Management Accounting - 12

Multiple Choice Multiple Answer
Question	The objects of cost accountancy are :-
Correct Answer	To ascertain cost and profitability , Cost Control , Presentation of Information
Your Answer	To ascertain cost and profitability , Cost Control , Presentation of Information
Multiple Choice Multiple Answer
Question	Management accounting is concerned with the following activities :-
Correct Answer	Decision making , Safeguarding assets , Planning and controlling activities
Your Answer	Decision making , Planning and controlling activities
Multiple Choice Multiple Answer
Question	Features of material usage variance are :-
Correct Answer	Measures the difference between the quantity of materials actually used and that should have been used. , Considers standard price X actual quantity , Considers standard price X standard quantity
Your Answer	Measures the difference between the quantity of materials actually used and that should have been used. , Considers standard price X actual quantity , Considers standard price X standard quantity
True/False
Question	Under the accelerating premium system incentive increases at a fast rate with the decrease in output.
Correct Answer	False
Your Answer	False
True/False
Question	If the physical stock is less than the stock as per the stores ledger, such shortage should be treated as an issue of material.
Correct Answer	True
Your Answer	False
Multiple Choice Single Answer
Question	An analysis of the time card of a worker on a machine shows that of the total 48 hours, he worked 45 hours (including 4 hours overtime) on production and that 3 hours was idle due to machine break-down. The rate of the worker is rupees ten per hour : but overtime is paid at 50 per cent extra. You are required to calculate the earnings of the worker.
Correct Answer	Rs.500/-
Your Answer	Rs.500/-
True/False
Question	Predetermined rate of absorption of overheads helps in quick preparation of cost estimates and quoting prices.
Correct Answer	True
Your Answer	True
Select The Blank
Question	If overhead absorbed i.e. overheads charged to units during the period is more than the overhead incurred, it is said that the overheads are ________.
Correct Answer	Over-absorbed
Your Answer	Under-absorbed
Select The Blank
Question	A worker is paid a monthly salary of Rs.500/- along with a bonus of 50 paise per unit completed, this type of labour cost may be classified as ________ cost.
Correct Answer	Semi-variable
Your Answer	Semi-variable
Select The Blank
Question	Goods purchased from A for Rs.2,020/- were passed through the sales book. The rectification of this error will result in ________.
Correct Answer	Decrease in gross profit by Rs.2,020/-
Your Answer	Increase in gross profit by Rs.2,020/-
True/False
Question	High time wages means necessarily high cost of production.
Correct Answer	False
Your Answer	False
Multiple Choice Multiple Answer
Question	The management of Dick Ltd. is deciding whether to buy component Y from the supplier, since the purchase cost is less than the manufacturing cost. State the non-financial aspects that must be considered before arriving at a decision :-
Correct Answer	Reliability regarding quality of the material supplied by the supplier , Alternative use of labour of engaged in manufacturing component Y , Regularity of material supplies from the supplier
Your Answer	Reliability regarding quality of the material supplied by the supplier , Alternative use of labour of engaged in manufacturing component Y , Regularity of material supplies from the supplier
Select The Blank
Question	Loans which are borrowed from financial institutions are to be paid off in 8 years, should be disclosed as ________ in the balance sheet.
Correct Answer	Long term liabilities
Your Answer	Long term liabilities
Select The Blank
Question	Interest receivable is a________ for the organization.
Correct Answer	Current asset
Your Answer	Current asset
True/False
Question	Period cost is the cost assigned to the products.
Correct Answer	False
Your Answer	True
Multiple Choice Single Answer
Question	A new computer worth Rs.35,000 was purchased on 18th June, 2003. The company has 10 such computers costing Rs.20,000/- each. The depreciation is charged @ 18% p.a. Find the depreciation on computers to be charged for the year.
Correct Answer	Rs.40,953.70
Your Answer	Rs.40,953.70
Multiple Choice Single Answer
Question	The direct material usage budget and direct material purchase budget differ because of which of the following?
Correct Answer	A planned change in the level of material stock
Your Answer	The level of efficiency of men or machines
True/False
Question	New companies can adopt Uniform costing system as a ready-made system.
Correct Answer	True
Your Answer	True
Multiple Choice Multiple Answer
Question	Pre-requisites of Uniform Costing are :-
Correct Answer	Spirit of mutual trust , Free Exchange of ideas , No rivalry
Your Answer	Free Exchange of ideas , No rivalry , Spirit of mutual trust
Multiple Choice Multiple Answer
Question	The principal functions of the cost accounting department are :-
Correct Answer	Classifying labour cost according to jobs, processes, etc. , Preparation of different reports based on direct, indirect labour cost, etc. , To focus on areas where labour cost may be reduced.
Your Answer	Classifying labour cost according to jobs, processes, etc. , Preparation of different reports based on direct, indirect labour cost, etc. , To focus on areas where labour cost may be reduced.
Multiple Choice Multiple Answer
Question	In which of the following situations, the flexible budget should be preferred?
Correct Answer	Sales are too difficult to predict , Supply level of input cannot be predicted , Varying levels of production activity
Your Answer	Sales are too difficult to predict , Supply level of input cannot be predicted , Varying levels of production activity
Multiple Choice Single Answer
Question	Select the information to be considered before installing a costing system :-
Correct Answer	Labour intensity of the product
Your Answer	Number of workers required
Multiple Choice Single Answer
Question	Tom company has sales of Rs.200,000/- with variable expenses of Rs.150,000/-, fixed expenses of Rs.60,000/-, and an operating loss of Rs.10,000/-. By how much would Tom have to increase its sales in order to achieve an operating income of 10% of sales?
Correct Answer	Rs.200,000/-
Your Answer	Rs.231,000/-
Multiple Choice Single Answer
Question	As on 31st March, 2004, it was decided to write off Rs.800/- of debtors as bad debts. Also, provision for bad and doubtful debts is to be made @ 5% and for discount on debtors @ 4%. Find the net amount of debtors to be disclosed in the balance sheet, if the total debtors before the aforesaid adjustments is Rs.98,623/-.
Correct Answer	Rs.89,214.58
Your Answer	Rs.88,285.26
Select The Blank
Question	Payment by ________ method lowers the cost of production through their impact on fixed costs.
Correct Answer	Results
Your Answer	Time
Multiple Choice Multiple Answer
Question	Which of the following aspects are mainly responsible for difficulty in application of Uniform costing system?
Correct Answer	Capital investment , Plant size , Location
Your Answer	Capital investment , Plant size , Location
Select The Blank
Question	The most appropriate method for apportionment of overheads of the purchasing and stores department is percentage on ________.
Correct Answer	Direct Material
Your Answer	Direct Material
Multiple Choice Single Answer
Question	Judge the given statement according to the given criteria :- 'Provision for doubtful debts account' and 'provision for discount on debtors account' mean same account can be maintained under two account-heads, since both are related to debtors and indicate a loss to the organization.
Correct Answer	The statement is incorrect but the reason is correct
Your Answer	The statement and the reason both are incorrect
Multiple Choice Multiple Answer
Question	Following errors affect the trial balance :-
Correct Answer	Wrong totaling of subsidiary books , Posting on the wrong side of an account , Omission of posting an account in the ledger
Your Answer	Wrong totaling of subsidiary books , Posting on the wrong side of an account , Omission of posting an account in the ledger
Select The Blank
Question	If the owner brings in personal calculator for office use, ________ account should be credited.
Correct Answer	Capital
Your Answer	Cash
Multiple Choice Multiple Answer
Question	From the following select the examples of errors of commission :-
Correct Answer	Sales recorded in the sales register as Rs.2,020/- instead of Rs.2,200/- , Received cash from Sham, credited to Ram's account , Paid transport charges, credited to transport charges account
Your Answer	Sales recorded in the sales register as Rs.2,020/- instead of Rs.2,200/- , Received cash from Sham, credited to Ram's account , Paid transport charges, credited to transport charges account
Select The Blank
Question	A ________ can be defined as a part of the organization for which separate budget can be prepared and implemented.
Correct Answer	Budget centre
Your Answer	Budget centre
Multiple Choice Single Answer
Question	Net sales Rs,7,50,000/-, opening stock Rs.1,14,375/-, purchases Rs.483,375/- and closing stock Rs.1,47,750/-. Calculate the Gross Profit.
Correct Answer	Rs.3,00,000/-
Your Answer	Rs.3,00,000/-
True/False
Question	Profitability statement is a period statement & provides information about the results of operations.
Correct Answer	True
Your Answer	True
Select The Blank
Question	The method of overhead apportionment which considers both the material cost as well as the labour cost, is known as ________ method.
Correct Answer	Prime cost percentage rate
Your Answer	Prime cost percentage rate
Multiple Choice Single Answer
Question	Net profit for the year before charging commission to the manager, is Rs.111,775/-. The manager of the company is entitled to commission @ 8% on net profits after charging commission. Find the amount of commission due to the manager.
Correct Answer	Rs.8,279.63
Your Answer	Rs.8,942/-
Multiple Choice Single Answer
Question	A manufacturer is producing alloy for which standard mix is 25% copper and 75% iron. Standard price for copper is Rs.80/- per kg. and for iron Rs.20/- per kg. 20% of input is standard loss. Actual output is 8,000 kg. of alloy using 2,000 kg of copper at Rs.90/- per kg. and 9,000 kg of iron at Rs.15/- per kg. Calculate the standard cost of copper.
Correct Answer	Rs.200,000/-
Your Answer	Rs.150,000/-
True/False
Question	Cheque received from a client on 28th September, 2004 must be entered in the bank book only after it is credited in the pass book.
Correct Answer	False
Your Answer	False
Multiple Choice Multiple Answer
Question	The various areas in which uniform costing can be adopted are :-
Correct Answer	Valuation of inventories , Charging of depreciation , Apportionment of overheads
Your Answer	Valuation of inventories , Charging of depreciation , Apportionment of overheads
Multiple Choice Single Answer
Question	The gross profit for the year 2004 is Rs.184,326/-. The depreciation on furniture for the year is Rs.24,561/-; dividend received amounted to Rs.12,000/- and the director's remuneration worked out to be Rs.95,784/-. Find the net profit for the year 2004.
Correct Answer	Rs.75,981/-
Your Answer	Rs.75,981/-
True/False
Question	The purpose of the profit and loss account is to bring together information which relates to gross profit and the expenses for running the business.
Correct Answer	True
Your Answer	True
Match The Following
Question Correct Answer Your Answer
Ledger Maintain all types of accounts Maintain all types of accounts
Audit Reviewing internal control system Reviewing internal control system
Accounting Process of analyzing & interpretation Process of analyzing & interpretation
Journal Book of original entry Book of original entry
Match The Following
Question Correct Answer Your Answer
Daily Time sheets Time spent by worker on job is recorded Time spent by worker on job is recorded
Time Keeping Department Recording of workers time Recording of workers time
Time booking department Jobwise booking of time. Jobwise booking of time.
Time Recording Clock Method Ticket number & clock card allotted to worker Ticket number & clock card allotted to worker
Multiple Choice Multiple Answer
Question	Items credited to Profit & Loss Account are :-
Correct Answer	Gross profit , Commission received , Interested received
Your Answer	Gross profit , Commission received , Interested received
True/False
Question	For a manufacturing company, dividend received is a non-operating income.
Correct Answer	True
Your Answer	False
Select The Blank
Question	A standard that is never altered, after being established, is known as ________ standard.
Correct Answer	Ideal
Your Answer	Basic
Multiple Choice Single Answer
Question	Rs.2,650/- were paid to ABC Ltd. for maintenance of machine; which account should be debited for this transaction?
Correct Answer	Maintenance of machine account
Your Answer	ABC Ltd.'s Account