Management Accounting

LIST OF ATTEMPTED QUESTIONS AND ANSWERS - Accounts Question

A journal entry is passed for trade discount, but no entry is passed for cash discount. Correct Answer False

Question The objectives of Uniform costing system are as follows :

Correct Answer To fix a common selling price for the industry as a whole , To compare efficiency of each unit against industry's overall performance , To compile reliable cost data for inter-firm comparison of costs

Your Answer To fix a common selling price for the industry as a whole , To compare efficiency of each unit against industry's overall performance , To compile reliable cost data for inter-firm comparison of costs

Question The lowest profit volume ratio can be ________%.

Correct Answer 0 Question Under time rate system a worker is paid on the basis of production achieved by him in a given time.

Correct Answer False

Question The balance as per bank book as on 30th November, 2004 was Rs.6,500/- and the bank pass book balance as on the same date was Rs.8,015/-. Select the transactions representing the reasons for this difference.

Correct Answer Cheques deposited but not cleared Rs.1,200/- , Unpresented cheques Rs.2,625/- , Bank interest not entered in the bank book Rs.90/-

Your Answer Cheques deposited but not cleared Rs.1,200/- , Unpresented cheques Rs.2,625/- , Bank interest not entered in the bank book Rs.90/-

Question Accounts representing expenses will have ________balance. Correct Answer Debit

Question It is said that adoption of uniform costing creates customer confidence because . . .

Correct Answer Prices are reliable

Question 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 increase by Rs.22,905/-

Question Balance sheet indicates the financial status of the business at given period.

Correct Answer True Question Identify the steps involved in the process of decision making :

Correct Answer Determination of the problem , Ascertainment of alternative courses of action , Screening each alternative so as to select the best one

Your Answer Determination of the solution , Ascertainment of alternative courses of action , Screening each alternative so as to select the best one

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

Question Routing the purchase requisition through the purchase department entails unnecessary delay in receiving the required materials.


Question The annual variable production overheads of a factory are Rs.70,000/-. The production manager anticipates that in the next year, the production efficiency will decrease by 4%. Find out budgeted production overheads for the next year.

Correct Answer Rs.72,800/-

Question Identify the steps involved in selecting the optimum product mix, when the limiting factor is number of labour hours and sales demand.

Correct Answer For each product find the contribution per unit and per labour hour , Award ranks to each of the products based on contribution per limiting factor , Priority is given to fulfill the market demand of the product which gives maximum contribution per labour hour.

Your Answer For each product find the contribution per unit and per labour hour , Priority is given to fulfill the market demand of the product which gives maximum contribution per unit

Question Product costs under direct costing include:

Correct Answer Prime cost and variable factory overheads

Your Answer Prime cost only

Question The Balance Sheet method of cash budget ignores any excess or shortage of cash during the budget period.

Correct Answer True

Question Presentation of information to enable managerial decision making' is one of the objects of which of the following

Correct Answer Cost Accounting

Your Answer Management Accounting

Question Payment by ________ method lowers the cost of production through their impact on fixed costs.

Correct Answer Results

Question Identify the fixed expenses from the following.

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

Question The systematic process of identifying and reporting variance is known as ________.

Correct Answer Variance analysis

Your Answer Standard costing

Question Dividend received on amount invested in shares is an example of ________.

Correct Answer non-operating income

Question It is difficult to apply Uniform costing system for an industry which has labour intensive companies as well as capital intensive companies, because :

Correct Answer The cost structure is different

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

Correct Answer fertilizer Question Which of the following is likely to be a contributory factor to the incidence of excess expenditure on material

cost? Correct Answer The level of control of the used of material in the production cycle , The incorrect choice of purchase order

quantity , Failure to control the issue of materials from stores Your Answer An increase in the maximum material inventory level , The incorrect choice of purchase order quantity , Failure

to control the issue of materials from stores Question If the storage cost of inventory increases, then the economic order quantity also increases.


Question From the following, select current assets:

Correct Answer Sundry debtors , Stock , Pre paid expenses Your Answer Sundry debtors , Stock Question The following inforamtion relating to material X and its standard use for production has been extracted from the

standard cost card: Price of material X = Rs.5/- per litre; consumptiion of X = 10 litres per unti of product.Data relating to actual material purchases and production during the period: Purchases of X = 4,000 litres; price paid for X =Rs.6/- per unit; actual production = 500units. Calculate material usage variance.

Correct Answer Rs.5,000/- (Favourable) Your Answer Rs.1,000/- (Favourable)

Question Correct Answer Your Answer

Total cost - Fixed cost Variable cost Variable costContribution - Fixed cost Profit Profit

Total cost + Profit Sales Sales

Fixed cost + Variable cost Total cost Total cost

Question Over which of the following costs is the management likely to have least control?

Correct Answer Buildings insurance cost

Your Answer Wages cost

Question A grinding machine is an example of impersonal cost centre

Correct Answer True

Question The profit volume ratio of BB & Co,. dealing in precision instruments, is 50% and the margin of safety is 40%. You are required to work out the break-even point and the net profit if the sale volume is

Rs.50,00,000/- Correct Answer Break even point-Rs.30,00,000/-, net profit-Rs.10,00,000/-

Question Subsidiary books include: Correct Answer Cash Book , Purchase Register , Sales Register

Question An adjustment relating to outstanding expenses will ________ the net profit. Correct Answer Decrease Question The sum of indirect material cost, indirect labour cost and indirect expenses is termed as factory cost. Correct Answer False

Your Answer True Question Features of material usage variance are :

Correct Answer Measures the difference between the quantity of materials actually used and that should have been used. , Considers standard price X actual quantity , Considers standard price X standard quantity

Your Answer Measures the difference between the quantity of materials actually purchased and that should have been purchased.

Question The cost that indicates historical cost, which is incurred in past, is known as

Correct Answer Sunk cost Question Danger level for inventory of materials means the safety stock of inventory.



Abnormal overheads Normality wise classification Normality wise classification

Indirect Material Element wise classification Element wise classification

Administration overheads Function wise classification Function wise classification

Fixed overheads Variability wise classification Variability wise classification

Question Token or disc method is a related to the system of ________.

Correct Answer Time-keeping Question A business is an activity carried out with the intention of earning the profit.

Correct Answer True Question XYZ & Co. is a partnership with X and Z as partners. The capital of X is Rs.58,000/- and that of Z is

Rs.75,000/-. Interest on capital is charged @ 12% p.a. and interest on drawings is charged @ 5% p.a. The drawings of X totaled to Rs.15,000/- and that of Z totaled to Rs.12,000/-. The profit for the year after considering interest on capital and drawings is Rs.125,000/- and the profits are shared in the ratio of their capitals, i.e. 58 : 75. Find the balance of capital accounts after giving

Correct Answer X - Rs.118,721.28 and Z -Rs.153,888.72 Question Under the accelerating premium system incentive increases at a fast rate with the decrease in output. Correct Answer False

Question Keeping company's liquid position sufficiently sound to meet its daily obligation is the main object of preparing ________ budget.

Correct Answer Cash Question Marginal costing is also known as ________.

Correct Answer Variable costing Question An error of partial omission can be rectified by either debiting or crediting the ________ account, as the

case maybe. Correct Answer suspense

Question The production budget may be prepared in terms of :

Correct Answer Units produced , Production cost , Material cost, labour cost and overheads

Your Answer Units produced , Production cost , Material cost, labour cost and overheads

Question Lack of efficient control on various aspects related to raw-material increases the material cost component of the finished product.

Correct Answer True

LIST OF ATTEMPTED QUESTIONS AND ANSWERS - Accounts

Select The Blank Question

If the customer is not likely to pay the amount receivable from him, this amount should to be treated as ________. Correct Bad debts

Answer Question These are the preventive costs of labour turnover.

Correct Answer

Cost of maintaining good relations with the workers , Cost of medical services , Cost of welfare facilities

Question Judge the sentence in italics according to criteria given below : " It is difficult to adopt Uniform costing system when a product can be manufactured by employing more than one method because the cost of production will vary according to the method used."

Correct Answer

The assertion and the reason are both correct

Question ________is the summary of all the balances in all the accounts listed in ledger account of an organization at any given point of time.

Correct Answer

Trial Balance

Question Loss on account of goods lost due to earthquake should be debited to which account?

Correct Answer

Profit and loss account

Question It is very easy to measure the portion of increased sales which is due to expenditure incurred for advertisement of the product

Correct Answer

False

Question These are the replacement costs of labour turnover.

Correct Answer

Inefficiency of new workers , Cost of selection and placement , Increased spoilage and defectives

Question The perpetual inventory system enables management to ascertain stock without physical verification.

Correct Answer

True

Question The organization chart shows the following aspects :

Correct Answer

Functional responsibility of different functional managers , Delegation of authority to various managers , Inter-functional relationships of these managers

Question Commission payable to General Manager is 10 % of the net profits. If the net profit before charging commission is Rs.29,200/-, then what will be the amount of his net profit after commission?

Correct Answer

Rs.26,545.45

Your Answer Rs.29,200/-

Question Identify the variable expenses.

Correct Answer

Repairs of plant when it is undertaken by an outside agency , Carriage inward by hired carriers , Wages paid to casual workers

Question Accounting refers to the process of analyzing & interpreting the information already recorded in the books of accounts.

Correct Answer

True

Question Uniform Costing simplifies the work of wage boards of fixing minimum wages and fair wages.

Correct Answer

True

Question Annual subscription paid by bank to the Chamber of Commerce on 31/03/04, as per the standing instructions, and advise sent thereafter, may lead to:

Correct Answer

Balance as per bank book > Balance as per pass book

Question Interest receivable is a________ for the organisation. Correct Answer

Current sset

Your Answer Long term asset Question

All personal expenses of the owner should be debited to the organisation's profit and loss account. Correct Answer

False

Your Answer True Question For a manufacturing company, dividend received is a non-operating income.

Correct Answer

True

Question If the total amount on the ________ side of commission account is more than the total of its credit side, the commission account is said to have a Debit balance.

Correct Answer

Debit

Question Linking overhead to a cost unit is known as overhead absorption.

Correct Answer

True

Your Answer False

Question If Rs.15,000/- has been paid to Kargil Relief Fund as the owner's personal contribution, ________ account should be debited in the books of accounts of the business.

Correct Answer

Drawings

Your Answer Donation

Question The objects of cost accountancy are . .

Correct Answer

To ascertain cost and profitability , Cost Control , Presentation of Information

Question In the determination of factory overhad application rates, the numerator of the formula is the :

Correct Answer

Estimated factory overhead for the next period

Question A firm has purchased a plant to manufacture a new product, the cost data for which is given below : Estimated annual sales 24,000 units. Estimated costs : Materials Rs.4/- per unit; labour Re.0.60 per unit; overheads Rs.24,000/- per year; administrative expenses Rs.28,800/- per year and selling expenses are 15% of sales; Calculate the selling price per unit if profit per unit is Rs.1.02.

Correct Answer

Rs.9.20/-

Your Answer Rs.7.74/-

Question Accounts representing expenses will have ________balance.

Correct Answer

Debit

Your Answer Nil

Question The capacity utilised to installed capacity ratio is 80% for the company. The capacity utilisation ratio in respect of a machine for a particular month is 90%. The available working hours in a month are 200 hours. The break of idle time is as follows : Waiting for job - 5hours, breakdown - 4 hours and waiting for tools - 3 hours. Calculate the idle time cost when the hourly fixed cost of running the machine is Rs.8/-.

Correct Answer

Rs.96/-

Question With a 10% increase in the selling price and 10% decrease in the physical sales volume, the profit volume ratio will:

Correct Answer

Increase

Your Answer Decrease

Question In case of defective material being returned by the stores department to the vendor, such material should be valued at the________.

Correct Answer

Purchase price

Multiple Choice Single Answer Question 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/-

Question The combination in which different products are sold by a company is known as ________.

Correct Answer

Sales mix

Your Answer Production mix

Question The standard derpartmental overhead rate is Rs.15/- per hour. Based on the following details, work out the activity level at which the overhead rate has been pre-determined. Activity level : 600 hours; overhead allowance Rs.12,000/-. Activity level : 800 hours; overhead allowance Rs.14,400/-. Activity

Correct Answer

1,600 hours

Your Answer 1,200 hours

Question Income Tax Act, recognise only one method of depreciation namely ________.

Correct Answer

Written down value method

Question If you are required to enforce uniform costing system in your industry, how would you proceed ?

Correct Answer

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

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


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

Question All cash sales are recorded in the sales register.

Correct Answer

False

Your Answer True

Question The objectives of cost accounting are :

Correct Answer

Cost control , Ascertain ment of cost of each product , Assist in managerial decision-making

Question It is said that the income statement represents wealth increase /decrease for the organisation.

Correct Answer

True

Your Answer False

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

Correct Answer

Rs.45,000/-

Question A business is an activity carried out with the intention of earning the profit.

Correct Answer

True

Question Uniform Costing Methods may be advantageously applied to . . .

Correct Answer

Single organization having number of branches. , Number of companies in same industry , Similar Industries such as cotton, jute etc.



________ authorises the production department to issue requistion for materials.

Correct Answer

Bill of material

Question Which system involves adoption of same costing principles, practices and procedures by the individual firms of an industry ?

Correct Answer

Uniform costing

Question Which of the following aspects are mainly responsible for difficulty in application of Uniform costing system.

Correct Capital investment , Plant size , Location

Answer Question ________ Accounting is the process of analysis and interpretation of financial data collected with help of financial

accounting & cost accounting. Correct Answer

Management

Question Receipts and payments method of cash budget is useful for preparing long term estimates.

Correct Answer

False

Question Economical use of labour, materials and facilities can achieved with the help of ________.

Correct Answer

Budgetary control

Question 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 costing

Question The main advantages of profit sharing are :

Correct Answer

Employees try to increase productivity , Incentives are shared by all the employees , Augments emplyees' efficiency

Question A business is an activity carried out with the intention of earning the profit.:

Correct Answer

True

Question In the adjustment entry passed for closing stock, the ________ account should be credited.

Correct Answer

Trading

Your Answer

Question The difference between sales and cost of sales is termed as ________.

Correct Answer

Answer Net Profit

Question Price based on Uniform Costing may be taken to be reliable and representative of the whole industry.

Correct Answer

True

Question The integrated form of all functional budgets is known as

Correct Answer

Master budget

Question Accounting is an art of recording, classifying & summarizing in a significant manner.

Correct Answer

True

Question Malik started business by contributing cash Rs.50,000/- and his personal car worth Rs.25,000/-; thus his capital account should be credited with Rs.75,000/-.

Correct Answer

True

Your Answer Question The greater the volume of production, the greater is the unit cost of production.

Correct Answer

False

Your Answer True Question If the profit of Y Ltd. is Rs.10,000/- and its profit volume ratio is 10%, then its margin of safety will be Rs.________.

Correct Answer 100,000 Question The selection of the supplier may depend upon the following aspects:

Correct Answer

Geographical location of the supplier , Price quoted by the supplier , Goodwill of the supplier


Correct Answer

True

Your Answer False

Question A very wide scope of Management Accounting is the limitation by itself.

Correct Answer

True

Your Answer

Question Depreciation on assets is credited to the trading account.

Correct Answer

False

Question Uniform costing system can be successfully implemented in any industry only when :

Correct Answer

Information is freely supplied by all the units , Well organised sector is ready to share the technological improvements , Information furnished by the units is complete and correct

Question ________is the summary of all the balances in all the accounts listed in ledger account of an organization at any given point of time.

Correct Answer

Trial Balance

Your Answer

Question Accounts representing expenses will have ________balance.

Correct Answer

Debit

Your Answer Nil

Question The balance as per bank book as on 30th November, 2004 was Rs.6,500/- and the bank pass book balance as on the same date was Rs.8,015/-. Select the transactions representing the reasons for this difference.

Correct Answer

Cheques deposited but not cleared Rs.1,200/- , Unpresented cheques Rs.2,625/- , Bank interest not entered in the bank book Rs.90/-

Question Balance sheet indicates the expenditure & income from the business.

Correct Answer

False

Your Answer

Question Profitability statement indicates the amount of assets & liabilities.

Correct Answer

False

Multiple Choice Single Answer Question Goods returned to the suppliers from whom it was ________d is recorded in thePurchasereturn register.

Correct Answer

Purchase

Question Time rate system is suitable for workers of the maintenance department.

Correct Answer

True

Your Answer

Question Debit all the expenses and credit all the income is the rule of the Real Account.

Correct Answer False Your Answer

Question Low inventory ratio indicates :

Correct Answer

Inefficient utilisation of material


Correct Cost control , Ascertain ment of cost of each product , Assist in managerial decision-making

Answer Your Answer


Total cost - Fixed cost Variable cost Semi-variable cost

Contribution - Fixed cost Profit Profit

Total cost + Profit Sales Total cost

Fixed cost + Variable cost Total cost Contribution

Question The phrase 'By Balance c/d.' written on the credit side of the rent account, indicates credit balance for this account.

Correct Answer

False

Your Answer

Question The wages paid to a trainee who constructs wooden mould for concrete laying on a building contract should be defined as

Correct Answer

Direct labour cost

Question Collection charges of Rs.4/- on a cheque received from Calcutta should be ________ in the bank book.

Correct Answer

Credited

Your Answer

Question The advantages of Halsey plan are :

Correct Answer

Bonus goes on increasing with increase in time saved. , Provides more incentive to speed up production , Guaranteed time rate payment is made

Question Ram and Laxman are partners of Kush & Bros. As on 1st April, 2003 Ram's capital is Rs.50,000/- and Laxman's capital is Rs.80,000/-. If interest on capital is to be provided @ 10% p.a., what will be amount of capital of each of the partners as on 31st March, 2004, assuming there were no additions during this period? Also, state the treatment of this item in the Profit and loss account.

Correct Answer

Ram's capital Rs.55,000/- , Laxman's capital Rs.88,000/- , Interest on capital should be debited to the Profit and loss account


Correct Answer

True

Question Creche expenses may be appropriately approtioned on the basis of ________.

Correct Answer

Number of female workers

Question Overhead capacity variance is the outcome of:

Correct Answer

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

Question Basic objective of Uniform Costing is . . .

Correct Answer comparison

Question Maintenance Department is a service cost centre.

Correct Answer

True

Question If you are required to enforce uniform costing system in your industry, how would you proceed ?

Correct Answer


Question An advertisement contract was made with an artist which stated that the remuneration will be 12% of net sales. On an average the monthly sales were Rs.36,000/-, however the average rate of sales return was 5% of that month's sale. Find the expenditure on account of advertisement.

Correct Answer

Rs 49,248/-

Question For the month of November, a firm has budgeted sales of 20,000 units of X at a price of Rs.10/- and sale of 30,000 untis of Y at a price of Rs.6/- per unit. Actual sale during the month was 35,000 units of X at Rs.9/- per unit and 25,000 units of Y at Rs.8/- per unit. Calculate sales volume variance, sales mix variance and sales quantity variance.

Correct Answer

Sales volume variance -Rs.120,000/- (Favourable) , Sales mix variance -Rs.44,000/- (Favourable) , Sales Quantity variance-Rs.76,000/- (Favourable)

Question Which cost is defined as an estimated cost, prepared in advance of production or supply, estimated within a prescribed set of working conditions?

Correct Answer

Standard cost


Global Tender Any supplier from the global market can fill the tender

Any supplier from the global market can fill the tender

Contribution - Fixed cost Tender from only one supplier Tender from only one supplier

Limited Tender Tenders from reliable but few suppliers Tenders from reliable but few suppliers

Open Tender Any supplier from the local market can fill the tender

Any supplier from the local market can fill the tender



The components of the selling and distribution cost budget are :

Correct Answer

Distribution expenses , Publicity expenditure , Salary of sales-office workers

Question Interest receivable is a________ for the organisation.

Correct Answer

Current sset

Question The balance sheet has three columns, viz. assets, liabilities and ledger folio.

Correct Answer

False

Question Find the budget which is inadequate as a cost control technique :

Correct Answer

Fixed budget

Question Accounting is an art of recording, classifying & summarizing in a significant manner.

Correct Answer

True

Question Direct Cost includes

Correct Answer Direct material , Direct labour , Direct expenses

Question The perpetual inventory system enables management to ascertain stock without physical verification.

Correct Answer

True

Question Profitability statement indicates the amount of assets & liabilities.

Correct Answer

False

Question Fundamentally, changes in price and changes in sales volume give rise to sales variances.:

Correct Answer

True

Question Overheads chargeable to a product, using direct labour cost basis, may be calculated by multiplying percentage of direct labour cost and ________.

Correct Answer

Direct labour cost of the product

Your Answer

Question Piece rate system is suitable when quality of goods produced is of extreme importance.

Correct Answer

False


Correct Answer

Cost control , Ascertain ment of cost of each product , Assist in managerial decision-making

Question The greater the volume of production, the greater is the unit cost of production.

Correct Answer

False

Question Balance sheet indicates the expenditure & income from the business.

Correct Answer

False

Question Financial Accounting is Correct Answer

Designed to supply information to internal/ external users , Referred as 'Historical' form of accounting , Concerned with financial factors

Your Answer Question The closing stocks should ________ the cost of the goods which sent on approval basis.

Correct Answer

Be increased by

Your Answer Question Annual subscription paid by bank to the Chamber of Commerce on 31/03/04, as per the standing instructions, and

advise sent thereafter, may lead to:

Correct Answer

Balance as per bank book > Balance as per pass book

Question Goods purchased from A for Rs.2,020/- were passed through the sales book. The rectification of this error will result in ________

Correct Answer

decrease in gross profit by Rs.2,020/-

Question A ________ can be defined as a part of the orgainsation for which separate budget can be prepared and implemented..

Correct Answer

Budget centre

Your Answer

Question The process of accounting split into three steams i.e. financial, cost, management accounting.

Correct Answer

True

Your Answer

Question Which of the following aspects are mainly responsible for difficulty in application of Uniform costing system.

Correct Answer

Capital investment , Plant size , Location

Question Financial statements are basically in two forms i.e. profitability statement and balance sheet.

Correct Answer True


Correct Answer

True

Your Answer

Question Financial Accounting discloses the financial performance & financial statements of the business as a whole.

Correct Answer

True

Your Answer

Question A cost incurred in the past and irrelevant for decision making is known as :

Correct Answer

Sunk cost

Question Which of the following information is included in the goods received note?

Correct Answer

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

Your Answer

Question Calculate inventory turnover ratio from the following : Maximum stock -7,000 units; minimum stock - 3,000 units and quantity of material issued during the year - 150,000 units.

Correct Answer

30

Multiple Choice Single Answer Question These are the methods of measuring labour turnover.

Correct Answer

Replacement Method , Separation Method , Flux Method

Question As a part of the data presented in support of a proposal to icnrease the production of clock radios, the sales manager of Wittman Electronics reproted the total additional cost required for the proposed increased production level. The increase in total cost is known as :

Correct Answer

Incremental cost

Your Answer

Question A worker is paid a monthly salary of Rs.500/- alongwith a bonus of 50 paise per unit completed, this type of labour cost may be classified as ________ cost.

Correct Answer

Semi-variable

Your Answer

Question It is said that adoption of uniform costing creates customer confidence because . . .

Correct Answer

Prices are reliable

Question Management accounting is concerned with the following activities :

Correct Answer

Decision making , Safeguarding assets , Planning and controlling activities

Your Answer


Audit Reviewing internal control system eviewing internal control system

Accounting Process of analyzing & interpretation Process of estimating profits

Journal Book of original entry Book of original entry

LedgerMaintain all types of accounts Maintain all types of accounts

Question The ________ is responsible for material losses while in storage.

Correct Answer

Store-keeper

Question Identify the variable expenses.

Correct Answer

Repairs of plant when it is undertaken by an outside agency , Carriage inward by hired carriers , Wages paid to casual workers

Question The variable costs are controllable at the lower lever.

Correct Answer

True

Question Profit and loss account indicates the profit earned as on a particular date.

Correct False

Answer

Question The cost of idle time incurred by employees that is considered normal for the production process should be charged to :

Correct Answer

Factory overheads

Question A business is an activity carried out with the intention of earning the profit.

Correct Answer

True

Question Following are the examples of service cost centre

Correct Answer

Stores department , Transport department , Accounting department

Question Presentation of information to enable managerial decision making' is one of the objects of which of the following

Correct Answer

Cost Accounting


Correct Answer

True

Question Overhead absorption rate will be different at different capacity levels.

Correct Answer

True

Question Ram is the owner of Dashrath & Sons. He is entitled to annual salary of Rs.8,000/-. Find its impact on profit of the enterprise.

Correct Answer

The net profit will decrease by Rs.8,000/-

Question The combination in which different products are sold by a company is known as ________.

Correct Answer

Sales mix

Question Indirect Cost is termed as ________.

Correct Answer

Overhead


Error of Principle Trial Balance does not get affected Wrong classification

Error of Omission Transaction is totally omitted Transaction is totally omitted

Error of commission Wrong Posting Wrong Posting

Compensating Error Wrong classification Trial Balance does not get affected

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Match The FollowingQuestion Correct Answer Your Answer

Profit and loss account Commission received Contingent liabilities

Manufacturing account Work in Progress Commission received

Balance Sheet Land & Building Dividend paid

Trading account Closing stock of finished goods Land & Building

Select The Blank Question Average stock = ________ + (Order size / 2).

Correct Answer Safety stock

Your Answer Maximum stock

Multiple Choice Single Answer Question A cost incurred in the past and irrelevant for decision making is known as :-

Correct Answer Sunk cost

Your Answer Controllable cost

Select The Blank Question One of the limitations of the budgetary control is that it ________.

Correct Answer Is an expensive affair

Your Answer Needs to be reviewed

Multiple Choice Multiple Answer Question Material Yield variance -Rs.1,000/- (Adverse); material mix variance -Rs.250/- (Favourable) and material

price variance - Rs.350/- (Favourable). Find material cost variance and material usage variance. Correct Answer Material cost variance -Rs.400/- (Adverse) , Material usage variance -Rs.750/- , Material usage variance

is adverse Your Answer Material cost variance -Rs.400/- (Adverse) , Material usage variance -Rs.750/- , Material usage variance

is favourable , Material usage variance is adverse Multiple Choice Single Answer Question A group of 10 men and 20 women workers were expected to produce 400 units of a product in an 8 hour

day. The standard hourly rate was fixed at Rs.25/- and Rs.15/-, respectively. Actually, a group of 15 men and 10 women workers was deployed and paid for 8 hours a day at an hourly rate of Rs.22/- and Rs.18/-, respectively. Two hours were wasted for the entire group due to power failure and only 300 units were produced. Calculate labour rate variance.

Correct Answer Rs.120/- (Favourable)

Your Answer Rs.120/- (Favourable)

True/False Question Indirect material cost is an integral part of finished goods.


Your Answer True

Multiple Choice Multiple Answer Question The net profit before certain adjustments was Rs.95,040/-. After giving due effects to the adjustments, the

revised net profit (after considering the adjustments) is Rs.78,560/-. Select the adjustments which might have brought this change.

Correct Answer Accrued commission income of Rs.32,960/- was not entered in the books , Rent for the month of March was payable and yet to be recorded Rs.19,280/- , Repairs expenditure to the extent of Rs.30,160/- was wrongly transferred to Machinery account

Your Answer Accrued commission income of Rs.32,960/- was not entered in the books , Rent for the month of March was payable and yet to be recorded Rs.19,280/- , Rent for the month of March was receivable and yet to be recorded Rs.19,280/- , Repairs expenditure to the extent of Rs.30,160/- was wrongly transferred to Machinery account

True/False Question A fixed budget is useful only when the actual level of activity corresponds to the budgeted level of activity.

Correct Answer True

Your Answer True

Multiple Choice Multiple Answer Question The balance as per bank book as on 30th June, 2004 is Rs.10,298/- while the balance as per pass book

as on the same date is Rs.10,123.60. Select the transactions representing the reasons for this difference :-

Correct Answer Interest credited by bank, not entered in the bank book, Rs.125.60 , Cheques dishonoured not entered in the bank book Rs.200/- , Debit side of the cash book is overcast by Rs.100/-

Your Answer Interest credited by bank, not entered in the bank book, Rs.125.60 , Cheques dishonoured not entered in

the bank book Rs.200/- , Debit side of the cash book is overcast by Rs.100/- , Debit side of the cash book is undercast by Rs.100.60

Multiple Choice Single Answer Question Ram is the owner of Dashrath & Sons. He is entitled to annual salary of Rs.8,000/-. Find its impact on

profit of the enterprise. Correct Answer The net profit will decrease by Rs.8,000/-

Your Answer The gross profit will decrease by Rs.8,300/-

True/False Question While preparing bank reconciliation statement for the month of September 2004, one should consider the

balance as per bank book as on 1st September, 2004 and the balance as per pass book as on 30th September, 2004.


Your Answer True

Select The Blank Question If Rs.15,000/- has been paid to Kargil Relief Fund as the owner's personal contribution, ________

account should be debited in the books of accounts of the business. Correct Answer Drawings

Your Answer Cash

Multiple Choice Multiple Answer Question If the sales forecast is less than the past sales but the top management insists upon a certain amount of

additional profits, then following steps can be taken to achieve the target profit :- Correct Answer Increase the selling price , Reduce cost of sales , Increase the selling efforts

Your Answer Increase the sales volume , Reduce cost of sales , Increase the selling efforts , Increase the selling price

Select The Blank Question If overhead absorbed i.e. overheads charged to units during the period is more than the overhead

incurred, it is said that the overheads are ________. Correct Answer Over-absorbed

Your Answer Equal to the actual

Select The Blank Question The ________ is responsible for material losses while in storage.

Correct Answer Store-keeper

Your Answer Store-keeper

Select The Blank Question Expenditure on repairs may be ideally allocated on the basis of ________.

Correct Answer Cost of repairs spread over the working life of the machine

Your Answer Cost of machine less scrap value divided by life of the machine.

True/False Question The sum of indirect material cost, indirect labour cost and indirect expenses is termed as Overheads.

Correct Answer True

Your Answer True

Multiple Choice Single Answer Question Factory cost is Rs.13,10,800/-. The administrative overheads are salaries Rs.40,000/-, rent and rates

Rs.6,400/-, traveling expenses Rs.12,400/-, Depreciation Rs,2,400/-, Directors fees Rs.24,000/-, General Charges Rs.24,800/-, Manager's salary Rs.38,400/-. What will be the office cost?

Correct Answer Rs.14,59,200/-

Your Answer Rs.11,72,200/-

Multiple Choice Single Answer Question The main object of establishing the maximum stock level for material is :-

Correct Answer To ensure that inventory never exceeds this limit

Your Answer To ensure that inventory never exceeds this limit

Multiple Choice Multiple Answer Question The management of Horngreen Ltd. is deciding whether to continue working at loss or to temporarily shut

down the factory. State the qualitative aspects that must be considered before arriving at a decision :- Correct Answer Loss of trained personnel , Loss of regular customers , Expenditure required to restart the factory

Your Answer Loss of regular customers

Multiple Choice Multiple Answer Question Select the accounts to be disclosed on the assets side of the Balance sheet :-

Correct Answer Furniture , Loan to Bank of U.S.A. , Land & building

Your Answer Furniture , Loan to Bank of U.S.A. , Loan from Bank of America , Land & building

True/False Question The Balance Sheet method of cash budget ignores any excess or shortage of cash during the budget

period. Correct Answer True

Your Answer True

Multiple Choice Multiple Answer Question Labour efficiency variance Rs.1,000/- (favourable); labour mix variance Rs.260/- (adverse) and labour

rate variance Rs.300/- (adverse). Compute labour cost variance and labour yield variance. Correct Answer Labour cost variance -Rs.700/- (Favourable) , Labour yield variance -Rs.1,260/- , Labour yield variance is

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

adverse , Labour yield variance is favourable Multiple Choice Multiple Answer Question Which of the following aspects are mainly responsible for difficulty in application of Uniform costing

system? Correct Answer Capital investment , Plant size , Location

Your Answer Capital investment , Plant size , Loans taken

Multiple Choice Single Answer Question The following data is available for a company for the month of April, 2004 : Territory I : selling expenses

Rs.7,600/-; distribution cost Rs.4,000/-; number of units sold -16,000; sales Rs.76,000/-. Territory II : selling expenses Rs.4,200/-; distribution cost Rs.1,800/-; number of units sold -6,000; sales Rs.28,000/-. Territory III : selling expenses Rs.6,240/-; distribution cost Rs.2,000/-; number of units sold -10,000; sales Rs.52,000/-. The company adopts sales basis and quantity basis for application of selling and distribution costs respectively. Compute the amount of selling and distribution costs chargeable to a consignment of 4,000 units of a product sold in each territory at Rs.2.50 per unit.

Correct Answer Territory I -Rs.2,000/-; Territory II -Rs.2,700/- and Territory III -Rs.2,000/-

Your Answer Territory I -Rs.2,700/-; Territory II -Rs.2,700/- and Territory III -Rs.2,000/-

True/False Question Debit all the expenses and credit all the income is the rule of the Real Account.


Your Answer True

Select The Blank Question The assets which are supposed to be used by the organization to do business, are known as

________assets.

Correct Answer Fixed

Your Answer Fixed

Multiple Choice Single Answer Question A worker works 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.



True/False Question Trading account is used to analyze how successfully and how efficiently the firm runs, particularly with

regards to the maintenance of the gross profit margin. Correct Answer True

Your Answer True

Multiple Choice Single Answer Question Re-order quantity may be measured as :-

Correct Answer Maximum stock level - re-order level + (minimum usage X minimum re-order period)

Your Answer Re-order level + minimum stock - (minimum usage X minimum re-order period)

Select The Blank Question A written order sent to inform the purchasing department of a need for materials is called a ________.

Correct Answer Purchase requisition note

Your Answer Purchase requisition note

Multiple Choice Single Answer Question Lata and Tara are partners of Latara & Co. As on 31st March, 2004 Lata's annual drawings were as

Rs.25,000/- and Tara's annual drawings amounted to Rs.18,000/-. If interest on drawings is charged @ 15% p.a., what is the amount of income for Latara & Co.?



Multiple Choice Multiple Answer Question Labour efficiency variance arises due to:-

Correct Answer Inefficient supervisor , Poor working conditions , Use of sub-standard quality of material

Your Answer Inefficient supervisor , Poor working conditions , Use of sub-standard quality of material


Total cost - Fixed cost Variable cost Variable cost

Contribution - Fixed cost Profit Semi-variable cost

Total cost + Profit Sales Total cost

Fixed cost + Variable cost Total cost Contribution

Multiple Choice Single Answer Question 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)

True/False Question Absorption costing is more suitable for decision making than marginal costing


Your Answer True

Select The Blank Question Economical use of labour, materials and facilities can achieved with the help of ________.

Correct Answer Budgetary control

Your Answer Forecast

Multiple Choice Multiple Answer Question Causes for adverse material price variance are:-

Correct Answer Uneconomical size of purchase orders , Failure to avail discounts allowed by suppliers. , Excessive freight charges

Your Answer Uneconomical size of purchase orders , Failure to avail discounts allowed by suppliers. , Economical size of purchase orders

Multiple Choice Multiple Answer Question The objects of cost accountancy are :-

Correct Answer To ascertain cost and profitability , Cost Control , Presentation of Information

Your Answer To ascertain cost and profitability , Cost Control , Presentation of Information

True/False Question Depreciation under Reducing Balance Method is calculated as (Number of units * Rate of depreciation

per unit). Correct Answer False

Your Answer True

Multiple Choice Multiple Answer Question Following are the examples of service cost centre :-

Correct Answer Stores department , Transport department , Accounting department

Your Answer Stores department , Transport department , Accounting department

Select The Blank Question Margin of safety indicates ________ of operations.

Correct Answer Profitability

Your Answer Flexibility

Select The Blank Question The short run financial plan which acts as a guide to achieve the predefined targets is known as

________. Correct Answer Budget

Your Answer Budgeted Profit & loss account

Multiple Choice Single Answer Question In considering a special order situation that will enable a company to make use of presently idle capacity,

which of the following costs would be irrelevant? Correct Answer Depreciation

Your Answer Labour

Multiple Choice Single Answer Question Which section of the Companies Act, 1956, states that cost audit is compulsory for certain industries?

Correct Answer 209(1) (d)

Your Answer 209(1) (c)

True/False Question The process of recording attendance time of the workers is known as time booking.


Your Answer True


Multiple Choice Single Answer Question Panna Ltd. temporarily has excess production capacity. The idle plant faculties can be used to

manufacture a low-margin item. The low-margin item should be produced if it can be sold for more than its:-

Correct Answer

Variable costs

Your Answer Fixed costs

True/False Question Linking overhead to a cost unit is known as overhead absorption.

Correct Answer

True

Your Answer True

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

Correct Answer

True

Your Answer True

True/False Question Treating capital receipt as revenue income is an example of errors of commission.

Correct Answer

False

Your Answer False

Multiple Choice Multiple Answer Question Select the cases where convention of conservation is applied :-

Correct Answer

Closing stock is valued at cost or market price whichever is lower , Providing for discount on debtors , Amortization of goodwill (goodwill being written off to Profit and Loss Account)

Your Answer Closing stock is valued at cost or market price whichever is lower , Amortization of goodwill (goodwill being written off to Profit and Loss Account) , Providing for discount on creditors


Normal Standards Considers past performance Considers past performance

Budgetary Control Points out efficiency/inefficiency Points out efficiency/inefficiency

Standard Costing Further probe and investigation Further probe and investigation

Current Standards Established for a shorter period Established for a shorter period

Multiple Choice Multiple Answer Question The characteristics of a good wage system are :-

Correct Answer

Flexible , Economical to use , Easy to understand

Your Answer Flexible , Economical to use , Easy to understand

Multiple Choice Single Answer Question Select the information to be considered before installing a costing system :-

Correct Answer

Labour intensity of the product

Your Answer Capital of the company

Select The Blank Question In case of defective material being returned by the stores department to the vendor, such material

should be valued at the________. Correct Answer

Purchase price

Your Answer Purchase price

Multiple Choice Multiple Answer Question Select the advantages of standard cost system :-

Correct Answer

Provides reliable basis for budgeting , Facilitates delegation of authority , Promotes economy and efficiency

Your Answer Provides reliable basis for budgeting , Facilitates delegation of authority , Promotes economy and efficiency

True/False Question Balance sheet indicates the expenditure & income from the business.

Correct Answer

False

Your Answer True

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

Correct Answer

True

Your Answer True

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

Correct Answer

True

Your Answer True

Select The Blank Question The process of attributing proportions of items of costs amongst cost centres is called ________.

Correct Answer

Cost apportionment

Your Answer Cost apportionment

True/False Question Financial Accounting discloses the financial performance & financial statements of the business

as a whole. Correct Answer

True

Your Answer True

Multiple Choice Multiple Answer Question Features of Taylor's differential piece rate system are as follows :-

Correct Answer

Minimal clerical work is involved in calculating the wages , Helps in building up an efficient labour force , Strong incentive to efficient and ambitious workers.

Your Answer Helps in building up an efficient labour force , Strong incentive to efficient and ambitious workers.

Select The Blank Question The expenses relating to maintenance and creation of demand for the product should be included

in the ________budget. Correct Answer

Selling expenses

Your Answer Financial

Multiple Choice Single Answer Question Insurance premium of Rs.18,000/- was paid on 15th January, 2004. The policy period is one year

from the date of payment of insurance. On 31st March, 2004 what amount should be debited to the Profit and Loss account as expenditure on account of insurance premium?

Correct Answer

Rs.3,750/-


True/False Question Uniform costing may lead to monopolistic conditions within the industry, prices may be raised and

customers may suffer. Correct Answer

True

Your Answer False

Multiple Choice Single Answer Question Which document facilitates estimating material cost of a particular job, before completion of that

job? Correct Answer

Bill of material

Your Answer Bill of material

Select The Blank Question In practical circumstances, the ________ are referred to as application of funds.

Correct Answer

Assets

Your Answer Liabilities

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

Correct Answer

False

Your Answer True

Multiple Choice Multiple Answer Question The disadvantages of supplementary overhead rates are:-

Correct Answer

It can be determined only after the end of the accounting period , Defeats the basic concept of normal cost , Involves lot of clerical activity

Your Answer It can be determined only after the end of the accounting period , Defeats the basic concept of normal cost , Involves lot of clerical activity

Multiple Choice Single Answer Question 29th July, 2004-Paid Rs.650/- to AMC Ltd. for maintenance of machine; 30th July, 2004-Paid

interest @ 6% p.a. to State Bank of India on loan of Rs.5,000/-; 1st Aug., 2004-Invested in shares of Reliance Noncom Ltd. and paid for the same in cash Rs.20,000/-; 1st Aug., 2004-Placed an order with M/s.Shah & Co. for goods to be received a month later for Rs.1,500/-; 4th Aug., 2004-Loan of Rs.5,000/- has been given to Mr. Laxman; 7th Aug., 2004-Paid in cash the following expenses :- Printing and stationery expenses Rs.500, telephone bill Rs.700/- and freight on goods purchased Rs.300/-; 8th\Aug., 2004-Paid to Desai & Sons by cheque Rs.335/-; 10th Aug., 2004-Received Rs.475/- from M/s. Manohar & Co. in full settlement of Rs.500/-. Calculate the amount by which the trial balance tallies.

Correct Answer

Rs.27,810/-


Select The Blank Question Furniture account will always have a ________ balance.

Correct Answer

Debit

Your Answer Credit

Select The Blank Question Average stock = ________ + (Order size / 2).

Correct Answer

Safety stock

Your Answer Maximum stock

Multiple Choice Multiple Answer Question Uniform costing system can be successfully implemented in any industry only when :-

Correct Answer

Information is freely supplied by all the units , Well organized sector is ready to share the technological improvements , Information furnished by the units is complete and correct

Your Answer Information is freely supplied by all the units , Well organized sector is ready to share the technological improvements , Information furnished by the units is complete and correct

Select The Blank Question Carriage charges paid for a new machine purchased if debited to carriage account would affect

the ________. Correct Answer

Machinery A/c and carriage A/c

Your Answer Fixed Asset A/c and Machinery A/c

Multiple Choice Multiple Answer Question Merits of break even point analysis are as follows:-

Correct Answer

Useful diagnostic tool. , Used for analyzing the risk implication of alternative actions. , Used to graphically represent complicated data.

Your Answer Useful diagnostic tool. , Used for analyzing the risk implication of alternative actions. , Used to graphically represent complicated data.

Multiple Choice Multiple Answer Question The data for two materials P and Q is given below : Material P : opening stock Rs.80,000/-;

closing stock Rs.40,000/- and purchases Rs.500,000/-. Material Q : opening stock Rs.170,000/-; closing stock Rs.60,000/- and purchases Rs.750,000/-. Identify which of the given statements relevant to the data given are correct?

Correct Answer

Inventory turnover period for material P is 40.5 days , Material P is faster moving material , Consumption of material Q is Rs.860,000/-

Your Answer Material Q is faster moving material , Consumption of material Q is Rs.860,000/-

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

Correct Answer

Prime cost and variable factory overheads

Your Answer Prime cost and fixed factory overheads

Multiple Choice Single Answer Question Tom company has sales of Rs.200,000/- with variable expenses of Rs.150,000/-, fixed expenses

of Rs.60,000/-, and an operating loss of Rs.10,000/-. By how much would Tom have to increase its sales in order to achieve an operating income of 10% of sales?

Correct Answer

Rs.200,000/-


Multiple Choice Single Answer Question Loan @ 12% p.a. of Rs.50,000/- was taken on 1st March, 2004. Find the interest expenditure on

31st March, 2004. Correct Answer

Rs.500/-

Your Answer Rs.600/-

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

Correct Answer

True

Your Answer True

Select The Blank Question In India the gas industry and electricity industry, and ________ industry are examples of

industries using the uniform costing system. Correct Answer

Fertilizer

Your Answer Fertilizer

Select The Blank Question If the customer is not likely to pay the amount receivable from him, this amount should to be

treated as ________. Correct Answer

Bad debts

Your Answer Bad debts

True/False Question Suspense account is closed automatically after rectification of all the errors.

Correct Answer

True

Your Answer True

Select The Blank Question Since the pass book and the bank book record the ________ transactions, the bank balance as

per these books should be equal. Correct Answer

Same

Your Answer Same

True/False Question Marginal costing is a technique of cost control.

Correct Answer

True

Your Answer True

True/False Question Financial, cost and management accounting are the three steams of accounting.

Correct Answer

True

Your Answer True

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

Correct Answer

True

Your Answer True

Multiple Choice Multiple Answer Question If you are required to enforce uniform costing system in your industry, how would you proceed?

Correct Answer


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

True/False Question Accounting refers to the process of analyzing & interpreting the information already recorded in

the books of accounts. Correct Answer

True

Your Answer True


True/False Question All costs are controllable.

Correct Answer

False

Your Answer False

Multiple Choice Multiple Answer Question From the following select the examples of errors of commission :-

Correct Answer

Sales recorded in the sales register as Rs.2,020/- instead of Rs.2,200/- , Received cash from Sham, credited to Ram's account , Paid transport charges, credited to transport charges account

Your Answer Received cash from Sham, credited to Ram's account , Paid transport charges, credited to transport charges account , Sales recorded in the sales register as Rs.2,020/- instead of Rs.2,200/-

True/False Question Financial accounting may deal with the ascertainment of cost & calculation of profitability of the

individual product. Correct Answer

False

Your Answer False

True/False Question It is said that marginal costs are used primarily in guiding decisions that are yet to be made.

Correct Answer

True

Your Answer True


Ledger Maintain all types of accounts List of all types of accounts

Audit Reviewing internal control system Reviewing internal control system

Accounting Process of analyzing & interpretation Process of analyzing & interpretation


Multiple Choice Single Answer Question The composition of selling costs is given below : salaries 4% of sales, traveling expenses 1.5% of

sales, and sales office 2% of sales. Find the amount of selling overheads if the sales are Rs.120,000/-.

Correct Answer

Rs.9,000/-


Select The Blank Question The ________ books are preferred when the volume of transactions is very large.

Correct Answer

Subsidiary

Your Answer Journal

Select The Blank Question The method of remuneration under which the workers are given in share in profits of the

organization, at a specified percentage, along-with their wages, is known as ________ method. Correct Answer

Profit-sharing

Your Answer Profit-sharing

Multiple Choice Multiple Answer Question Select the non-monetary incentives :-

Correct Answer

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

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

Select The Blank Question A written order sent to inform the purchasing department of a need for materials is called a

________. Correct Answer

Purchase requisition note

Your Answer Purchase requisition note

Multiple Choice Single Answer Question In considering a special order situation that will enable a company to make use of presently idle

capacity, which of the following costs would be irrelevant? Correct Answer

Depreciation

Your Answer Depreciation

True/False Question Cost Accounting is concerned with calculation of the profitability and state of affairs of the

organization as a whole. Correct Answer

False

Your Answer False

True/False Question 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 False


Advantageously applicable in similar industries

Scope of uniform costing Process of uniform costing

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

Avoids cut throat competition Advantage of uniform costing Disadvantage of uniform costing

Treatment given to research and development costs

Fields covered by uniform costing Fields covered by uniform costing

True/False Question Financial Accounting primarily protects the interests of the outsiders dealing with organization in

various capacities. Correct Answer

True

Your Answer True

Multiple Choice Multiple Answer Question Which of the following information is included in the goods received note?

Correct Answer

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

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

Select The Blank Question Under the ________ of wage payment the worker is paid on the basis of production achieved

irrespective of the time taken for its performance. Correct Answer

Straight piece rate system

Your Answer Straight piece rate system

Select The Blank Question Factory light, telephone expenses are examples of ________ expenses.

Correct Answer

Indirect

Your Answer Indirect

Select The Blank Question Purchase day book for the month of April was under cast by Rs.1000/- ________ account should

be credited. Correct Answer

Suspense

Your Answer Purchase

True/False Question Revenue expenditure indicates the amount of funds spent during a certain period with the

intention to receive the returns in future. Correct Answer

False

Your Answer True

True/False Question Management Accounting aims at enabling the management to take the decisions about the

future. It may consider future data as well as non-financial factors. Correct Answer

True

Your Answer False

True/False Question Indirect material indicates that material which can be identified with the individual cost centre.

Correct Answer

False

Your Answer True

Multiple Choice Multiple Answer Question These are the replacement costs of labour turnover :-

Correct Answer

Inefficiency of new workers , Cost of selection and placement , Increased spoilage and defectives

Your Answer Cost of personnel administration , Inefficiency of new workers , Cost of selection and placement

True/False Question Uniform costing system is a pre-requisite to an inter-firm comparison of firms belonging to the

different industries. Correct Answer

False

Your Answer False

Multiple Choice Multiple Answer Question A materials requisition form normally contains the following aspects:-

Correct Answer

Quantity requisitioned , Per unit material cost , Job number

Your Answer Vendors' name , Quantity requisitioned

True/False Question The reports generated by financial accounting are meant for the use by management for effective

decisions. Correct Answer

True

Your Answer True

Select The Blank Question Under-recovery of overheads implies that the profit will be ________ to the extent of total under-

recovered overheads. Correct Answer

Increased

Your Answer Decreased

Multiple Choice Multiple Answer Question Features of purchase requisition slip are :-

Correct Answer

Raised when the stock of a raw material has fallen to the re-order level. , Indicates the type, quantity and quality of material required , The information about the price of material is excluded

Your Answer Raised when the stock of a raw material has fallen to the re-order level. , Indicates the type, quantity and quality of material required , The information about the price of material is excluded

Multiple Choice Multiple Answer Question You have received tenders from two suppliers - X & Co. and Y & Co. The details regarding price

and other terms and conditions are as follows : X & Co. : Price Rs.5/- per unit; trade discount 15% and cash discount 4% if bills are paid within a fortnight; freight Rs.2/- per 100 units. Y & Co. : Price Rs.4/- per unit upto 2,000 units; no cash discount but 15% per annum interest is charged if bills are paid within a fortnight from receipt of materials; freight Rs.3/- per 100 units. 10,000 units are required every month. The organization pays 50% of total monthly bills every fortnight. Compare the total cost for the organization for transacting with X & Co. and Y & Co. and advise the supplier with whom the order should be placed.

Correct Answer

Cost to the organization :Y & Co. -Rs.40,425.94 , Order should be placed with Y & Co. , Total cost is lower with Y & Co.

Your Answer Cost to the organization :Y & Co. -Rs.40,425.94 , Cost to the organization : Y & Co.-Rs.41,850/- , Order should be placed with Y & Co.

Multiple Choice Multiple Answer Question Features of convention of consistency are :-

Correct Answer

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

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

Multiple Choice Multiple Answer Question The factors to be considered while preparing the direct materials budget are :-

Correct Answer

Adequacy of material storing space , Availability of funds , Material in stores but reserved for specific purposes

Your Answer Adequacy of material storing space , Availability of funds , Material in stores but reserved for specific purposes

Select The Blank Question Crane expenses should be apportioned on the basis of ________.

Correct Answer

Number of hours crane worked in the department

Your Answer Number of hours crane worked in the department

True/False Question The amount of profit which is retained by the organization is transferred to 'Reserves and Surplus'

in the balance sheet. Correct Answer

True

Your Answer True

Select The Blank Question If it is given that the office expenses account includes Rs.10,000/- for purchase of computer-table,

the net profit will ________, after the necessary adjustment is done. Correct Answer

Increase

Your Answer Reduce further

Multiple Choice Single Answer Question Cash budget is extremely useful since it:-

Correct Answer

Gives information about estimated cash inflows and outflows

Your Answer Gives information about estimated cash inflows and outflows

Multiple Choice Single Answer Question XYZ & Co. has taken a loan of Rs.100,000/- @ 15% p.a. on 1st October, 2003. Interest is to be

paid on half yearly basis. What treatment should be given in the books of accounts of XYZ & Co. as on 31st March, 2004?

Correct Answer

Interest account should be debited with Rs.7,520.55 and outstanding interest account should be credited with Rs.7,520.55

Your Answer Interest account should be debited with Rs.15,000/- and outstanding interest account should be credited with Rs.15,000/-

Multiple Choice Multiple Answer Question The objectives of cost accounting are :-

Correct Answer

Cost control , Ascertainment of cost of each product , Assist in managerial decision-making

Your Answer Cost control , Ascertainment of cost of each product , Assist in managerial decision-making

Select The Blank Question The ________ is a perpetual inventory record.

Correct Answer

Bin card

Your Answer Goods received note

True/False Question Routing the purchase requisition through the purchase department entails unnecessary delay in

receiving the required materials. Correct Answer

False

Your Answer False

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

Correct Answer

False

Your Answer False

Multiple Choice Multiple Answer Question Select the items which may be classified as selling and distribution overheads :-

Correct Answer

Delivery van expenses , Rent of finished goods warehouse , Sales research expenses

Your Answer Delivery van expenses , Rent of finished goods warehouse , Sales research expenses

Select The Blank Question The assets which are supposed to be used by the organization to do business, are known as

________assets. Correct Answer

Fixed

Your Answer Current

True/False Question Trading account is an important account which will be used to analyze how successful and how

efficiently the firm runs its business. Correct Answer

True

Your Answer False

True/False Question Management Accounting is the process of analysis and interpretation of financial data collected

with help of financial accounting and cost accounting Correct Answer

True

Your Answer True

True/False Question P&L statement which is a period statement & relates to a certain period tells about results of

operations. Correct Answer

True

Your Answer True

Multiple Choice Multiple Answer Question The objectives of Uniform costing system are as follows :-

Correct Answer

To fix a common selling price for the industry as a whole , To compare efficiency of each unit against industry's overall performance , To compile reliable cost data for inter-firm comparison of costs

Your Answer To fix a common selling price for the industry as a whole , To compare efficiency of each unit against industry's overall performance , To compile reliable cost data for inter-firm comparison of costs

Multiple Choice Single Answer Question The bank book shows an overdraft of Rs.117/- as on 31st December, 2003. It is found that the

pass book is debited with Rs.11/- representing a dishonored cheque, originally received from Mr.A. The fact of dishonor was not recorded in the bank book. Find the balance as per pass book.

Correct Answer

Rs.128/- (overdraft)

Your Answer Rs.106/-(overdraft)


Select The Blank Question Budgeted profit and loss account and budgeted balance sheet are also known as ________.

Correct Answer

Master budget

Your Answer Master budget

Multiple Choice Single Answer Question Compute actual total cost based on the data given below: Total standard cost (standard

material cost + standard labour cost) -Rs.19,633.33; labour rate variance-Rs.900/- (adverse); material price variance -Rs.90/- (Favourable); material yield variance -Rs.700/- (Favourable); labour yield variance -Rs.333.33 (Favourable).

Correct Answer

Rs.19,410/-

Your Answer Rs.19,856.66


Ledger Maintain all types of accounts Maintain all types of accounts

Audit Reviewing internal control system Reviewing internal control system

Accounting Process of analyzing & interpretation

Process of analyzing & interpretation


Select The Blank Question The selection of ________ may depend upon the various factors like characteristics of the

business organization, tax considerations, statutory requirements etc. Correct Answer

Accounting period

Your Answer Budget period

Select The Blank Question Carriage charges paid for a new machine purchased if debited to carriage account would

affect the ________. Correct Answer

Machinery A/c and carriage A/c

Your Answer Machinery A/c and carriage A/c

Multiple Choice Multiple Answer Question Identify the causes due to which the cost of labour may be high :-

Correct Answer

Excess staffing , Lack of experienced and efficient personnel , High labour turnover

Your Answer Excess staffing , Lack of experienced and efficient personnel , High labour turnover

Multiple Choice Multiple Answer Question The causes of idle time can be analyzed as :-

Correct Answer

Administrative causes , Productive causes , Economic causes

Your Answer Administrative causes , Productive causes , Economic causes

Multiple Choice Multiple Answer

Question Plant and equipment can become a key factor in the following circumstances :-

Correct Answer

Limited capacity due to lack of capital , Insufficient capacity due to shortage of space , Limited number of hours for which the plant can be used

Your Answer Limited capacity due to lack of capital , Insufficient capacity due to shortage of space , Limited number of hours for which the plant can be used

Select The Blank Question An adjustment relating to outstanding expenses will ________ the net profit.

Correct Answer

Decrease

Your Answer Decrease

Multiple Choice Multiple Answer Question The quarterly production of a company's product which has a steady market is 20,000 units.

Each unit of product requires 0.5 kg of raw material. The cost of placing one order for raw material is Rs.100/- and the inventory carrying cost is Rs.2/- per kg per annum. The lead time for procurement of raw material is 36 days and a safety stock of 1,000 kg of raw materials is maintained by the company. The company has been able to negotiate the following discount structure with the raw material supplier : For order quantity below 7,000 kg -discount per order is NIL. For order quantity between 7,000 kg and 8,000 kg., discount per order is Rs.400/-. For order quantity between 8,000 kg and 16,000 kg., discount per order is Rs.2,000/-. For order quantity between 16,000 kg and 30,000 kg., discount per order is Rs.3,200/-. Find the statements which indicate the correct costs for the different order sizes.

Correct Answer

If order size is 20,000 units, total cost is Rs.17,000/- , If order size is 6,667 units, total cost is Rs.6,867/- , If order size is 10,000 units, total cost is Rs.8,400/-

Your Answer If order size is 6,667 units, total cost is Rs.6,867/- , If order size is 10,000 units, total cost is Rs.8,400/- , If order size is 20,000 units, total cost is Rs.17,000/-

True/False Question The process of recording attendance time of the workers is known as time booking.

Correct Answer

False

Your Answer False

Multiple Choice Single Answer Question 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)


True/False Question Compound journal entry avoids duplication of effort.

Correct Answer

True

Your Answer True

Multiple Choice Multiple Answer Question A materials requisition form normally contains the following aspects:-

Correct Answer

Quantity requisitioned , Per unit material cost , Job number

Your Answer Quantity requisitioned , Per unit material cost , Job number

Multiple Choice Multiple Answer Question Material Yield variance -Rs.1,000/- (Adverse); material mix variance -Rs.250/- (Favourable)

and material price variance - Rs.350/- (Favourable). Find material cost variance and material usage variance.

Correct Answer

Material cost variance -Rs.400/- (Adverse) , Material usage variance -Rs.750/- , Material usage variance is adverse

Your Answer Material cost variance -Rs.400/- (Adverse) , Material usage variance -Rs.750/- , Material usage variance is adverse

Multiple Choice Single Answer Question The credit purchases are as follows : July Rs.80,000/- and August Rs.140,000/-. Creditors

are paid either on a 'prompt basis' (on the spot) or 30 days basis. It is estimated that 10% of the creditors are in the prompt category. Find the amount paid :-

Correct Answer

Rs.177,000/-


Multiple Choice Single Answer Question Accrued income indicates:-

Correct Answer

Current year's income not received in the current year

Your Answer Previous year's income received in the current year

Multiple Choice Single Answer Question Opening stock valued at Rs.7,400/-; Purchases Rs.24,700/-; Wages Rs.5,400/-; Sales

Rs.48,600/-; Closing stock Rs.7,000/-. Calculate Gross Profit? Correct Answer

Rs.18,100/-


Multiple Choice Multiple Answer Question Select the entries which need to be rectified :-

Correct Answer

Purchase A/c ......... Dr. to Damodar's A/c (Being furniture purchased from Damodar) , Gopal's A/c ........... Dr. to cash A/c (Being entry for payment of railway freight for goods purchased) , Cash A/c ............Dr. to Suresh's A/c (Being cash received from Suresh for goods sold to him for)

Your Answer 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)

Multiple Choice Single Answer Question Purchases returns of Rs.18,000/- were wrongly transferred to the sales returns account.

Calculate its impact on net profit. Correct Answer

The net profit will not be affected

Your Answer The net profit will decrease by Rs.36,000/-

True/False Question Margin of safety = Contribution / Profit volume ratio

Correct Answer

False

Your Answer False

Select The Blank Question Angle formed by the intersection of total cost line and sales line is called angle of ________.

Correct Answer

Incidence

Your Answer Incidence

Multiple Choice Multiple Answer Question Select the transactions which can be entered in the Journal proper :-

Correct Answer

Opening entries , Closing entries , Rectification entries

Your Answer Opening entries , Closing entries , Rectification entries

Select The Blank Question The standard cost of actual hours when any employee remains idle due to abnormal

circumstances is known as ________. Correct Answer

Idle time variance

Your Answer Idle time variance

Select The Blank Question In case of defective material being returned by the stores department to the vendor, such

material should be valued at the________. Correct Answer

Purchase price

Your Answer Purchase price

Multiple Choice Single Answer Question The overheads apportioned to three production departments A, B and C and two service

departments P and Q are Rs.75,000/-; Rs.100,000/-; Rs.80,000/-; Rs.60,000/- and Rs.40,000/- respectively. Overheads of department P are shared by A, B, C and Q in the ratio of 4 : 3 : 2 : 1 and that of department Q are shared by A, B, C and P in the ratio of 3 : 3 : 2 : 2. Ascertain the total overheads of each production department.

Correct Answer

A -Rs.116,836/-; B -Rs.134,889/- and C -Rs.103,265/-

Your Answer A -Rs.116,836/-; B -Rs.146,837/- and C -Rs.176,838/-

Select The Blank Question Generally all the liabilities will have ________ balance.

Correct Answer

Credit

Your Answer Credit

True/False Question All costs are controllable.

Correct Answer

False

Your Answer False

Multiple Choice Single Answer

Question The type of costs presented to management for elimination of a product-line should be limited to :-

Correct Answer

Relevant costs

Your Answer Standard costs

True/False Question The term 'scheduled costs' is used interchangeably with the word 'standard costs'.

Correct Answer

False

Your Answer True

Select The Blank Question A standard that is never altered, after being established, is known as ________ standard.

Correct Answer

Ideal

Your Answer Basic

Select The Blank Question The ________ is of immense help in guiding the companies to operate their accounts on

uniform basis. Correct Answer

Uniform cost manual

Your Answer Uniform cost manual

Multiple Choice Single Answer Question Land was purchased by Sweeth Tooth Ltd. at a cost of Rs.50,000/-. Its market price as on

the balance sheet date is Rs.60,000/-. At what amount should the asset be disclosed in the balance sheet?

Correct Answer

Rs.50,000/-; Cost concept

Your Answer Rs.50,000/-; Cost concept

Multiple Choice Multiple Answer Question The various areas in which uniform costing can be adopted are :-

Correct Answer

Valuation of inventories , Charging of depreciation , Apportionment of overheads

Your Answer Valuation of inventories , Charging of depreciation , Apportionment of overheads

True/False Question Budgetary control system provides a basis for establishment of the incentive systems.

Correct Answer

True

Your Answer False

True/False Question The Balance Sheet method of cash budget ignores any excess or shortage of cash during

the budget period. Correct Answer

True

Your Answer True

Multiple Choice Single Answer Question The opening balance of cash account is Rs. 25,000/-, cash received from debtors Rs.

30,000/-, sold goods on cash basis amounting to Rs. 50,000/-, paid to creditors Rs. 20,000/-, purchase furniture Rs. 5000/-. What is the closing balance of the cash account?

Correct Answer

Rs. 80,000

Your Answer Rs. 80,000

Multiple Choice Multiple Answer Question You have received tenders from two suppliers - X & Co. and Y & Co. The details regarding

price and other terms and conditions are as follows : X & Co. : Price Rs.5/- per unit; trade discount 15% and cash discount 4% if bills are paid within a fortnight; freight Rs.2/- per 100 units. Y & Co. : Price Rs.4/- per unit upto 2,000 units; no cash discount but 15% per annum interest is charged if bills are paid within a fortnight from receipt of materials; freight Rs.3/- per 100 units. 10,000 units are required every month. The organization pays 50% of total monthly bills every fortnight. Compare the total cost for the organization for transacting with X & Co. and Y & Co. and advise the supplier with whom the order should be placed.

Correct Answer

Cost to the organization :Y & Co. -Rs.40,425.94 , Order should be placed with Y & Co. , Total cost is lower with Y & Co.

Your Answer Cost to the organization :Y & Co. -Rs.40,425.94 , Order should be placed with Y & Co. , Total cost is lower with Y & Co.

Multiple Choice Multiple Answer Question Inventory holding cost comprises of :-

Correct Answer

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

Your Answer Cost of insurance , Rent of store house , Cost of material

Select The Blank Question Under Bedaux Point system the standard time is divided into standard minutes and each

standard minute identified as ________. Correct Answer

Bedaux point or B

Your Answer Bedaux point or B

True/False Question Marginal costing rewards sales whereas absorption costing rewards production.

Correct Answer

True

Your Answer True

Multiple Choice Single Answer Question Loan @ 12% p.a. of Rs.50,000/- was taken on 1st March, 2004. Find the interest

expenditure on 31st March, 2004. Correct Answer

Rs.500/-


Multiple Choice Multiple Answer Question Different types of tenders are :-

Correct Answer

Singly tender , Open tender , Global tender

Your Answer Singly tender , Open tender , Global tender

True/False Question While preparing bank reconciliation statement for the month of September 2004, one should

consider the balance as per bank book as on 1st September, 2004 and the balance as per pass book as on 30th September, 2004.

Correct Answer

False

Your Answer False


Daily Time sheets Time spent by worker on job is recorded

Jobwise booking of time.

Time Keeping Department Recording of workers time Recording of workers time

Time booking department Jobwise booking of time. Time spent by worker on job is recorded

Time Recording Clock Method Ticket number & clock card allotted to worker

Ticket number & clock card allotted to worker

Multiple Choice Single Answer Question The following information is available regarding two orders for the same product. Order I :

material Rs.20,000/-; wages Rs.25,000/-; selling price Rs.120,000/- and percentage of profit on cost 20%. Order II : material Rs.30,000/-; wages Rs.40,000/-; selling price Rs.195,000/- and percentage of profit on cost 25%. Factory overheads are charged on a fixed percentage basis on wages and office overheads are based on percentage to works cost. Find out percentage of office overheads.

Correct Answer

100% of works cost

Your Answer 60% of works cost

True/False Question Depreciation, interest and property tax continue even when the operations are discontinued.

Correct Answer

True

Your Answer True


Multiple Choice Multiple Answer Question Select the correct formulae for calculating break even point :-

Correct Answer Fixed cost / (Selling price per unit - Variable cost per unit) , [Fixed cost / Marginal contribution] X Sales , [Fixed cost / (Fixed cost + Net Profit)] X Sales

Your Answer Fixed cost / (Selling price per unit - Variable cost per unit) , [Fixed cost / Marginal contribution] X Sales , [Fixed cost / (Fixed cost + Net Profit)] X Sales

True/False Question Amortization of goodwill should be considered while preparing cash budget.


Your Answer True

Select The Blank Question A ________ note is prepared when excess material is returned to stores.

Correct Answer Material returned

Your Answer Material returned

Multiple Choice Single Answer Question M Ltd. manufactures three products P, Q and R. The unit selling price of these products are

Rs.100/-, Rs.80/- and Rs.50/-, respectively. The corresponding unit variable costs are Rs.50/-, Rs.40/- and Rs.20/-, respectively. The quantity wise proportion in which these products are manufactured and sold are 20%, 30% and 50%, respectively. The total fixed costs are Rs.14,80,000/-. You are required to work out the overall break even point quantity for M Ltd.

Correct Answer 40,000 units

Your Answer 90,000 units

Multiple Choice Multiple Answer Question Items debited to Profit & Loss Account are :-

Correct Answer Salary , Discount allowed , Postage & telegram

Your Answer Salary , Purchases of raw material , Postage & telegram

Multiple Choice Multiple Answer Question Features of convention of conservation are :-

Correct Answer Anticipates all future losses and expenses , Ignores all future incomes and profits, unless they are actually realized , Applicable to valuation of current assets

Your Answer Anticipates all future losses and expenses , Ignores all future incomes and profits, unless they are actually realized , Applicable to valuation of current assets

Select The Blank Question The variance which measures the profit consequences of selling different products in

proportions other than the standard, is known as ________ variance. Correct Answer Sales margin mix

Your Answer Sales margin yield

Multiple Choice Single Answer Question 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.

Multiple Choice Multiple Answer Question These are the methods of measuring labour turnover :-

Correct Answer Replacement Method , Separation Method , Flux Method

Your Answer Replacement Method , Separation Method , Flux Method


Question Which of the following information is included in the goods received note?

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

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

Multiple Choice Single Answer Question A lathe machine was purchased on 31st March, 2004 for Rs.65,000/-, however it was

installed only on 5th April, 2004. The depreciation is charged @ 15% p.a.. Find the amount of depreciation charge for the said lathe machine for the year ended 31st March, 2004.

Correct Answer Nil

Your Answer Rs.26.71

Select The Blank Question The lowest profit volume ratio can be ________%.

Correct Answer 0

Your Answer 0

Multiple Choice Single Answer Question Cool-wind Ltd., manufactures fans, which sold at Rs.400 pre piece. The cost of sales is

composed of 40% of direct material, 30% wages and 30% overheads. An increase in material price by 25% and in wage rate by 10% is expected in the forthcoming year; as a result of which the profit at current selling price may dwindle by 39% of present gross profit. With the above information, you are required to determine the future selling price, if the present rate of gross profit is to be maintained.

Correct Answer Rs.452/-


Multiple Choice Multiple Answer Question The main advantages of profit sharing are :-

Correct Answer Employees try to increase productivity , Incentives are shared by all the employees , Augments employees' efficiency

Your Answer Employees try to increase productivity , Incentives are shared by all the employees , Augments employees' efficiency

Multiple Choice Single Answer Question The budgeted level of activity of the production department of Style India Ltd. is 5,000 hours

per period. From the given information find the cost for 3,500 hours per period. Indirect wages Re.0.40 per hour :-



Select The Blank Question Copy of a firm's account in the bank's ledger is known as ________.

Correct Answer Bank statement

Your Answer Bank book

True/False Question The perpetual inventory system enables management to ascertain stock without physical

verification.

Correct Answer True

Your Answer True

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

Correct Answer True

Your Answer True

Multiple Choice Multiple Answer Question From the following, select current assets:-

Correct Answer Sundry debtors , Stock , Pre paid expenses

Your Answer Sundry debtors , Stock , Pre paid expenses


Flexible budget More elastic and practical More elastic and practical

Advantage of budgetary control system Managerial tool which increases effectiveness of managerial control

Managerial tool which increases effectiveness of managerial control

Fixed budget Difficult to implement in fast changing industrial scenario

Difficult to implement in fast changing industrial scenario

Disadvantage of budgetary control system

Restricts the efforts of the managers to the budgeted targets

Restricts the efforts of the managers to the budgeted targets

Select The Blank Question Loss is equal to fixed cost minus ________.

Correct Answer Contribution

Your Answer Contribution

Multiple Choice Single Answer Question Which cost is defined as an estimated cost, prepared in advance of production or supply,

estimated within a prescribed set of working conditions? Correct Answer Standard cost

Your Answer Standard cost

Multiple Choice Single Answer Question The following figures relate to a company manufacturing a varied range of products : Year

2003 Total sales Rs.22,23,000/- and total cost Rs.19,83,600/-. Year 2004 : Total sales Rs.24,51,000/- and Total cost Rs.21,43,200/-. Assuming stability in prices, calculate the profit volume ratio :-

Correct Answer 0.3

Your Answer 0.3

Multiple Choice Multiple Answer Question The management of Dick Ltd. is deciding whether to buy component Y from the supplier,

since the purchase cost is less than the manufacturing cost. State the non-financial aspects that must be considered before arriving at a decision :-

Correct Answer Reliability regarding quality of the material supplied by the supplier , Alternative use of labour

of engaged in manufacturing component Y , Regularity of material supplies from the supplier Your Answer Fixed cost relating to existing manufacturing set-up , Reliability regarding quality of the

material supplied by the supplier , Regularity of material supplies from the supplier

Multiple Choice Multiple Answer Question Merits of break even point analysis are as follows:-

Correct Answer Useful diagnostic tool. , Used for analyzing the risk implication of alternative actions. , Used to graphically represent complicated data.

Your Answer Useful diagnostic tool. , Used for analyzing the risk implication of alternative actions. , Used to graphically represent complicated data.

True/False Question Idle time variance is always favourable.


Your Answer False

Select The Blank Question A person in charge of a ________ may be held responsible for its proper functioning and

cost control. Correct Answer Cost centre

Your Answer Cost centre

Select The Blank Question Profit = Contribution per unit X ________.

Correct Answer Margin of safety (units)

Your Answer Production (units)

Select The Blank Question Education facility to workers and their children, pension, superannuation fund are examples

of ________ incentives. Correct Answer Non-monetary

Your Answer Non-monetary

True/False Question The sales mix variance highlights the fact that the actual mix of sales has been in the same

ratio as budgeted. Correct Answer False

Your Answer True

Multiple Choice Multiple Answer Question The advantages of Halsey plan are :-

Correct Answer Bonus goes on increasing with increase in time saved. , Provides more incentive to speed up production , Guaranteed time rate payment is made

Your Answer Bonus goes on increasing with increase in time saved. , Provides more incentive to speed up production , Guaranteed time rate payment is made

Multiple Choice Single Answer Question Insurance premium of Rs.18,000/- was paid on 15th January, 2004. The policy period is one

year from the date of payment of insurance. On 31st March, 2004 what amount should be debited to the Profit and Loss account as expenditure on account of insurance premium?



Multiple Choice Multiple Answer Question The suspense account has a debit balance of Rs.40,000/-. Select the transactions which are

capable of nullifying this balance.

Correct Answer Conveyance expenses of Rs.25,000/- were posted on the wrong side of the account. , Purchased computer worth Rs.28,000/- was recorded in the ledger as , The total of the purchase book was cast short by Rs.44,000/-

Your Answer Free samples worth Rs.40,000/- distributed during the year were credited to sales account , Conveyance expenses of Rs.25,000/- were posted on the wrong side of the account. , Purchased computer worth Rs.28,000/- was recorded in the ledger as

True/False Question An item of cost that is direct for one business organization may be indirect for another

business organization. Correct Answer True

Your Answer True


Compensating Error Wrong classification Wrong classification

Error of Principle Trial Balance does not get affected Trial Balance does not get affected

Error of Omission Transaction is totally omitted Transaction is totally omitted

Error of commission Wrong Posting Wrong Posting

True/False Question Danger level for inventory of materials means the safety stock of inventory.


Your Answer False

True/False Question Differential cost analysis is incorporated in the cost books.


Your Answer True

Multiple Choice Single Answer Question The use of contribution per unit of limiting factor as the basis for ranking products to be

produced and sold is aimed at which of the following? Correct Answer Maximization of short-term profit

Your Answer Maximization of short-term profit

Multiple Choice Single Answer Question Currently Beta Ltd. is earning a contribution of Rs.80/- per unit and the variable cost is

Rs.180/- per unit. Its fixed costs are Rs.200,000/-. Its existing sales are 5,000 units. The company has a proposal that the sales staff may be paid a commission of 10% of sales instead of fixed salaries totaling Rs.80,000/-. This action is expected to increase the sales by 10%. Compute the amount of profit assuming the proposal is accepted?



Multiple Choice Single Answer Question Determine re-order level from the following : Maximum daily consumption - 200 units;

maximum delivery period - 12 days; average daily consumption - 150 units and average delivery period - 8 days.

Correct Answer 2,400 units

Your Answer 2,400 units

Multiple Choice Multiple Answer Question Features of purchase requisition slip are :-

Correct Answer Raised when the stock of a raw material has fallen to the re-order level. , Indicates the type, quantity and quality of material required , The information about the price of material is excluded

Your Answer Raised when the stock of a raw material has fallen to the re-order level. , Indicates the type, quantity and quality of material required , The information about the price of material is excluded

Multiple Choice Single Answer Question The annual variable production overheads of a factory are Rs.70,000/-. The production

manager anticipates that in the next year, the production efficiency will decrease by 4%. Find out budgeted production overheads for the next year.



True/False Question Revenue expenditure indicates the amount of funds spent during a certain period with the

intention to receive the returns in future. Correct Answer False

Your Answer False

Select The Blank Question ________ is any documentary evidence to justify that a particular transaction has taken

place. Correct Answer Voucher

Your Answer Voucher

Select The Blank Question The term ________ indicates expenditure incurred on or attributable to a given thing.

Correct Answer Cost

Your Answer Expense

Select The Blank Question Creche expenses may be appropriately apportioned on the basis of ________.

Correct Answer Number of female workers

Your Answer Number of female workers

True/False Question Credit balances in all the Personal & Real accounts appear on asset side.


Your Answer False


Multiple Choice Multiple Answer Question The data for XYZ Ltd. is as follows : Fixed assets Rs.60,000/-; total cost Rs.105,000/-; working capital is equal

to 25% of the sales value. The company expects 25% return on capital employed. Capital employed is equal to fixed assets plus working capital. Select the correct answers:-

Correct Answer Working capital Rs.32,000/- , Sales Rs.128,000/- , Return on capital employed

Your Answer Sales Rs.128,000/- , Return on capital employed , Working capital Rs.32,000/-

Multiple Choice Multiple Answer Question In which of the following situations, the flexible budget should be preferred?

Correct Answer Sales are too difficult to predict , Supply level of input cannot be predicted , Varying levels of production activity

Your Answer Sales are too difficult to predict , Supply level of input cannot be predicted , Varying levels of production activity

Select The Blank Question While preparing trial balance, the balance as per ________ book is considered as bank balance.

Correct Answer Bank

Your Answer Bank

Multiple Choice Single Answer Question Tom company has sales of Rs.200,000/- with variable expenses of Rs.150,000/-, fixed expenses of

Rs.60,000/-, and an operating loss of Rs.10,000/-. By how much would Tom have to increase its sales in order to achieve an operating income of 10% of sales?




Received sanction for a loan of Rs.10 lakhs

Overdraft as per bank book = Overdraft as per pass book

Henceforth, there shall be no difference in overdraft balances

Closed the account with State Bank of India

Henceforth, there shall be no difference in overdraft balances

Overdraft as per bank book = Balances per pass book

Debit side of bank book is overcast Overdraft as per bank book < Overdraft as per pass book

Overdraft as per bank book < Overdraft as 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

Select The Blank Question It is the ________ method of measuring labour turnover which is a combination of separation method and

replacement method. Correct Answer Flux

Your Answer Flux

Multiple Choice Single Answer Question The following information is available regarding two orders for the same product. Order I : material

Rs.20,000/-; wages Rs.25,000/-; selling price Rs.120,000/- and percentage of profit on cost 20%. Order II : material Rs.30,000/-; wages Rs.40,000/-; selling price Rs.195,000/- and percentage of profit on cost 25%. Factory overheads are charged on a fixed percentage basis on wages and office overheads are based on percentage to works cost. Find out percentage of office overheads.

Correct Answer 100% of works cost

Your Answer 100% of works cost

Multiple Choice Single Answer Question Cool-wind Ltd., manufactures fans, which sold at Rs.400 pre piece. The cost of sales is composed of 40% of

direct material, 30% wages and 30% overheads. An increase in material price by 25% and in wage rate by 10% is expected in the forthcoming year; as a result of which the profit at current selling price may dwindle by 39% of present gross profit. With the above information, you are required to determine the future selling price, if the present rate of gross profit is to be maintained.




Question Items credited to Profit & Loss Account are :-

Correct Answer Gross profit , Commission received , Interested received

Your Answer Gross profit , Commission received , Interested received

Multiple Choice Multiple Answer Question A gang of 10 men, 20 women and 30 boys at the standard rate of Rs.15/-, Rs.10/- and Rs.8/- per hour,

respectively, is expected to produce 5,000 units in a week of 40 working hours. In a particular week the gang which consisted of 12 men, 16 women and 40 boys was paid at the rate of Rs.13/-, Rs.11/- and Rs.5/- per hour, respectively. This gang actually produced 6,000 units. Due to a serious machine break-down three hours work was totally lost during the week. Calculate labour efficiency variance (exclusive of idle time) for each category of workers, viz. men, women and boys.

Correct Answer Men -Rs.540/- (Favourable) , Women -Rs.3,680/- (Favourable) , Boys - Rs.320/- (Adverse)

Your Answer Men -Rs.540/- (Favourable) , Boys - Rs.320/- (Adverse) , Women -Rs.368/- (Adverse)

True/False Question Predetermined rate of absorption of overheads helps in quick preparation of cost estimates and quoting

prices. Correct Answer True

Your Answer True

True/False Question In differential cost analysis, decisions are taken by comparing the incremental revenue with differential costs.

Correct Answer True

Your Answer True

Select The Blank Question Preparation of direct material ________ budget is the responsibility of the Purchase manager.

Correct Answer Purchase

Your Answer Purchase

Multiple Choice Multiple Answer Question Actual costs determined on the basis of costing records maintained have following limitations :-

Correct Answer No practical utility from control point of view , No practical utility for price fixation , Expensive

Your Answer No practical utility from control point of view , Expensive , Very difficult to understand

Multiple Choice Single Answer Question Amit sold Goods to Atul for Rs. 50,000/- on cash & Rs. 50,000/- on credit basis. Amit allowed 10% discount

for on the spot transaction. What is the amount that should be debited to the cash account? Correct Answer Rs.45,000/-


Multiple Choice Multiple Answer Question Uniform costing system can be successfully implemented in any industry only when :-

Correct Answer Information is freely supplied by all the units , Well organized sector is ready to share the technological improvements , Information furnished by the units is complete and correct

Your Answer Information is freely supplied by all the units , Well organized sector is ready to share the technological improvements , Information furnished by the units is complete and correct

Multiple Choice Multiple Answer Question The selection of the supplier may depend upon the following aspects:-

Correct Answer Geographical location of the supplier , Price quoted by the supplier , Goodwill of the supplier

Your Answer Geographical location of the supplier , Price quoted by the supplier , Goodwill of the supplier

True/False Question Time rate system is suitable for workers of the maintenance department.

Correct Answer True

Your Answer True

Select The Blank Question The sales forecast (quantity) should be compared with the ________ to find out whether it is possible for the

firm to handle this level of sales. Correct Answer Production capacity

Your Answer Unutilized capacity

True/False Question If excess of cash is estimated in the cash budget, it may be possible to utilize it to give bonus to the

employees. Correct Answer False

Your Answer False

Multiple Choice Single Answer Question XYZ Ltd. has sufficient idle capacity. It has received an enquiry for the supply of 300 units (packed in better

box at an additional cost of Rs.20/- per box). The variable cost of manufacturing the product is Rs.150/-. The company expects a profit of Rs.6,000/- from this wholesale offer. What minimum price should it quote for this deal?



Multiple Choice Single Answer Question Which variance is used to analyze the effect of change in the quantity of output from a given mix of inputs?

Correct Answer Materials yield variance

Your Answer Materials mix variance

Multiple Choice Multiple Answer Question From the following, select current assets:-

Correct Answer Sundry debtors , Stock , Pre paid expenses

Your Answer Sundry debtors , Stock , Pre paid expenses

Multiple Choice Multiple Answer Question The different purposes served by standard costing technique are :-

Correct Answer Cost control , Cost awareness , Performance appraisal

Your Answer Cost control , Cost awareness , Performance appraisal

Select The Blank

Question ________ authorizes the production department to issue requisition for materials.

Correct Answer Bill of material

Your Answer Bill of material

Multiple Choice Single Answer Question As cost centers facilitate the control function, in many cases, they are termed as :-

Correct Answer Responsibility centers

Your Answer Responsibility centers

Multiple Choice Single Answer Question Unearned commission of Rs.5,000/- needs to be recorded in the books of accounts. Find its correct impact.

Correct Answer The asset side of the balance sheet will increase by Rs.5,000/-

Your Answer The asset side of the balance sheet will increase by Rs.5,000/-

Multiple Choice Multiple Answer Question Financial Accounting is :-

Correct Answer Designed to supply information to internal/ external users , Referred as 'Historical' form of accounting , Concerned with financial factors

Your Answer Designed to supply information to internal/ external users , Referred as 'Historical' form of accounting , Concerned with financial factors

Multiple Choice Multiple Answer Question Features of convention of materiality are :-

Correct Answer Transactions having material impact on profitability should be considered , Insignificant transactions will be ignored

Your Answer Transactions having material impact on profitability should be considered , Insignificant transactions will be ignored , The accounting policies & procedures should be followed consistently

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


Your Answer False

Select The Blank Question Normally, the planning for dividend payments and interest payments is based on the ________ budget.

Correct Answer Cash

Your Answer Income

True/False Question Factory rent is a direct cost to the factory as a whole but indirect to the production departments.

Correct Answer True

Your Answer True

True/False Question Uniform costing system is defined as a system using common concepts and standard accounting practices by

different entities in different industry to facilitate inter-firm comparison.

Correct Answer True

Your Answer True

Select The Blank Question As per the provisions of Section 209 of ________, all the company form of organization is legally required to

follow the mercantile or accrual system of accounting. Correct Answer The Companies Act, 1956

Your Answer The Companies Act, 1956

Multiple Choice Single Answer Question Standard time required for a job is 10 hours, i.e.10 X 60 = 600 'Bs'. The worker has actually completed the job

in 6 hours, i.e.6 X 60 = 360 'Bs'. Time wage rate is Rs.20/- per hour. Bonus is shared between the worker and the foreman in the ratio of 3:1. Calculate total earning of the worker as per Bedeaux Point System.




Tool-room expenses Direct labour hours Direct labour hours

Power Horse power of machine Machine hours

Stores department Number of material requisitions Number of material requisitions

Boiler house Cubic feet of steam supplied Cubic feet of steam supplied

Select The Blank Question The method which deals with ownership rights being given to workers is known as ________ method of

remuneration. Correct Answer Co-partnership

Your Answer Co-partnership

Select The Blank Question If the total amount on the ________ side of commission account is more than the total of its credit side, the

commission account is said to have a Debit balance. Correct Answer Debit

Your Answer Debit

Multiple Choice Single Answer Question Firm X manufactures surgical goods. Its normal production is 2,600 units per month at a total cost of

Rs.32,000/-. At full capacity it can manufacture 3,400 units per month at a total cost of Rs.38,000/-. Calculate total fixed cost.



Multiple Choice Single Answer Question Find the budget which is inadequate as a cost control technique :-

Correct Answer Fixed budget

Your Answer Fixed budget

Select The Blank Question The ________ is of immense help in guiding the companies to operate their accounts on uniform basis.

Correct Answer Uniform cost manual

Your Answer Uniform cost manual

Select The Blank Question Advance received from customers is ________ for the organization.

Correct Answer A liability

Your Answer A liability

Multiple Choice Multiple Answer Question For the following transactions find out the value of material issued using FIFO (First in first out) method. 1/7/04

- Opening balance 200 units @ Rs.10/- 3/7/04 - Issued to production department 80 units. 4/7/04 - Purchased 300 units @ Rs.11/-. 6/7/04 - Issued to production department 150 units. 8/7/04 - Purchased 250 units @ Rs.13/-. 11/7/04 - Issued to production department 170 units.

Correct Answer 3/7/04 - 80 units @ Rs.10/- , 6/7/04 - 120 units @ Rs.10/- and 30 units @ Rs.11/- , 11/7/04 - 170 units @ Rs.11/-

Your Answer 3/7/04 - 80 units @ Rs.10/- , 6/7/04 - 120 units @ Rs.10/- and 30 units @ Rs.11/- , 11/7/04 - 170 units @ Rs.11/-

True/False Question Profitability statement is a period statement & provides information about the results of operations.

Correct Answer True

Your Answer True

Multiple Choice Single Answer Question The opening balance of cash account is Rs. 25,000/-, cash received from debtors Rs. 30,000/-, sold goods on

cash basis amounting to Rs. 50,000/-, paid to creditors Rs. 20,000/-, purchase furniture Rs. 5000/-. What is the closing balance of the cash account?

Correct Answer Rs. 80,000

Your Answer Rs. 80,000

True/False Question The labour cost which can be identified with the individual cost centre is known as the Direct Labour Cost.

Correct Answer True

Your Answer True

True/False Question Depreciation can be defined as a permanent, continuous and gradual reduction in the book value of a fixed

asset. Correct Answer True

Your Answer True


True/False Question A firm earns profit when contribution is equal to fixed costs under variable costing.

Correct Answer

False

Your Answer True

Multiple Choice Multiple Answer Question Features of convention of consistency are :-

Correct Answer

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

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

Select The Blank Question The variance which measures the profit consequences of selling different products in proportions

other than the standard, is known as ________ variance. Correct Answer

Sales margin mix

Your Answer Sales margin yield

Multiple Choice Single Answer Question SRR Ltd. producing a single product, sells it at Rs.50/- per unit. Unit variable cost is Rs.35/- and

fixed costs amounts to Rs.12,00,000/- per annum. Calculate the increase in sales required if profits are to be increased by Rs.2.4 lakhs

Correct Answer

Rs.800,000/-



Advantageously applicable in similar industries

Scope of uniform costing Fields covered by uniform costing

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

True/False Question Long term loan borrowed from financial institution comes under the heading of long term liabilities.

Correct Answer

True

Your Answer True

Select The Blank Question Baum Differential Plan is a combination of Taylor's differential piece rate system and Halsey

system and is also known as ________. Correct Answer

Milwankee plan

Your Answer Milwankee plan

Multiple Choice Single Answer Question Rent of Rs.7,500/- for the month of April was received in March. Which account should be

credited in the books of accounts for making an entry for receipt of the said amount? Correct Answer

Rent received in advance account

Your Answer Rent received account

Select The Blank Question The system which combines the benefits of time rate and piece rate system by providing a

minimum time rate payment along with incentives is known as ________ system. Correct Answer

Gantt task bonus

Your Answer Differential time rate

Select The Blank Question If the standard contribution is less than the actual contribution, then ________ variance arises.

Correct Answer

Favourable

Your Answer Sales quantity

Select The Blank Question ________ is the summary of all the balances in all the accounts listed in ledger account of an

organization at any given point of time. Correct Answer

Trial Balance

Your Answer Trial Balance

Multiple Choice Single Answer Question Which cost is defined as an estimated cost, prepared in advance of production or supply,

estimated within a prescribed set of working conditions? Correct Answer

Standard cost

Your Answer Standard cost

Multiple Choice Multiple Answer Question Select the items which may be classified as selling and distribution overheads :-

Correct Answer

Delivery van expenses , Rent of finished goods warehouse , Sales research expenses

Your Answer Delivery van expenses , Rent of finished goods warehouse , Sales research expenses

Multiple Choice Multiple Answer Question Master budget provides a basis for computing effect of changes in :-

Correct Answer

Product mix of the company , Sales volume , Production facilities

Your Answer Product mix of the company , Sales volume , Production facilities

Select The Blank Question Under-recovery of overheads implies that the profit will be ________ to the extent of total under-

recovered overheads. Correct Answer

Increased

Your Answer Increased

Select The Blank Question Retirement from the service is an ________ cause of labour turnover.

Correct Answer

Unavoidable

Your Answer Extra-ordinary

True/False Question The role of the budget committee may be taken as an advisory role to the Chief Executive.

Correct Answer

True

Your Answer True

Multiple Choice Multiple Answer Question Items debited to Profit & Loss Account are :-

Correct Answer

Salary , Discount allowed , Postage & telegram

Your Answer Salary , Discount allowed , Purchases of raw material

Multiple Choice Single Answer Question Which of the following costs is most likely to have a cost behaviour pattern described as a fixed

cost upto an activity level of 1,000 units, with a variable cost there after which decreases from 10 paisa to 8 paise per unit at 2,000 units?

Correct Answer

Wages payment which is fixed for a minimum output quantity after which a bonus per unit is paid which reduces when activity level exceeds 1,000 units

Your Answer Royalty payment per unit which reduces after 2,000 units

Select The Blank Question In the adjustment entry passed for closing stock, the ________ account should be credited.

Correct Answer

Trading

Your Answer Trading

True/False Question Overhead absorption rate will be different at different capacity levels.

Correct Answer

True

Your Answer True

Multiple Choice Single Answer Question Standard cost specification per unit of product : 20 labour hours per unit @ Rs.22/- per labour

hour. Actual production and labour cost : Actual production 300 units; time used in production -5,500 hours; Idle time -600 hours; time paid for-6,100 hours, total wages paid -Rs.146,400/-. Compute Idle time variance.

Correct Answer

Rs.13,200/- (Adverse)


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

Correct Answer

True

Your Answer True

Multiple Choice Single Answer Question A factory received a carton containing two materials X and Y. The invoice relating to the materials

discloses the following details : Material X - 400 kg @ Rs.10/- per kg. =Rs.4,000/-; Material Y - 600 kg @ Rs.15/- per kg.= Rs.9,000/-; Sales @ 5% =Rs.650/-; Insurance @ 1% =Rs.130/-; Freight and handling charges = Rs.220/-. Handling of these materials in the factory resulted in a

loss of 10 kg of material X and 20 kg of material Y. At what rate you would issue these materials to the jobs?

Correct Answer

Material X -Rs.11.10; Material Y -Rs.16.68

Your Answer Material X -Rs.11.10; Material Y -Rs.16.68

Multiple Choice Single Answer Question In a factory, bonus to workmen is paid according to the Rowan plan. The allotted time for a job is

40 hours and the normal rate of wages is Rs.1.25 per hour. The factory overhead charges are 50 paisa per hour for the hours taken. The factory cost of a work order, executed by one worker, X, is Rs.161.875 and that by another, Y, is Rs.155.46. The cost of material in each case is Rs.100/-. Calculate the amount of time taken by the workman X to complete the work order.

Correct Answer

30 hours

Your Answer 28 hours

Multiple Choice Single Answer Question Calculate inventory turnover ratio from the following :Maximum stock -7,000 units; minimum stock

- 3,000 units and quantity of material issued during the year - 150,000 units. Correct Answer

30

Your Answer 21

True/False Question Piece rate system is suitable when quality of goods produced is of extreme importance.

Correct Answer

False

Your Answer False

Multiple Choice Multiple Answer Question Select the advantages of standard cost system :-

Correct Answer

Promotes economy and efficiency , Provides reliable basis for budgeting , Facilitates delegation of authority

Your Answer Provides reliable basis for budgeting , Facilitates delegation of authority , Promotes economy and efficiency

True/False Question 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

Select The Blank Question 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 Personal

Multiple Choice Multiple Answer Question The balance as per bank book as on 30th November, 2004 was Rs.6,500/- and the bank pass

book balance as on the same date was Rs.8,015/-. Select the transactions representing the reasons for this difference.

Correct Answer

Cheques deposited but not cleared Rs.1,200/- , Unpresented cheques Rs.2,625/- , Bank interest not entered in the bank book Rs.90/-

Your Answer Bank charges not entered in the bank book Rs.90/- , Cheques deposited but not cleared

Rs.1,200/- , Unpresented cheques Rs.2,625/-

True/False Question The phrase 'By Balance c/d.' written on the credit side of the rent account, indicates credit balance

for this account. Correct Answer

False

Your Answer False


Transport facilities to employees Preventive cost of labour turnover Normal cause of labour turnover

Relationship between supervisor and worker

Avoidable cause of labour turnover Avoidable cause of labour turnover

Dismissal of employee Unavoidable cause of labour turnover Normal cost of labour turnover

Increased spoilage and defectives Replacement cost of labour turnover Preventive cost of labour turnover

Select The Blank Question The systematic process of identifying and reporting variance is known as ________.

Correct Answer

Variance analysis

Your Answer Variance analysis

Multiple Choice Multiple Answer Question The components of the selling and distribution cost budget are :-

Correct Answer

Distribution expenses , Publicity expenditure , Salary of sales-office workers

Your Answer Distribution expenses , Publicity expenditure , Salary of shop-floor workers

Multiple Choice Multiple Answer Question Identify the causes due to which the cost of labour may be high :-

Correct Answer

Excess staffing , Lack of experienced and efficient personnel , High labour turnover

Your Answer Excess staffing , Lack of experienced and efficient personnel , High labour turnover

Multiple Choice Single Answer Question Which of the following is a correct definition of the key factor?

Correct Answer

The factor which limits the activities of the undertaking

Your Answer The factor which maximized sales

True/False Question Amortization of goodwill should be considered while preparing cash budget.

Correct Answer

False

Your Answer True

Multiple Choice Single Answer Question Details of budgeted and actual fixed overheads and output for the year 2004 are as follows :

Budgeted fixed overheads -Rs.20,00,000/-; actual fixed overheads -Rs.21,50,000/-; budgeted

output - 40,000 units and actual output- 45,000 units. Compute the per unit standard rate for fixed overheads.

Correct Answer

Rs.50/-

Your Answer Rs.44.44

Multiple Choice Single Answer Question It is difficult to apply Uniform costing system for an industry which has labour intensive companies

as well as capital intensive companies, because :- Correct Answer

The cost structure is different

Your Answer The cost structure is different

Multiple Choice Single Answer Question A manufacturing unit produces electronic circuits at the rate of 6 pieces an hour. The unit works in

single shift of 8 hours during a six-day week and remains close for 18 days a year on account of holidays. Average idle hours per month is 20 for cleaning and maintenance of equipments. Against an average annual output of 12,000 pieces during last ten years, the actual output achieved during the year was 10,800 pieces. The fixed overheads for the year amounted to Rs.540,000/-. You are required to calculate the idle capacity costs on the assumption that overhead recovery rate is based on maximum capacity.

Correct Answer

Rs.207,121.60

Your Answer Rs.193,121.60

True/False Question The ideal budget period for a company engaged in generation and distribution of electricity is one

year. Correct Answer

False

Your Answer True

Select The Blank Question If the profit volume ratio is 25%, then the variable cost is equal to ________ of sales value.

Correct Answer

0.75

Your Answer 0.25

Multiple Choice Multiple Answer Question The features of multiplicity of key factors are as follows :-

Correct Answer

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

Your Answer Only one key factor , More than one key factors , Refers to a complex situation

Multiple Choice Multiple Answer Question Select the non-monetary incentives :-

Correct Answer

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

Your Answer Co-partnership , Health and safety services , Canteen facility

Multiple Choice Multiple Answer Question Ram and Laxman are partners of Kush & Bros. As on 1st April, 2003 Ram's capital is Rs.50,000/-

and Laxman's capital is Rs.80,000/-. If interest on capital is to be provided @ 10% p.a., what will be the amount of capital of each of the partners as on 31st March, 2004, assuming there were no additions during this period? Also, state the treatment of this item in the Profit and loss account.

Correct Answer

Ram's capital Rs.55,000/- , Laxman's capital Rs.88,000/- , Interest on capital should be debited to the Profit and loss account

Your Answer Ram's capital Rs.55,000/- , Laxman's capital Rs.88,000/- , Interest on capital should be debited to the Profit and loss account

Multiple Choice Multiple Answer Question 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 Units of output are measurable , Work delays are frequent , Job is standardized

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