LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/False
Question Purchased goods by paying Rs.35,000/-: In this case, the cash account should be debited.
Correct Answer True
Your Answer False
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)
Select The Blank
Question The process of recording the business transactions in a defined set of records is referred to as ________.
Correct Answer Balance sheet
Your Answer Balance sheet
True/False
Question In the ledger account only credit entries relating to a particular account are posted.
Correct Answer False
Your Answer False
True/False
Question Error of commission refer to a situation where a transaction is not recorded in the books of account.
Correct Answer False
Your Answer True
Multiple Choice Multiple Answer
Question The selection of the supplier may depend upon the following aspects:
Correct Answer Geographical location of the supplier , Price quoted by the supplier , Goodwill of the supplier
Your Answer Geographical location of the supplier , Price quoted by the supplier , Goodwill of the supplier
Multiple Choice Single Answer
Question Which system involves adoption of same costing principles, practices and procedures by the individual firms of an industry ?
Correct Answer Uniform costing
Your Answer Uniform costing
True/False
Question Predetermined rate of absorption of overheads helps in quick preparation of cost estimates and quoting prices.
Correct Answer True
Your Answer False
True/False
Question Idle capacity and idle time mean one and the same thing.
Correct Answer False
Your Answer False
Multiple Choice Multiple Answer
Question Purchased goods worth Rs.6,450/- on 10th March, 2004. However the goods were delivered directly to the plant situated at Nagar and hence this transaction was not recorded in the purchase book, which is maintained at the corporate office. Analyse the impact of this transaction.
Correct Answer The gross profit will increase by Rs.6,450/-
Your Answer The gross profit will increase by Rs.6,450/-
Select The Blank
Question Payment by ________ method lowers the cost of production through their impact on fixed costs.
Correct Answer Results
Your Answer Time
Multiple Choice Single Answer
Question The overheads of a machine shop X should be apportioned using which of the following basis?
Correct Answer Machine hours
Your Answer Direct labour cost
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 realised , Applicable to valuation of current assets
Your Answer Anticipates all future losses and expenses , Applicable to valuation of current assets , Applicable to valuation of non-current asset
Multiple Choice Multiple Answer
Question Merits of break even point analysis are as follows:
Correct Answer Useful diagnostic tool. , Used for analysing the risk implication of alternative actions. , Used to graphically represent complicated data.
Your Answer Useful diagnostic tool. , Used for analysing the risk implication of alternative actions. , Useful in the long run.
True/False
Question Narration must be mentioned in the ledger.
Correct Answer False
Your Answer True
True/False
Question The actual hours taken by the labour are compared with the standard hours allowed for output to find out the labour yield variance.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question The features of multiplicity of key factors are as follows :
Correct Answer More than one key factors , Refers to a complex situation , Can be resolved by using linear programming technique
Your Answer More than one key factors , Refers to a complex situation , Can be resolved by using linear programming technique
Multiple Choice Single Answer
Question Included in the trial balance is the sales promotion suspense account with a debit balance of Rs.6,300/-. It is given that this balance should be written off. Calculate its impact on profit of the company.
Correct Answer The net profit will decrease by Rs.6,300/-
Your Answer The gross profit will decrease by Rs.6,300/-
Multiple Choice Multiple Answer
Question Items credited to Profit & Loss Account are…
Correct Answer Gross profit , Commission received , Interested received
Your Answer Gross profit , Commission received , Interested received
Multiple Choice Multiple Answer
Question The production budget may be prepared in terms of :
Correct Answer Units produced , Production cost , Material cost, labour cost and overheads
Your Answer Units produced , Production cost , Material cost, selling cost and overheads
Multiple Choice Multiple Answer
Question If you are required to enforce uniform costing system in your industry, how would you proceed ?
Correct Answer Collecting data from all units of your industry , Ensuring that the data collected is complete and correct , Maintaining secrecy of the data collected
Your Answer Collecting data from all units of your industry , Ensuring that the data collected is complete and correct , Maintaining secrecy of the data collected
Select The Blank
Question Goods returned to the suppliers from whom it was ________d is recorded in thePurchasereturn register.
Correct Answer Purchase
Your Answer Purchase
Select The Blank
Question Profit volume ratio is also known as ________.
Correct Answer Contribution to sales ratio
Your Answer Sales to contribution ratio
True/False
Question Standard costing is always accompanied by a system of budgeting but budgetary control may be operated in business where standard costing is impracticable.
Correct Answer True
Your Answer True
Select The Blank
Question Crane expenses should be apportioned on the basis of ________.
Correct Answer Number of hours crane worked in the department
Your Answer Number of hours crane worked in the department
Select The Blank
Question Marginal costing is also known as ________.
Correct Answer Variable costing
Your Answer Variable costing
Multiple Choice Multiple Answer
Question Select the examples of functional budgets:
Correct Answer Sales budget , Production budget , Research and development budget
Your Answer Sales budget , Production budget , Research and development budget
Multiple Choice Single Answer
Question A firm has purchased a plant to manufacture a new product, the cost data for which is given below : Estimated annual sales 24,000 units. Estimated costs : Materials Rs.4/- per unit; labour Re.0.60 per unit; overheads Rs.24,000/- per year; administrative expenses Rs.28,800/- per year and selling expenses are 15% of sales; Calculate the selling price per unit if profit per unit is Rs.1.02.
Correct Answer Rs.9.20/-
Your Answer Rs.7.74/-
Multiple Choice Single Answer
Question A worker 12 hours on a scheme of payment by results. His day rate is Rs.150/- an hour, the material cost of the product is Rs.600/- and the overheads are recovered at 15% of the total direct wages. Calculate the factory cost of the product under the piece rate work plan.
Correct Answer Rs.2,670/-
Your Answer Rs.2,850/-
Match The Following
Question Correct Answer Your Answer
Change in profit/ Change in activity level Profit volume ratio Profit volume ratio
Change in total cost/ Change in activity level Variable cost per unit Total contribution
Total sales X Profit volume ratio Total contribution Variable cost per unit
Selling price ( Actual sales - Break even sales) Margin of safety Margin of safety
Select The Blank
Question Preparation of direct material ________ budget is the responsibility of the Purchase manager.
Correct Answer Purchase
Your Answer Purchase
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
Select The Blank
Question ________ system of wage payment is a combination of Halsey system and Gantt system.
Correct Answer Diemer
Your Answer Barth premium
Select The Blank
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
Your Answer Uniform costing
Multiple Choice Single Answer
Question The credit side of the sales book was overcast by Rs.2,000/-. As a result of this rectification, what of the given impacts is likely to happen?
Correct Answer The liability side of the balance sheet will increase by Rs.2,000/-
Your Answer The liability side of the balance sheet will increase by Rs.2,000/-
Select The Blank
Question The method of overhead apportionment which considers both the material cost as well as the labour cost, is known as ________ method.
Correct Answer Prime cost percentage rate
Your Answer Prime cost percentage rate
Multiple Choice 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
Match The Following
Question Correct Answer Your Answer
Normal Standards Anticipated to be achieved in future Once established can never be altered
Basic Standards Established for a longer period of time Anticipated to be achieved in the budget period
Current Standards Established for a shorter period of time Anticipated to be unachievable in future
Expected Standards Anticipated to be achieved in the budget period Established for a shorter period of time
Multiple Choice Single Answer
Question The cost that indicates historical cost, which is incurred in past, is known as
Correct Answer Sunk cost
Your Answer Sunk cost
Multiple Choice Multiple Answer
Question Which of the following budgets may be termed as a long term budget?
Correct Answer Capital expenditure budget , Research and Development expenditure budget , Budget of a transportation company
Your Answer Capital expenditure budget , Research and Development expenditure budget , Budget of a transportation company
Multiple Choice Single Answer
Question If a predetermined overhead rate is not employed an the volume of production is increased over the level planned, the cost per unit would be expected to :
Correct Answer Decrease for fixed costs and remain unchanged for variable costs
Your Answer Remain unchanged for fixed costs and increase for variable costs
Multiple Choice Single Answer
Question If the overhead expenditure to be absorbed is the foreman's salary, the most appropriate basis for absorption would be :
Correct Answer Direct labour hours
Your Answer Weight of material
Multiple Choice Single Answer
Question Which system provides an opportunity to companies to adopt the one best method of cost accounting system known to the industry ?
Correct Answer Uniform costing
Your Answer Job costing
Select The Blank
Question Loans which are borrowed from financial institutions are to be paid off in 8 years, should be disclosed as ________ in the balance sheet.
Correct Answer Long term liabilities
Your Answer Current liabilities
True/False
Question The bin card and stores ledger, being independent records, comparison of these two records should be avoided.
Correct Answer False
Your Answer True
Multiple Choice Multiple Answer
Question Accounting is the art where transactions are …
Correct Answer Summarized , Classified , Recorded
Your Answer Summarized , Classified , Recorded
True/False
Question Purchased goods by paying Rs.35,000/-: In this case, the cash account should be debited.
Correct Answer True
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)
Your Answer Rs.1,100/- (Favourable)
Select The Blank
Question The process of recording the business transactions in a defined set of records is referred to as ________.
Correct Answer Balance sheet
Your Answer Balance sheet
True/False
Question In the ledger account only credit entries relating to a particular account are posted.
Correct Answer False
Your Answer False
True/False
Question Error of commission refer to a situation where a transaction is not recorded in the books of account.
Correct Answer False
Your Answer True
Multiple Choice Multiple Answer
Question The selection of the supplier may depend upon the following aspects:
Correct Answer Geographical location of the supplier , Price quoted by the supplier , Goodwill of the supplier
Your Answer Geographical location of the supplier , Price quoted by the supplier , Goodwill of the supplier
Multiple Choice Single Answer
Question Which system involves adoption of same costing principles, practices and procedures by the individual firms of an industry ?
Correct Answer Uniform costing
Your Answer Uniform costing
True/False
Question Predetermined rate of absorption of overheads helps in quick preparation of cost estimates and quoting prices.
Correct Answer True
Your Answer False
True/False
Question Idle capacity and idle time mean one and the same thing.
Correct Answer False
Your Answer False
Multiple Choice Multiple Answer
Question Purchased goods worth Rs.6,450/- on 10th March, 2004. However the goods were delivered directly to the plant situated at Nagar and hence this transaction was not recorded in the purchase book, which is maintained at the corporate office. Analyse the impact of this transaction.
Correct Answer The gross profit will increase by Rs.6,450/-
Your Answer The gross profit will increase by Rs.6,450/-
Select The Blank
Question Payment by ________ method lowers the cost of production through their impact on fixed costs.
Correct Answer Results
Your Answer Time
Multiple Choice Single Answer
Question The overheads of a machine shop X should be apportioned using which of the following basis?
Correct Answer Machine hours
Your Answer Direct labour cost
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 realised , Applicable to valuation of current assets
Your Answer Anticipates all future losses and expenses , Applicable to valuation of current assets , Applicable to valuation of non-current asset
Multiple Choice Multiple Answer
Question Merits of break even point analysis are as follows:
Correct Answer Useful diagnostic tool. , Used for analysing the risk implication of alternative actions. , Used to graphically represent complicated data.
Your Answer Useful diagnostic tool. , Used for analysing the risk implication of alternative actions. , Useful in the long run.
True/False
Question Narration must be mentioned in the ledger.
Correct Answer False
Your Answer True
True/False
Question The actual hours taken by the labour are compared with the standard hours allowed for output to find out the labour yield variance.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question The features of multiplicity of key factors are as follows :
Correct Answer More than one key factors , Refers to a complex situation , Can be resolved by using linear programming technique
Your Answer More than one key factors , Refers to a complex situation , Can be resolved by using linear programming technique
Multiple Choice Single Answer
Question Included in the trial balance is the sales promotion suspense account with a debit balance of Rs.6,300/-. It is given that this balance should be written off. Calculate its impact on profit of the company.
Correct Answer The net profit will decrease by Rs.6,300/-
Your Answer The gross profit will decrease by Rs.6,300/-
Multiple Choice Multiple Answer
Question Items credited to Profit & Loss Account are…
Correct Answer Gross profit , Commission received , Interested received
Your Answer Gross profit , Commission received , Interested received
Multiple Choice Multiple Answer
Question The production budget may be prepared in terms of :
Correct Answer Units produced , Production cost , Material cost, labour cost and overheads
Your Answer Units produced , Production cost , Material cost, selling cost and overheads
Multiple Choice Multiple Answer
Question If you are required to enforce uniform costing system in your industry, how would you proceed ?
Correct Answer Collecting data from all units of your industry , Ensuring that the data collected is complete and correct , Maintaining secrecy of the data collected
Your Answer Collecting data from all units of your industry , Ensuring that the data collected is complete and correct , Maintaining secrecy of the data collected
Select The Blank
Question Goods returned to the suppliers from whom it was ________d is recorded in thePurchasereturn register.
Correct Answer Purchase
Your Answer Purchase
Select The Blank
Question Profit volume ratio is also known as ________.
Correct Answer Contribution to sales ratio
Your Answer Sales to contribution ratio
True/False
Question Standard costing is always accompanied by a system of budgeting but budgetary control may be operated in business where standard costing is impracticable.
Correct Answer True
Your Answer True
Select The Blank
Question Crane expenses should be apportioned on the basis of ________.
Correct Answer Number of hours crane worked in the department
Your Answer Number of hours crane worked in the department
Select The Blank
Question Marginal costing is also known as ________.
Correct Answer Variable costing
Your Answer Variable costing
Multiple Choice Multiple Answer
Question Select the examples of functional budgets:
Correct Answer Sales budget , Production budget , Research and development budget
Your Answer Sales budget , Production budget , Research and development budget
Multiple Choice Single Answer
Question A firm has purchased a plant to manufacture a new product, the cost data for which is given below : Estimated annual sales 24,000 units. Estimated costs : Materials Rs.4/- per unit; labour Re.0.60 per unit; overheads Rs.24,000/- per year; administrative expenses Rs.28,800/- per year and selling expenses are 15% of sales; Calculate the selling price per unit if profit per unit is Rs.1.02.
Correct Answer Rs.9.20/-
Your Answer Rs.7.74/-
Multiple Choice Single Answer
Question A worker 12 hours on a scheme of payment by results. His day rate is Rs.150/- an hour, the material cost of the product is Rs.600/- and the overheads are recovered at 15% of the total direct wages. Calculate the factory cost of the product under the piece rate work plan.
Correct Answer Rs.2,670/-
Your Answer Rs.2,850/-
Match The Following
Question Correct Answer Your Answer
Change in profit/ Change in activity level Profit volume ratio Profit volume ratio
Change in total cost/ Change in activity level Variable cost per unit Total contribution
Total sales X Profit volume ratio Total contribution Variable cost per unit
Selling price ( Actual sales - Break even sales) Margin of safety Margin of safety
Select The Blank
Question Preparation of direct material ________ budget is the responsibility of the Purchase manager.
Correct Answer Purchase
Your Answer Purchase
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
Select The Blank
Question ________ system of wage payment is a combination of Halsey system and Gantt system.
Correct Answer Diemer
Your Answer Barth premium
Select The Blank
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
Your Answer Uniform costing
Multiple Choice Single Answer
Question The credit side of the sales book was overcast by Rs.2,000/-. As a result of this rectification, what of the given impacts is likely to happen?
Correct Answer The liability side of the balance sheet will increase by Rs.2,000/-
Your Answer The liability side of the balance sheet will increase by Rs.2,000/-
Select The Blank
Question The method of overhead apportionment which considers both the material cost as well as the labour cost, is known as ________ method.
Correct Answer Prime cost percentage rate
Your Answer Prime cost percentage rate
Multiple Choice 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
Match The Following
Question Correct Answer Your Answer
Normal Standards Anticipated to be achieved in future Once established can never be altered
Basic Standards Established for a longer period of time Anticipated to be achieved in the budget period
Current Standards Established for a shorter period of time Anticipated to be unachievable in future
Expected Standards Anticipated to be achieved in the budget period Established for a shorter period of time
Multiple Choice Single Answer
Question The cost that indicates historical cost, which is incurred in past, is known as
Correct Answer Sunk cost
Your Answer Sunk cost
Multiple Choice Multiple Answer
Question Which of the following budgets may be termed as a long term budget?
Correct Answer Capital expenditure budget , Research and Development expenditure budget , Budget of a transportation company
Your Answer Capital expenditure budget , Research and Development expenditure budget , Budget of a transportation company
Multiple Choice Single Answer
Question If a predetermined overhead rate is not employed an the volume of production is increased over the level planned, the cost per unit would be expected to :
Correct Answer Decrease for fixed costs and remain unchanged for variable costs
Your Answer Remain unchanged for fixed costs and increase for variable costs
Multiple Choice Single Answer
Question If the overhead expenditure to be absorbed is the foreman's salary, the most appropriate basis for absorption would be :
Correct Answer Direct labour hours
Your Answer Weight of material
Multiple Choice Single Answer
Question Which system provides an opportunity to companies to adopt the one best method of cost accounting system known to the industry ?
Correct Answer Uniform costing
Your Answer Job costing
Select The Blank
Question Loans which are borrowed from financial institutions are to be paid off in 8 years, should be disclosed as ________ in the balance sheet.
Correct Answer Long term liabilities
Your Answer Current liabilities
True/False
Question The bin card and stores ledger, being independent records, comparison of these two records should be avoided.
Correct Answer False
Your Answer True
Multiple Choice Multiple Answer
Question Accounting is the art where transactions are …
Correct Answer Summarized , Classified , Recorded
Your Answer Summarized , Classified , Recorded
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