Management Accounting - 14

	LIST OF ATTEMPTED QUESTIONS AND ANSWERS
	Multiple Choice Multiple Answer   Question   Essentials for effective implementation of budgetary control system are   Correct Answer   Commitment of top management , Clearly defined objectives , Continous budget education   Your Answer   Commitment of top management , Clearly defined objectives , Continous budget education  Multiple Choice Multiple Answer   Question   Features of convention of consistency are . . .   Correct Answer   The accounting policies and procedures should be followed consistently , Facilitates the comparison of financial statements , It facilitates comparison of financial statements on period-to-period basis   Your Answer   The accounting policies and procedures should be followed consistently , It facilitates comparison of financial statements on period-to-period basis  True/False   Question   The bin card and stores ledger, being independent records, comparison of these two records should be avoided.   Correct Answer   False   Your Answer   False  Match The Following Question Correct Answer Your Answer Dividend paid Profit and loss appropriation account Profit and loss account Freight inwards Manufacturing account Manufacturing account Sales Trading account Capital account Freight outwards Profit and loss account Trading account  Select The Blank   Question   Large angle of incidence indicates ________ amount of profits.   Correct Answer   higher   Your Answer   same  True/False   Question   Error of commission refer to a situation where a transaction is not recorded in the books of account.   Correct Answer   False   Your Answer   True  Multiple Choice Single Answer   Question   Relevant costs in decision making are :   Correct Answer   Those costs which will arise as a result of the proposed action   Your Answer   Those costs which will arise as a result of the proposed action  Select The Blank   Question   ________is the summary of all the balances in all the accounts listed in ledger account of an organization at any given point of time.   Correct Answer   Trial Balance   Your Answer   Trial Balance  Multiple Choice Multiple Answer   Question   Overhead capacity variance is the outcome of:   Correct Answer   Shortage of labour , Enforced idle time, e.g.power breakdowns , Customer demand being more or less than anticipated   Your Answer   Shortage of labour , Enforced idle time, e.g.power breakdowns , Customer demand being more or less than anticipated  True/False   Question   Factory overheads consist of all overhead costs incurred from the stage of procurement of material till the production of finished goods.   Correct Answer   True   Your Answer   True  True/False   Question   Bank reconciliation statement must be prepared before the preparation of profit and loss account and balance sheet.   Correct Answer   True   Your Answer   True  Multiple Choice Single Answer   Question   Included in the trial balance is the sales promotion suspense account with a debit balance of Rs.6,300/-. It is given that this balance should be written off. Calculate its impact on profit of the company.   Correct Answer   The net profit will decrease by Rs.6,300/-   Your Answer   The gross profit will increase by Rs.6,300/-  Select The Blank   Question   In calculation of total sales margin variance, the ________cost of sales is deducted from the actual sales revenue.   Correct Answer   Standard   Your Answer   Actual  Match The Following Question Correct Answer Your Answer Increase in contribution will lead to Increase in profits Increase in profit volume ratio Increase in fixed cost will lead to Increase in break even point Decrease in contribution Decrease in variable cost will lead to Increase in profit volume ratio Increase in profits Decrease in selling price will lead to Decrease in contribution Increase in break even point  Multiple Choice Multiple Answer   Question   Marginal costing technique is useful in taking decisions relating to which of the following courses of action?   Correct Answer   Decision to drop a product line , Decision to accept a special offer at price lower than the normal selling price , Decision regarding temporary shut-downs   Your Answer   Decision to drop a product line , Decision to accept a special offer at price lower than the normal selling price , Decision to accept a special offer at price higher than the normal selling price , Decision regarding temporary shut-downs  Multiple Choice Single Answer   Question   Basic objective of Uniform Costing is . . .   Correct Answer   comparison   Your Answer   To control cost  Select The Blank   Question   Re-order level should be higher than ________ but lesser than maximum stock level.   Correct Answer   Minimum level   Your Answer   Minimum level  True/False   Question   The variable costs are controllable at the lower lever.   Correct Answer   True   Your Answer   False  Select The Blank   Question   Economical use of labour, materials and facilities can achieved with the help of ________.   Correct Answer   Budgetary control   Your Answer   Budgetary control  Select The Blank   Question   Goods returned by Pawan worth Rs.1,000/- is debited to Pawan's Account. In order to rectify the mistake, which account should be debited ? ________   Correct Answer   Suspense account   Your Answer   Personal account  True/False   Question   The purchase account should be debited when an order is placed with the supplier of material.   Correct Answer   False   Your Answer   False  True/False   Question   Accounting refers to the process of analyzing & interpreting the information already recorded in the books of accounts.   Correct Answer   True   Your Answer   True  Select The Blank   Question   Interest receivable is a________ for the organisation.   Correct Answer   Current sset   Your Answer   Long term asset  Multiple Choice Single Answer   Question   Purchases returns of Rs.18,000/- were wrongly transferred to the sales returns account. Calculate its impact on net profit.   Correct Answer   The net profit will not be affected   Your Answer   The net profit will decrease by Rs.18,000/-  Multiple Choice Single Answer   Question   Amit sold Goods to Atul for Rs. 50,000/- on cash & Rs. 50,000/- on credit basis. Amit allowed 10% discount for on the spot transaction. What is the amount that should be debited to the cash account?   Correct Answer   Rs.45,000/-   Your Answer   Rs.50,000/-  Multiple Choice Single Answer   Question   Interest on bank loan, was paid till the quarter ending 30th September, 2003, Rs.36,000/-. Find the amount to be debited to the profit and loss account for the year ending on 31st March, 2004, assuming the loan is not yet repaid as on this date.   Correct Answer   Rs.72,000/-   Your Answer   Rs.36,000/-  Multiple Choice Single Answer   Question   The features of the Halsey Plan are:   Correct Answer   The benefit of time saved is divided equally between the employer and employee   Your Answer   The benefit of time saved is divided equally between the employer and employee  True/False   Question   The sum of indirect material cost, indirect labour cost and indirect expenses is termed as factory cost.   Correct Answer   False   Your Answer   True  Multiple Choice Single Answer   Question   Determine re-order level from the following : Maximum daily consumption - 200 units; maximum delivery period - 12 days; average daily consumption - 150 units and average delivery period - 8 days.   Correct Answer   2,400 units   Your Answer   2,400 units  Select The Blank   Question   An error of partial omission can be rectified by either debiting or crediting the ________ account, as the case maybe.   Correct Answer   suspense   Your Answer   adjusted profit and loss  Multiple Choice Multiple Answer   Question   Select the examples of functional budgets:   Correct Answer   Sales budget , Production budget , Research and development budget   Your Answer   Sales budget , Production budget , Research and development budget  Multiple Choice Single Answer   Question   With the help of the given information, find actual fixed overheads for actual output. Fixed overheads volume variance -Rs.75,000/- (Favourable); fixed overheads efficiency variance -Rs.95,000/- (Favourable); fixed overheads calendar variance Rs.20,000/- (Adverse); fixed voerheads expenditure variance Rs.100,000/- (Adverse) and standard fixed overheads for actual output -Rs.575,000/-.   Correct Answer   Rs.600,000/-   Your Answer   Rs.525,000/-  Select The Blank   Question   Furniture account will always have a ________ balance.   Correct Answer   Debit   Your Answer   Credit  Select The Blank   Question   If the ordering cost ________s, then the economic order quantity will Increase.   Correct Answer   Increase   Your Answer   Increase  Multiple Choice Multiple Answer   Question   Which of the following information is included in the goods received note?   Correct Answer   Date of receipt of material , Quantity received , Description of goods   Your Answer   Date of receipt of material , Quantity received , Price of goods , Description of goods  Multiple Choice Multiple Answer   Question   Select the non-monetary incentives   Correct Answer   Health and safety services , Canteen facility , Loans at reduced rate of interest   Your Answer   Health and safety services , Canteen facility  True/False   Question   A business is an activity carried out with the intention of earning the profit.   Correct Answer   True   Your Answer   True  True/False   Question   Linking overhead to a cost unit is known as overhead absorption.   Correct Answer   True   Your Answer   True  Multiple Choice Multiple Answer   Question   The operating profit as per cost statement may differ from the profit as per Profit and Loss Account due to existence of   Correct Answer   Depreciation on plant and machinery , Interest on loans taken from other , Interest on loans granted to others   Your Answer   Depreciation on plant and machinery , Interest on loans taken from other  Multiple Choice Multiple Answer   Question   The main advantages of profit sharing are :   Correct Answer   Employees try to increase productivity , Incentives are shared by all the employees , Augments emplyees' efficiency   Your Answer   Employees try to increase productivity , Incentives are shared by all the employees  Multiple Choice Multiple Answer   Question   Labour efficiency variance Rs.1,000/- (favourable); labour mix variance Rs.260/- (adverse) and labour rate variance Rs.300/- (adverse). Compute labour cost variance and labour yield variance.   Correct Answer   Labour cost variance -Rs.700/- (Favourable) , Labour yield variance -Rs.1,260/- , Labour yield variance is favourable   Your Answer   Labour cost variance -Rs.700/- (Favourable) , Labour yield variance -Rs.1,260/-  True/False   Question   The best way to reduce labour cost is to recruit cheap labour.   Correct Answer   False   Your Answer   False  True/False   Question   Balance sheet indicates the financial status of the business at given period.   Correct Answer   True   Your Answer   True  Multiple Choice Multiple Answer   Question   Select the items which may be classified as selling and distribution overheads.   Correct Answer   Delivery van expenses , Rent of finished goods warehouse , Sales research expenses   Your Answer   Delivery van expenses , Rent of finished goods warehouse , Sales research expenses  Select The Blank   Question   In India the gas industry and electricity industry, and ________ industry are examples of industries using the uniform costing system.   Correct Answer   fertilizer   Your Answer   fertilizer  Multiple Choice Single Answer   Question   The process of recording the costs in a formal and systematic manner with the intention of preparing statistical data there from a ascertain the cost, is known as . . .   Correct Answer   Cost accounting   Your Answer   Cost accounting  Multiple Choice Single Answer   Question   Fixed deposit bearing interest @ 5.50%, for Rs.10,000/- was kept with Bank of India on 1st June, 2003, for a period of one year. The type of the fixed deposit is cumulative, i.e. interest shall be received only on maturity. What treatment should be given in the books of accounts on 31st March, 2004, the year ending date?   Correct Answer   An entry for Rs.458.34, debiting interest accrued but not due account should be passed   Your Answer   An entry for Rs.458.34, crediting interest accrued but not due account should be passed

True/False
Question	A business is an activity carried out with the intention of earning the profit.
Correct Answer	True
Your Answer	True
True/False
Question	Balance sheet indicates the financial status of the business at given period.
Correct Answer	True
Your Answer	True
True/False
Question	Accounting refers to the process of analyzing & interpreting the information already recorded in the books of accounts.
Correct Answer	True
Your Answer	False
True/False
Question	Accounting is an art of recording, classifying & summarizing in a significant manner.
Correct Answer	True
Your Answer	True
True/False
Question	Financial accounting may deal with the ascertainment of cost & calculation of profitability of the individual product.
Correct Answer	False
Your Answer	False
True/False
Question	The reports generated by financial accounting are meant for the use by management for effective decisions.
Correct Answer	True
Your Answer	True