SCDL SEM 1

Select The BlankQuestionFurniture account will always have a ________ balance.Correct AnswerDebitYour AnswerNil

Multiple Choice Multiple AnswerQuestionAccounting is the art where transactions are …Correct AnswerSummarized , Classified , RecordedYour AnswerSummarized , Classified , Recorded

True/FalseQuestionThe phrase ‘By Balance c/d.’ written on the credit side of the rent account, indicates credit balance for this account.Correct AnswerFalseYour AnswerFalse

Select The BlankQuestionThe ________ variance is the difference between the actual variable overhead incurred and the standard variable overhead charged to production.Correct AnswerTotal variable overheadYour AnswerTotal variable overhead

True/FalseQuestionAccounting refers to the process of analyzing & interpreting the information already recorded in the books of accounts.Correct AnswerTrueYour AnswerTrue

Select The BlankQuestionThe selection of ________ may depend upon the various factors like characteristics of the business organisation, tax considerations, statutory requirements etc.Correct AnswerAccounting periodYour AnswerAccounting period

True/FalseQuestionStandard costs are used for external reporting.Correct AnswerFalseYour AnswerFalse

True/FalseQuestionIt is said that the income statement represents wealth increase /decrease for the organisation.

Correct AnswerTrueYour AnswerFalse

Multiple Choice Single AnswerQuestionMr. 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 AnswerRs.300,000/-Your AnswerRs.200,000/-

Multiple Choice Multiple AnswerQuestionThe factors to be considered while preparing the direct materials budget are :Correct AnswerAdequacy of material storing space , Availability of funds , Material in stores but reserved for specific purposesYour AnswerAdequacy of material storing space , Availability of funds , Material in stores but reserved for specific purposes

Multiple Choice Multiple AnswerQuestionIn which of the following situations, the flexible budget should be preferred?Correct AnswerSales are too difficult to predict , Supply level of input cannot be predicted , Varying levels of production activityYour AnswerSales are too difficult to predict , Supply level of input cannot be predicted , Varying levels of production activity

Multiple Choice Multiple AnswerQuestionTechniques of management accounting include:Correct AnswerMarginal costing , Budgetary control , Standard costingYour AnswerMarginal costing , Cost control , Budgetary control , Standard costing

Match The FollowingQuestionCorrect AnswerYour AnswerProfit and loss accountCommission receivedDividend paidManufacturing accountWork in ProgressLand & BuildingBalance SheetLand & BuildingClosing stock of finished goodsTrading accountClosing stock of finished goodsWork in Progress

True/FalseQuestionWhile preparing the labour cost budget, factors such as overtime working or night shift working may be ignored.Correct Answer

FalseYour AnswerFalse

Multiple Choice Multiple AnswerQuestionIf 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 profitCorrect AnswerIncrease the selling price , Reduce cost of sales , Increase the selling effortsYour AnswerIncrease the selling price , Increase the sales volume , Increase the selling efforts

Multiple Choice Multiple AnswerQuestionFrom the following, select intangible assets:Correct AnswerGoodwill , Patents , Trade MarksYour AnswerPatents , Trade Marks , Investments

True/FalseQuestionBank reconciliation statement must be prepared before the preparation of profit and loss account and balance sheet.Correct AnswerTrueYour AnswerFalse

Multiple Choice Single AnswerQuestionFind the budget which is inadequate as a cost control technique :Correct AnswerFixed budgetYour AnswerFixed budget

True/FalseQuestionPredetermined rate of absorption of overheads helps in quick preparation of cost estimates and quoting prices.Correct AnswerTrueYour AnswerTrue

Multiple Choice Single AnswerQuestionNet 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 AnswerRs.3,00,000/-Your AnswerRs.3,00,000/-

Select The BlankQuestion________ is an example of intangible asset.Correct AnswerGoodwillYour AnswerLand

True/FalseQuestionAccounting is an art of recording, classifying & summarizing in a significant manner.Correct AnswerTrueYour AnswerTrue

True/FalseQuestionGoods sent to the customers on approval basis should be treated as sales.Correct AnswerFalseYour AnswerFalse

Multiple Choice Multiple AnswerQuestionFeatures of Sunk cost are . . .Correct AnswerIndicates historical cost , Not relevant in decision making process , Incurred in pastYour AnswerIndicates historical cost , Incurred in past , Relevant in decision making process

True/FalseQuestionProfitability statement indicates the amount of assets & liabilities.Correct AnswerFalseYour AnswerTrue

True/FalseQuestionA business is an activity carried out with the intention of earning the profit.Correct AnswerTrueYour AnswerTrue

Multiple Choice Multiple AnswerQuestionIdentify the steps involved in selecting the optimum product mix, when the limiting factor is number of labour hours and sales demand.Correct AnswerFor 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 AnswerFor 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 AnswerQuestionTechniques of management accounting include:Correct AnswerMarginal costing , Budgetary control , Standard costingYour AnswerMarginal costing , Cost control , Budgetary control

True/FalseQuestion

The ideal budget period for a company engaged in generation and distribution of electricity is one year.Correct AnswerFalseYour AnswerFalse

Select The BlankQuestionThe ________ adjustment is necessary to relfect the cost for the use of fixed asset during the year.Correct AnswerDepreciationYour AnswerDepreciation

True/FalseQuestionAccording 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 AnswerTrueYour AnswerTrue

Select The BlankQuestionCrane expenses should be apportioned on the basis of ________.Correct AnswerNumber of hours crane worked in the departmentYour AnswerNumber of hours crane worked in the department

Multiple Choice Multiple AnswerQuestionEssentials for effective implementation of budgetary control system areCorrect AnswerCommitment of top management , Clearly defined objectives , Continous budget educationYour AnswerCommitment of top management , Clearly defined objectives , Continous budget education

Multiple Choice Single AnswerQuestionCommission 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 AnswerRs.26,545.45Your AnswerRs.29,200/-

Select The BlankQuestionA forecast is mere estimate of what is likely to happen, but ________ is the action plan to be followed.Correct AnswerBudgetYour AnswerBudget

True/FalseQuestionA very wide scope of Management Accounting is the limitation by itself.Correct AnswerTrueYour AnswerTrue

Select The BlankQuestionThe combination in which different products are sold by a company is known as ________.Correct AnswerSales mixYour AnswerSales mix

Multiple Choice Single AnswerQuestionThe reporting method used in the costing system should be based on the principle ofCorrect AnswerManagement by exceptionYour AnswerManagement by objectives

True/FalseQuestionBalance sheet indicates the financial status of the business at given period.Correct AnswerTrueYour AnswerTrue

Multiple Choice Single AnswerQuestionThe 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 AnswerService costsYour AnswerService costs

Multiple Choice Single AnswerQuestionM/s Vivek Enterprises has paid rent relating to the residence of Mr. Vivek, proprietor of Vivek Enterprises. This payment should be treated asCorrect AnswerDrawingsYour AnswerCapital

Select The BlankQuestionMeasurement of ________ gives an idea of the degree of mobility of labour.Correct AnswerLabour turnoverYour AnswerLabour turnover

Multiple Choice Single AnswerQuestionNet 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 AnswerRs.8,279.63Your AnswerRs.8,942/-

Match The FollowingQuestionCorrect Answer

Your AnswerTotal costCost of finished goodsCost of finished goodsNon operating incomeProfit on sale of investmentProfit on sale of investmentSelling and distribution overheadsAdvertisement expensesAdvertisement expensesFactory overheadsRepair for factory buildingRepair for factory building

True/FalseQuestionControl on purchase of material is exercised by the storekeeper.Correct AnswerFalseYour AnswerTrue

Multiple Choice Single AnswerQuestionA 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 Answer0.1765Your Answer0.15

Select The BlankQuestionEconomical use of labour, materials and facilities can achieved with the help of ________.Correct AnswerBudgetary controlYour AnswerCost control

True/FalseQuestionCredit balances in all the Personal & Real accounts appear on asset side.Correct AnswerFalseYour AnswerFalse

Multiple Choice Multiple AnswerQuestionContents of Uniform Cost Manual areCorrect AnswerOrganization , Cost Accounting system , Presentation of informationYour AnswerOrganization , Cost Accounting system , Presentation of information

Multiple Choice Multiple AnswerQuestionUniform Costing Methods may be advantageously applied to . . .Correct AnswerSingle organization having number of branches. , Number of companies in same industry , Similar Industries such as cotton, jute etc.Your AnswerSingle organization having number of branches. , Number of companies in same industry , Similar Industries such as cotton, jute etc.

True/FalseQuestion1) Financial statements are basically in two forms i.e. profitability statement and balance sheet.Correct AnswerTrueYour AnswerTrue

Multiple Choice Multiple AnswerQuestionThe process of accounting has three streams of accounting —————,——–and ———————-.Correct AnswerFinancial Accounting , Cost Accounting , Management AccountingYour AnswerFinancial Accounting , Cost Accounting , Management Accounting

True/FalseQuestionLong term loan borrowed from financial institution comes under the heading of long term liabilities.Correct AnswerTrueYour AnswerTrue

Match The FollowingQuestionCorrect AnswerYour AnswerBook-KeepingBooks of AccountsBooks of AccountsFinancial statementProfitability statement & Balance-sheetProfitability statement & Balance-sheetAccountingProcess of analyzing & interpretationProcess of analyzing & interpretationProfitability statementIndicates the amount of profit earnedIndicates the amount of profit earnedBalance-sheetFinancial statusFinancial status

Multiple Choice Single AnswerQuestionJudge 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 AnswerThe statement and its reason are both incorrectYour AnswerThe statement is correct but its reason is incorrect

Multiple Choice Multiple AnswerQuestionFeatures of money measurement concept are . . .Correct AnswerOnly 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 accountingYour AnswerOnly 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 AnswerQuestionThe installation and operation of ___________ accounting requires a very elaborate organizational structure and large number of rules & regulationsCorrect AnswerManagementYour AnswerManagement

Select The BlankQuestion________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 AnswerLedgerYour AnswerTrading

Match The FollowingQuestionCorrect AnswerYour AnswerSunk CostHistorical CostHistorical CostCost CentreFacilitate the fixation of responsibilityFacilitate the fixation of responsibilityCost ControlProcess of controlling costs of operationsProcess of controlling costs of operationsDifferential CostIncrease or Decrease in costIncrease or Decrease in cost

Multiple Choice Multiple AnswerQuestionWhich of the following transactions should be excluded while preparing a cost sheet ?Correct AnswerInterest on loan , Bad debts , Expenses on criminal law suitYour AnswerSale of scrap material , Interest on loan , Bad debts

True/FalseQuestionIn a Balance-Sheet right hand side is referred as assets side and left hand side is referred as liabilities.Correct AnswerTrueYour AnswerTrue

True/FalseQuestionCredit note is an intimation send to person dealing with the business that his account being debited for the purpose indicated therein.Correct AnswerFalseYour AnswerFalse

True/FalseQuestionPrimary distribution is effected on the basis of service rendered to the service departments by the production departments.Correct AnswerFalseYour AnswerTrue

Multiple Choice Multiple AnswerQuestionMarginal costing is found to be unsuccessful in the following situations :-Correct AnswerImpossible 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 natureYour AnswerImpossible 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/FalseQuestionDebit Note is an intimation sent to person dealing with the business that his account is being credited for the purpose indicated therein.Correct AnswerFalseYour AnswerTrue

Multiple Choice Multiple AnswerQuestionLabour efficiency variance arises due to:Correct AnswerInefficient supervisor , Poor working conditions , Use of sub-standard quality of materialYour AnswerInefficient supervisor , Poor working conditions , Use of sub-standard quality of material

True/FalseQuestionFinancial Accounting discloses the financial performance & financial statements of the business as a whole.Correct AnswerTrueYour AnswerTrue

True/FalseQuestionBalance sheet indicates the expenditure & income from the business.Correct AnswerFalseYour AnswerTrue

Select The BlankQuestionThe indirect material cost, indirect labour cost and indirect expenses cost, collectively are termed as ________.Correct AnswerOverheadYour AnswerOverhead

Select The BlankQuestionA person in charge of a ________ may be held responsible for its proper functioning and cost control.Correct AnswerCost centreYour AnswerCost centre

Multiple Choice Multiple AnswerQuestionThe organization chart shows the following aspects :Correct AnswerFunctional responsibility of different functional managers , Delegation of authority to various managers , Inter-functional relationships of these managersYour AnswerFunctional responsibility of different functional managers , Delegation of authority to various managers , Inter-functional relationships of these managers

True/FalseQuestionUniform costing system is a pre-requisite to an inter-firm comparison of firms belonging to the different industries.Correct AnswerFalseYour AnswerFalse

True/FalseQuestionP&L statement which is a period statement & relates to a certain period tells about results of operations.Correct AnswerTrueYour AnswerFalse

Select The BlankQuestionDepreciation charged on office furniture on straight line basis is an example of ________.Correct AnswerAdministration overheadsYour AnswerAdministration overheads

True/FalseQuestionUnder time rate system a worker is paid on the basis of production achieved by him in a given time.Correct AnswerFalseYour AnswerFalse

Select The BlankQuestionInformation as to the cost and profit / loss associated with the firm’s operations is provided to the ________ by Management accounting.Correct AnswerManagementYour AnswerManagement

True/FalseQuestionDanger level for inventory of materials means the safety stock of inventory.

Correct AnswerFalseYour AnswerTrue

True/FalseQuestionThe role of the budget committee may be taken as an advisory role to the Chief Executive.Correct AnswerTrueYour AnswerTrue

Multiple Choice Multiple AnswerQuestionThe main advantages of profit sharing are :Correct AnswerEmployees try to increase productivity , Incentives are shared by all the employees , Augments emplyees’ efficiencyYour AnswerEmployees try to increase productivity , Incentives are shared by all the employees , Augments emplyees’ efficiency

Select The BlankQuestion________ Accounting assists the management in establishing the plans to attain the economic objectives and take proper decisions for the attainment of its objectives.Correct AnswerManagementYour AnswerManagement

Multiple Choice Multiple AnswerQuestionWhich of the following is likely to be a contributory factor to the incidence of excess expenditure on material cost?Correct AnswerThe 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 storesYour AnswerAn 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 AnswerQuestionManagement accounting is concerned with the following activities :Correct AnswerDecision making , Safeguarding assets , Planning and controlling activitiesYour AnswerDecision making , Safeguarding assets , Planning and controlling activities

Multiple Choice Multiple AnswerQuestionFeatures of double entry accounting system are . . .Correct AnswerEvery business transaction has two elements , When business receives something, it has to pay something , Every debit has a corresponding creditYour AnswerEvery business transaction has two elements , When business receives something, it has to pay something , Every debit has a corresponding credit

Select The BlankQuestion

Under Differential Time Rate method payment is made at Rs. 1.40 per hour when the level of efficiency is between________.Correct Answer90% to 100%Your Answer90% to 100%

True/FalseQuestionMaintenance Department is a service cost centre.Correct AnswerTrueYour AnswerTrue

True/FalseQuestionThe process of accounting split into three steams i.e. financial, cost, management accounting.Correct AnswerTrueYour AnswerTrue

Select The BlankQuestionThe difference between sales and cost of sales is termed as ________.Correct AnswerNet ProfitYour AnswerNet Profit

Select The BlankQuestionThe final result disclosed by trading account is the ________profit earned by the organization.Correct AnswerGrossYour AnswerGross

Multiple Choice Multiple AnswerQuestionSelect the accounts to be disclosed on the liability side of the Balance sheet.Correct AnswerLoan , Outstanding expenses , CreditorsYour AnswerLoan , Outstanding expenses , Creditors

True/FalseQuestionPenalty paid for delay in payment to creditors represents uncontrollable cost.Correct AnswerFalseYour AnswerFalse

Multiple Choice Single AnswerQuestionWhich document facilitates estimating material cost of a particular job, before completion of that job?Correct AnswerBill of materialYour AnswerMaterial requisition note

Multiple Choice Single AnswerQuestionPurchases returns of Rs.18,000/- were wrongly transferred to the sales returns account. Calculate its impact on net profit.Correct AnswerThe net profit will not be affectedYour AnswerThe net profit will not be affected

Multiple Choice Single AnswerQuestionIt is said that adoption of uniform costing creates customer confidence because . . .Correct AnswerPrices are reliableYour AnswerPrices are reliable

Multiple Choice Single AnswerQuestionAn 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 AnswerThe net profit will not be affectedYour AnswerThe net profit will not be affected

Match The FollowingQuestion Correct Answer Your AnswerAccounting Process of analyzing & interpretation Process of analyzing & interpretationProfitability statement Indicates the amount of profit earned Indicates the amount of profit earnedBalance-sheet Financial status Financial statusBook-Keeping Books of Accounts Books of AccountsFinancial statement Profitability statement & Balance-sheet Profitability statement & Balance-sheet

Multiple Choice Single AnswerQuestion Salary paid to employee amounted Rs. 10,000, transferred to Trading A/C is an example of_______Correct Answer Error of CommissionYour Answer Error of Commission

Multiple Choice Single AnswerQuestion Labour cost indicates that labour cost which cannot be identified with the individual cost centre and is incurred for those employees who are not engaged in the manufacturing process but only assist iCorrect Answer RemunerationYour Answer Indirect

True/FalseQuestion 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 FalseYour Answer False

Select The BlankQuestion Over absorption of overheads may take place due to the reasons like ________ overheads being less than the ________ overheadsCorrect Answer actualYour Answer estimatedCorrect Answer estimatedYour Answer actual

True/FalseQuestion Income received in advance transfer to current liabilities

Correct Answer TrueYour Answer True

Select The BlankQuestion 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 matchCorrect Answer reasonsYour Answer reasonsCorrect Answer pass bookYour Answer pass book

Select The BlankQuestion Fixed cost is the cost that tend to remain ________ irrespective of ________Correct Answer constantYour Answer constantCorrect Answer level of activityYour Answer level of activity

True/FalseQuestion A business is an activity carried out with the intention of earning the profit.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion 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 isCorrect Answer 4,200Your Answer 4,000

Select The BlankQuestion Management Accounting has a very ________ scope and it requires ________ organizational structureCorrect Answer wideYour Answer wideCorrect Answer elaborateYour Answer elaborate

True/FalseQuestion Accounting is an art of recording, classifying & summarizing in a significant manner.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion 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 purchasedCorrect Answer 3,15,000Your Answer 3,15,000

Multiple Choice Multiple AnswerQuestion Important advantages of Uniform Costing can be said to beCorrect 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 unitsYour 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 AnswerQuestion P/L A/C debit side includesCorrect Answer salary , discount allowed , postage & telegramYour Answer postage & telegram , salary , discount allowed

Multiple Choice Multiple AnswerQuestion Actual costs may be affected due to inefficient functioning such as

Correct Answer Abnormal expenses , In efficient use of labour , In efficient use of materialYour Answer Abnormal expenses , In efficient use of labour , In efficient use of material

Multiple Choice Single AnswerQuestion 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 AnswerQuestion Sales quantity may be forecasted after taking into consideration various factors such asCorrect Answer Analysis of past trends , Market research , Reports by salesmenYour Answer Analysis of past trends , Market research , Reports by salesmen

True/FalseQuestion For taking make or buy decision marginal costing technique provide useful assistance.Correct Answer TrueYour Answer True

True/FalseQuestion Profitability statement indicates the amount of assets & liabilities.Correct Answer FalseYour Answer False

Multiple Choice Single AnswerQuestion It is an appropriate basis of apportionment of depreciation expenditureCorrect Answer value of assetsYour Answer value of assets

True/FalseQuestion The variable costs are controllable at the lower level.Correct Answer TrueYour Answer True

True/FalseQuestion Balance sheet indicates the expenditure & income from the business.Correct Answer FalseYour Answer False

Match The FollowingQuestion Correct Answer Your AnswerJournal Book of original entry Book of original entryLedger Maintain all types of Accounts Maintain all types of AccountsAssets All the properties owned by the business All the properties owned by the businessLiabilities All the amount owed by the business All the amount owed by the businessDrawing Withdrawn for personal use Withdrawn for personal use

Select The BlankQuestion A budget manual is a document setting out the ________ of the persons and ________ required for the budget control.Correct Answer ResponsibilitiesYour Answer ResponsibilitiesCorrect Answer Forms and proceduresYour Answer Forms and procedures

True/FalseQuestion Credit balances in all the Personal & Real accounts appear on asset side.Correct Answer FalseYour Answer True

True/FalseQuestion The process of accounting split into three steams i.e. financial, cost, management accounting.


Multiple Choice Single AnswerQuestion Omission of posting an amount in the ledgerCorrect Answer Error of OmissionYour Answer Error of Omission

True/FalseQuestion Non-operating / financial expenses are added while calculating net profit.Correct Answer FalseYour Answer True

True/FalseQuestion Balance sheet indicates the financial status of the business at given period.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion A Budget Manual may contain the following particularsCorrect Answer Duties and responsibilities of various executives , Functions and duties of Budget Officer , Scope of the Budget and area to be coveredYour Answer Duties and responsibilities of various executives , Functions and duties of Budget Officer , Scope of the Budget and area to be covered

Select The BlankQuestion Semi ________ overheads are neither ________ nor variable in nature.Correct Answer fixedYour Answer variableCorrect Answer variableYour Answer fixed

True/FalseQuestion Due to errors of principle the arithmetical accuracy of the trial balance does not get affected.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion Direct Cost includesCorrect Answer Direct material , Direct labour , Direct expensesYour Answer Direct material , Direct labour , Direct expenses

Select The BlankQuestion Financial Accounting protects the interest of outsiders . it considers ________ transaction and it is a ________ requirementCorrect Answer historicalYour Answer historicalCorrect Answer legalYour Answer legal

True/FalseQuestion Bin Card is having all the information of item received and issued.Correct Answer FalseYour Answer True

Select The BlankQuestion Budgetary Control is useful for ________-and ________-as a powerful tool in the hands of managementCorrect Answer Cost controlYour Answer Cost controlCorrect Answer Maximization of profitsYour Answer Maximization of profits

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

Multiple Choice Multiple AnswerQuestion The material Requisition note containsCorrect Answer Number and date , Department demanding the material , Signature of the authority approving the demandYour Answer Number and date , Department demanding the material , Signature of the authority approving the demand

Multiple Choice Multiple AnswerQuestion Following error affect the trial balanceCorrect Answer Wrong totaling of subsidiary books , Posting on the wrong side of an account , Omission of posting an account in the ledgerYour Answer Wrong totaling of subsidiary books , Posting on the wrong side of an account , Omission of posting an account in the ledger

Select The BlankQuestion Fixed overheads normally arise as a result of policy and are largely ________ in nature at the ________ level of the managementCorrect Answer uncontrollableYour Answer controllableCorrect Answer lowerYour Answer top

True/FalseQuestion Budget is prepared for a fixed period of time.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion Sold Goods of Amitabh worth Rs. 15,000 against 15% Trade discount. The Goods worth appear on account ___________Correct Answer 12750Your Answer 12750

Multiple Choice Single AnswerQuestion This is not the non monetary incentive.Correct Answer Co-partnershipYour Answer Co-partnership

Multiple Choice Multiple AnswerQuestion P/L A/C debit side includesCorrect Answer salary , discount allowed , postage & telegramYour Answer salary , discount allowed , postage & telegram

Select The BlankQuestion Along with financial accounting, ________ and ________ are the other streams of accountingCorrect Answer Cost AccountingYour Answer Cost AccountingCorrect Answer Management AccountingYour Answer Management Accounting

True/FalseQuestion A very wide scope of Management Accounting is the limitation by itself.Correct Answer TrueYour Answer True

True/FalseQuestion 1) Financial statements are basically in two forms i.e. profitability statement and balance sheet.


True/FalseQuestion Financial Accounting discloses the financial performance & financial statements of the business as a whole.Correct Answer TrueYour Answer True

True/FalseQuestion Management Accounting is the process of analysis and interpretation of financial data collected with help of financial accounting and cost accountingCorrect Answer TrueYour Answer True

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

True/FalseQuestion Cost Accounting is concerned with calculation of the profitability and state of affairs of the organization as a whole.Correct Answer FalseYour Answer False

True/FalseQuestion Financial accounting may deal with the ascertainment of cost & calculation of profitability of the individual product.Correct Answer FalseYour Answer False

True/FalseQuestion 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 TrueYour Answer True

True/FalseQuestion Financial Accounting primarily protects the interests of the outsiders dealing with organization in various capacities.Correct Answer TrueYour Answer True

Match The FollowingQuestion Correct Answer Your AnswerFinancial Accounting Systematic recording of business transactions Systematic recording of business transactionsCost Accounting Ascertainment of cost Ascertainment of costManagement Accounting Analyzing & interpretation of financial data Analyzing & interpretation of financial dataAccounting Art of interpreting & classifying business transaction Art of interpreting & classifying business transactionBook Keeping Recording of business transactions Recording of business transactions

Match The FollowingQuestion Correct Answer Your AnswerBills Payable Amount payable to supplier Amount payable to supplierBills Receivable Amount received from the customer Amount received from the customerTrade Discount Not accounted for in the books of Accounts Not accounted for in the books of AccountsCash Discount Accounted for in the books of Accounts Accounted for in the books of AccountsBad debts Amount not received from customer Amount not received from customer

True/FalseQuestion Amount invested in purchasing Fixed Asset is a revenue expenditure.Correct Answer FalseYour Answer True

Multiple Choice Multiple AnswerQuestion Going Concern Concept __________________Correct Answer Indefinite longer period , Not likely to close down in shorter period , This affects the values of asset and liabilitiesYour Answer Indefinite longer period , Not likely to close down in shorter period , This affects the values of asset and liabilities

Multiple Choice Multiple AnswerQuestion 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 mCorrect Answer 20,000,18,000,16,200Your Answer 20,000,18,000,16,200

Multiple Choice Multiple AnswerQuestion Profit & Loss A/C credit side hasCorrect Answer Gross profit , Commission received , Interested receivedYour Answer Gross profit , Commission received , Interested received

Multiple Choice Single AnswerQuestion Juhi started business with Rs borrowed capital of Rs. 1,00,000 with 10% interest per year. What is the total amount of the capitalCorrect Answer 1,10,000Your Answer 90,000

True/FalseQuestion Cheques issued but not yet presented – the balance as per the bank pass book will be higher.Correct Answer TrueYour Answer False

Multiple Choice Single AnswerQuestion This cost indicates historical cost which is incurred in past.Correct Answer Sunk costYour Answer Sunk cost

Multiple Choice Single AnswerQuestion Labour cost is the cost of __________ paid to employees of the organization.Correct Answer RemunerationYour Answer Remuneration

Multiple Choice Single AnswerQuestion Company having opening stock of Rs. 1,80,000 purchase Rs. 8,00,000. Freight Inward Rs, 35000 & closing stock Rs. 2,00,000, having direct wages Rs. 2,35,000. What will be prime cost.Correct Answer 10,50,000Your Answer 10,50,000

Multiple Choice Multiple AnswerQuestion For the proper interpretation and presentation of cost the overhead further classified asCorrect Answer Factory overheads , Office and administration overheads , Selling & distribution overheadYour Answer Factory overheads , Office and administration overheads , Selling & distribution overhead

True/FalseQuestion Valuation of returns indicates the material returned by store department to production departmentCorrect Answer FalseYour Answer False

True/FalseQuestion 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 TrueYour Answer True

True/FalseQuestion A good wage payment system will punish the workers for the matters beyond the control of the workers.Correct Answer FalseYour Answer False

Multiple Choice Multiple AnswerQuestion These are the features of fixed overheadsCorrect Answer total cost remains the same , per unit cost may vary , not dependent on volume of outputYour Answer total cost remains the same , per unit cost may vary , not dependent on volume of output

True/FalseQuestion Under marginal costing technique only fixed costs are considered as relevant for decision making.Correct Answer FalseYour Answer False

True/FalseQuestion Product mix refers to the proportion in which various products of a company can be sold.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion The cost that varies in direct proportion with the level of activity is calledCorrect Answer variable costYour Answer variable cost

Multiple Choice Multiple AnswerQuestion Basic assumptions made by marginal costing areCorrect 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 AnswerQuestion 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 AnswerQuestion 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 AnswerQuestion Standard Costs are used as tool forCorrect Answer Cost ControlYour Answer Price fixation

Multiple Choice Single AnswerQuestion Standard Costing specifically relates to the function ofCorrect Answer ProductionYour Answer Production

True/FalseQuestion Uniform Costing disturbs the healthy competition in the industryCorrect Answer FalseYour Answer True

Multiple Choice Multiple AnswerQuestion Uniform Costing Methods may be advantageously appliedCorrect 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 AnswerQuestion The following factors affects the budgeted advertisement costCorrect Answer Percentage of profits , Availability of funds , Competitors policyYour Answer Percentage of profits , Availability of funds , Competitors policy

Multiple Choice Multiple AnswerQuestion In Cash budget , Operating cash outflow includesCorrect Answer Payment to Creditors , Cash purchases of raw material , Wages/salariesYour Answer Payment to Creditors , Cash purchases of raw material , Wages/salaries

Multiple Choice Multiple AnswerQuestion Characteristics of budget can be said to beCorrect 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 attainedYour 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 BlankQuestion Like initial formation expenses, ________ and R & D are the examples of Deferred Revenue ExpenditureCorrect Answer Initial AdvertisementYour Answer Purchase of an assetCorrect Answer R & DYour Answer

Select The BlankQuestion If ________ is not provided, the asset may appear in the Balance Sheet at an ________ amountCorrect Answer depreciationYour Answer depreciationCorrect Answer overstatedYour Answer overstated

Select The BlankQuestion If ________ books are the books which record the transactions in the chronological order, ________ is the book where transactions of a similar nature are pooled togetherCorrect Answer subsidiaryYour Answer jornalCorrect Answer ledgerYour Answer ledger

Select The BlankQuestion While selecting source of supply ________ epartment may call for the ________ from the prospective suppliersCorrect Answer purchaseYour Answer purchaseCorrect Answer quotationYour Answer quotation

Select The BlankQuestion 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 jobCorrect Answer discourageYour Answer discourageCorrect Answer leavingYour Answer leaving

Select The BlankQuestion 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 ________ efficiencyCorrect Answer 101% to 125 %Your Answer 101% to 125 %Correct Answer 80% to90%Your Answer 80% to90%

Select The BlankQuestion Expenditure like general lighting are apportioned considering ________ as a base and expenditure like depreciation are apportioned considering ________ as a base.Correct Answer number of light pointsYour Answer number of light pointsCorrect Answer value of assetsYour Answer value of assets

Select The BlankQuestion ________ and ________ are examples of element wise classification ofoverhead costsCorrect Answer Idirect materialYour Answer Idirect materialCorrect Answer indirect labourYour Answer indirect labour

Select The BlankQuestion Break even point is a situation of no ________ no ________Correct Answer profitYour Answer profitCorrect Answer lossYour Answer loss

Select The BlankQuestion 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 limitYour Answer limitCorrect Answer outputYour Answer output

Multiple Choice Multiple AnswerQuestionThe selection of the supplier may depend upon the following aspects:Correct AnswerGeographical location of the supplier , Price quoted by the supplier , Goodwill of the supplierYour AnswerGeographical location of the supplier , Price quoted by the supplier , Goodwill of the supplier

Multiple Choice Single AnswerQuestionNet 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 AnswerBy providing depreciation to the extent of Rs.15,000/-Your AnswerBy providing depreciation to the extent of Rs.15,000/-

True/FalseQuestionOverhead absorption rate will be different at different capacity levels.Correct AnswerTrueYour AnswerTrue

Select The BlankQuestionThe budget that represents the funds investment for expansion, diversification, etc. is known as ________.Correct AnswerCapital expenditure budgetYour AnswerCapital expenditure budget

Select The BlankQuestionThe ________ variance is the difference between the actual variable overhead incurred and the standard variable overhead charged to production.Correct AnswerTotal variable overheadYour AnswerTotal variable overhead

Multiple Choice Single AnswerQuestionThe cost that indicates historical cost, which is incurred in past, is known asCorrect AnswerSunk costYour AnswerSunk cost

Select The BlankQuestionInformation as to the cost and profit / loss associated with the firm’s operations is provided to the ________ by Management accounting.Correct AnswerManagementYour AnswerManagement

Select The BlankQuestionFactory 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 Answer83750Your Answer83750

Select The BlankQuestionUniform costing is not a separate method of ________.Correct Answercost accountingYour Answercost accounting

Multiple Choice Multiple AnswerQuestionWhich of the following budgets may be termed as a long term budget?

Correct AnswerCapital expenditure budget , Research and Development expenditure budget , Budget of a transportation companyYour AnswerCapital expenditure budget , Research and Development expenditure budget

Multiple Choice Single AnswerQuestionThe 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 ratioCorrect Answer0.3Your Answer0.3

Multiple Choice Single AnswerQuestionThe cost of idle time incurred by employees that is considered normal for the production process should be charged to :Correct AnswerFactory overheadsYour AnswerDirect labour

Select The BlankQuestionCreche expenses may be appropriately approtioned on the basis of ________.Correct AnswerNumber of female workersYour AnswerNumber of female workers

Multiple Choice Single AnswerQuestionOpening 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 AnswerRs.10,50,000/-Your AnswerRs.10,70,000/-

Multiple Choice Multiple AnswerQuestionLimitations of Management Accounting includes——————-Correct AnswerIts wide scope , Possibility of intuitive decision , Requires elaborate organizational structureYour AnswerIts wide scope , Possibility of intuitive decision , Requires elaborate organizational structure

Select The BlankQuestionIndirect Cost is termed as ________.Correct AnswerOverheadYour AnswerOverhead

Multiple Choice Multiple AnswerQuestionFeatures of Financial Accounting includes—————–Correct AnswerIt is a legal requirement , It protects the interest of outsiders , It considers historical transactions

Your AnswerIt is a legal requirement , It protects the interest of outsiders , It considers historical transactions

Multiple Choice Multiple AnswerQuestionIdentify the budgets for which the production manager sould be held responsible :Correct AnswerProduction budget , Production overheads budget , Plant utilisation budgetYour AnswerProduction budget , Production overheads budget , Plant utilisation budget

Multiple Choice Single AnswerQuestionA 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 AnswerRs.120/- (Favourable)Your AnswerRs.150/- (Favourable)

Multiple Choice Multiple AnswerQuestionTechniques of management accounting include:Correct AnswerMarginal costing , Budgetary control , Standard costingYour AnswerCost control , Budgetary control , Standard costing

True/FalseQuestionA grinding machine is an example of impersonal cost centreCorrect AnswerTrueYour AnswerTrue

True/FalseQuestionProfitability statement indicates the amount of assets & liabilities.Correct AnswerFalseYour AnswerFalse

Multiple Choice Single AnswerQuestionUniform costing system is useful in the following areasCorrect AnswerClassification of cost accountsYour AnswerPreparing financial statements

Multiple Choice Multiple AnswerQuestionThe features of multiplicity of key factors are as follows :Correct AnswerMore than one key factors , Refers to a complex situation , Can be resolved by using linear programming techniqueYour Answer

More than one key factors , Refers to a complex situation , Can be resolved by using linear programming technique

True/FalseQuestionBalance sheet indicates the expenditure & income from the business.Correct AnswerFalseYour AnswerFalse

True/FalseQuestionInterim dividend paid by the company should be debited to the profit and loss appropriation account.Correct AnswerTrueYour AnswerTrue

Multiple Choice Multiple AnswerQuestionA materials requisition form normally contains the following aspects:Correct AnswerQuantity requisitioned , Per unit material cost , Job numberYour AnswerQuantity requisitioned , Job number

Multiple Choice Multiple AnswerQuestionThe production budget may be prepared in terms of :Correct AnswerUnits produced , Production cost , Material cost, labour cost and overheadsYour AnswerUnits produced , Production cost , Material cost, labour cost and overheads

Multiple Choice Single AnswerQuestionPanna 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 AnswerVariable costsYour AnswerVariable costs

Multiple Choice Multiple AnswerQuestionIf 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 profitCorrect AnswerIncrease the selling price , Reduce cost of sales , Increase the selling effortsYour AnswerIncrease the selling price , Increase the sales volume , Reduce cost of sales

True/FalseQuestionReceipts and payments method of cash budget is useful for preparing long term estimates.Correct AnswerFalseYour AnswerFalse

Multiple Choice Multiple AnswerQuestionSelect the advantages of standard cost system.Correct AnswerProvides reliable basis for budgeting , Facilitates delegation of authority , Promotes economy and efficiencyYour AnswerProvides reliable basis for budgeting , Facilitates delegation of authority

True/FalseQuestionThe sales mix variance highlights the fact that the actual mix of sales has been in the same ratio as budgeted.Correct AnswerFalseYour AnswerFalse

Select The BlankQuestionIn case of seasonal industry, the budget period may be taken as ________.Correct AnswerOne seasonYour AnswerOne season

True/FalseQuestionLack of efficient control on various aspects related to raw-material increases the material cost component of the finished product.Correct AnswerTrueYour AnswerTrue

True/FalseQuestionDue to compensating errors the arithmetical accuracy of the trial balance is affected.Correct AnswerFalseYour AnswerFalse

Multiple Choice Single AnswerQuestionMaterial 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 AnswerRs.1,600/- (Favourable)Your AnswerRs.800/- (Favourable)

Select The BlankQuestionThe process of recording the business transactions in a defined set of records is referred to as ________.Correct AnswerBalance sheetYour AnswerProfit and Loss Account

Match The FollowingQuestion

Correct AnswerYour AnswerDaily Time sheetsTime spent by worker on job is recordedTime spent by worker on job is recordedTime Keeping DepartmentRecording of workers timeRecording of workers timeTime booking departmentJobwise booking of time.Jobwise booking of time.Time Recording Clock MethodTicket number & clock card allotted to workerTicket number & clock card allotted to worker

True/FalseQuestionPurchased goods by paying Rs.35,000/-: In this case, the cash account should be debited.Correct AnswerTrueYour AnswerTrue

Select The BlankQuestionIf the customer is not likely to pay the amount receivable from him, this amount should to be treated as ________.Correct AnswerBad debtsYour AnswerBad debts

True/FalseQuestionAccounting is an art of recording, classifying & summarizing in a significant manner.Correct AnswerTrueYour AnswerTrue

Match The FollowingQuestionCorrect AnswerYour AnswerBook-KeepingBooks of AccountsBooks of AccountsFinancial statementProfitability statement & Balance-sheetProfitability statement & Balance-sheetAccountingProcess of analyzing & interpretationProcess of analyzing & interpretationProfitability statementIndicates the amount of profit earnedIndicates the amount of profit earnedBalance-sheetFinancial statusFinancial status

True/FalseQuestionThe problem of multiple key factors can be solved with the help of techniques like linear programming, operations research, etc.

Correct AnswerTrueYour AnswerTrue

Select The BlankQuestionThe ________ books are preferred when the volume of transactions is very large.Correct AnswerSubsidiaryYour AnswerJournal

Multiple Choice Multiple AnswerQuestionIf you are required to enforce uniform costing system in your industry, how would you proceed ?Correct AnswerCollecting data from all units of your industry , Ensuring that the data collected is complete and correct , Maintaining secrecy of the data collectedYour AnswerCollecting 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/FalseQuestionAll costs are controllable.Correct AnswerFalseYour AnswerFalse

Select The BlankQuestion Furniture account will always have a ________ balance.Correct Answer DebitYour Answer Nil

Multiple Choice Multiple AnswerQuestion Accounting is the art where transactions are …Correct Answer Summarized , Classified , RecordedYour Answer Summarized , Classified , Recorded

True/FalseQuestion The phrase ‘By Balance c/d.’ written on the credit side of the rent account, indicates credit balance for this account.Correct Answer FalseYour Answer False

Select The BlankQuestion The ________ variance is the difference between the actual variable overhead incurred and the standard variable overhead charged to production.Correct Answer Total variable overheadYour Answer Total variable overhead

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

Select The BlankQuestion The selection of ________ may depend upon the various factors like characteristics of the business organisation, tax considerations, statutory requirements etc.

Correct Answer Accounting periodYour Answer Accounting period

True/FalseQuestion Standard costs are used for external reporting.Correct Answer FalseYour Answer False

True/FalseQuestion It is said that the income statement represents wealth increase /decrease for the organisation.Correct Answer TrueYour Answer False

Multiple Choice Single AnswerQuestion 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 AnswerQuestion 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 purposesYour Answer Adequacy of material storing space , Availability of funds , Material in stores but reserved for specific purposes

Multiple Choice Multiple AnswerQuestion 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 activityYour Answer Sales are too difficult to predict , Supply level of input cannot be predicted , Varying levels of production activity

Multiple Choice Multiple AnswerQuestion Techniques of management accounting include:Correct Answer Marginal costing , Budgetary control , Standard costingYour Answer Marginal costing , Cost control , Budgetary control , Standard costing

Match The FollowingQuestion Correct Answer Your Answer

Profit and loss account Commission received Dividend paid

Manufacturing account Work in Progress Land & Building

Balance Sheet Land & Building Closing stock of finished goods

Trading account Closing stock of finished goods Work in Progress

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

Multiple Choice Multiple AnswerQuestion 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 profitCorrect Answer Increase the selling price , Reduce cost of sales , Increase the selling effortsYour Answer Increase the selling price , Increase the sales volume , Increase the selling efforts

Multiple Choice Multiple AnswerQuestion From the following, select intangible assets:Correct Answer Goodwill , Patents , Trade MarksYour Answer Patents , Trade Marks , Investments

True/FalseQuestion Bank reconciliation statement must be prepared before the preparation of profit and loss account and balance sheet.Correct Answer TrueYour Answer False

Multiple Choice Single AnswerQuestion Find the budget which is inadequate as a cost control technique :Correct Answer Fixed budgetYour Answer Fixed budget

True/FalseQuestion Predetermined rate of absorption of overheads helps in quick preparation of cost estimates and quoting prices.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion 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 BlankQuestion ________ is an example of intangible asset.Correct Answer GoodwillYour Answer Land

True/FalseQuestion Accounting is an art of recording, classifying & summarizing in a significant manner.Correct Answer TrueYour Answer True

True/FalseQuestion Goods sent to the customers on approval basis should be treated as sales.Correct Answer FalseYour Answer False

Multiple Choice Multiple AnswerQuestion Features of Sunk cost are . . .Correct Answer Indicates historical cost , Not relevant in decision making process , Incurred in pastYour Answer Indicates historical cost , Incurred in past , Relevant in decision making process

True/FalseQuestion Profitability statement indicates the amount of assets & liabilities.Correct Answer FalseYour Answer True

True/FalseQuestion A business is an activity carried out with the intention of earning the profit.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion 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 AnswerQuestion Techniques of management accounting include:Correct Answer Marginal costing , Budgetary control , Standard costingYour Answer Marginal costing , Cost control , Budgetary control

True/FalseQuestion The ideal budget period for a company engaged in generation and distribution of electricity is one year.Correct Answer FalseYour Answer False

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

True/FalseQuestion 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 TrueYour Answer True

Select The BlankQuestion Crane expenses should be apportioned on the basis of ________.Correct Answer Number of hours crane worked in the departmentYour Answer Number of hours crane worked in the department

Multiple Choice Multiple AnswerQuestion Essentials for effective implementation of budgetary control system areCorrect Answer Commitment of top management , Clearly defined objectives , Continous budget educationYour Answer Commitment of top management , Clearly defined objectives , Continous budget education

Multiple Choice Single AnswerQuestion 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.26,545.45Your Answer Rs.29,200/-

Select The BlankQuestion A forecast is mere estimate of what is likely to happen, but ________ is the action plan to be followed.Correct Answer BudgetYour Answer Budget

True/FalseQuestion A very wide scope of Management Accounting is the limitation by itself.Correct Answer TrueYour Answer True

Select The BlankQuestion The combination in which different products are sold by a company is known as ________.Correct Answer Sales mixYour Answer Sales mix

Multiple Choice Single AnswerQuestion The reporting method used in the costing system should be based on the principle ofCorrect Answer Management by exceptionYour Answer Management by objectives

True/FalseQuestion Balance sheet indicates the financial status of the business at given period.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion 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 costsYour Answer Service costs

Multiple Choice Single AnswerQuestion M/s Vivek Enterprises has paid rent relating to the residence of Mr. Vivek, proprietor of Vivek Enterprises. This payment should be treated asCorrect Answer DrawingsYour Answer Capital

Select The BlankQuestion Measurement of ________ gives an idea of the degree of mobility of labour.Correct Answer Labour turnoverYour Answer Labour turnover

Multiple Choice Single AnswerQuestion 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.8,279.63Your Answer Rs.8,942/-


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/FalseQuestion Control on purchase of material is exercised by the storekeeper.Correct Answer FalseYour Answer True

Multiple Choice Single AnswerQuestion 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 0.1765Your Answer 0.15

Select The BlankQuestion Economical use of labour, materials and facilities can achieved with the help of ________.Correct Answer Budgetary controlYour Answer Cost control

True/FalseQuestion Credit balances in all the Personal & Real accounts appear on asset side.Correct Answer FalseYour Answer False

Multiple Choice Multiple AnswerQuestion Contents of Uniform Cost Manual areCorrect Answer Organization , Cost Accounting system , Presentation of informationYour Answer Organization , Cost Accounting system , Presentation of information

Multiple Choice Multiple AnswerQuestion 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/FalseQuestion 1) Financial statements are basically in two forms i.e. profitability statement and balance sheet.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion The process of accounting has three streams of accounting —————,——–and ———————-.Correct Answer Financial Accounting , Cost Accounting , Management AccountingYour Answer Financial Accounting , Cost Accounting , Management Accounting

True/FalseQuestion Long term loan borrowed from financial institution comes under the heading of long term liabilities.Correct Answer TrueYour Answer True


Book-Keeping Books of Accounts Books of Accounts

Financial statement Profitability statement & Balance-sheet Profitability statement & Balance-sheet

Accounting Process of analyzing & interpretation Process of analyzing & interpretation

Profitability statement Indicates the amount of profit earned Indicates the amount of profit earned

Balance-sheet Financial status Financial status

Multiple Choice Single AnswerQuestion 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 incorrectYour Answer The statement is correct but its reason is incorrect

Multiple Choice Multiple AnswerQuestion 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 accountingYour 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 AnswerQuestion The installation and operation of ___________ accounting requires a very elaborate organizational structure and large number of rules & regulationsCorrect Answer ManagementYour Answer Management

Select The BlankQuestion ________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 LedgerYour Answer Trading


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 AnswerQuestion Which of the following transactions should be excluded while preparing a cost sheet ?Correct Answer Interest on loan , Bad debts , Expenses on criminal law suitYour Answer Sale of scrap material , Interest on loan , Bad debts

True/FalseQuestion In a Balance-Sheet right hand side is referred as assets side and left hand side is referred as liabilities.Correct Answer TrueYour Answer True

True/FalseQuestion Credit note is an intimation send to person dealing with the business that his account being debited for the purpose indicated therein.Correct Answer FalseYour Answer False

True/FalseQuestion Primary distribution is effected on the basis of service rendered to the service departments by the production departments.Correct Answer FalseYour Answer True

Multiple Choice Multiple AnswerQuestion 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 natureYour 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/FalseQuestion 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 FalseYour Answer True

Multiple Choice Multiple AnswerQuestion Labour efficiency variance arises due to:Correct Answer Inefficient supervisor , Poor working conditions , Use of sub-standard quality of materialYour Answer Inefficient supervisor , Poor working conditions , Use of sub-standard quality of material

True/FalseQuestion Financial Accounting discloses the financial performance & financial statements of the business as a whole.Correct Answer TrueYour Answer True

True/FalseQuestion Balance sheet indicates the expenditure & income from the business.Correct Answer FalseYour Answer True

Select The BlankQuestion The indirect material cost, indirect labour cost and indirect expenses cost, collectively are termed as ________.Correct Answer OverheadYour Answer Overhead

Select The BlankQuestion A person in charge of a ________ may be held responsible for its proper functioning and cost control.Correct Answer Cost centreYour Answer Cost centre

Multiple Choice Multiple AnswerQuestion 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 managersYour Answer Functional responsibility of different functional managers , Delegation of authority to various managers , Inter-functional relationships of these managers

True/FalseQuestion Uniform costing system is a pre-requisite to an inter-firm comparison of firms belonging to the different industries.Correct Answer FalseYour Answer False

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

Select The BlankQuestion Depreciation charged on office furniture on straight line basis is an example of ________.Correct Answer Administration overheadsYour Answer Administration overheads

True/FalseQuestion Under time rate system a worker is paid on the basis of production achieved by him in a given time.Correct Answer FalseYour Answer False

Select The BlankQuestion Information as to the cost and profit / loss associated with the firm’s operations is provided to the ________ by Management accounting.Correct Answer ManagementYour Answer Management

True/FalseQuestion Danger level for inventory of materials means the safety stock of inventory.Correct Answer FalseYour Answer True

True/FalseQuestion The role of the budget committee may be taken as an advisory role to the Chief Executive.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion The main advantages of profit sharing are :Correct Answer Employees try to increase productivity , Incentives are shared by all the employees , Augments emplyees’ efficiencyYour Answer Employees try to increase productivity , Incentives are shared by all the employees , Augments emplyees’ efficiency

Select The BlankQuestion ________ Accounting assists the management in establishing the plans to attain the economic objectives and take proper decisions for the attainment of its objectives.Correct Answer ManagementYour Answer Management

Multiple Choice Multiple AnswerQuestion 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 storesYour 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 AnswerQuestion Management accounting is concerned with the following activities :Correct Answer Decision making , Safeguarding assets , Planning and controlling activitiesYour Answer Decision making , Safeguarding assets , Planning and controlling activities

Multiple Choice Multiple AnswerQuestion 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 creditYour Answer Every business transaction has two elements , When business receives something, it has to pay something , Every debit has a corresponding credit

Select The BlankQuestion 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/FalseQuestion Maintenance Department is a service cost centre.Correct Answer TrueYour Answer True

True/FalseQuestion The process of accounting split into three steams i.e. financial, cost, management accounting.


Select The BlankQuestion The difference between sales and cost of sales is termed as ________.Correct Answer Net ProfitYour Answer Net Profit

Select The BlankQuestion The final result disclosed by trading account is the ________profit earned by the organization.Correct Answer GrossYour Answer Gross

Multiple Choice Multiple AnswerQuestion Select the accounts to be disclosed on the liability side of the Balance sheet.Correct Answer Loan , Outstanding expenses , CreditorsYour Answer Loan , Outstanding expenses , Creditors

True/FalseQuestion Penalty paid for delay in payment to creditors represents uncontrollable cost.Correct Answer FalseYour Answer False

Multiple Choice Single AnswerQuestion Which document facilitates estimating material cost of a particular job, before completion of that job?Correct Answer Bill of materialYour Answer Material requisition note

Multiple Choice Single AnswerQuestion 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 affectedYour Answer The net profit will not be affected

Multiple Choice Single AnswerQuestion It is said that adoption of uniform costing creates customer confidence because . . .Correct Answer Prices are reliableYour Answer Prices are reliable

Multiple Choice Single AnswerQuestion 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 affectedYour Answer The net profit will not be affected

True/FalseQuestion Purchased goods by paying Rs.35,000/-: In this case, the cash account should be debited.Correct Answer TrueYour Answer False

True/FalseQuestion 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 TrueYour Answer True

Select The BlankQuestion The various contents of a uniform cost manual are organisation, cost accounting system and ________.

Correct Answer presentation of informationYour Answer organisation structure

True/FalseQuestion It is said that marginal costs are used primarily in guiding decisions that are yet to be made.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion Select the examples of functional budgets:Correct Answer Sales budget , Production budget , Research and development budgetYour Answer Sales budget , Production budget , Capital expenditure budget

Multiple Choice Single AnswerQuestion A business’s telephone bill should nromally be classified into which one of the following categories?Correct Answer Semi-variable costYour Answer Variable cost


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 AnswerQuestion 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.0.98Your Answer Re.0.68

Select The BlankQuestion The process of finding the reasons for the difference in the balance as per bank book and pass book is known as ________.Correct Answer ReconciliationYour Answer Reconciliation

Multiple Choice Multiple AnswerQuestion 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 commissionYour 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 AnswerQuestion 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 differentYour Answer The cost structure is different

Multiple Choice Single AnswerQuestion Balance sheet is statement ofCorrect Answer All Assets and PropertiesYour Answer All Assets and Properties

Select The BlankQuestion The closing stocks should ________ the cost of the goods which sent on approval basis.Correct Answer Be increased byYour Answer Not get affected by

True/FalseQuestion Under the Rowan plan bonus is a fixed percentage.Correct Answer FalseYour Answer True

True/FalseQuestion Idle time variance is always favourable.Correct Answer FalseYour Answer False

Multiple Choice Multiple AnswerQuestion Select the items which may be classified as selling and distribution overheads.Correct Answer Delivery van expenses , Rent of finished goods warehouse , Sales research expensesYour Answer Delivery van expenses , Rent of finished goods warehouse , Rent of raw material godown

Select The BlankQuestion Information as to the cost and profit / loss associated with the firm’s operations is provided to the ________ by Management accounting.Correct Answer ManagementYour Answer Cost

Multiple Choice Single AnswerQuestion 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 AnswerQuestion 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 AnswerQuestion 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 AnswerQuestion 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 costsYour Answer Variable costs

Select The BlankQuestion Contribution represents pool of resources available for meeting all costs other than ________.Correct Answer Variable costsYour Answer Variable costs

Select The BlankQuestion Goods returned to the suppliers from whom it was ________d is recorded in thePurchasereturn register.Correct Answer PurchaseYour Answer Purchase

Multiple Choice Multiple AnswerQuestion 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 favourableYour Answer The sales value variance is adverse

True/FalseQuestion Depreciation, interest and property tax continue even when the operations are discontinued.Correct Answer TrueYour Answer True

Select The BlankQuestion The balance of the suspense account will ________ after all the errors areCorrect Answer become zeroYour Answer become zero

Multiple Choice Multiple AnswerQuestion Management accounting is concerned with the following activities :Correct Answer Decision making , Safeguarding assets , Planning and controlling activitiesYour Answer Decision making , Planning and controlling activities

True/FalseQuestion It is said that the income statement represents wealth increase /decrease for the organisation.Correct Answer TrueYour Answer False

Select The BlankQuestion The difference between sales and prime cost is known as ________.Correct Answer Gross ProfitYour Answer Gross Profit

Multiple Choice Multiple AnswerQuestion 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 activityYour Answer Sales are too difficult to predict , Supply level of input cannot be predicted , Varying levels of production activity

Multiple Choice Single AnswerQuestion 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/-


Sunk Cost Historical Cost Historical Cost

Cost Centre Facilitate the fixation of responsibility Facilitate the fixation of responsibility

Cost Control Process of controlling costs of operations Process of controlling costs of operations

Differential Cost Increase or Decrease in cost Increase or Decrease in cost

Select The BlankQuestion Cost volume profit analysis focuses attention on the ________ effect of a particular course of action.Correct Answer short runYour Answer short and long run

Multiple Choice Multiple AnswerQuestion 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 AnswerQuestion Uniform costing system is useful in the following areasCorrect Answer Classification of cost accountsYour Answer Preparing financial statements

True/FalseQuestion Revenue expenditure indicates the amount of funds spent during a certain period with the intention to receive the returns in future.Correct Answer FalseYour Answer True

True/FalseQuestion Price based on Uniform Costing may be taken to be reliable and representative of the whole industry.Correct Answer TrueYour Answer True

True/FalseQuestion 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 FalseYour Answer False

Multiple Choice Multiple AnswerQuestion The objectives of Uniform costing system are as follows :Correct Answer To fix a common selling price for the industry as a whole , To compare efficiency of each unit against industry’s overall performance , To compile reliable cost data for inter-firm comparison of costsYour 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 AnswerQuestion 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 BlankQuestion Carriage charges paid for a new machine purchased if debited to carriage account would affect the ________Correct Answer Machinery A/c and carriage A/cYour Answer Carriage A/c

Multiple Choice Multiple AnswerQuestion Different types of tenders are :Correct Answer Singly tender , Open tender , Global tenderYour Answer Multiple tender , Open tender , Global tender

Multiple Choice Single AnswerQuestion 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 AnswerQuestion Basic objective of Uniform Costing is . . .Correct Answer comparisonYour Answer To control cost

Multiple Choice Multiple AnswerQuestion Select the entries which need to be rectifiedCorrect Answer Purchase A/c ……… Dr. to Damodar’s A/c (Being furniture purchased from Damodar) , Gopal’s A/c ……….. Dr. to cash A/c (Being entry for payment of railway freight for goods purchased) , Cash A/c …………Dr. to Suresh’s A/c (Being cash received from Suresh for goods sold to him for)Your Answer Gopal’s A/c ……….. Dr. to cash A/c (Being entry for payment of railway freight for goods purchased)

Multiple Choice Single AnswerQuestion 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.40,953.70Your Answer Rs.36,000/-

Select The BlankQuestion 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 volumeYour Answer Sales margin yield

Multiple Choice Multiple AnswerQuestion 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 factoryYour Answer Expenditure required to restart the factory

Multiple Choice Single AnswerQuestion The purchase budget for October is Rs.12,500/- and November is Rs.15,000/-. If the materials are purchased for cash the supplier is offering a rebate of 5%. If the materials are purchased on credit of 30 days, no rebate is offered. The company purchaseCorrect Answer October- NIL, November- Rs.26,750/-Your Answer October- Rs.14,250/-, November- Rs.11,875/-

True/FalseQuestion Maintenance Department is a service cost centre.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion 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 accountYour Answer Laxman’s capital Rs.88,000/- , Interest on capital should be debited to the Profit and loss account

Multiple Choice Single AnswerQuestion 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 accountYour Answer ABC Ltd.’s Account


Advantageously applicable in similar industries Scope of uniform costing Fields covered by uniform costing

Spirit of mutual trust Requisite for uniform costing Disadvantage of uniform costing

Avoids cut throat competition Advantage of uniform costing Requisite for uniform costing

Treatment given to research and development costs Fields covered by uniform costing Advantage of uniform costing

Select The BlankQuestion Under the AB________ analysis, nuts and bolts used as material will be classified as category C.Correct Answer CYour Answer C

Select The BlankQuestion 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-absorbedYour Answer True and fair

Multiple Choice Multiple AnswerQuestion 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 turnoverYour Answer Lack of experienced and efficient personnel , High labour turnover , No idle time

Multiple Choice Multiple AnswerQuestion 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 supervisorYour Answer Rent and taxes of the factory , Wages paid to indirect workers like cleaners, helpers,etc. , Salary paid to factory supervisor

Multiple Choice Multiple AnswerQuestion From the following, select intangible assets:Correct Answer Goodwill , Patents , Trade MarksYour Answer Goodwill , Patents , Trade Marks

True/FalseQuestion 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 TrueYour Answer False

Select The BlankQuestion Average stock = ________ + (Order size / 2)Correct Answer Safety stockYour Answer Reorder level

True/FalseQuestion High time wages means necessarily high cost of production.Correct Answer FalseYour Answer True

Multiple Choice Single AnswerQuestion The integrated form of all functional budgets is known as :Correct Answer Master budgetYour Answer Master budget

Select The BlankQuestion Marginal costing is also known as ________.Correct Answer Variable costingYour Answer Indirect costing

Multiple Choice Single AnswerQuestion 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 AnswerQuestion 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/FalseQuestion Due to compensating errors the arithmetical accuracy of the trial balance is affected.Correct Answer FalseYour Answer False

Multiple Choice Single AnswerQuestion 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 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 AnswerQuestion Advance tax account should appear in which of the final statement of accounts.Correct Answer Asset side of the balance sheetYour Answer Debit side of the profit and loss account


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 BlankQuestion Furniture account will always have a ________ balance.Correct Answer DebitYour Answer Inflated

Select The BlankQuestion Payment by ________ method lowers the cost of production through their impact on fixed costs.Correct Answer ResultsYour Answer Cash

Multiple Choice Multiple AnswerQuestion The objects of cost accountancy are . .Correct Answer To ascertain cost and profitability , Cost Control , Presentation of InformationYour Answer To ascertain cost and profitability , Cost Control , To portray the financial status

Multiple Choice Multiple AnswerQuestion Select the various methods adopted for treatment of under or over absorbed overheadsCorrect Answer Use of supplementary rates , Carrying over the amount to remaining period , Writing off to the Costing Profit and Loss AccountYour Answer Use of supplementary rates , Carrying over the amount to remaining period , Writing off to the Costing Profit and Loss Account

True/FalseQuestion Absorption costing is more suitable for decision making than marginal costingCorrect Answer FalseYour Answer True

Select The BlankQuestion A low margin of safety indicates ________ fixed overheads.Correct Answer higherYour Answer higher

Multiple Choice Single AnswerQuestion Which of the following operations would normally be carried out first when preparing a master budget?Correct Answer Determining the budget periodYour Answer Identifying the principal budget factor

True/FalseQuestion Period cost is the cost assigned to the products.Correct Answer FalseYour Answer True

Select The BlankQuestion Profit = Contribution per unit X ________.Correct Answer Margin of safety (units)Your Answer Sales (units)

Multiple Choice Multiple AnswerQuestion Which of the following aspects are mainly responsible for difficulty in application of Uniform costing system.Correct Answer Capital investment , Plant size , LocationYour Answer Capital investment , Plant size , Loans taken

Select The BlankQuestion As per the provisions of Section 209 of ________, all the company form of organisation is legally required to follow the mercantile or accrual system of accounting.Correct Answer The Companies Act, 1956Your Answer The Companies Act, 1956

Multiple Choice Single AnswerQuestion 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% varCorrect Answer Rs.13.85Your Answer Rs.11.85

Select The BlankQuestion 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 fireYour Answer Goods lost by fire

Multiple Choice Multiple AnswerQuestion 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 managementYour 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 AnswerQuestion 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 activityYour 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/FalseQuestion GAIL having monopoly in the CNG (Compressed Natural Gas) market can implement the Uniform costing system.Correct Answer FalseYour Answer True

True/FalseQuestion One of the main objection to the contribution approach of costing is that it ignores fixed cost.Correct Answer TrueYour Answer False

Multiple Choice Multiple AnswerQuestion Pre-requisites of Uniform Costing are . . .Correct Answer Spirit of mutual trust , Free Exchange of ideas , No rivalryYour Answer Spirit of mutual trust , Free Exchange of ideas , Tendency of withholding information

Select The BlankQuestion Uniform costing is not a separate method of ________.Correct Answer cost accountingYour Answer costing

Multiple Choice Single AnswerQuestion 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/FalseQuestion An entry in the stores ledger is required for transfer of material from one job to another in the same department.Correct Answer FalseYour Answer False

Multiple Choice Multiple AnswerQuestion 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/FalseQuestion 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 TrueYour Answer True

Multiple Choice Single AnswerQuestion 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 AnswerQuestion 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 0.1765Your Answer 0.15

True/FalseQuestion Purchased goods by paying Rs.35,000/-: In this case, the cash account should be debited.Correct Answer TrueYour Answer False

Multiple Choice Single AnswerQuestion Compute fixed overheads calendar variance when fixed overhead volume variance is Rs.250/- (Favourable); fixed overheads efficiency variance is Rs.2,150/- (Adverse) and fixed overheads capacity variance is Rs.800/-(Favourable).Correct Answer Rs.1,600/- (Favourable)Your Answer Rs.1,100/- (Favourable)

Select The BlankQuestion The process of recording the business transactions in a defined set of records is referred to as ________.Correct Answer Balance sheetYour Answer Balance sheet

True/FalseQuestion In the ledger account only credit entries relating to a particular account are posted.Correct Answer FalseYour Answer False

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

Multiple Choice Multiple AnswerQuestion 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 supplierYour Answer Geographical location of the supplier , Price quoted by the supplier , Goodwill of the supplier

Multiple Choice Single AnswerQuestion Which system involves adoption of same costing principles, practices and procedures by the individual firms of an industry ?Correct Answer Uniform costingYour Answer Uniform costing

True/FalseQuestion Predetermined rate of absorption of overheads helps in quick preparation of cost estimates and quoting prices.Correct Answer TrueYour Answer False

True/FalseQuestion Idle capacity and idle time mean one and the same thing.Correct Answer FalseYour Answer False

Multiple Choice Multiple AnswerQuestion 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 gross profit will increase by Rs.6,450/-

Select The BlankQuestion Payment by ________ method lowers the cost of production through their impact on fixed costs.Correct Answer ResultsYour Answer Time

Multiple Choice Single AnswerQuestion The overheads of a machine shop X should be apportioned using which of the following basis?Correct Answer Machine hoursYour Answer Direct labour cost

Multiple Choice Multiple AnswerQuestion Features of convention of conservation are . . .Correct Answer Anticipates all future losses and expenses , Ignores all future incomes and profits, unless they are actually realised , Applicable to valuation of current assetsYour Answer Anticipates all future losses and expenses , Applicable to valuation of current assets , Applicable to valuation of non-current asset

Multiple Choice Multiple AnswerQuestion Merits of break even point analysis are as follows:Correct Answer Useful diagnostic tool. , Used for analysing the risk implication of alternative actions. , Used to graphically represent complicated data.Your Answer Useful diagnostic tool. , Used for analysing the risk implication of alternative actions. , Useful in the long run.

True/FalseQuestion Narration must be mentioned in the ledger.Correct Answer FalseYour Answer True

True/FalseQuestion The actual hours taken by the labour are compared with the standard hours allowed for output to find out the labour yield variance.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion 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

Multiple Choice Single AnswerQuestion 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 decrease by Rs.6,300/-

Multiple Choice Multiple AnswerQuestion Items credited to Profit & Loss Account are…Correct Answer Gross profit , Commission received , Interested receivedYour Answer Gross profit , Commission received , Interested received

Multiple Choice Multiple AnswerQuestion The production budget may be prepared in terms of :Correct Answer Units produced , Production cost , Material cost, labour cost and overheadsYour Answer Units produced , Production cost , Material cost, selling cost and overheads

Multiple Choice Multiple AnswerQuestion 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 collectedYour Answer Collecting data from all units of your industry , Ensuring that the data collected is complete and correct , Maintaining secrecy of the data collected

Select The BlankQuestion Goods returned to the suppliers from whom it was ________d is recorded in thePurchasereturn register.Correct Answer PurchaseYour Answer Purchase

Select The BlankQuestion Profit volume ratio is also known as ________.Correct Answer Contribution to sales ratioYour Answer Sales to contribution ratio

True/FalseQuestion Standard costing is always accompanied by a system of budgeting but budgetary control may be operated in business where standard costing is impracticable.Correct Answer TrueYour Answer True

Select The BlankQuestion Crane expenses should be apportioned on the basis of ________.Correct Answer Number of hours crane worked in the departmentYour Answer Number of hours crane worked in the department

Select The BlankQuestion Marginal costing is also known as ________.Correct Answer Variable costingYour Answer Variable costing

Multiple Choice Multiple AnswerQuestion Select the examples of functional budgets:Correct Answer Sales budget , Production budget , Research and development budgetYour Answer Sales budget , Production budget , Research and development budget

Multiple Choice Single AnswerQuestion 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 AnswerQuestion A worker 12 hours on a scheme of payment by results. His day rate is Rs.150/- an hour, the material cost of the product is Rs.600/- and the overheads are recovered at 15% of the total direct wages. Calculate the factory cost of the product under the piece rate work plan.Correct Answer Rs.2,670/-Your Answer Rs.2,850/-


Change in profit/ Change in activity level Profit volume ratio Profit volume ratio

Change in total cost/ Change in activity level Variable cost per unit Total contribution

Total sales X Profit volume ratio Total contribution Variable cost per unit

Selling price ( Actual sales – Break even sales) Margin of safety Margin of safety

Select The BlankQuestion Preparation of direct material ________ budget is the responsibility of the Purchase manager.Correct Answer PurchaseYour Answer Purchase

True/FalseQuestion Uniform costing may lead to monopolistic conditions within the industry, prices may be raised and customers may suffer.Correct Answer TrueYour Answer False

Select The BlankQuestion ________ system of wage payment is a combination of Halsey system and Gantt system.Correct Answer DiemerYour Answer Barth premium

Select The BlankQuestion The system which provides an opportunity to the small units to take advantage of the research work taken by the large scale units of the same industry is known as ________ system.Correct Answer Uniform costingYour Answer Uniform costing

Multiple Choice Single AnswerQuestion The credit side of the sales book was overcast by Rs.2,000/-. As a result of this rectification, what of the given impacts is likely to happen?Correct Answer The liability side of the balance sheet will increase by Rs.2,000/-Your Answer The liability side of the balance sheet will increase by Rs.2,000/-

Select The BlankQuestion 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 rateYour Answer Prime cost percentage rate

Multiple Choice Multiple AnswerQuestion The components of the selling and distribution cost budget are :Correct Answer Distribution expenses , Publicity expenditure , Salary of sales-office workersYour Answer Distribution expenses , Publicity expenditure , Salary of shop-floor workers


Normal Standards Anticipated to be achieved in future Once established can never be altered

Basic Standards Established for a longer period of time Anticipated to be achieved in the budget period

Current Standards Established for a shorter period of time Anticipated to be unachievable in future

Expected Standards Anticipated to be achieved in the budget period Established for a shorter period of time

Multiple Choice Single AnswerQuestion The cost that indicates historical cost, which is incurred in past, is known asCorrect Answer Sunk costYour Answer Sunk cost

Multiple Choice Multiple AnswerQuestion 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 companyYour Answer Capital expenditure budget , Research and Development expenditure budget , Budget of a transportation company

Multiple Choice Single AnswerQuestion If a predetermined overhead rate is not employed an the volume of production is increased over the level planned, the cost per unit would be expected to :Correct Answer Decrease for fixed costs and remain unchanged for variable costsYour Answer Remain unchanged for fixed costs and increase for variable costs

Multiple Choice Single AnswerQuestion If the overhead expenditure to be absorbed is the foreman’s salary, the most appropriate basis for absorption would be :Correct Answer Direct labour hoursYour Answer Weight of material

Multiple Choice Single AnswerQuestion Which system provides an opportunity to companies to adopt the one best method of cost accounting system known to the industry ?Correct Answer Uniform costingYour Answer Job costing

Select The BlankQuestion 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 liabilitiesYour Answer Current liabilities

True/FalseQuestion The bin card and stores ledger, being independent records, comparison of these two records should be avoided.Correct Answer FalseYour Answer True

Multiple Choice Multiple AnswerQuestion Accounting is the art where transactions are …Correct Answer Summarized , Classified , RecordedYour Answer Summarized , Classified , Recorded

Multiple Choice Single AnswerQuestion Goods kept in the godown were destroyed

by fire on 18th June, 2004. The cost of such goods was Rs.18,950/-. The goods were not insured. Find the amount which should be debited to the profitability statement.

Correct Answer

Rs.18,950/-

Your Answer

Rs.18,950/-

Multiple Choice Single AnswerQuestion The cost behaviour patterns for a company

is as follows : Activity level: 500 units, the total cost is Rs.2,500/-; Activity level : 700 units, the total cost is Rs.3,100/-; Activity level: 900 units, the total cost is Rs.4,600/- If fixed cost remains unchanged throughout all activity levels, which of the following statements is true in relation to the cost behaviour?

Correct Answer

Variable cost per unit is increases above 700 units.

Your Answer

Total average cost per unit is constant for all activity levels.

True/FalseQuestion Bank reconciliation statement must be

prepared before the preparation of profit and loss account and balance sheet.

Correct Answer

True

Your Answer

False

True/FalseQuestion 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

False

Multiple Choice Multiple AnswerQuestion Items credited to Trading Account are :-Correct Answer

Sales , Goods lost by fire , Closing stock

Your Answer

Sales , Goods lost by fire , Closing stock

Select The BlankQuestion If the firm is operating with zero margin of

safety, decline of even a single unit in sales will result in ________.

Correct Answer

Loss

Your Answer

Net profit

Select The BlankQuestion Purchase day book for the month of April

was under cast by Rs.1000/- ________ account should be credited.

Correct Answer

Suspense

Your Answer

Purchase

Multiple Choice Single AnswerQuestion The profit volume ratio of X Ltd. is 50% and

the margin of safety to sales ratio is 40%. You are required to calculate the net profit if sale volume is Rs.100,000/-

Correct Answer

Rs.20,000/-

Your Answer

Rs.10,000/-

Select The BlankQuestion The process of attributing proportions of

items of costs amongst cost centres is called ________.

Correct Answer

Cost apportionment

Your Answer

Absorption of indirect costs

Multiple Choice Single AnswerQuestion Purchases included an amount of Rs.

25,450/- representing purchase of computer. The rate of depreciation is 10% for computers. Calculate the net effect of this transaction on the profitability statement.

Correct Answer

Net profit will increase by Rs.22,905/-

Your Answer

Net profit will decrease by Rs.22,905/-

Multiple Choice Multiple AnswerQuestion 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

Select The BlankQuestion If the bank pays off the credit card bill, as

per the standing instructions, the overdraft as per bank book will be ________ the overdraft as per pass book.

Correct Answer

Lesser than

Your Answer

Equal to

Multiple Choice Single AnswerQuestion What is the balance of the cash account

after considering the relevant transactions from the following set : 4th July, 2004-Sold goods to Deshmukh & Co. for Rs.2,500/-; 5th July, 2004-Received Rs.5,000/- for rent of June, 04; 7th July, 2004-Paid salaries by cheque for Rs.8,000/-; 15th July, 2004-Received commission, in cash, from XYZ Ltd., Rs.3,000/-; 21st July, 2004-Paid salaries by cash Rs.2,500/-; 22nd July, 2004-Deposited cash into Bank of India Rs.3,000/-; 25th July, 2004-Purchased

furniture from Shantilal for Rs.10,000/-. Shantilal has given a credit period of 45 days; 26th July, 2004-Paid cash for purchase of machine from Elpro Ltd. For Rs.30,000/-; 28th July, 2004-Paid ready cash for advertisement inserted in newspaper, Rs.200/-; 28th July, 2004-Withdrawn cash from Bank of India Rs.50,000/-.

Correct Answer

Rs.22,300 (debit)

Your Answer

Rs.33,200 (debit)

Multiple Choice Multiple AnswerQuestion 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 gross profit will not be affected

Multiple Choice Multiple AnswerQuestion Inventory holding cost comprises of :-Correct Answer

Cost of insurance , Rent of store house , Salary of store keeper

Your Answer

Cost of insurance , Cost of material

Select The BlankQuestion The handloom industry will have ________

fixed cost and high variable cost.Correct Answer

Low

Your Answer

Low

Select The BlankQuestion Collection charges of Rs.4/- on a cheque

received from Calcutta should be ________ in the bank book.

Correct Answer

Credited

Your Answer

Added

Multiple Choice Single AnswerQuestion A producer of tin boxes purchased 5,000 kg

of tin sheet for Rs.50,000/- for producing large size tin boxes. 1,600 large boxes, each weighing 2 kg were manufactured. In addition to the above 400 large boxes were damaged in the course of manufacture. Rectification of these boxes amounted to Rs.1,000/-. 700 kg of off cuts were used for producing small tin boxes. Market value of these off cuts is Rs.5/- per kg. 250 kgs of off cuts were sold @ Rs.3/- per kg. Other costs Rs.9,400/- were apportioned in the ratio of weight of output. Calculate cost of each

large sized tin box assuming that there are no opening and closing stocks.

Correct Answer

Rs.27.38

Your Answer

Rs.27.38

Match The FollowingQuestion Correct

AnswerYour Answer

Ledger Maintain all types of accounts

Maintain all types of accounts

Audit

Reviewing internal control system

Process of analyzing & interpretation

Accounting


Process of estimating profits

Journal Book of original entry

Book of original entry

Multiple Choice Multiple AnswerQuestion Piece rate systems are very useful in the

following circumstances:-Correct Answer

Units of output are measurable , Job is standardized , The flow of work is regular

Your Answer

Work delays are frequent , Job is standardized , The flow of work is regular

True/FalseQuestion Time-keeping facilitates the preparation of

payroll.Correct Answer

True

Your Answer

True

Multiple Choice Multiple AnswerQuestion 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


True/FalseQuestion Overhead absorption is an exercise by

which overhead is properly spread over production for the period.

Correct Answer

True

Your False

Answer

Select The BlankQuestion The final result disclosed by trading account

is the ________ profit earned by the organization.

Correct Answer

Gross

Your Answer

Gross

True/FalseQuestion The bin card and stores ledger, being

independent records, comparison of these two records should be avoided.

Correct Answer

False

Your Answer

True

Select The BlankQuestion Goods returned by Pawan worth Rs.1,000/-

is debited to Pawan’s Account. In order to rectify the mistake, ________ account should be debited.

Correct Answer

Suspense

Your Answer

Suspense

Select The BlankQuestion Financial Accounting considers those

transactions which can be expressed in terms of ________.

Correct Answer

Money

Your Answer

Money

Multiple Choice Single AnswerQuestion A producer has the option to procure a

particular material from two sources: Source A assures that the defectives will not exceed 2% of the supplied quantity. Source B does not give any assurance, but on the basis of past experience of supplies from this source, it is observed that defective percentage is 2.8%. The material is supplied in lots of 1,000 units by both sources. Source B supplies the lot at a price, which is lower by Rs.100/- as compared to Source A. The defective material units can be rectified at a cost of Rs.5/- per unit. Which of the two sources is more economical?

Correct Answer

Source B is more economical

Your Answer

Source B is more economical

Select The BlankQuestion Under Bedaux Point system the standard

time is divided into standard minutes and each standard minute identified as ________.

Correct Bedaux point or B

AnswerYour Answer

Bedaux point or B

Multiple Choice Single AnswerQuestion A company had incurred fixed expenses of

Rs.225,000/- with sales of Rs.750,000/- and earned a profit of Rs.150,000/- during the first month. In the second month, it suffered a loss of Rs.75,000/-. You are required to calculate the margin of safety for the first month.

Correct Answer

Rs.300,000/-

Your Answer

Rs.300,000/-

Multiple Choice Single AnswerQuestion An important feature of cost accounting is :Correct Answer

Focuses attention on the profitability of each product and service.

Your Answer

Focuses attention on the profitability of each product and service.

Select The BlankQuestion Generally all the liabilities will have

________ balance.Correct Answer

Credit

Your Answer

Credit

Multiple Choice Single AnswerQuestion Balance sheet is statement of :-Correct Answer

All Assets and Properties

Your Answer

All Assets and Properties


AnswerYour Answer

Daily Time sheets

Time spent by worker on job is recorded


Time Keeping Department

Recording of workers time


Time booking department

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 High time wages means necessarily high cost of production.

Correct Answer

False

Your Answer

False

True/FalseQuestion The effect of price reduction is always

reduction in the margin of safety and also reduction in the break even point.

Correct Answer

False

Your Answer

False

Multiple Choice Single AnswerQuestion Product costs under direct costing include:-Correct Answer

Prime cost and variable factory overheads

Your Answer

Prime cost, variable and fixed factory overheads

True/FalseQuestion While passing the journal entry, it is of

utmost importance to ensure that the total of amount debited is equal to the total of the amount credited.

Correct Answer

True

Your Answer

True

Multiple Choice Single AnswerQuestion Which document is a part of the perpetual

inventory system?Correct Answer

Bin card

Your Answer

Material requisition note

Multiple Choice Multiple AnswerQuestion Which of the formulae can be used to

calculate profit volume ratio :-Correct Answer

Change in contribution / Change in sales , 1 – (Change in variable cost / Change in sales) , (Fixed cost + Profit) / Sales

Your Answer

Change in contribution / Change in sales

Multiple Choice Multiple AnswerQuestion Features of Sunk cost are :-Correct Answer

Indicates historical cost , Not relevant in decision making process , Incurred in past

Your Answer

Indicates historical cost , Not relevant in decision making process , Incurred in past

True/FalseQuestion 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

True

Multiple Choice Multiple AnswerQuestion Select the appropriate rectification entries

for the following transactions (i) Rs.200/- received in respect of a bad debt previously written off was credited to Debtors account. (ii) Paid Rs.6,000/- to a Mr. Rao, clerk, as salary in lieu of notice. This amount was debited to his personal account (iii) Interest @ 5% p.a. on a loan of Rs.5,000/- was debited to general expenses account.

Correct Answer

Debtors A/c ……….Dr. Rs.200/- to bad debts recovered A/c Rs.200/- , Rs.6,000/- to Rao’s A/c Rs.6,000/- , Rs.250/- to General Expenses A/c Rs.250/-

Your Answer

Debtors A/c ……….Dr. Rs.200/- to bad debts recovered A/c Rs.200/- , Rs.250/- to General Expenses A/c Rs.250/-

Multiple Choice Multiple AnswerQuestion A materials requisition form normally

contains the following aspects:-Correct Answer

Quantity requisitioned , Per unit material cost , Job number

Your Answer

Quantity requisitioned , Per unit material cost , Job number

True/FalseQuestion Predetermined rate of absorption of

overheads helps in quick preparation of cost estimates and quoting prices.

Correct Answer

True

Your Answer

False

Multiple Choice Multiple AnswerQuestion Select the steps to be followed while

preparing bank reconciliation statement :-Correct Answer

Compare the transactions in the bank book and the pass book , Check the totals and the balancing of both the books , Confirm that the opening balances of both the books are tallying

Your Answer

Compare the transactions in the bank book and the pass book , Confirm that the opening balances of both the books are tallying , Confirm that the closing balances of both the books are tallying

Multiple Choice Multiple AnswerQuestion 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 , Promotes economy and efficiency

Multiple Choice Multiple AnswerQuestion 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 AnswerQuestion 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

Multiple Choice Multiple AnswerQuestion 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/FalseQuestion Under the accelerating premium system

incentive increases at a fast rate with the decrease in output.

Correct Answer

False

Your Answer

False

True/FalseQuestion 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 AnswerQuestion 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 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/FalseQuestion Predetermined rate of absorption of

overheads helps in quick preparation of cost estimates and quoting prices.

Correct Answer

True

Your Answer

True

Select The BlankQuestion 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 BlankQuestion A worker is paid a monthly salary of Rs.500/-

along with a bonus of 50 paise per unit completed, this type of labour cost may be classified as ________ cost.

Correct Answer

Semi-variable

Your Answer

Semi-variable

Select The BlankQuestion 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/FalseQuestion High time wages means necessarily high cost

of production.Correct Answer

False

Your Answer

False

Multiple Choice Multiple AnswerQuestion 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

Select The BlankQuestion 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 BlankQuestion Interest receivable is a________ for the

organization.Correct Answer

Current asset

Your Answer

Current asset

True/FalseQuestion Period cost is the cost assigned to the

products.Correct Answer

False

Your Answer

True

Multiple Choice Single AnswerQuestion 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.40,953.70

Multiple Choice Single AnswerQuestion 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/FalseQuestion New companies can adopt Uniform costing

system as a ready-made system.Correct Answer

True

Your Answer

True

Multiple Choice Multiple AnswerQuestion 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 AnswerQuestion 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.

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 AnswerQuestion 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 AnswerQuestion 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 AnswerQuestion 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 AnswerQuestion 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 BlankQuestion Payment by ________ method lowers the

cost of production through their impact on fixed costs.

Correct Answer

Results

Your Answer

Time

Multiple Choice Multiple AnswerQuestion 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 Answer

Direct Material

Your Answer

Direct Material

Multiple Choice Single AnswerQuestion 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 AnswerQuestion 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 BlankQuestion If the owner brings in personal calculator for

office use, ________ account should be credited.

Correct Answer

Capital

Your Answer

Cash

Multiple Choice Multiple AnswerQuestion From the following select the examples of

errors of commission :-Correct Answer


Your Answer


Select The BlankQuestion 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 AnswerQuestion 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/FalseQuestion Profitability statement is a period statement &

provides information about the results of operations.

Correct Answer

True

Your Answer

True

Select The BlankQuestion 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 AnswerQuestion 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 AnswerQuestion 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/-

Your Answer

Rs.150,000/-

True/FalseQuestion 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 AnswerQuestion The various areas in which uniform costing

can be adopted are :-Correct Valuation of inventories , Charging of

Answer depreciation , Apportionment of overheadsYour Answer

Valuation of inventories , Charging of depreciation , Apportionment of overheads

Multiple Choice Single AnswerQuestion 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/FalseQuestion The purpose of the profit and loss account is

to bring together information which relates to gross profit and the expenses for running the business.

Correct Answer

True

Your Answer

True


AnswerYour Answer

Ledger Maintain all types of accounts

Maintain all types of accounts

Audit Reviewing internal control system

Reviewing internal control system

Accounting



Journal Book of original entry

Book of original entry


AnswerYour Answer

Daily Time sheets



Time Keeping Department



Time booking department



Time Recording Clock

Ticket number & clock

Ticket number & clock

Method card allotted to worker

card allotted to worker

Multiple Choice Multiple AnswerQuestion Items credited to Profit & Loss Account are :-Correct Answer

Gross profit , Commission received , Interested received

Your Answer

Gross profit , Commission received , Interested received

True/FalseQuestion For a manufacturing company, dividend

received is a non-operating income.Correct Answer

True

Your Answer

False

Select The BlankQuestion A standard that is never altered, after being

established, is known as ________ standard.Correct Answer

Ideal

Your Answer

Basic

Multiple Choice Single AnswerQuestion 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 AnswerQuestion Cost Accounting ______________.Correct Answer

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

Your Answer

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

Multiple Choice Multiple AnswerQuestion Management Accounting

__________________.Correct Answer

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

Your Answer

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

Multiple Choice Multiple AnswerQuestion Accounting is the art of

______________,____________ and ____________ in a significant manner

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

Correct Answer

Summarizing , Classifying , Recording

Your Answer

Summarizing , Classifying , Recording

Multiple Choice Multiple AnswerQuestion 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


AnswerYour Answer

Personal A/C

Debit the receiver, Credit the giver

Debit the receiver, Credit the giver

Real A/C

Debit what comes in, Credit what goes out

Debit what comes in, Credit what goes out

Nominal A/C

Debit all the expenses, Credit all the incomes

Debit all the expenses, Credit all the incomes

Tangible assets

Building, Machinery

Building, Machinery

In tangible assets

Patents, Trade marks

Patents, Trade marks

True/FalseQuestion Credit note is an intimation send to

person dealing with the business that his account being debited for the purpose indicated therein.

Correct Answer

False

Your Answer

True

True/FalseQuestion Amount invested in purchasing Fixed

Asset is a revenue expenditure.Correct Answer

False

Your Answer

False

True/FalseQuestion As per double entry system o accounting

, total of all debits should be equal to all credits.

Correct Answer

True

Your Answer

True

Multiple Choice Multiple AnswerQuestion Convention of Consistency Materiality

________________Correct Answer

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

Your Answer

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

Multiple Choice Multiple AnswerQuestion Cash and—————are the two systems

of accounting.Correct Answer

Mercantile

Your Answer

Mercantile

Multiple Choice Single AnswerQuestion The opening balance of cash account is

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

Correct Answer

80,000

Your Answer

80,000

Multiple Choice Single AnswerQuestion Bank Reconciliation statement is

required in case ofCorrect Answer

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

Your Answer

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


AnswerYour Answer

Error of Principle

Trial Balance does not get affected

Wrong Posting

Error of Omission

The transaction is totally

The transaction is totally

omitted omittedError of commission

Wrong Posting

Wrong classification

Compensating Error

Wrong classification

Trial Balance does not get affected

Difference in trial balance

Transferred to suspense account

Transferred to suspense account

Multiple Choice Multiple AnswerQuestion Direct Cost includesCorrect Answer

Direct material , Direct labour , Direct expenses

Your Answer

Direct material , Direct labour , Direct expenses

Multiple Choice Single AnswerQuestion Labour cost indicates that labour cost

which cannot be identified with the individual cost centre and is incurred for those employees who are not engaged in the manufacturing process but only assist i

Correct Answer

Remuneration

Your Answer

Indirect

Multiple Choice Multiple AnswerQuestion The Prime Cost includes the aggregate

ofCorrect Answer

Direct Material Cost , Direct Labour Cost , Direct Expenses

Your Answer

Direct Material Cost , Direct Labour Cost , Direct Expenses

Multiple Choice Multiple AnswerQuestion From the following particulars what must

appear in purchase requisitionCorrect Answer

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

Your Answer

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

Multiple Choice Multiple AnswerQuestion Following points are taking into

consideration for evaluation of receiptsCorrect Answer

The Price , The trade discount is to be deducted , Other amounts such as sales

tax, excise duty, octroi dutyYour Answer

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

Multiple Choice Multiple AnswerQuestion While fixing the maximum level following

factors are consideredCorrect Answer

Maximum usage , Storage facilities , Availability of funds

Your Answer

Maximum usage , Rate of consumption

True/FalseQuestion Fixed cost tends to vary with time rather

than with level of activity.Correct Answer

True

Your Answer

True

True/FalseQuestion 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

Multiple Choice Single AnswerQuestion Find out the break even point and profit if

sales are Rs. 50,00,000 and P/V Ratio is 50% and margin of safety is 40%

Correct Answer

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

Your Answer

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

True/FalseQuestion For better control, variances of a period

may be compare with the previous period.

Correct Answer

True

Your Answer

True

True/FalseQuestion Expected standards are more realistic

and useful for cost control.Correct Answer

True

Your Answer

True

True/FalseQuestion The difference between standard cost

and actual cost is termed as Variance.Correct Answer

True

Your Answer

True

Multiple Choice Multiple AnswerQuestion For reporting of variance, following

propositions should be consideredCorrect Answer

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

Your Answer

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

Multiple Choice Multiple AnswerQuestion Basic three steps in Standard Costing

areCorrect Answer

Setting standards , Comparing actuals with standards , Measurement of variance

Your Answer

Setting standards , Comparing actuals with standards , Measurement of variance

Multiple Choice Single AnswerQuestion Find out Labour Efficiency Variance, if

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

Correct Answer

Rs.900/- ( Adverse )

Your Answer

Rs.900/- ( Adverse )

Multiple Choice Single AnswerQuestion Standard costs are the targets to be

attained by the actual performance.Correct Answer

Minimum

Your Answer

Minimum

Multiple Choice Single AnswerQuestion Standard Costs are used as tool forCorrect Answer

Cost Control

Your Answer

Cost Control

Select The BlankQuestion Accounting to the matching principles of

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

Correct Answer

cost

Your Answer

cost

Correct Answer

revenues

Your Answer

revenues

Select The BlankQuestion Along with financial accounting,

________ and ________ are the other streams of accounting

Correct Answer

Cost Accounting

Your Answer

Management Accounting

Correct Answer

Management Accounting

Your Answer

Cost Accounting

Select The BlankQuestion If the revenue expenditure is treated as

________ expenditure , it will not affect the agreement of ________ balance

Correct Answer

capital

Your Answer

capital

Correct Answer

trial

Your Answer

trial

Select The BlankQuestion 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 BlankQuestion After material is received from the

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

Correct Answer

ordered

Your Answer

ordered

Correct Answer

variation

Your Answer

variation

Select The BlankQuestion Under the daily ________ sheets

method, each worker is provided with a daily time sheet on which time ________ by him on various jobs is expected to be mentioned

Correct Answer

time

Your Answer

work

Correct Answer

spent

Your spent

Answer

Select The BlankQuestion 4.Under the differential time rate method

the wages are paid at Rs. 1.50 per hour between ________ efficiency and Rs.1.25 per hour between ________ efficiency

Correct Answer

101% to 125 %

Your Answer

90-100

Correct Answer

80% to90%

Your Answer

101% to 125 %

Select The BlankQuestion Under Gannt Task bonus system where

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

Correct Answer

below standard

Your Answer

below standard

Correct Answer

at standard

Your Answer

at standard

Select The BlankQuestion ________ and ________ are examples

of element wise classification ofoverhead costs

Correct Answer

Idirect material

Your Answer

Idirect material

Correct Answer

indirect labour

Your Answer

selling overheads

Select The BlankQuestion Fixed cost is the cost that tend to remain

________ irrespective of ________Correct Answer

constant

Your Answer

constant

Correct Answer

level of activity

Your Answer

level of activity

Select The BlankQuestion The process of Allocation &

apportionment can followed to decide the ________ of overheads to each budget center

Correct Answer

Allocation & apportionment

Your Distribution

AnswerCorrect Answer

Loading

Multiple Choice Multiple AnswerQuestion 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 AnswerQuestion Features of convention of

consistency are . . .Correct Answer

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

Your Answer

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

True/FalseQuestion The bin card and stores ledger,

being independent records, comparison of these two records should be avoided.

Correct Answer

False

Your Answer

False


Correct Answer

Your Answer

Dividend paid

Profit and loss appropriation account

Profit and loss account

Freight inwards

Manufacturing account

Manufacturing account

Sales Trading account

Capital account

Freight outwards

Profit and loss account

Trading account

Select The BlankQuestion Large angle of incidence indicates

________ amount of profits.Correct Answer

higher

Your Answer

same

True/FalseQuestion 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 AnswerQuestion 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 BlankQuestion ________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 AnswerQuestion Overhead capacity variance is the

outcome of:Correct Answer

Shortage of labour , Enforced idle time, e.g.power breakdowns , Customer demand being more or less than anticipated

Your Answer

Shortage of labour , Enforced idle time, e.g.power breakdowns , Customer demand being more or less than anticipated

True/FalseQuestion 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/FalseQuestion 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 AnswerQuestion 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/-

Select The BlankQuestion In calculation of total sales margin

variance, the ________cost of sales is deducted from the actual sales revenue.

Correct Answer

Standard

Your Answer

Actual


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 AnswerQuestion Marginal costing technique is

useful in taking decisions relating to which of the following courses of action?

Correct Answer

Decision to drop a product line , Decision to accept a special offer

at price lower than the normal selling price , Decision regarding temporary shut-downs

Your Answer

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

Multiple Choice Single AnswerQuestion Basic objective of Uniform Costing

is . . .Correct Answer

comparison

Your Answer

To control cost

Select The BlankQuestion Re-order level should be higher

than ________ but lesser than maximum stock level.

Correct Answer

Minimum level

Your Answer

Minimum level

True/FalseQuestion The variable costs are controllable

at the lower lever.Correct Answer

True

Your Answer

False

Select The BlankQuestion Economical use of labour,

materials and facilities can achieved with the help of ________.

Correct Answer

Budgetary control

Your Answer

Budgetary control

Select The BlankQuestion 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/FalseQuestion The purchase account should be

debited when an order is placed with the supplier of material.

Correct Answer

False

Your Answer

False

True/FalseQuestion 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 BlankQuestion Interest receivable is a________

for the organisation.Correct Answer

Current sset

Your Answer

Long term asset

Multiple Choice Single AnswerQuestion 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 AnswerQuestion 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 AnswerQuestion 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 AnswerQuestion The features of the Halsey Plan

are:Correct Answer

The benefit of time saved is divided equally between the employer and employee

Your Answer

The benefit of time saved is divided equally between the employer and employee

True/FalseQuestion 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 AnswerQuestion 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 BlankQuestion 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 AnswerQuestion Select the examples of functional

budgets:Correct Answer

Sales budget , Production budget , Research and development budget

Your Answer

Sales budget , Production budget , Research and development budget

Multiple Choice Single AnswerQuestion 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 BlankQuestion Furniture account will always have

a ________ balance.Correct Answer

Debit

Your Answer

Credit

Select The BlankQuestion If the ordering cost ________s,

then the economic order quantity will Increase.

Correct Answer

Increase

Your Answer

Increase

Multiple Choice Multiple AnswerQuestion Which of the following information

is included in the goods received note?

Correct Answer

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

Your Answer

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

Multiple Choice Multiple AnswerQuestion Select the non-monetary

incentivesCorrect Answer

Health and safety services , Canteen facility , Loans at reduced rate of interest

Your Answer

Health and safety services , Canteen facility

True/FalseQuestion A business is an activity carried

out with the intention of earning the profit.

Correct Answer

True

Your Answer

True

True/FalseQuestion Linking overhead to a cost unit is

known as overhead absorption.Correct Answer

True

Your Answer

True

Multiple Choice Multiple AnswerQuestion The operating profit as per cost

statement may differ from the profit as per Profit and Loss Account due to existence of

Correct Answer

Depreciation on plant and machinery , Interest on loans taken from other , Interest on loans granted to others

Your Answer

Depreciation on plant and machinery , Interest on loans taken from other

Multiple Choice Multiple AnswerQuestion 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 AnswerQuestion 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/FalseQuestion The best way to reduce labour

cost is to recruit cheap labour.Correct Answer

False

Your Answer

False

True/FalseQuestion Balance sheet indicates the

financial status of the business at given period.

Correct Answer

True

Your Answer

True

Multiple Choice Multiple AnswerQuestion 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 BlankQuestion 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 AnswerQuestion 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 AnswerQuestion 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/FalseQuestion A business is an activity carried

out with the intention of earning the profit.

Correct AnswerTrueYour Answer True

True/FalseQuestion Balance sheet indicates the

financial status of the business at given period.


True/FalseQuestion Accounting refers to the

process of analyzing & interpreting the information already recorded in the books of accounts.

Correct AnswerTrueYour Answer False

True/FalseQuestion Accounting is an art of

recording, classifying & summarizing in a significant manner.


True/FalseQuestion Financial accounting may deal

with the ascertainment of cost & calculation of profitability of the individual product.

Correct AnswerFalseYour Answer False

True/FalseQuestion The reports generated by

financial accounting are meant for the use by management for effective decisions.


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SCDL SEM 1