be
Correct Answer It may be prepared in terms of quantity or money or both , It is prepared for
a fixed period of time , It spells out objectives to be attained
Your Answer It may be prepared in terms of quantity or money or both , It is prepared for a
fixed period of time , It spells out objectives to be attained
Select The Blank
Question Like initial formation expenses, ________ and R & D are the examples of Deferred
Revenue Expenditure
Correct Answer Initial Advertisement
Your Answer Purchase of an asset
Correct Answer R & D
Your Answer
Select The Blank
Page 55
Question If ________ is not provided, the asset may appear in the Balance Sheet at an
________ amount
Correct Answer depreciation
Your Answer depreciation
Correct Answer overstated
Your Answer overstated
Select The Blank
Question If ________ books are the books which record the transactions in the chronological
order, ________ is the book where transactions of a similar nature are pooled together
Correct Answer subsidiary
Your Answer jornal
Correct Answer ledger
Your Answer ledger
Select The Blank
Question While selecting source of supply ________ epartment may call for the ________ from
the prospective suppliers
Correct Answer purchase
Your Answer purchase
Correct Answer quotation
Your Answer quotation
Select The Blank
Question Preventive costs of labour turnover refers to all the costs which may be incurred by
the organisation to keep workers happy and ________ them from ________ the job
Correct Answer discourage
Your Answer discourage
Correct Answer leaving
Your Answer leaving
Select The Blank
Question 4.Under the differential time rate method the wages are paid at Rs. 1.50 per hour
between ________ efficiency and Rs.1.25 per hour between ________ efficiency
Correct Answer 101% to 125 %
Your Answer 101% to 125 %
Correct Answer 80% to90%
Your Answer 80% to90%
Select The Blank
Question Expenditure like general lighting are apportioned considering ________ as a base
Page 56
and expenditure like depreciation are apportioned considering ________ as a base.
Correct Answer number of light points
Your Answer number of light points
Correct Answer value of assets
Your Answer value of assets
Select The Blank
Question ________ and ________ are examples of element wise classification ofoverhead costs
Correct Answer Idirect material
Your Answer Idirect material
Correct Answer indirect labour
Your Answer indirect labour
Select The Blank
Question Break even point is a situation of no ________ no ________
Correct Answer profit
Your Answer profit
Correct Answer loss
Your Answer loss
Select The Blank
Question A key factor is defined as the factor which, at a particular point of time or over a
period will ________ the volume of ________
Correct Answer limit
Your Answer limit
Correct Answer output
Your Answer output
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple Answer
Question The management of Horngreen 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
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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 1st 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
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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
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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 thetrial 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/- (Favourable); labour cost variance -Rs.450/- (Adverse); fixed overhead cost
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variance -Rs.22,000/- (Adverse); variable overhead cost variance -Rs.6,000/- (adverse).
Correct Answer Rs.24,050/- (Adverse)
Your Answer Rs.32,850/- (Favourable)
Multiple Choice Single Answer
Question Advance tax account should appear in which of the final statement of 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
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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.
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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
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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
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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
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Labels: Management Accounting (Set III)
Management Accounting - 8
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
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
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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
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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
Page 67
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
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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
thePurchasereturn 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
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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
31st March, 2004.
Correct Answer Debtors - Rs.59,516/-; Creditors - Rs.66,911/-
Your Answer Debtors - Rs.53,845/-; Creditors - Rs.72,582/-
Match The Following
Question Correct Answer Your Answer
Sunk Cost Historical Cost Historical Cost
Cost Centre Facilitate the fixation of responsibility Facilitate the fixation of responsibility
Cost Control Process of controlling costs of operations Process of controlling costs of
operations
Differential Cost Increase or Decrease in cost Increase or Decrease in cost
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Select The Blank
Question Cost volume profit analysis focuses attention on the ________ effect of a particular
course of action.
Correct Answer short run
Your Answer short and long run
Multiple Choice Multiple Answer
Question The balance as per bank book as on 30th June, 2004 is Rs.10,298/- while the
balance as per pass book as on the same date is Rs.10,123.60. Select the 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 on 28th 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
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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
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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 18th June, 2003. The company
has 10 such computers costing Rs.20,000/- each. The depreciation is charged @ 18% p.a.
Find the depreciation on computers to be charged for the 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
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Labels: Management Accounting (Set III)
Wednesday, June 3, 2009Management Accounting - 7
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LIST OF ATTEMPTED QUESTIONS 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
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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
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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 15th 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
Page 75
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
Page 76
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
Page 77
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
________.
Page 78
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
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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
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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
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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 1st April, 2004. Calculate the impact of this transaction on the final
statements of accounts for the year ended 31st March, 2004.
Correct Answer The net profit will not be affected
Your Answer The net profit will not be affected
Top of Form
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 , Presentation of Information
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
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Multiple Choice Multiple Answer Question
Features of material usage variance are :-
Correct Answer
Measures the difference between the quantity of materials actually used and that should have been used. , Considers standard price X actual quantity , Considers standard price X standard quantity
Your Answer
Measures the difference between the quantity of materials actually used and that should have been used. , Considers standard price X actual quantity , Considers standard price X standard quantity
True/False Question
Under the accelerating premium system incentive increases at a fast rate with the decrease in output.
Correct Answer
False
Your Answer
False
True/False Question
If the physical stock is less than the stock as per the stores ledger, such shortage should be treated as an issue of material.
Correct Answer
True
Your Answer
False
Multiple Choice Single Answer Question
An analysis of the time card of a worker on a machine shows that of the total 48 hours, he worked 45 hours (including 4 hours overtime) on production and that 3 hours was idle
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due to machine break-down. The rate of the worker is rupees ten per hour : but overtime is paid at 50 per cent extra. You are required to calculate the earnings of the worker.
Correct Answer
Rs.500/-
Your Answer
Rs.500/-
True/False Question
Predetermined rate of absorption of overheads helps in quick preparation of cost estimates and quoting prices.
Correct Answer
True
Your Answer
True
Select The Blank Question
If overhead absorbed i.e. overheads charged to units during the period is more than the overhead incurred, it is said that the overheads are ________.
Correct Answer
Over-absorbed
Your Answer
Under-absorbed
Select The Blank Question
A worker is paid a monthly salary of Rs.500/- along with a bonus of 50 paise per unit completed, this type of labour cost may be classified as ________ cost.
Correct Answer
Semi-variable
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Your Answer
Semi-variable
Select The Blank Question
Goods purchased from A for Rs.2,020/- were passed through the sales book. The rectification of this error will result in ________.
Correct Answer
Decrease in gross profit by Rs.2,020/-
Your Answer
Increase in gross profit by Rs.2,020/-
True/False Question
High time wages means necessarily high cost of production.
Correct Answer
False
Your Answer
False
Multiple Choice Multiple Answer Question
The management of Dick Ltd. is deciding whether to buy component Y from the supplier, since the purchase cost is less than the manufacturing cost. State the non-financial aspects that must be considered before arriving at a decision :-
Correct Answer
Reliability regarding quality of the material supplied by the supplier , Alternative use of labour of engaged in manufacturing component Y , Regularity of material supplies from the supplier
Your Answer
Reliability regarding quality of the material supplied by the supplier , Alternative use of labour of engaged in manufacturing component Y , Regularity of material supplies from the supplier
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Select The Blank Question
Loans which are borrowed from financial institutions are to be paid off in 8 years, should be disclosed as ________ in the balance sheet.
Correct Answer
Long term liabilities
Your Answer
Long term liabilities
Select The Blank Question
Interest receivable is a________ for the organization.
Correct Answer
Current asset
Your Answer
Current asset
True/False Question
Period cost is the cost assigned to the products.
Correct Answer
False
Your Answer
True
Multiple Choice Single Answer Question
A new computer worth Rs.35,000 was purchased on 18th June, 2003. The company has 10 such computers costing Rs.20,000/- each. The depreciation is charged @ 18% p.a. Find the depreciation on computers to be charged for the year.
Correct Answer
Rs.40,953.70
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Your Answer
Rs.40,953.70
Multiple Choice Single Answer Question
The direct material usage budget and direct material purchase budget differ because of which of the following?
Correct Answer
A planned change in the level of material stock
Your Answer
The level of efficiency of men or machines
True/False Question
New companies can adopt Uniform costing system as a ready-made system.
Correct Answer
True
Your Answer
True
Multiple Choice Multiple Answer Question
Pre-requisites of Uniform Costing are :-
Correct Answer
Spirit of mutual trust , Free Exchange of ideas , No rivalry
Your Answer
Free Exchange of ideas , No rivalry , Spirit of mutual trust
Multiple Choice Multiple Answer Question
The principal functions of the cost accounting department are :-
Correct Answer
Classifying labour cost according to jobs, processes, etc. , Preparation of different reports based on direct, indirect labour cost, etc. , To focus on areas where labour cost may be reduced.
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Your Answer
Classifying labour cost according to jobs, processes, etc. , Preparation of different reports based on direct, indirect labour cost, etc. , To focus on areas where labour cost may be reduced.
Multiple Choice Multiple Answer Question
In which of the following situations, the flexible budget should be preferred?
Correct Answer
Sales are too difficult to predict , Supply level of 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
Select the information to be considered before installing a costing system :-
Correct Answer
Labour intensity of the product
Your Answer
Number of workers required
Multiple Choice Single Answer Question
Tom company has sales of Rs.200,000/- with variable expenses of Rs.150,000/-, fixed expenses of Rs.60,000/-, and an operating loss of Rs.10,000/-. By how much would Tom have to increase its sales in order to achieve an operating income of 10% of sales?
Correct Answer
Rs.200,000/-
Your Answer
Rs.231,000/-
Multiple Choice Single Answer
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Question
As on 31st March, 2004, it was decided to write off Rs.800/- of debtors as bad debts. Also, provision for bad and doubtful debts is to be made @ 5% and for discount on debtors @ 4%. Find the net amount of debtors to be disclosed in the balance sheet, if the total debtors before the aforesaid adjustments is Rs.98,623/-.
Correct Answer
Rs.89,214.58
Your Answer
Rs.88,285.26
Select The Blank Question
Payment by ________ method lowers the cost of production through their impact on fixed costs.
Correct Answer
Results
Your Answer
Time
Multiple Choice Multiple Answer Question
Which of the following aspects are mainly responsible for difficulty in application of Uniform costing system?
Correct Answer
Capital investment , Plant size , Location
Your Answer
Capital investment , Plant size , Location
Select The Blank Question
The most appropriate method for apportionment of overheads of the purchasing and stores department is percentage on ________.
Correct
Direct Material
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Answer Your Answer
Direct Material
Multiple Choice Single Answer Question
Judge the given statement according to the given criteria :- 'Provision for doubtful debts account' and 'provision for discount on debtors account' mean same account can be maintained under two account-heads, since both are related to debtors and indicate a loss to the organization.
Correct Answer
The statement is incorrect but the reason is correct
Your Answer
The statement and the reason both are incorrect
Multiple Choice Multiple Answer Question
Following errors affect the trial balance :-
Correct Answer
Wrong totaling of subsidiary books , Posting on the wrong side of an account , Omission of posting an account in the ledger
Your Answer
Wrong totaling of subsidiary books , Posting on the wrong side of an account , Omission of posting an account in the ledger
Select The Blank Question
If the owner brings in personal calculator for office use, ________ account should be credited.
Correct Answer
Capital
Your Answer
Cash
Multiple Choice Multiple Answer
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Question
From the following select the examples of errors of commission :-
Correct Answer
Sales recorded in the sales register as Rs.2,020/- instead of Rs.2,200/- , Received cash from Sham, credited to Ram's account , Paid transport charges, credited to transport charges account
Your Answer
Sales recorded in the sales register as Rs.2,020/- instead of Rs.2,200/- , Received cash from Sham, credited to Ram's account , Paid transport charges, credited to transport charges account
Select The Blank Question
A ________ can be defined as a part of the organization for which separate budget can be prepared and implemented.
Correct Answer
Budget centre
Your Answer
Budget centre
Multiple Choice Single Answer Question
Net sales Rs,7,50,000/-, opening stock Rs.1,14,375/-, purchases Rs.483,375/- and closing stock Rs.1,47,750/-. Calculate the Gross Profit.
Correct Answer
Rs.3,00,000/-
Your Answer
Rs.3,00,000/-
True/False Question
Profitability statement is a period statement & provides information about the results of operations.
Correct Answ
True
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er Your Answer
True
Select The Blank Question
The method of overhead apportionment which considers both the material cost as well as the labour cost, is known as ________ method.
Correct Answer
Prime cost percentage rate
Your Answer
Prime cost percentage rate
Multiple Choice Single Answer Question
Net profit for the year before charging commission to the manager, is Rs.111,775/-. The manager of the company is entitled to commission @ 8% on net profits after charging commission. Find the amount of commission due to the manager.
Correct Answer
Rs.8,279.63
Your Answer
Rs.8,942/-
Multiple Choice Single Answer Question
A manufacturer is producing alloy for which standard mix is 25% copper and 75% iron. Standard price for copper is Rs.80/- per kg. and for iron Rs.20/- per kg. 20% of input is standard loss. Actual output is 8,000 kg. of alloy using 2,000 kg of copper at Rs.90/- per kg. and 9,000 kg of iron at Rs.15/- per kg. Calculate the standard cost of copper.
Correct Answer
Rs.200,000/-
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Your Answer
Rs.150,000/-
True/False Question
Cheque received from a client on 28th 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 various areas in which uniform costing can be adopted are :-
Correct Answer
Valuation of inventories , Charging of depreciation , Apportionment of overheads
Your Answer
Valuation of inventories , Charging of depreciation , Apportionment of overheads
Multiple Choice Single Answer Question
The gross profit for the year 2004 is Rs.184,326/-. The depreciation on furniture for the year is Rs.24,561/-; dividend received amounted to Rs.12,000/- and the director's remuneration worked out to be Rs.95,784/-. Find the net profit for the year 2004.
Correct Answer
Rs.75,981/-
Your Answer
Rs.75,981/-
True/False Question
The purpose of the profit and loss account is to bring together information
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which relates to gross profit and the expenses for running the business.
Correct Answer
True
Your Answer
True
Match The FollowingQuestion
Correct Answer
Your Answer
Ledger Maintain all types of accounts
Maintain all types of accounts
Audit Reviewing internal control system
Reviewing internal control system
Accounting
Process of analyzing & interpretation
Process of analyzing & interpretation
Journal
Book of original entry
Book of original entry
Match The FollowingQuestion
Correct Answer
Your Answer
Daily Time sheets
Time spent by worker
Time spent by worker
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on job is recorded
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
Multiple Choice Multiple Answer Question
Items credited to Profit & Loss Account are :-
Correct Answer
Gross profit , Commission received , Interested received
Your Answer
Gross profit , Commission received , Interested received
True/False Question
For a manufacturing company, dividend received is a non-operating income.
Correct Answer
True
Your Answer
False
Select The Blank
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Question
A standard that is never altered, after being established, is known as ________ standard.
Correct Answer
Ideal
Your Answer
Basic
Multiple Choice Single Answer Question
Rs.2,650/- were paid to ABC Ltd. for maintenance of machine; which account should be debited for this transaction?
Correct Answer
Maintenance of machine account
Your Answer
ABC Ltd.'s Account
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
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, 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
Dividendpaid
Profit and loss appropriationaccount
Profit and loss account
Freight inwards
Manufacturing account
Manufacturing account
Sales Tradingaccount
Capital account
Freight outwards
Profit and loss accou
Trading account
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nt
Select The Blank Question Large angle of
incidence indicates ________ amount of profits.
Correct Answer higher
Your Answer same
True/False Question Error of commission
refer to a situation where a transaction is not recorded in the books of account.
Correct Answer False
Your Answer True
Multiple Choice Single Answer Question Relevant costs in
decision making are : Correct Answer Those costs which will
arise as a result of the proposed action
Your Answer Those costs which will arise as a result of the proposed action
Select The Blank Question ________is the
summary of all the balances in all the accounts 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,
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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.
Correct Answer The net profit will decrease by Rs.6,300/-
Your Answer The gross profit will increase by Rs.6,300/-
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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
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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
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
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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
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Multiple Choice Single Answer Question Purchases returns of
Rs.18,000/- were wrongly transferred to the sales returns account. Calculate its impact on net profit.
Correct Answer The net profit will not be affected
Your Answer The net profit will decrease by Rs.18,000/-
Multiple Choice Single Answer Question Amit sold Goods to Atul
for Rs. 50,000/- on cash & Rs. 50,000/- on credit basis. Amit allowed 10% discount for on the spot transaction. What is the amount that should be debited to the cash account?
Correct Answer Rs.45,000/-
Your Answer Rs.50,000/-
Multiple Choice Single Answer Question Interest on bank loan,
was paid till the quarter ending 30th 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
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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 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
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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
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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 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 ,
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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.
Correct Answer False
Your Answer False
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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
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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
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 True
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Answer 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.
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Correct Answer
True
Your Answer True