LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Multiple Answer Question The advantages of written communication are

Correct Answer Accuracy , Can be recorded , Brevity Your Answer Accuracy , Can be recorded

Multiple Choice Multiple Answer Question Business letters can be useful in different ways like

Correct Answer Legal evidence , Permanent information , Recovering dues Your Answer Legal evidence , Permanent information , Recovering dues

Multiple Choice Multiple Answer Question Essential parts of business letters would be

Correct Answer Head address , Date , Outward number Your Answer Head address , Date , Outward number

Multiple Choice Multiple Answer Question The Head address includes

Correct Answer Tel no. , Name of organization Your Answer Tel no. , Name of organization , Name of person

Multiple Choice Multiple Answer Question The body of the letter may be divided into

Correct Answer Opening Para , Main communication , Closing paragraph Your Answer Reference Para , Opening Para , Main communication , Closing paragraph

Multiple Choice Multiple Answer Question Examples of salutations would be

Correct Answer Dear sir , Respected Sir Your Answer Thanking you , Yours faithfully , Respected Sir

Multiple Choice Multiple Answer

Question

The matter in the memorandum may include

Correct Answer Procedures , Rules , Instructions Your Answer True/False Question People external to the organization do not have any access to the costing records. Procedures , Rules , Instructions

Correct Answer True Your Answer True

Multiple Choice Multiple Answer Question Features of Financial Accounting includes----------------Correct Answer It is a legal requirement , It protects the interest of outsiders , It considers historical transactions It is a legal requirement , It protects the interest of outsiders , It Your Answer considers historical transactions True/False Question A cheque received from a customer but not deposited into bank must be recorded in the cash book.

Correct Answer True Your Answer False

Multiple Choice Single Answer Goods return by Pande worth Rs. 2000 should have appeared Question on the credit side of Pandes account for rectifying the same. Following account to be credited Correct Answer Suspense A/C Your Answer Goods A/C

Multiple Choice Single Answer Amit purchase of Rs. 6710 had been posted to the debit of the Question creditors A/C as 6170 rectifying the transaction the creditor A/C is to be debited amount to Rs Correct Answer 540 Your Answer 540

Multiple Choice Single Answer The periodical total of sales book was cash short by Rs. 5000 for Question rectifying the same, which A/C to be debited

Correct Answer Suspense A/C Your Answer Cash A/C

Multiple Choice Single Answer Old furniture sold for Rs. 5400 has been entered as Rs 4500 in Question the cash book, for rectifying the same Suspense A/C credited to Rs Correct Answer 900 Your Answer 900

Multiple Choice Multiple Answer Question Following error 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 Posting on the wrong side of an account , Omission of posting Your Answer an account in the ledger True/False Question Due to compensating errors the arithmetical accuracy of the trial balance get affected.

Correct Answer False Your Answer False

Multiple Choice Single Answer Question This cost indicates historical cost which is incurred in past.

Correct Answer Sunk cost Your Answer Sunk cost

Match The Following Question Non-operating Income Non-operating Expense Selling & Distribution Factory Cost Total Cost Correct Answer Profit on sale of shares Dividend on shares Advertisement Your Answer Profit on sale of shares Dividend on shares Advertisement

Repair for factory building Repair for factory building Cost of finished goods Cost of finished goods

Multiple Choice Single Answer The prime cost is Rs. 10,00,000 the factory cost is Rs. Question 13,00,000, the total administration overheads are 14,00,000 and having selling overhead of Rs. 86000. What is the Total cost? Correct Answer 37,86,000 Your Answer 37,86,000

Multiple Choice Multiple Answer Question Non Operating Expenses includes

Correct Answer Loss on sale of asset , Goodwill , Only a, b Your Answer True/False Question Perpectual inventory system includes continuous verification of physical stock at regular intervals. Goodwill , Preliminary expenses written off

Correct Answer True Your Answer True

Multiple Choice Single Answer Under the differential time rate method of wage payment up to Question 80% of efficiency following rate is offered. Correct Answer Rs. 1.00 per hour Your Answer True/False Question Per unit cost of variable overheads may reduce as the volume of output increases but the total overheads remain constant. Rs. 1.00 per hour

Correct Answer False Your Answer True/False Question False

Machine hour rate is calculated as (amount of overheads to be absorbed)/(labour hours required for production)

Correct Answer False Your Answer False

Multiple Choice Single Answer Question This is the best example of element wise classification of cost.

Correct Answer material Your Answer material

Multiple Choice Single Answer Question This is an example of semi variable overheads.

Correct Answer electricity Your Answer electricity

Multiple Choice Multiple Answer Question wise classification of overheads takes the form of

Correct Answer indirect material , indirect labour , indirect expenses Your Answer True/False Question To take make or buy decision under the marginal costing , if purchase price of the product is less than its variable cost it is advisable to go for manufacturing proposition. indirect material , indirect labour , indirect expenses

Correct Answer False Your Answer True/False Question Budget is prepared for a fixed period of time. False

Correct Answer True Your Answer True/False Question Depreciation does not involve cash out flow True

Correct Answer True Your Answer True

Multiple Choice Multiple Answer Question Uncontrollable variances are

Correct Answer Strike , Change in customers demand , Devaluation of currency Your Answer Strike , Change in customers demand , Devaluation of currency

Multiple Choice Multiple Answer Question Correct Answer Your Answer Basic three steps in Standard Costing are Setting standards , Comparing actuals with standards , Measurement of variance Setting standards , Comparing actuals with standards , Measurement of variance

Multiple Choice Single Answer Calculate Labour Rate Variance, If actual rate per hour is Question Rs.3.50/- , Standard rate is Rs.3/- per unit and actual hours are 13, 500. Correct Answer Rs.6750/- ( Adverse ) Your Answer Rs.6750/- ( Favorable )

Multiple Choice Single Answer Calculate Labour Efficiency Variance, If actual rate per hour is Question Rs.3.50/- , Standard rate is Rs.3/- per unit and standard hours are 15,000 and Actual hours are 13, 500. Correct Answer Rs.4500/- ( Favorable ) Your Answer Rs.4500/- ( Favorable )

Multiple Choice Multiple Answer Following factors will have to be considered before preparing Question Production Budget in terms of quantity Production capacity , Co-ordination with Sales forecast , Correct Answer Management Policy Your Answer Co ordination with Stores department , Production capacity

Match The Following Question Maximum level Correct Answer The level above which actual stock should not exceed The level below which actual stock should not reduce Your Answer The level above which actual stock should not exceed The level below which actual stock should not reduce

Minimum level

Re-order level Danger level Fixation of inventory level

To take the step for Initiating proper action for procurement of further lots movement of material of material Below minimum level Below minimum level

Initiating proper action for To take the step for procurement of further lots movement of material of material

Select The Blank If ________ is not provided, the asset may appear in the Question Balance Sheet at an ________ amount Correct Answer depreciation Your Answer depreciation

Correct Answer overstated Your Answer overstated

Select The Blank Generally accounts of the assets will have ________ balance Question and liabilities will have ________ balance Correct Answer debits Your Answer debits

Correct Answer credits Your Answer credits

Select The Blank In financial statements P& L Accounts relates to a specific Question duration whereas ________ is for a given point of time Correct Answer P& L Accounts Your Answer Balance sheet

Correct Answer Balance sheet Your Answer Select The Blank Along with financial accounting, ________ and ________ are the Question other streams of accounting Correct Answer Cost Accounting Your Answer Cost Accounting

Correct Answer Management Accounting Your Answer Management Accounting

Select The Blank Labour Turnover indicates ________ in labour force showing a Question highly increasing trend or highly ________ trend Correct Answer change

Your Answer

change

Correct Answer decreasing Your Answer decreasing

Select The Blank Preventive costs of labour turnover refers to all the costs which Question may be incurred by the organisation to keep workers happy and ________ them from ________ the job Correct Answer discourage Your Answer encourage

Correct Answer leaving Your Answer leaving

Select The Blank Expenditure like general lighting are apportioned considering Question ________ as a base and expenditure like depreciation are apportioned considering ________ as a base. Correct Answer number of light points Your Answer number of light points

Correct Answer value of assets Your Answer number of light points

Select The Blank Under absorption of overheads may take place due to the Question reasons like ________ overheads being more than the ________ overheads Correct Answer actual Your Answer actual

Correct Answer estimated Your Answer estimated

Select The Blank Fixed overheads normally arise as a result of policy and are Question largely ________ in nature at the ________ level of the management Correct Answer uncontrollable Your Answer uncontrollable

Correct Answer lower Your Answer lower

Select The Blank A key factor is defined as the factor which, at a particular point of Question time or over a period will ________ the volume of ________ Correct Answer limit Your Answer limit

Correct Answer output Your Answer output

Select The Blank ________ of Trial Balance generally ensures ________ Question accuracy of the process of ledger posting . Correct Answer Talling Your Answer Talling

Correct Answer arithmetical Your Answer arithmetical

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-toperiod 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 Dividend paid Freight inwards Sales Freight outwards

Correct Answer Profit and loss appropriation account Manufacturing account Trading account Profit and loss account

Your Answer Profit and loss account Manufacturing account Capital account Trading account

Select The Blank Question Large angle of incidence indicates ________ amount of profits. Correct Answer higher Your Answer True/False same

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 Increase in contribution will lead to

Correct Answer Increase in profits

Your Answer Increase in profit volume ratio Decrease in contribution Increase in profits Increase in break even point

Increase in fixed cost will Increase in break even lead to point Decrease in variable cost Increase in profit volume will lead to ratio Decrease in selling price will lead to Decrease in contribution

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 norm al 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 True/False Question

Minimum level

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 True/False Question Personal account

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 True/False Question False

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

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

MA1

Multiple Choice Single Answer Question KDL Ltd. charges depreciation @ 20% on written down value method. The net book value of its machinery on 1st January, 2003 was Rs.125,000/-. What will be the net book value of its machinery on year end, i.e.31st December, 2003, assuming there were no additions or disposals during the year? Correct Answer Rs.100,000/Your Answer Rs.100,000/True/False 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 True 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 , Loans at reduced rate of interest 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 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 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.? Correct Answer Rs.6,450/Your Answer Rs.6,450/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.7,520.55 and outstanding interest account should be credited with Rs.7,520.55 True/False Question Balance sheet indicates the financial status of the business at given period. Correct Answer True Your Answer False Multiple Choice Single Answer Question Labour turnover rate is best defined as :

Correct Answer The number of leavers replaced divided by the average of employees on the payroll Your Answer The number of leavers replaced divided by the average of employees on the payroll 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 Uniform costing Multiple Choice Multiple Answer Question The key factor determines the : Correct Answer Level of activity , Capacity utilization , Level of sales Your Answer Level of activity , Capacity utilization , Level of sales Select The Blank Question If the ordering cost ________s, then the economic order quantity will Increase. Correct Answer Increase Your Answer Decrease Select The Blank Question The difference between sales and cost of sales is termed as ________. Correct Answer Net Profit Your Answer Contribution Margin 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 Match The Following Question Correct Answer Your Answer Book-Keeping Books of Accounts Financial status Financial statement Profitability statement & Balance-sheet Profitability statement & Balancesheet Accounting Process of analyzing & interpretation Process of analyzing & interpretation Profitability statement Indicates the amount of profit earned Indicates the amount of profit earned Balance-sheet Financial status Books of Accounts 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 Uniform Costing Methods may be advantageously applied to . . . Correct Answer Single organization having number of branches. , Number of companies in

same industry , Similar Industries such as cotton, jute etc. Your Answer Single organization having number of branches. , Number of companies in same industry , Similar Industries such as cotton, jute etc. True/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 Profitability statement indicates the amount of assets & liabilities. Correct Answer False Your Answer False True/False Question Accounting is an art of recording, classifying & summarizing in a significant manner. Correct Answer True Your Answer True Multiple Choice Single Answer Question An order for goods worth Rs.18,000/- was placed on 25th March, 2004. The goods were received on 1st April, 2004. Calculate the impact of this transaction on the final statements of accounts for the year ended 31st March, 2004. Correct Answer The net profit will not be affected Your Answer The net profit will not be affected True/False Question Balance sheet indicates the expenditure & income from the business. Correct Answer False Your Answer False True/False Question Interim dividend paid by the company should be debited to the profit and loss appropriation account. Correct Answer True Your Answer True 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 Budget True/False Question The process of accounting split into three steams i.e. financial, cost, management accounting. Correct Answer True Your Answer True Match The Following Question Correct Answer Your Answer Real A/C Debit what comes in, Credit what goes out Debit the receiver, Credit the giver Trade Discount Not accounted for in the books of Accounts Not accounted for in the books of

Accounts Cash Discount Accounted for in the books of Accounts Accounted for in the books of Accounts Rs.1 Personal A/C Debit the receiver, Credit the giver Debit what comes in, Credit what goes out Select The Blank Question Indirect Cost is termed as ________. Correct Answer Overhead Your Answer Overhead 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 The objectives of cost accounting are : Correct Answer Cost control , Ascertain ment of cost of each product , Assist in managerial decision-making Your Answer Cost control , Ascertain ment of cost of each product , Assist in managerial decision-making Multiple Choice Single Answer Question The finance manager is responsible for which of the following budget? Correct Answer Cash budget Your Answer Cash budget Select The Blank Question Interest on ________ is credited to Capital account. Correct Answer Capital Your Answer Capital Select The Blank Question Under the average cost method of valuing material issues, new issue price is determined after ________ issue. Correct Answer Each Your Answer The next True/False Question The effect of price reduction is always reduction in the margin of safety and also reduction in the break even point. Correct Answer False Your Answer False True/False Question Price based on Uniform Costing may be taken to be reliable and representative of the whole industry. Correct Answer True Your Answer False Multiple Choice Multiple Answer 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 The level of control of the used of material in the production cycle , An increase in the maximum material inventory level , Failure to control the issue of materials from stores Question If the total manufacturing overhead of a tiles producing factory amounted to Rs.15 lakhs and the overhead rate was Rs.5/- per sq.ft, then the production for the period can be stated as ________ sq.ft. tiles. Correct Answer 300000 Your Answer 300000 Question Accounting is the art where transactions are Correct Answer Summarized , Classified , Recorded Your Answer Classified , Recorded , Processed True/False Question If excess of cash is estimated in the cash budget, it may be possible to utilise it to give bonus to the employees. Correct Answer False Your Answer False 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 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 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 , Preliminary expenses written off Question Expenditure on income-tax is an example of ________. Correct Answer non-operating expenditure Your Answer administrative overheads 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 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 Your Answer Cost of maintaining good relations with the workers , Cost of medical services , Cost of welfare facilities Question Select the items which may be classified as administration overheads.

Correct Answer Depreciation on office furniture , Director's remuneration , Telephone expenses Your Answer Director's remuneration , Telephone expenses Question Any amount of profit earned in the past which is not distributed to the owner, belongs to the creditors. Correct Answer False Your Answer True 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 LIST OF ATTEMPTED QUESTIONS AND ANSWERS MA2

Question Under time rate system a worker is paid on the basis of production achieved by him in a given time. Correct Answer False Your Answer False Question Budgeted profit and loss account and budgeted balance sheet are also known as ________. Correct Answer Master budget Your Answer Master budget Match The Following Question Correct Answer Your Answer Drawings Proprietor's account Proprietor's account Deferred revenue expenditure Real account Real account Deferred revenue expenditure written off Nominal account Nominal account Loan Personal account Personal account Question ________ Accounting is the process of analysis and interpretation of financial data collected with help of financial accounting & cost accounting Correct Answer Management Your Answer Management 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 Question A grinding machine is an example of impersonal cost centre Correct Answer True Your Answer True 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

Question Piece rate systems are very useful in the following circumstances: Correct Answer Units of output are measurable , Job is standardised , The flow of work is regular Your Answer Work delays are frequent , Job is standardised , The flow of work is regular Question The process of recording the business transactions in a defined set of records is referred to as ________. Correct Answer Balance sheet Your Answer Trial Balance 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 Match The Following Question Correct Answer Your Answer Liabilities All the amount owed by the business All the amount owed by the business Drawing Withdrawn for personal use Withdrawn for personal use Journal Book of original entry Book of original entry Ledger Maintain all types of Accounts Maintain all types of Accounts Assets All the properties owned by the business All the properties owned by the business Question Judge the given statement according to the given criteria. Goods being real account, when goods are lost by fire, the goods account should be debited because the goods are not going out of the factory. Correct Answer The statement is correct but the reason is incorrect Your Answer The statement and the reason both are incorrect Question A ________ inventory turnover period indicates efficient utilisation of material. Correct Answer Low Your Answer High Question Financial accounting may deal with the ascertainment of cost & calculation of profitability of the individual product. Correct Answer False Your Answer 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 Question Financial Accounting primarily protects the interests of the outsiders dealing with organization in various capacities. Correct Answer True Your Answer False Question Purchased 200 shares of Bharat Forge Ltd. for Rs.850/- per share, which account should be debited?

Correct Answer Investment account - Rs.170,000/Your Answer Investment account - Rs.170,000/Question Contents of Uniform Cost Manual are Correct Answer Organization , Cost Accounting system , Presentation of information Your Answer Organization , Cost Accounting system , Presentation of information 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 Inventory turnover period for material P is 40.5 days , Material Q is faster moving material , Consumption of material Q is Rs.860,000/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 True Question Overhead absorption rate will be different at different capacity levels. Correct Answer True Your Answer True Question Accounting is the art where transactions are Correct Answer Summarized , Classified , Recorded Your Answer Summarized , Classified , Recorded Question Features of a cost sheet are as follows Correct Answer Indicates the total cost of production during a given period , Indicates the unit cost of production during a given period , Helps the management in fixing the selling price to be quoted for the Your Answer Indicates the total cost of production during a given period , Helps the management in fixing the selling price to be quoted for the , Helps the management in taking 'make' or 'buy' decision for the 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 Question Under Differential Time Rate method payment is made at Rs. 1.40 per hour when the level of efficiency is between________. Correct Answer 90% to 100% Your Answer 90% to 100% Question The alternative courses of action for an integrated textile mill are: Correct Answer Sell cloth Your Answer Sell carpets Question Direct labour hour rate method of absorption of overheads is suitable where most of the production is done by using machines. Correct Answer False Your Answer True

Question The Ezee Company Ltd. plans to sell 108,000 units of product E in first quarter of 2004, 120,000 units in second quarter of 2004, 132,000 units in third quarter of 2004, 156,000 units in fourth quarter of 2004and 138,000 units in the first quarter of 20 Correct Answer 153,000 units Your Answer 136,000 units 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 Question The selection of ________ may depend upon the various factors like characteristics of the business organisation, tax considerations, statutory requirements etc. Correct Answer Accounting period Your Answer Accounting period Question Calculate the machine hour rate. The amount of overhead pertaining to June, 2004 to be apportioned is Rs.170,010/-. The machine cannot work without an operator. During the month June, 2004 the machine operator has been paid for 5,670 hours. Correct Answer Rs.29.98 Your Answer Rs.30/Question Uniform Costing simplifies the work of wage boards of fixing minimum wages and fair wages. Correct Answer True Your Answer True Question If the profit volume ratio is 25%, then the variable cost is equal to ________ of sales value. Correct Answer 0.75 Your Answer 0.75 Question Balance sheet is considered to be a part of the financial statements. Correct Answer True Your Answer True Question Select the cost that indicates increased or decreased total cost due to the increased or decreased volume of operations. Correct Answer Differential cost Your Answer Differential cost 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 Question The process of attributing proportions of items of costs amongst const centres is called ________. Correct Answer Cost apportionment Your Answer Cost allocation Question 1) Financial statements are basically in two forms i.e. profitability statement and balance sheet. Correct Answer True Your Answer True

Question The variance which measures the deviation of the rate actually paid to labour as from the standard hourly rate is known as: Correct Answer Labour rate variance Your Answer Labour rate variance Question Advance received from customers is ________ for the organisation. Correct Answer A liability Your Answer A liability Question Financial Accounting discloses the financial performance & financial statements of the business as a whole. Correct Answer True Your Answer True 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 Capital Question Furniture account will always have a ________ balance. Correct Answer Debit Your Answer Debit Question Product costs under direct costing include: Correct Answer Prime cost and variable factory overheads Your Answer Prime cost only 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 Question The sum of indirect material cost, indirect labour cost and indirect expenses is termed as factory cost. Correct Answer False Your Answer False Question Items debited to Profit & Loss Account are Correct Answer Salary , Discount allowed , Postage & telegram Your Answer Salary , Discount allowed , Postage & telegram LIST OF ATTEMPTED QUESTIONS AND ANSWERS MA3

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 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 Gopal's A/c ........... Dr. to cash A/c (Being entry for payment of railway freight for goods purchased) , Joshi's A/c ........... Dr. to Bank A/c. (Being entry for dishonour of cheque which was originally issued by Joshi) , Cash A/c ............Dr. to Suresh's A/c (Being cash received from Suresh for goods sold to him for) 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 , Allowing free access to all the units to the collected data 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 dishonoured cheque, originally received from Mr.A. The fact of dishonour was not recorded in the bank book. Find the balance as per pass book. Correct Answer Rs.128/- (overdraft) Your Answer Rs.106/- (credit) Multiple Choice Multiple Answer 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 Multiple Choice Multiple Answer 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 Your Answer Rent and taxes of the factory , Wages paid to indirect workers like cleaners, helpers,etc. , Salary paid to factory supervisor True/False Question Budgetary control is one of the techniques of management accounting. Correct Answer True Your Answer True True/False Question Management Accounting is a developed stage of Cost Accounting Correct Answer True Your Answer False True/False Question In the ledger account only credit entries relating to a particular account are posted. Correct Answer False Your Answer False Multiple Choice Multiple Answer Question Features of Sunk cost are . . . Correct Answer Indicates historical cost , Not relevant in decision making process , Incurred in past Your Answer Indicates historical cost , Not relevant in decision making process , Incurred in past

Match The Following Question Correct Answer Your Answer Global Tender Any supplier from the global market can fill the tender Any supplier from the global market can fill the tender Single Tender 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 True/False Question Fixed overhead variances may be calculated either on the basis of units of output or on the basis of standard hours. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Features of Taylor's differential piece rate system are as follows : Correct Answer Minima 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 Minima clerical work is involved in calculating the wages , Helps in building up an efficient labour force , Strong incentive to efficient and ambitious workers. True/False Question Financial Accounting discloses the financial performance & Financial status of the business as a whole Correct Answer True Your Answer True Select The Blank Question Loss is equal to fixed cost minus ________ Correct Answer Contribution Your Answer Contribution Multiple Choice Multiple Answer Question Direct Cost includes Correct Answer Direct material , Direct labour , Direct expenses Your Answer Direct material , Direct labour , Direct expenses Select The Blank Question The document which lays down the cost accounting plans and procedures to be followed by the constituent units is known as ________. Correct Answer uniform cost manual Your Answer uniform cost manual True/False Question Cost Accounting is a legal requirement. Correct Answer False Your Answer False Select The Blank

Question The principle of ________ is followed while preparing the financial statements. Correct Answer Going concern Your Answer Going concern True/False Question Cash account can have a credit balance. Correct Answer False Your Answer True 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 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 Period cost is the cost assigned to the products. Correct Answer False Your Answer False Multiple Choice Single Answer Question Interest on drawings of partners should be credited to which account? Correct Answer Profit and loss account Your Answer Profit and loss account Multiple Choice Multiple Answer Question Labour turnover means : Correct Answer Influx and exit of employees , Quantitative measurement of instability of working force , Rate of change in the average working force Your Answer Influx and exit of employees , Quantitative measurement of instability of working force , Rate of change in the average working force True/False Question Book keeping is clerical while accounting is managerial Correct Answer True Your Answer True True/False Question Financial Statements which are generated as a result of the management accounting report & financial performance of the organization as a whole. Correct Answer False Your Answer False Match The Following Question Correct Answer Your Answer Fixed overheads Variability wise classification Variability wise classification Abnormal overheads Normality wise classification Normality wise classification

Indirect Material Element wise classification Element wise classification Administration overheads Function wise classification Function wise classification Multiple Choice Single Answer Question The half-yearly sales of product X are as follows : 1st half -30,000 units; 2nd half 37,500 units. The production pattern of the company is based on 80% of the sales of the current six months and 20% of the budgeted sales of the next six months. Calcu Correct Answer 1st half -31,500 units; 2nd half - 30,000 units Your Answer 1st half -24,000 units; 2nd half - 30,000 units Select The Blank Question The variance which denotes the variation in overhead recovery due to the budgeted quantity of products being greater or less than actual production, is known as ________ variance. Correct Answer Volume Your Answer Efficiency Multiple Choice Single Answer Question Annual sales were Rs.10,50,000/- and sales returned by customers amounted to Rs.28,000/-. The salesmen are entitled to an incentive of 3% of net sales. Calculate the amount of incentive due to the salesmen. Correct Answer Rs.30,660/Your Answer Rs.30,660/True/False Question An entry in the stores ledger is required for transfer of material from one job to another in the same department. Correct Answer False Your Answer False Select The Blank Question As per the provisions of Section 209 of ________, all the company form of organisation is legally required to follow the mercantile or accrual system of accounting. Correct Answer The Companies Act, 1956 Your Answer The Companies Act, 1956 Multiple Choice Single Answer Question Sita and Gita are partners of SGL & Co. As on 1st August, 2003 Sita's capital stood as Rs.10,000/- and Gita's capital as Rs.18,000/-. If interest on capital is to be provided @ 10% p.a., what should be the treatment of this interest in the profitability statement, assuming there were no additions to capital during this period? Correct Answer Profit and loss account should be debited with Rs.1,866.67 Your Answer Profit and loss account should be debited with Rs.1,866.67 True/False Question GAIL having monopoly in the CNG (Compressed Natural Gas) market can implement the Uniform costing system. Correct Answer False Your Answer True True/False Question Bank reconciliation statement can be prepared on weekly basis. Correct Answer True Your Answer True

Select The Blank Question The ________ ledger carries the individual accounts, whereas the general ledger records the consolidated effect of the individual transactions. Correct Answer Control Your Answer Control 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 True/False Question 1) Cost Accounting and Management Accounting are similar to each other in many respects. Correct Answer True Your Answer True True/False Question The reports generated by financial accounting are meant for the use by management for effective decisions. Correct Answer True Your Answer False 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 Token or disc method is a related to the system of ________. Correct Answer Time-keeping Your Answer Time-keeping True/False Question Cost Accounting may be considered to be a part of management Accounting. Correct Answer True Your Answer True Select The Blank Question The ________ variance is the difference between the actual variable overhead incurred and the standard variable overhead charged to production. Correct Answer Total variable overhead Your Answer Total variable overhead 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 True/False Question Uniform Costing simplifies the work of wage boards of fixing minimum wages and fair wages.

Correct Answer True Your Answer True True/False Question Management Accounting is not at all a legal requirement Correct Answer True Your Answer True LIST OF ATTEMPTED QUESTIONS AND ANSWERS KMA1

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 quantity Match The Following Question Correct Answer Your Answer Non-Operating income Issue of shares Issue of shares Plan of investment in fixed assets Capital Expenditure Budget Capital Expenditure Budget Plan for surplus/shortage of cash Cash Budget Cash Sales Operating income Cash Sales Cash Sales Multiple Choice Multiple Answer 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 Your Answer Repairs of plant when it is undertaken by an outside agency , Carriage inward by hired carriers , Wages paid to casual workers 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 Select The Blank Question The budget that represents the funds investment for expansion, diversification, etc. is known as ________. Correct Answer Capital expenditure budget Your Answer Capital expenditure budget Multiple Choice Single Answer Question Basic objective of Uniform Costing is . . . Correct Answer comparison Your Answer comparison Multiple Choice Single Answer Question Which of the following cost is also termed as Prime Cost ? Correct Answer Direct cost Your Answer Direct cost

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 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 Co-partnership Multiple Choice Multiple Answer 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. Your Answer Single organization having number of branches. , Number of companies in same industry , Similar Industries such as cotton, jute etc. Multiple Choice Single Answer Question Select the cost that indicates increased or decreased total cost due to the increased or decreased volume of operations. Correct Answer Differential cost Your Answer Differential cost 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 selling price , Reduce cost of sales , Increase the selling efforts Multiple Choice Multiple Answer Question The disadvantages of time rate system are : Correct Answer Ignores the efficiency of workers , Higher labour cost , Lack of motivation to increase productivity Your Answer Ignores the efficiency of workers , Higher labour cost , Lack of motivation to increase productivity 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 Select the appropriate rectification entries for the following transactions (i) Rs.200/received in respect of a bad debt previously written off was credited to Debtors account. (ii) Paid Rs.6,000/- to a Mr. Rao, clerk, as salary in lieu of notice. This amount was debited to his personal account (iii) Interest @ 5% p.a. on a loan of Rs.5,000/- was debited to general expenses account. Correct Answer Debtors A/c ..........Dr. Rs.200/- to bad debts recovered A/c Rs.200/- , Rs.6,000/- to Rao's A/c Rs.6,000/- , Rs.250/- to General Expenses A/c Rs.250/Your Answer Debtors A/c ..........Dr. Rs.200/- to bad debts recovered A/c Rs.200/- , Rs.6,000/to Rao's A/c Rs.6,000/- , Rs.250/- to General Expenses A/c Rs.250/-

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 Single Answer Question Quantify the increase in profit on account of following errors : (a) Repairs of furniture amounting to Rs.2,000/- were debited to furniture account. Furniture is depreciated @10% p.a. (b) Interest received on bank deposits was credited to dividend received account, Rs.1,550/- (c) A television purchased for the managing director's office for Rs.45,000/- was debited to Interior decoration expenses. Correct Answer Rs.43,200/Your Answer Rs.44,750/Select The Blank Question The analysis which is also referred as 'what if' analysis is known as________. Correct Answer Cost volume profit analysis Your Answer Profit variance analysis 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 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 automobile True/False Question The balance sheet has three columns, viz. assets, liabilities and ledger folio. Correct Answer False Your Answer False Select The Blank Question Income Tax Act, recognise only one method of depreciation namely ________. Correct Answer Written down value method Your Answer Written down value method 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 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 regarding temporary shut-downs 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 Accounting is an art of recording, classifying & summarizing in a significant manner. Correct Answer True Your Answer True Multiple Choice Single Answer Question Flood occurred on 18th March, 2004 and goods worth Rs.28,000/- were destroyed. The insurance company accepted on 28th March, 2004 the claim for Rs.10,000/- only. The claim amount was received on 2nd April, 2004. Find the impact of this transaction on net profit for the year ending 31st March, 2004. Correct Answer The net profit will decrease by Rs.18,000/Your Answer The net profit will increase by Rs.10,000/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 While preparing the labour cost budget, factors such as overtime working or night shift working may be ignored. Correct Answer False Your Answer False 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 Examples of indirect material are Correct Answer Consumable stores , Glue used in book binding , Nails used in packing boxes Your Answer Consumable stores , Glue used in book binding , Nails used in packing boxes True/False Question If excess of cash is estimated in the cash budget, it may be possible to utilise it to give bonus to the employees. Correct Answer False 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 True/False 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 Your Answer True Multiple Choice Multiple Answer Question Select the items which may be classified as administration overheads. Correct Answer Depreciation on office furniture , Director's remuneration , Telephone expenses Your Answer Depreciation on office furniture , Director's remuneration , Telephone expenses Multiple Choice Single Answer Question Which of the following is a correct definition of the key factor? Correct Answer The factor which limits the activites of the undertaking Your Answer The factor which the top management feel is important Select The Blank Question The varinace that attempts to ascertain the effect of change in sales volume on the difference between actual and budgeted contribution is known as ________ variance. Correct Answer Sales margin volume Your Answer Total sales margin 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 Select The Blank Question Depreciation is caused by use factor, obsolescence and ________. Correct Answer Time factor Your Answer Time factor Multiple Choice Single Answer Question A business's telephone bill should nromally be classified into which one of the following categories? Correct Answer Semi-variable cost Your Answer Semi-variable cost Select The Blank Question If the ordering cost ________s, then the economic order quantity will Increase. Correct Answer Increase Your Answer Increase True/False Question Depreciation under Reducing Balance Method is calculated as (Number of units * Rate of depreciation per unit) Correct Answer False Your Answer False 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 favourable

Multiple Choice Single Answer Question Which system can assist in fixing a common selling price for the industry as a whole on the basis of cost of production of all units belonging to that industry ? Correct Answer Uniform costing Your Answer Uniform costing True/False Question All cash sales are recorded in the sales register. Correct Answer False Your Answer True Match The Following Question Correct Answer Your Answer Transport facilities to employees Preventive cost of labour turnover Preventive cost 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 Unavoidable cause of labour turnover Increased spoilage and defectives Replacement cost of labour turnover Replacement cost of labour turnover True/False Question Profitability statement indicates the amount of assets & liabilities. Correct Answer False Your Answer False LIST OF ATTEMPTED QUESTIONS AND ANSWERS KMA2

True/False Question Balance sheet indicates the expenditure & income from the business. Correct Answer False Your Answer True 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 True True/False Question Indirect material cost is an integral part of finished goods. Correct Answer False Your Answer False Multiple Choice Multiple Answer Question Select the various methods adopted for treatment of under or over absorbed overheads Correct Answer Use of supplementary rates , Carrying over the amount to remaining period , Writing off to the Costing Profit and Loss Account

Your Answer Use of supplementary rates , Carrying over the amount to remaining period , Writing off to the Costing Profit and Loss Account True/False Question Generally speaking income represents wealth increase and business success; higher the income, lower will be the success of a business. Correct Answer False Your Answer False 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 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 1) Financial statements are basically in two forms i.e. profitability statement and balance sheet. 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 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. Correct Answer Rs.180/Your Answer Rs.160/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 compile reliable cost data for inter-firm comparison of costs , To fix a common selling price so as to maximize profits of each unit Select The Blank Question Computation of gross wages, deductions and net wages payable is the function of the ________ department. Correct Answer Personnel Your Answer Cost accounting

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 True 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 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 Match The Following Question Correct Answer Your Answer Normal Standards Anticipated to be achieved in future Established for a longer period of time Basic Standards Established for a longer period of time Once established can never be altered Current Standards Established for a shorter period of time Established for a shorter period of time Expected Standards Anticipated to be achieved in the budget period Anticipated to be achieved in future 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 Trading account is an important account which will be used to analyse how successful and how efficiently the firm runs its business. 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 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 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 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/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 sales-office workers Multiple Choice Single Answer Question The present unit cost data for a product is as follows: selling price Rs.15/-, variable costs Rs.8/-. If selling prices are reduced by 10% and variable costs are increased by 12.5%. Which of the following is the amended contribution to sales ratio? Correct Answer 0.333 Your Answer 0.5 Multiple Choice Multiple Answer Question Select the correct statements. Ram's account.Dr. Rs.10,000 To Bank account Rs.10,000 Correct Answer Ram is a creditor , Rs.10,000/- has been paid to Ram , The payment is made by cheque Your Answer Ram is an employee , Rs.10,000/- has been paid to Ram , The payment is made by cheque Select The Blank Question Generally, all real accounts will have a ________ balance Correct Answer Debit Your Answer Debit 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 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/Match The Following

Question Correct Answer Your Answer Purchase budget Forecast of quantity and value of materials Forecast of quantity and value of materials Budget committee Analyses the performance of different budget centres Analyses the performance of different budget centres Cash budget Assists in predicting shortage of cash Assists in predicting shortage of cash Budget Objective is performance evaluation Objective is performance evaluation Multiple Choice Multiple Answer Question Contents of Uniform Cost Manual are Correct Answer Organization , Cost Accounting system , Presentation of information Your Answer Organization , Cost Accounting system , Presentation of information 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 - (maximum usage X maximum re-order period) Select The Blank Question The selection of ________ may depend upon the various factors like characteristics of the business organisation, tax considerations, statutory requirements etc. Correct Answer Accounting period Your Answer Accounting period 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 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 Inefficiency of new workers , Cost of selection and placement , Increased spoilage and defectives 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 The process of accounting split into three steams i.e. financial, cost, management accounting. Correct Answer True Your Answer True Select The Blank

Question Advance received from customers is ________ for the organisation. Correct Answer A liability Your Answer A liability True/False Question Variable cost + Profit = Sales Correct Answer False Your Answer False Select The Blank Question The ________ adjustment is necessary to relfect the cost for the use of fixed asset during the year. Correct Answer Depreciation Your Answer Depreciation 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 , Augments emplyees' efficiency True/False Question Cash account can have a credit balance. Correct Answer False Your Answer False 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 profit and loss 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 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 Single Answer Question The integrated form of all functional budgets is known as : Correct Answer Master budget Your Answer Master budget 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 Over-absorbed Select The Blank Question The final result disclosed by trading account is the ________profit earned by the

organization. Correct Answer Gross Your Answer Gross LIST OF ATTEMPTED QUESTIONS AND ANSWERS kma1

Select The Blank Question Number of days inventory is held can be calculated by dividing number of days in a year by ________. Correct Answer Inventory turnover ratio Your Answer Inventory turnover ratio True/False Question Budgetary control is one of the techniques of management accounting. Correct Answer True Your Answer True True/False Question All personal expenses of the owner should be debited to the organisation's profit and loss account. Correct Answer False Your Answer False Match The Following Question Correct Answer Your Answer Total cost Cost of finished goods Cost of finished goods Non operating income Profit on sale of investment Profit on sale of investment Selling and distribution overheads Advertisement expenses Advertisement expenses Factory overheads Repair for factory building Repair for factory building True/False Question The amount of profit which is retained by the organisation is transferred to 'Reserves and Surplus' in the balance sheet. Correct Answer True Your Answer True Select The Blank Question Purchase of national saving certificates by the company from its profits, should be debited to ________ account. Correct Answer Investments Your Answer Investments True/False Question Yield variance equal to zero indicates that the standard yield and actual yield are the same. Correct Answer True Your Answer True True/False Question Book keeping is clerical while accounting is managerial Correct Answer True

Your Answer True Match The Following Question Correct Answer Your Answer Advantageously applicable in similar industries Scope of uniform costing Scope of uniform costing Spirit of mutual trust Requisite for uniform costing Requisite for uniform costing Avoids cut throat competition Advantage of uniform costing Advantage of uniform costing Treatment given to research and development costs Fields covered by uniform costing Fields covered by uniform costing Multiple Choice Single Answer Question Calculate inventory holding period. Safety stock - 250 units; maximum stock - 6,500 units; re-order quantity - 3,800 units and material issued during 2003 is 24,000 units. Correct Answer 66.9 days Your Answer 67 days True/False Question Material mix and material yield variance can be calculated even when only one raw material is used for production. Correct Answer False Your Answer False Select The Blank Question A ________ inventory turnover period indicates efficient utilisation of material. Correct Answer Low Your Answer Low Multiple Choice Single Answer Question KDL Ltd. charges depreciation @ 20% on written down value method. The net book value of its machinery on 1st January, 2003 was Rs.125,000/-. What will be the net book value of its machinery on year end, i.e.31st December, 2003, assuming there were no additions or disposals during the year? Correct Answer Rs.100,000/Your Answer Rs.100,000/Multiple Choice Single Answer Question A lathe machine was purhcased 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 Nil Multiple Choice Single Answer Question A factory has 8 hours a day and the standard daily wage is Rs.80/-. Standard output per hour is 5 units. During a day worker P produced 30 units, Q produced 36 units and S produced 42 units. Calculate wages payable to P,Q and S under Merrick Multiple Piece Rate System. Correct Answer P - Rs.60/-; Q - Rs.79.20; S - Rs.100.80 Your Answer P - Rs.50/-; Q - Rs.69.20; S - Rs.79.80

Multiple Choice Single Answer Question A company budgets for a production of 150,000 units. The variable cost per unit is Rs.14/- and fixed cost is Rs.2/- per unit. The company fixes its selling price to fetch a profit of 15% on total cost. What is the break even point for the company? Correct Answer 68,182 units Your Answer 61,182 units True/False Question Management Accounting is not at all a legal requirement Correct Answer True Your Answer True Multiple Choice Multiple Answer 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 Your Answer Functional responsibility of different functional managers , Delegation of authority to various managers , Inter-functional relationships of these managers Multiple Choice Single 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/Your Answer Rs.49,248/Multiple Choice Multiple Answer Question Features of Taylor's differential piece rate system are as follows : Correct Answer Minima 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 Minima clerical work is involved in calculating the wages , Helps in building up an efficient labour force , Strong incentive to efficient and ambitious workers. 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 Variable cost , [Fixed cost / (Fixed cost + Net Profit)] X Sales Select The Blank Question The ________ variance is the difference between the actual variable overhead incurred and the standard variable overhead charged to production. Correct Answer Total variable overhead Your Answer Variable overhead volume 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 Multiple Choice Multiple Answer Question Management Accounting is Correct Answer Designed particularly for internal use , Helpful in estimating the future along with past period , Useful in furnishing the necessary information to the management

Your Answer Designed particularly for internal use , Helpful in estimating the future along with past period , Useful in furnishing the necessary information to the management Select The Blank Question Warehousing cost is an item of ________ Correct Answer Distribution overheads Your Answer Office overheads Select The Blank Question The lowest profit volume ratio can be ________%. Correct Answer 0 Your Answer 0.1 True/False Question Cost Accounting is a legal requirement. Correct Answer False Your Answer False True/False Question Management Accounting is a developed stage of Cost Accounting Correct Answer True Your Answer True True/False Question Trading account is used to analyse 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 Calculate the earnings of workers Monica and Sonica under Taylor's differential piece rate system. Hours in a day =8; normal rate per unit = Rs.12/-; standard time per unit = 30 seconds; rate differential : 80% of piece rate below standard, 120% of piece rate at or above standard. Monica produces 900 units per day and Sonica produces 1,100 units per day. Correct Answer Monica -Rs.72/-; Sonica - Rs.132/Your Answer Monica -Rs.110/-; Sonica - Rs.90/ 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 Multiple Choice Multiple Answer Question The factors that influence determination of budget period are : Correct Answer Type of budget, viz. Sales or capital expenditure budget , General economic conditions , Trade cycle of business Your Answer Type of budget, viz. Sales or capital expenditure budget , General economic conditions , Trade cycle of business 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 Rent of store house , Cost of material , Salary of store keeper 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 organised 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 organised sector is ready to share the technological improvements , Information furnished by the units is complete and correct True/False Question In marginal costing, under and over absorption of fixed overheads is bound to arise. Correct Answer False Your Answer True Multiple Choice Multiple Answer Question Piece rate systems are very useful in the following circumstances: Correct Answer Units of output are measurable , Job is standardised , The flow of work is regular Your Answer Units of output are measurable , Work delays are frequent , Job is standardised Multiple Choice Single Answer Question Judge the following narrative according to the criteria given : There are many organizations whose sales fluctuate with fluctuations in the weather, viz. ice-cream, sweaters, etc. Correct Answer The statement and the reason are both incorrect Your Answer The statement and the reason are both correct True/False Question New companies can adopt Uniform costing system as a ready-made system. Correct Answer True Your Answer False Select The Blank Question An amount of Rs.200/- is received from P and is credited to Q. The rectification entry would affect ________ Correct Answer P's A/c and Q's A/c Your Answer P's A/c and Q's A/c Multiple Choice Single Answer Question Trade Discount refers to the discount . . . Correct Answer received on purchases Your Answer received on purchases True/False Question Cost Accounting may be considered to be a part of management Accounting. Correct Answer True Your Answer True 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 Select The Blank Question In India, where public undertakings operate along with the private sector undertakings, ________ enables a comparative assessment to be made of the two sectors. Correct Answer uniform costing Your Answer uniform costing

Multiple Choice Single Answer Question A firm has monthly fixed cost commitment of Rs.200,000/-. It is producing only one product which is sold at a price of Rs.80/- per unit. Per unit variable cost is Rs.50/-. Calculate annual break even point. Correct Answer 80,000 units Your Answer 64,000 units True/False Question 1) Cost Accounting and Management Accounting are similar to each other in many respects. Correct Answer True Your Answer True Multiple Choice Single Answer Question Cool-wind Ltd., manufactures fans, which at 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/Your Answer Rs.452/True/False Question Credit balance in interest account indicates income for the organisation. Correct Answer True Your Answer True

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-toperiod 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 Dividend paid Freight inwards Sales Freight outwards

Correct Answer Profit and loss appropriation account Manufacturing account Trading account Profit and loss account

Your Answer Profit and loss account Manufacturing account Capital account Trading account

Select The Blank Question Large angle of incidence indicates ________ amount of profits. Correct Answer higher Your Answer True/False same

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 Increase in contribution will lead to

Correct Answer Increase in profits

Your Answer Increase in profit volume ratio Decrease in contribution Increase in profits Increase in break even point

Increase in fixed cost will Increase in break even lead to point Decrease in variable cost Increase in profit volume will lead to ratio Decrease in selling price will lead to Decrease in contribution

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 True/False Question

Minimum level

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 True/False Question Personal account

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 True/False Question False

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

Multiple Choice Multiple Answer

Question

Cost Accounting ______________.

Correct Answer Concerned with specific activities. , Classified according to their nature. , It deals with both i.e. past & present. Your Answer Concerned with specific activities. , Classified according to their nature. , It covers whole business Multiple Choice Multiple Answer Question Management Accounting __________________. Correct Answer Designed particularly for internal use only. , Looks forward in estimating the future along with past period. , This furnishes the necessary information to management. Your Answer Designed particularly for internal use only. , Looks forward in estimating the future along with past period. , This furnishes the necessary information to management. , Only a, b, c. Multiple Choice Multiple Answer Question Accounting is the art of ______________,____________ and ____________ in a significant manner and in terms of money transactions and events which are of a financial character and interpreting the res Correct Answer Summarizing , Classifying , Recording Your Answer Summarizing , Classifying , Recording

Multiple Choice Multiple Answer Question The process of accounting has three streams of accounting --------------,--------and ----------------------. Correct Answer Financial Accounting , Cost Accounting , Management Accounting Your Answer Financial Accounting , Cost Accounting , Management Accounting Match The Following Question Personal A/C Real A/C Nominal A/C Tangible assets

Correct Answer

Your Answer

Debit the receiver, Credit Debit the receiver, Credit the giver the giver Debit what comes in, Credit what goes out Debit all the expenses, Credit all the incomes Building, Machinery Debit what comes in, Credit what goes out Debit all the expenses, Credit all the incomes Building, Machinery

In tangible assets True/False Question

Patents, Trade marks

Patents, Trade marks

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

True/False Question

Amount invested in purchasing Fixed Asset is a revenue expenditure. Correct Answer False Your Answer False

True/False Question

As per double entry system o accounting , total of all debits should be equal to all credits. Correct Answer True Your Answer True

Multiple Choice Multiple Answer Question Convention of Consistency Materiality ________________ Correct Answer The accounting policies & procedures should follow consistently on period to period , It facilitates the comparison of financial statements on period to period , If any change the fact should be disclosed with its effects on profitability Your Answer The accounting policies & procedures should follow consistently on period to period , It facilitates the comparison of financial statements on period to period , If any change the fact should be disclosed with its effects on profitability Multiple Choice Multiple Answer Question Cash and---------------are the two systems of accounting. Correct Answer Mercantile Your Answer Mercantile

Multiple Choice Single Answer

Question

The opening balance of cash account is Rs. 25,000, cash received from debtors Rs. 30,000, sold goods amounted to Rs. 50,000, paid to creditors Rs. 20,000, purchase furniture Rs. 5000. What is the clos Correct Answer 80,000 Your Answer 80,000

Multiple Choice Single Answer Question Bank Reconciliation statement is required in case of Correct Answer difference between the bank balance as per the bank book and as per pass book Your Answer difference between the bank balance as per the bank book and as per pass book Match The Following Question Error of Principle Error of Omission Error of commission Compensating Error

Correct Answer Trial Balance does not get affected The transaction is totally omitted Wrong Posting Wrong classification

Your Answer Wrong Posting The transaction is totally omitted Wrong classification Trial Balance does not get affected

Difference in trial balance Transferred to suspense Transferred to suspense account account Multiple Choice Multiple Answer Question Direct Cost includes Correct Answer Direct material , Direct labour , Direct expenses Your Answer Direct material , Direct labour , Direct expenses

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

Multiple Choice Multiple Answer Question The Prime Cost includes the aggregate of Correct Answer Direct Material Cost , Direct Labour Cost , Direct Expenses Your Answer Direct Material Cost , Direct Labour Cost , Direct Expenses

Multiple Choice Multiple Answer Question From the following particulars what must appear in purchase requisition Correct Answer Material to be purchased should be cleanly specified , Material should purchase whenever the market for the same is favorable , Purchase requisition should state the quantity of material required. Your Answer Material to be purchased should be cleanly specified , Purchase requisition should state the quantity of material required. Multiple Choice Multiple Answer Question Following points are taking into consideration for evaluation of receipts Correct Answer The Price , The trade discount is to be deducted , Other amounts such as sales tax, excise duty, octroi duty Your Answer The Price , The trade discount is to be deducted , Other amounts such as sales tax, excise duty, octroi duty Multiple Choice Multiple Answer Question While fixing the maximum level following factors are considered Correct Answer Maximum usage , Storage facilities , Availability of funds Your Answer True/False Question Maximum usage , Rate of consumption

Fixed cost tends to vary with time rather than with level of activity. Correct Answer True Your Answer True

True/False Question

To take make or buy decision under the marginal costing , if purchase price of the product is less than its variable cost it is advisable to go for manufacturing proposition.

Correct Answer False Your Answer False

Multiple Choice Single Answer Question Find out the break even point and profit if sales are Rs. 50,00,000 and P/V Ratio is 50% and margin of safety is 40% Correct Answer Rs.30,00,000 and Rs.10,00,000 Your Answer True/False Question Rs.30,00,000 and Rs.10,00,000

For better control, variances of a period may be compare with the previous period. Correct Answer True Your Answer True

True/False Question

Expected standards are more realistic and useful for cost control. Correct Answer True Your Answer True

True/False Question

The difference between standard cost and actual cost is termed as Variance. Correct Answer True Your Answer True

Multiple Choice Multiple Answer Question For reporting of variance, following propositions should be considered Correct Answer Responsibility of each individual should be defined , Reporting should be simple, clear and quick , Analysis of variance should be accurate. Your Answer Responsibility of each individual should be defined , Reporting should be simple, clear and quick , Analysis of variance should be accurate. Multiple Choice Multiple Answer Question Basic three steps in Standard Costing are

Correct Answer Setting standards , Comparing actuals with standards , Measurement of variance Your Answer Setting standards , Comparing actuals with standards , Measurement of variance Multiple Choice Single Answer Question Find out Labour Efficiency Variance, if Standard Rate is Rs.1.50/- per hour, Standard hours are 12,000 and Actual hours are 12,600. Correct Answer Rs.900/- ( Adverse ) Your Answer Rs.900/- ( Adverse )

Multiple Choice Single Answer Question Standard costs are the targets to be attained by the actual performance. Correct Answer Minimum Your Answer Minimum

Multiple Choice Single Answer Question Standard Costs are used as tool for Correct Answer Cost Control Your Answer Cost Control

Select The Blank Question Accounting to the matching principles of accounting, the ________ incurred during an accounting period are required to be match with ________ during that period Correct Answer cost Your Answer cost

Correct Answer revenues Your Answer revenues

Select The Blank Question Along with financial accounting, ________ and ________ are the other streams of accounting Correct Answer Cost Accounting Your Answer Management Accounting

Correct Answer Management Accounting Your Answer Cost Accounting

Select The Blank Question If the revenue expenditure is treated as ________ expenditure , it will not affect the agreement of ________ balance Correct Answer capital Your Answer capital

Correct Answer trial Your Answer trial

Select The Blank Question While selecting source of supply ________ epartment may call for the ________ from the prospective suppliers Correct Answer purchase Your Answer purchase

Correct Answer quotation Your Answer quotation

Select The Blank Question After material is received from the supplier, quantity actually received is compared with quantity ________-and ________-if any, are taken up with the supplier Correct Answer ordered Your Answer ordered

Correct Answer variation Your Answer variation

Select The Blank Question Under the daily ________ sheets method, each worker is provided with a daily time sheet on which time ________ by him on various jobs is expected to be mentioned Correct Answer time Your Answer work

Correct Answer spent

Your Answer

spent

Select The Blank Question 4.Under the differential time rate method the wages are paid at Rs. 1.50 per hour between ________ efficiency and Rs.1.25 per hour between ________ efficiency Correct Answer 101% to 125 % Your Answer 90-100

Correct Answer 80% to90% Your Answer 101% to 125 %

Select The Blank Question Under Gannt Task bonus system where the output is ________ payment is made as per minimum time rate, output is ________ payment is made as per time wages plus some increase in wage rates Correct Answer below standard Your Answer below standard

Correct Answer at standard Your Answer at standard

Select The Blank Question ________ and ________ are examples of element wise classification ofoverhead costs Correct Answer Idirect material Your Answer Idirect material

Correct Answer indirect labour Your Answer selling overheads

Select The Blank Question Fixed cost is the cost that tend to remain ________ irrespective of ________ Correct Answer constant Your Answer constant

Correct Answer level of activity

Your Answer

level of activity

Select The Blank Question The process of Allocation & apportionment can followed to decide the ________ of overheads to each budget center Correct Answer Allocation & apportionment Your Answer Distribution

Correct Answer Loading Your Answer

LIST OF ATTEMPTED QUESTIONS AND ANSWERS 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 Net book value of loose tools as on 1st April, 2003 was Rs.45,000/-. As on 31st March, 2004 the management felt that the real worth of these loose tools is only Rs.30,000/-. What can be done to achieve the desired reduction in the net book value of loose tools? Correct Answer By providing depreciation to the extent of Rs.15,000/Your Answer By providing depreciation to the extent of Rs.15,000/-

True/False Question

Overhead absorption rate will be different at different capacity levels.

Correct Answer True Your Answer True

Select The Blank Question The budget that represents the funds investment for expansion, diversification, etc. is known as ________. Correct Answer Capital expenditure budget

Your Answer

Capital expenditure budget

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

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

Select The Blank Question Information as to the cost and profit / loss associated with the firm's operations is provided to the ________ by Management accounting. Correct Answer Management Your Answer Management

Select The Blank Question Factory cost of a product is Rs.335,000/-, if the selling overheads are charged @25% of factory cost, then the amount of selling overheads should be Rs.________/Correct Answer 83750 Your Answer 83750

Select The Blank Question Uniform costing is not a separate method of ________. Correct Answer cost accounting Your Answer cost accounting

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 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 Single 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 Your Answer Direct labour

Select The Blank Question Creche expenses may be appropriately approtioned on the basis of ________. Correct Answer Number of female workers Your Answer Number of female workers

Multiple Choice Single Answer Question Opening stock of Rs.1,80,000/-, purchases Rs.8,00,000/-, freight inward Rs.35,000/-, closing stock Rs.2,00,000/ -, direct wages Rs.2,35,000/-. Calculate the prime cost. Correct Answer Rs.10,50,000/Your Answer Rs.10,70,000/-

Multiple Choice Multiple Answer Question Limitations of Management Accounting includes------------------Correct Answer Its wide scope , Possibility of intuitive decision , Requires elaborate organizational structure Your Answer Its wide scope , Possibility of intuitive decision , Requires elaborate organizational structure Select The Blank Question Indirect Cost is termed as ________. Correct Answer Overhead Your Answer Overhead

Multiple Choice Multiple Answer Question Features of Financial Accounting includes-----------------

Correct Answer It is a legal requirement , It protects the interest of outsiders , It considers historical transactions Your Answer It is a legal requirement , It protects the interest of outsiders , It considers historical transactions Multiple Choice Multiple Answer Question Identify the budgets for which the production manager sould be held responsible : Correct Answer Production budget , Production overheads budget , Plant utilisation budget Your Answer Production budget , Production overheads budget , Plant utilisation budget 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.150/- (Favourable)

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

True/False Question

A grinding machine is an example of impersonal cost centre

Correct Answer True Your Answer True

True/False Question

Profitability statement indicates the amount of assets & liabilities.

Correct Answer False Your Answer False

Multiple Choice Single Answer Question Uniform costing system is useful in the following areas Correct Answer Classification of cost accounts

Your Answer

Preparing financial statements

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 True/False Question

Balance sheet indicates the expenditure & income from the business.

Correct Answer False Your Answer False

True/False Question

Interim dividend paid by the company should be debited to the profit and loss appropriation account. 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 , Job number

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, labour cost and overheads Multiple Choice Single Answer Question Panna Ltd. temporarily has excess production capacity. The idle plant facilties can be used to manufacture a low-margin item. The low- margin item should be produced if it can be sold for more than its: Correct Answer Variable costs Your Answer Variable costs

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 selling price , Increase the sales volume , Reduce cost of sales True/False Question

Receipts and payments method of cash budget is useful for preparing long term estimates. Correct Answer False Your Answer False

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

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 False

Select The Blank Question In case of seasonal industry, the budget period may be taken as ________. Correct Answer One season Your Answer One season

True/False Question

Lack of efficient control on various aspects related to raw-material increases the material cost component of the finished product. Correct Answer True Your Answer True

True/False Question

Due to compensating errors the arithmetical accuracy of the trial balance is affected. Correct Answer False Your Answer False

Multiple Choice Single Answer Question Material price variance for a job is Rs.800/- (Favourable). Actual quantity of material used is 100 kg whereasthe standard quantity of material is 120% of actual quantity. Actual price paid for the material is 80% of the standard price. Calculate material cost variance. Correct Answer Rs.1,600/- (Favourable) Your Answer Rs.800/- (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 Profit and Loss Account

Match The Following Question Daily Time sheets Time Keeping Department Time booking department Time Recording Clock Method True/False Question

Correct Answer

Your Answer

Time spent by worker on job Time spent by worker on job is recorded is recorded Recording of workers time Jobwise booking of time. Ticket number & clock card allotted to worker Recording of workers time Jobwise booking of time. Ticket number & clock card allotted to worker

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

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

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

Match The Following Question Book-Keeping Financial statement Accounting Profitability statement Balance-sheet

Correct Answer Books of Accounts Profitability statement & Balance-sheet Process of analyzing & interpretation

Your Answer Books of Accounts Profitability statement & Balance-sheet Process of analyzing & interpretation

Indicates the amount of profit Indicates the amount of profit earned earned Financial status Financial status

True/False Question

The problem of multiple key factors can be solved with the help of techniques like linear programming, operations research, etc. Correct Answer True Your Answer True

Select The Blank Question The ________ books are preferred when the volume of transactions is very large. Correct Answer Subsidiary Your Answer Journal

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 , Allowing free access to all the units to the collected data True/False Question

All costs are controllable.

Correct Answer False Your Answer False

LIST OF ATTEMPTED QUESTIONS AND ANSWERS 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

Manufacturing overheads represents all costs incurred in the factory including direct material cost and direct labour cost. Correct Answer False Your Answer False

True/False Question

Profitability statement indicates the amount of assets & liabilities.

Correct Answer False Your Answer False

Multiple Choice Single Answer Question The use of contribution per unti of limiting factor as the basis for ranking products to be produced and sold is aimed at which of the following? Correct Answer Maximisation of short-term profit Your Answer Maximisation of short-term profit

Multiple Choice Multiple Answer 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 Your Answer Repairs of plant when it is undertaken by an outside agency , Carriage inward by hired carriers , Wages paid to casual workers Select The Blank Question Profit volume ratio is also known as ________. Correct Answer Contribution to sales ratio Your Answer Contribution to sales ratio

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 True

Multiple Choice Single Answer Question Which of the following is the most efficient use of the clock card? Correct Answer To facilitate payment for time spend on the work premises Your Answer To facilitate payment for time spend on the work premises

Multiple Choice Single Answer Question Which of the following is a correct definition of the key factor? Correct Answer The factor which limits the activites of the undertaking Your Answer True/False Question The factor which the top management feel is important

Marginal costing is a technique of cost control.

Correct Answer True Your Answer True

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

Select The Blank Question A ________ inventory turnover period indicates efficient utilisation of material. Correct Answer Low Your Answer True/False Question Low

Provision for discount on debtors account should be credited to the Profit and Loss Account. Correct Answer False

Your Answer

True

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/Your Answer Rs.18,000/-

Multiple Choice Multiple Answer Question The factors which influence the selection of the method for absorption of overheads are: Correct Answer Type of industry , Nature of products , Manufacturing process Your Answer Type of industry , Nature of products , Manufacturing process

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 True/False Question Opening entries , Closing entries , Rectification entries

The problem of multiple key factors can be solved with the help of techniques like linear programming, operations research, etc. Correct Answer True Your Answer True

Multiple Choice Single Answer Question Out of debtors totaling to Rs.58,750/-, Rs.5,000/- were expected to be bad. What should be the amount of debtors that must be disclosed in the balance sheet? Correct Answer Rs.53,750/Your Answer True/False Question Rs.53,750/-

Balance sheet indicates the expenditure & income from the business. Correct Answer False Your Answer False

Select The Blank Question Dividend received on amount invested in shares is an example of ________. Correct Answer non-operating income Your Answer non-operating income

Select The Blank Question ________ variance represents the over or under utilisation of pland and machinery. Correct Answer Capacity Your Answer Capacity

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

Select The Blank Question Under Differential Time Rate method payment is made at Rs. 1.40 per hour when the level of efficiency is between________. Correct Answer 90% to 100% Your Answer True/False Question 90% to 100%

Absorption costing is more suitable for decision making than marginal costing Correct Answer False Your Answer False

True/False Question

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

Your Answer True/False Question

True

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

Multiple Choice Multiple Answer Question Features of Taylor's differential piece rate system are as follows : Correct Answer Minima 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 Minima clerical work is involved in calculating the wages , Helps in building up an efficient labour force , Strong incentive to efficient and ambitious workers. True/False Question A business is an activity carried out with the intention of earning the profit. Correct Answer True Your Answer True

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 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 Select The Blank

Question

________account can be defined as the record of all the transactions pertaining to a person, asset, liability income or expenditure which have taken place in a specified period. Correct Answer Ledger Your Answer Ledger

Multiple Choice Multiple Answer Question State the features of these transactions : (i) Commission paid Rs.250/- was posted twice to Commission account (ii) Rs.5,000/representing goods sold to A, was posted to the credit to commission received account (iii) Sold machine for Rs.8000/-, was credited to Sales account. Correct Answer The debit side of the trial balance will be in excess by Rs.250/- , Involves an error of principle , Involves an error of commission Your Answer The debit side of the trial balance will be in excess by Rs.13,250/- , Involves an error of principle , Involves an error of commission Multiple Choice Multiple Answer Question Select the steps to be followed while preparing bank reconciliation statement. Correct Answer Compare the transactions in the bank book and the pass book , Check the totals and the balancing of both the books , Confirm that the opening balances of both the books are tallying Your Answer Compare the transactions in the bank book and the pass book , Check the totals and the balancing of both the books , Confirm that the closing balances of both the books are tallying True/False Question Bank charges debited in the pass book represent clerical mistake on the part of the bank employees. Correct Answer False Your Answer True

Multiple Choice Single Answer Question A dividend warrant of Rs.2,076/- was paid direct to the bank and nothing appeared in the cash book. This is an example of : Correct Answer Direct deposit into the bank Your Answer True/False Question Direct deposit into the bank

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

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

Select The Blank Question ________ Accounting is the process of analysis and interpretation of financial data collected with help of financial accounting & cost accounting Correct Answer Management Your Answer Management

Match The Following Question Real A/C Trade Discount Cash Discount Rs.1 Personal A/C

Correct Answer Debit what comes in, Credit what goes out Not accounted for in the books of Accounts Accounted for in the books of Accounts Debit the receiver, Credit the giver

Your Answer Debit what comes in, Credit what goes out Not accounted for in the books of Accounts Accounted for in the books of Accounts Debit the receiver, Credit the giver

Multiple Choice Single 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 Your Answer Indirect labour cost

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 , Allowing free access to all the units to the collected data Match The Following Question Advantageously Correct Answer Scope of uniform costing Your Answer Scope of uniform costing

applicable in similar industries Spirit of mutual trust Avoids cut throat competition Treatment given to research and development costs Requisite for uniform costing Advantage of uniform costing Requisite for uniform costing Advantage of uniform costing

Fields covered by uniform Process of uniform costing costing

Select The Blank Question Margin of safety indicates ________ of operations. Correct Answer Profitability Your Answer True/False Question Profitability

Depreciation, interest and property tax continue even when the operations are discontinued. 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

Multiple Choice Multiple Answer Question Uncontrollable variances are Correct Answer Strike , Change in customers demand , Devaluation of currency Your Answer Change in customers demand , Wrong management policy , Devaluation of currency

True/False Question

Indirect labour cost indicates that labour cost which cannot be identified with the individual cost centre. Correct Answer True Your Answer True

True/False Question

There is no need to open a suspense account if the trial balance does not agree. Correct Answer False Your Answer False

Select The Blank Question Interest on overdraft charged by the bank is ________ to the pass book and ________ to the cash book Correct Answer debited Your Answer credited

Correct Answer credited Your Answer debited

Select The Blank Question Bank reconciliation statement is the statement prepared to explain the ________ as to why the bank balance as per ________ and bank balance as per bank book does not match Correct Answer reasons Your Answer reasons

Correct Answer pass book Your Answer pass book

Multiple Choice Single Answer Question Old furniture sold for Rs. 5400 has been entered as Rs 4500 in the cash book, for rectifying the same Suspense A/C credited to Rs Correct Answer 900

Your Answer

900

Multiple Choice Multiple Answer Question Material Price Variance may occur due to Correct Answer Change in price of material , Failure to take discounts , Weak purchase organization Your Answer Careless use of material , Change in price of material Select The Blank Question In financial statements P& L Accounts relates to a specific duration whereas ________ is for a given point of time Correct Answer P& L Accounts Your Answer Balance sheet

Correct Answer Balance sheet Your Answer Multiple Choice Single Answer Question Goods return by Pande worth Rs. 2000 should have appeared on the credit side of Pandes account for rectifying the same. Following account to be credited Correct Answer Suspense A/C Your Answer True/False Question Suspense A/C

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

Select The Blank Question Bin Card is not an ________ record but only a ________ record. Correct Answer Accounting Your Answer Qualitative

Correct Answer Quantitative Your Answer Quantitative

Multiple Choice Single Answer

Question

Salary given in trial balance Rs. 5000/-, still 2000/- is to be paid . The outstanding salary is debited to Profit &Loss A/C. The second effect is -Correct Answer Transfer to balance sheet liability side Your Answer Transfer to balance sheet liability side

Select The Blank Question While selecting source of supply ________ epartment may call for the ________ from the prospective suppliers Correct Answer purchase Your Answer purchase

Correct Answer quotation Your Answer True/False Question quotation

Profitability statement indicates the amount of assets & liabilities.

Correct Answer False Your Answer True

Multiple Choice Single Answer Question Calculate Sales Price Variance, If actual price is Rs.5.40/- per unit, Standard price is Rs.5/- per unit and actual sales volume is 500 units. Correct Answer Rs.200/- ( Favorable ) Your Answer True/False Question Rs.250/- ( Favorable )

Debit the receiver & credit the giver is a rule of Real a/c.

Correct Answer False Your Answer True

Multiple Choice Single Answer Question If at 50% capacity, total factory overheads are Rs.10,000/- (out of which 60% are fixed and 40 % are variable) then what will the amount of total factory overheads at 60% capacity Correct Answer Rs.10,800/Your Answer True/False Rs.12,000/-

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 Administration overheads are ________ in nature and can be controlled mainly at ________ level of the management Correct Answer fixed Your Answer variable

Correct Answer top Your Answer top

Match The Following Question Advance Application Outstanding Prepaid Drawing

Correct Answer Not related in current year Increase in Assets Amount still payable in current year Amount paid for next year Amount of personal use

Your Answer Not related in current year Increase in Assets Amount still payable in current year Amount paid for next year Amount of personal use

Multiple Choice Multiple Answer Question These are the features of fixed overheads Correct Answer total cost remains the same , per unit cost may vary , not dependent on volume of output Your Answer total cost remains the same , per unit cost may vary , not dependent on volume of output , per unit cost remains the same. Multiple Choice Single Answer Question __________ Accounting is primarily protects the interest of the outsiders dealing with the organization various capacities like investors, suppliers, customers etc. Correct Answer Financial Your Answer True/False Cost

Question

Head of the Department should sign the purchase requisition.

Correct Answer True Your Answer True

Multiple Choice Multiple Answer Question FIFO method Correct Answer The price of the earliest available lot is considered first , If the lot is exhausted, the price of the next available lot is considered , It is used for issue of material Your Answer The price of the earliest available lot is considered first , If the lot is exhausted, the price of the next available lot is considered , Physical lots of the material are kept separate , It is used for issue of material True/False Question

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

Select The Blank Question Bin card is maintained by ________ department whereas ________ is maintained by costing department. Correct Answer Stores Your Answer Stores

Correct Answer Store ledger Your Answer True/False Question Store ledger

The situation of over absorption arises if the overheads absorbed are less than the actual overheads. Correct Answer False Your Answer True

Multiple Choice Multiple Answer Question Accounts is a Correct Answer Record of all transaction Your Answer Record of all transaction , Record of purchasing goods & services , Record of selling goods & services

Multiple Choice Single Answer

Question

If production overheads to be absorbed are Rs. 20000/- and machine hours worked are 5000 then the machine hour rate will be, Correct Answer Re. 4 per machine hour. Your Answer True/False Question Rs. 5 per machine hour.

Due to errors of principle the arithmetical accuracy of the trial balance get affected. Correct Answer False Your Answer True

Multiple Choice Multiple Answer Question P/L A/C debit side includes Correct Answer salary , discount allowed , postage & telegram Your Answer discount allowed , interest received

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 , Job card Method , Flux Method

Multiple Choice Multiple Answer Question Trading a/c credit side includes Correct Answer sales , goods lost by fire , closing stock Your Answer sales , closing stock

Multiple Choice Multiple Answer Question From the following data, workout the EOQ annual demand. 5000 units, ordering cost Rs. 60 per unit, price per unit Rs. 100, inventory carrying cost15% on average inventory Correct Answer 300 Your Answer 200

Select The Blank Question Financial Accounting protects the interest of outsiders . it considers ________ transaction and it is a ________ requirement Correct Answer historical

Your Answer

Current

Correct Answer legal Your Answer legal

Multiple Choice Single Answer Question Under the Emersons Efficiency Bonus System at following efficiency level no bonus is payable. Correct Answer Below 66.66% Your Answer Below 66.66%

Select The Blank Question Planning lays down the course of action to be taken in future. In case budgetary control, it is in the form of the ________ and in case of ________ costing, it is in the form of the standard cost Correct Answer budgets Your Answer contracts

Correct Answer standard Your Answer budgets

Match The Following Question Discount received Outstanding expenses Depreciation Interest on capital Discount allowed

Correct Answer Suppliers Liabilities Assets Borrowed capital Debtors

Your Answer Suppliers Liabilities Assets Borrowed capital Debtors

True/False Question

canteen facility to workers, health and safety services are examples of monetary incentives. Correct Answer False Your Answer True

Multiple Choice Single Answer

Question

This is the best example of element wise classification of cost.

Correct Answer material Your Answer selling overheads

Multiple Choice Single Answer Question This is the process of recording attendance time of the workers. Correct Answer Time keeping Your Answer Time rate System

Multiple Choice Multiple Answer Question Wage rate standards takes into consideration the following factors Correct Answer The system of wage payments , System for bonus payment , Grades of workers required Your Answer The system of wage payments , System for bonus payment , Grades of workers required Select The Blank Question Standard Costing system facilitates ________ and ________ for each individual or department Correct Answer Delegation of authority Your Answer Fixation of responsibility

Correct Answer Fixation of responsibility Your Answer True/False Question Delegation of authority

If actual cost is more than the standard cost then it is called favorable variance. Correct Answer False 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 True

True/False Question

The aggregate of indirect material cost, indirect labour cost and indirect expenses is termed as factory cost.

Correct Answer False Your Answer True

Select The Blank Question Fixed cost is the cost that tend to remain ________ irrespective of ________ Correct Answer constant

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

MA1

Multiple Choice Single Answer Question KDL Ltd. charges depreciation @ 20% on written down value method. The net book value of its machinery on 1st January, 2003 was Rs.125,000/-. What will be the net book value of its machinery on year end, i.e.31st December, 2003, assuming there were no additions or disposals during the year? Correct Answer Rs.100,000/Your Answer Rs.100,000/True/False 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 True 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 , Loans at reduced rate of interest 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 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 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.? Correct Answer Rs.6,450/Your Answer Rs.6,450/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.7,520.55 and outstanding interest account should be credited with Rs.7,520.55 True/False Question Balance sheet indicates the financial status of the business at given period. Correct Answer True Your Answer False Multiple Choice Single Answer Question Labour turnover rate is best defined as :

Correct Answer The number of leavers replaced divided by the average of employees on the payroll Your Answer The number of leavers replaced divided by the average of employees on the payroll 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 Uniform costing Multiple Choice Multiple Answer Question The key factor determines the : Correct Answer Level of activity , Capacity utilization , Level of sales Your Answer Level of activity , Capacity utilization , Level of sales Select The Blank Question If the ordering cost ________s, then the economic order quantity will Increase. Correct Answer Increase Your Answer Decrease Select The Blank Question The difference between sales and cost of sales is termed as ________. Correct Answer Net Profit Your Answer Contribution Margin 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 Match The Following Question Correct Answer Your Answer Book-Keeping Books of Accounts Financial status Financial statement Profitability statement & Balance-sheet Profitability statement & Balancesheet Accounting Process of analyzing & interpretation Process of analyzing & interpretation Profitability statement Indicates the amount of profit earned Indicates the amount of profit earned Balance-sheet Financial status Books of Accounts 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 Uniform Costing Methods may be advantageously applied to . . . Correct Answer Single organization having number of branches. , Number of companies in

same industry , Similar Industries such as cotton, jute etc. Your Answer Single organization having number of branches. , Number of companies in same industry , Similar Industries such as cotton, jute etc. True/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 Profitability statement indicates the amount of assets & liabilities. Correct Answer False Your Answer False True/False Question Accounting is an art of recording, classifying & summarizing in a significant manner. Correct Answer True Your Answer True Multiple Choice Single Answer Question An order for goods worth Rs.18,000/- was placed on 25th March, 2004. The goods were received on 1st April, 2004. Calculate the impact of this transaction on the final statements of accounts for the year ended 31st March, 2004. Correct Answer The net profit will not be affected Your Answer The net profit will not be affected True/False Question Balance sheet indicates the expenditure & income from the business. Correct Answer False Your Answer False True/False Question Interim dividend paid by the company should be debited to the profit and loss appropriation account. Correct Answer True Your Answer True 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 Budget True/False Question The process of accounting split into three steams i.e. financial, cost, management accounting. Correct Answer True Your Answer True Match The Following Question Correct Answer Your Answer Real A/C Debit what comes in, Credit what goes out Debit the receiver, Credit the giver Trade Discount Not accounted for in the books of Accounts Not accounted for in the books of

Accounts Cash Discount Accounted for in the books of Accounts Accounted for in the books of Accounts Rs.1 Personal A/C Debit the receiver, Credit the giver Debit what comes in, Credit what goes out Select The Blank Question Indirect Cost is termed as ________. Correct Answer Overhead Your Answer Overhead 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 The objectives of cost accounting are : Correct Answer Cost control , Ascertain ment of cost of each product , Assist in managerial decision-making Your Answer Cost control , Ascertain ment of cost of each product , Assist in managerial decision-making Multiple Choice Single Answer Question The finance manager is responsible for which of the following budget? Correct Answer Cash budget Your Answer Cash budget Select The Blank Question Interest on ________ is credited to Capital account. Correct Answer Capital Your Answer Capital Select The Blank Question Under the average cost method of valuing material issues, new issue price is determined after ________ issue. Correct Answer Each Your Answer The next True/False Question The effect of price reduction is always reduction in the margin of safety and also reduction in the break even point. Correct Answer False Your Answer False True/False Question Price based on Uniform Costing may be taken to be reliable and representative of the whole industry. Correct Answer True Your Answer False Multiple Choice Multiple Answer 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 The level of control of the used of material in the production cycle , An increase in the maximum material inventory level , Failure to control the issue of materials from stores Question If the total manufacturing overhead of a tiles producing factory amounted to Rs.15 lakhs and the overhead rate was Rs.5/- per sq.ft, then the production for the period can be stated as ________ sq.ft. tiles. Correct Answer 300000 Your Answer 300000 Question Accounting is the art where transactions are Correct Answer Summarized , Classified , Recorded Your Answer Classified , Recorded , Processed True/False Question If excess of cash is estimated in the cash budget, it may be possible to utilise it to give bonus to the employees. Correct Answer False Your Answer False 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 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 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 , Preliminary expenses written off Question Expenditure on income-tax is an example of ________. Correct Answer non-operating expenditure Your Answer administrative overheads 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 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 Your Answer Cost of maintaining good relations with the workers , Cost of medical services , Cost of welfare facilities Question Select the items which may be classified as administration overheads.

Correct Answer Depreciation on office furniture , Director's remuneration , Telephone expenses Your Answer Director's remuneration , Telephone expenses Question Any amount of profit earned in the past which is not distributed to the owner, belongs to the creditors. Correct Answer False Your Answer True 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 LIST OF ATTEMPTED QUESTIONS AND ANSWERS MA2

Question Under time rate system a worker is paid on the basis of production achieved by him in a given time. Correct Answer False Your Answer False Question Budgeted profit and loss account and budgeted balance sheet are also known as ________. Correct Answer Master budget Your Answer Master budget Match The Following Question Correct Answer Your Answer Drawings Proprietor's account Proprietor's account Deferred revenue expenditure Real account Real account Deferred revenue expenditure written off Nominal account Nominal account Loan Personal account Personal account Question ________ Accounting is the process of analysis and interpretation of financial data collected with help of financial accounting & cost accounting Correct Answer Management Your Answer Management 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 Question A grinding machine is an example of impersonal cost centre Correct Answer True Your Answer True 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

Question Piece rate systems are very useful in the following circumstances: Correct Answer Units of output are measurable , Job is standardised , The flow of work is regular Your Answer Work delays are frequent , Job is standardised , The flow of work is regular Question The process of recording the business transactions in a defined set of records is referred to as ________. Correct Answer Balance sheet Your Answer Trial Balance 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 Match The Following Question Correct Answer Your Answer Liabilities All the amount owed by the business All the amount owed by the business Drawing Withdrawn for personal use Withdrawn for personal use Journal Book of original entry Book of original entry Ledger Maintain all types of Accounts Maintain all types of Accounts Assets All the properties owned by the business All the properties owned by the business Question Judge the given statement according to the given criteria. Goods being real account, when goods are lost by fire, the goods account should be debited because the goods are not going out of the factory. Correct Answer The statement is correct but the reason is incorrect Your Answer The statement and the reason both are incorrect Question A ________ inventory turnover period indicates efficient utilisation of material. Correct Answer Low Your Answer High Question Financial accounting may deal with the ascertainment of cost & calculation of profitability of the individual product. Correct Answer False Your Answer 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 Question Financial Accounting primarily protects the interests of the outsiders dealing with organization in various capacities. Correct Answer True Your Answer False Question Purchased 200 shares of Bharat Forge Ltd. for Rs.850/- per share, which account should be debited?

Correct Answer Investment account - Rs.170,000/Your Answer Investment account - Rs.170,000/Question Contents of Uniform Cost Manual are Correct Answer Organization , Cost Accounting system , Presentation of information Your Answer Organization , Cost Accounting system , Presentation of information 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 Inventory turnover period for material P is 40.5 days , Material Q is faster moving material , Consumption of material Q is Rs.860,000/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 True Question Overhead absorption rate will be different at different capacity levels. Correct Answer True Your Answer True Question Accounting is the art where transactions are Correct Answer Summarized , Classified , Recorded Your Answer Summarized , Classified , Recorded Question Features of a cost sheet are as follows Correct Answer Indicates the total cost of production during a given period , Indicates the unit cost of production during a given period , Helps the management in fixing the selling price to be quoted for the Your Answer Indicates the total cost of production during a given period , Helps the management in fixing the selling price to be quoted for the , Helps the management in taking 'make' or 'buy' decision for the 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 Question Under Differential Time Rate method payment is made at Rs. 1.40 per hour when the level of efficiency is between________. Correct Answer 90% to 100% Your Answer 90% to 100% Question The alternative courses of action for an integrated textile mill are: Correct Answer Sell cloth Your Answer Sell carpets Question Direct labour hour rate method of absorption of overheads is suitable where most of the production is done by using machines. Correct Answer False Your Answer True

Question The Ezee Company Ltd. plans to sell 108,000 units of product E in first quarter of 2004, 120,000 units in second quarter of 2004, 132,000 units in third quarter of 2004, 156,000 units in fourth quarter of 2004and 138,000 units in the first quarter of 20 Correct Answer 153,000 units Your Answer 136,000 units 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 Question The selection of ________ may depend upon the various factors like characteristics of the business organisation, tax considerations, statutory requirements etc. Correct Answer Accounting period Your Answer Accounting period Question Calculate the machine hour rate. The amount of overhead pertaining to June, 2004 to be apportioned is Rs.170,010/-. The machine cannot work without an operator. During the month June, 2004 the machine operator has been paid for 5,670 hours. Correct Answer Rs.29.98 Your Answer Rs.30/Question Uniform Costing simplifies the work of wage boards of fixing minimum wages and fair wages. Correct Answer True Your Answer True Question If the profit volume ratio is 25%, then the variable cost is equal to ________ of sales value. Correct Answer 0.75 Your Answer 0.75 Question Balance sheet is considered to be a part of the financial statements. Correct Answer True Your Answer True Question Select the cost that indicates increased or decreased total cost due to the increased or decreased volume of operations. Correct Answer Differential cost Your Answer Differential cost 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 Question The process of attributing proportions of items of costs amongst const centres is called ________. Correct Answer Cost apportionment Your Answer Cost allocation Question 1) Financial statements are basically in two forms i.e. profitability statement and balance sheet. Correct Answer True Your Answer True

Question The variance which measures the deviation of the rate actually paid to labour as from the standard hourly rate is known as: Correct Answer Labour rate variance Your Answer Labour rate variance Question Advance received from customers is ________ for the organisation. Correct Answer A liability Your Answer A liability Question Financial Accounting discloses the financial performance & financial statements of the business as a whole. Correct Answer True Your Answer True 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 Capital Question Furniture account will always have a ________ balance. Correct Answer Debit Your Answer Debit Question Product costs under direct costing include: Correct Answer Prime cost and variable factory overheads Your Answer Prime cost only 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 Question The sum of indirect material cost, indirect labour cost and indirect expenses is termed as factory cost. Correct Answer False Your Answer False Question Items debited to Profit & Loss Account are Correct Answer Salary , Discount allowed , Postage & telegram Your Answer Salary , Discount allowed , Postage & telegram LIST OF ATTEMPTED QUESTIONS AND ANSWERS MA3

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 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 Gopal's A/c ........... Dr. to cash A/c (Being entry for payment of railway freight for goods purchased) , Joshi's A/c ........... Dr. to Bank A/c. (Being entry for dishonour of cheque which was originally issued by Joshi) , Cash A/c ............Dr. to Suresh's A/c (Being cash received from Suresh for goods sold to him for) 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 , Allowing free access to all the units to the collected data 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 dishonoured cheque, originally received from Mr.A. The fact of dishonour was not recorded in the bank book. Find the balance as per pass book. Correct Answer Rs.128/- (overdraft) Your Answer Rs.106/- (credit) Multiple Choice Multiple Answer 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 Multiple Choice Multiple Answer 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 Your Answer Rent and taxes of the factory , Wages paid to indirect workers like cleaners, helpers,etc. , Salary paid to factory supervisor True/False Question Budgetary control is one of the techniques of management accounting. Correct Answer True Your Answer True True/False Question Management Accounting is a developed stage of Cost Accounting Correct Answer True Your Answer False True/False Question In the ledger account only credit entries relating to a particular account are posted. Correct Answer False Your Answer False Multiple Choice Multiple Answer Question Features of Sunk cost are . . . Correct Answer Indicates historical cost , Not relevant in decision making process , Incurred in past Your Answer Indicates historical cost , Not relevant in decision making process , Incurred in past

Match The Following Question Correct Answer Your Answer Global Tender Any supplier from the global market can fill the tender Any supplier from the global market can fill the tender Single Tender 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 True/False Question Fixed overhead variances may be calculated either on the basis of units of output or on the basis of standard hours. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Features of Taylor's differential piece rate system are as follows : Correct Answer Minima 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 Minima clerical work is involved in calculating the wages , Helps in building up an efficient labour force , Strong incentive to efficient and ambitious workers. True/False Question Financial Accounting discloses the financial performance & Financial status of the business as a whole Correct Answer True Your Answer True Select The Blank Question Loss is equal to fixed cost minus ________ Correct Answer Contribution Your Answer Contribution Multiple Choice Multiple Answer Question Direct Cost includes Correct Answer Direct material , Direct labour , Direct expenses Your Answer Direct material , Direct labour , Direct expenses Select The Blank Question The document which lays down the cost accounting plans and procedures to be followed by the constituent units is known as ________. Correct Answer uniform cost manual Your Answer uniform cost manual True/False Question Cost Accounting is a legal requirement. Correct Answer False Your Answer False Select The Blank

Question The principle of ________ is followed while preparing the financial statements. Correct Answer Going concern Your Answer Going concern True/False Question Cash account can have a credit balance. Correct Answer False Your Answer True 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 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 Period cost is the cost assigned to the products. Correct Answer False Your Answer False Multiple Choice Single Answer Question Interest on drawings of partners should be credited to which account? Correct Answer Profit and loss account Your Answer Profit and loss account Multiple Choice Multiple Answer Question Labour turnover means : Correct Answer Influx and exit of employees , Quantitative measurement of instability of working force , Rate of change in the average working force Your Answer Influx and exit of employees , Quantitative measurement of instability of working force , Rate of change in the average working force True/False Question Book keeping is clerical while accounting is managerial Correct Answer True Your Answer True True/False Question Financial Statements which are generated as a result of the management accounting report & financial performance of the organization as a whole. Correct Answer False Your Answer False Match The Following Question Correct Answer Your Answer Fixed overheads Variability wise classification Variability wise classification Abnormal overheads Normality wise classification Normality wise classification

Indirect Material Element wise classification Element wise classification Administration overheads Function wise classification Function wise classification Multiple Choice Single Answer Question The half-yearly sales of product X are as follows : 1st half -30,000 units; 2nd half 37,500 units. The production pattern of the company is based on 80% of the sales of the current six months and 20% of the budgeted sales of the next six months. Calcu Correct Answer 1st half -31,500 units; 2nd half - 30,000 units Your Answer 1st half -24,000 units; 2nd half - 30,000 units Select The Blank Question The variance which denotes the variation in overhead recovery due to the budgeted quantity of products being greater or less than actual production, is known as ________ variance. Correct Answer Volume Your Answer Efficiency Multiple Choice Single Answer Question Annual sales were Rs.10,50,000/- and sales returned by customers amounted to Rs.28,000/-. The salesmen are entitled to an incentive of 3% of net sales. Calculate the amount of incentive due to the salesmen. Correct Answer Rs.30,660/Your Answer Rs.30,660/True/False Question An entry in the stores ledger is required for transfer of material from one job to another in the same department. Correct Answer False Your Answer False Select The Blank Question As per the provisions of Section 209 of ________, all the company form of organisation is legally required to follow the mercantile or accrual system of accounting. Correct Answer The Companies Act, 1956 Your Answer The Companies Act, 1956 Multiple Choice Single Answer Question Sita and Gita are partners of SGL & Co. As on 1st August, 2003 Sita's capital stood as Rs.10,000/- and Gita's capital as Rs.18,000/-. If interest on capital is to be provided @ 10% p.a., what should be the treatment of this interest in the profitability statement, assuming there were no additions to capital during this period? Correct Answer Profit and loss account should be debited with Rs.1,866.67 Your Answer Profit and loss account should be debited with Rs.1,866.67 True/False Question GAIL having monopoly in the CNG (Compressed Natural Gas) market can implement the Uniform costing system. Correct Answer False Your Answer True True/False Question Bank reconciliation statement can be prepared on weekly basis. Correct Answer True Your Answer True

Select The Blank Question The ________ ledger carries the individual accounts, whereas the general ledger records the consolidated effect of the individual transactions. Correct Answer Control Your Answer Control 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 True/False Question 1) Cost Accounting and Management Accounting are similar to each other in many respects. Correct Answer True Your Answer True True/False Question The reports generated by financial accounting are meant for the use by management for effective decisions. Correct Answer True Your Answer False 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 Token or disc method is a related to the system of ________. Correct Answer Time-keeping Your Answer Time-keeping True/False Question Cost Accounting may be considered to be a part of management Accounting. Correct Answer True Your Answer True Select The Blank Question The ________ variance is the difference between the actual variable overhead incurred and the standard variable overhead charged to production. Correct Answer Total variable overhead Your Answer Total variable overhead 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 True/False Question Uniform Costing simplifies the work of wage boards of fixing minimum wages and fair wages.

Correct Answer True Your Answer True True/False Question Management Accounting is not at all a legal requirement Correct Answer True Your Answer True LIST OF ATTEMPTED QUESTIONS AND ANSWERS KMA1

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 quantity Match The Following Question Correct Answer Your Answer Non-Operating income Issue of shares Issue of shares Plan of investment in fixed assets Capital Expenditure Budget Capital Expenditure Budget Plan for surplus/shortage of cash Cash Budget Cash Sales Operating income Cash Sales Cash Sales Multiple Choice Multiple Answer 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 Your Answer Repairs of plant when it is undertaken by an outside agency , Carriage inward by hired carriers , Wages paid to casual workers 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 Select The Blank Question The budget that represents the funds investment for expansion, diversification, etc. is known as ________. Correct Answer Capital expenditure budget Your Answer Capital expenditure budget Multiple Choice Single Answer Question Basic objective of Uniform Costing is . . . Correct Answer comparison Your Answer comparison Multiple Choice Single Answer Question Which of the following cost is also termed as Prime Cost ? Correct Answer Direct cost Your Answer Direct cost

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 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 Co-partnership Multiple Choice Multiple Answer 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. Your Answer Single organization having number of branches. , Number of companies in same industry , Similar Industries such as cotton, jute etc. Multiple Choice Single Answer Question Select the cost that indicates increased or decreased total cost due to the increased or decreased volume of operations. Correct Answer Differential cost Your Answer Differential cost 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 selling price , Reduce cost of sales , Increase the selling efforts Multiple Choice Multiple Answer Question The disadvantages of time rate system are : Correct Answer Ignores the efficiency of workers , Higher labour cost , Lack of motivation to increase productivity Your Answer Ignores the efficiency of workers , Higher labour cost , Lack of motivation to increase productivity 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 Select the appropriate rectification entries for the following transactions (i) Rs.200/received in respect of a bad debt previously written off was credited to Debtors account. (ii) Paid Rs.6,000/- to a Mr. Rao, clerk, as salary in lieu of notice. This amount was debited to his personal account (iii) Interest @ 5% p.a. on a loan of Rs.5,000/- was debited to general expenses account. Correct Answer Debtors A/c ..........Dr. Rs.200/- to bad debts recovered A/c Rs.200/- , Rs.6,000/- to Rao's A/c Rs.6,000/- , Rs.250/- to General Expenses A/c Rs.250/Your Answer Debtors A/c ..........Dr. Rs.200/- to bad debts recovered A/c Rs.200/- , Rs.6,000/to Rao's A/c Rs.6,000/- , Rs.250/- to General Expenses A/c Rs.250/-

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 Single Answer Question Quantify the increase in profit on account of following errors : (a) Repairs of furniture amounting to Rs.2,000/- were debited to furniture account. Furniture is depreciated @10% p.a. (b) Interest received on bank deposits was credited to dividend received account, Rs.1,550/- (c) A television purchased for the managing director's office for Rs.45,000/- was debited to Interior decoration expenses. Correct Answer Rs.43,200/Your Answer Rs.44,750/Select The Blank Question The analysis which is also referred as 'what if' analysis is known as________. Correct Answer Cost volume profit analysis Your Answer Profit variance analysis 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 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 automobile True/False Question The balance sheet has three columns, viz. assets, liabilities and ledger folio. Correct Answer False Your Answer False Select The Blank Question Income Tax Act, recognise only one method of depreciation namely ________. Correct Answer Written down value method Your Answer Written down value method 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 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 regarding temporary shut-downs 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 Accounting is an art of recording, classifying & summarizing in a significant manner. Correct Answer True Your Answer True Multiple Choice Single Answer Question Flood occurred on 18th March, 2004 and goods worth Rs.28,000/- were destroyed. The insurance company accepted on 28th March, 2004 the claim for Rs.10,000/- only. The claim amount was received on 2nd April, 2004. Find the impact of this transaction on net profit for the year ending 31st March, 2004. Correct Answer The net profit will decrease by Rs.18,000/Your Answer The net profit will increase by Rs.10,000/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 While preparing the labour cost budget, factors such as overtime working or night shift working may be ignored. Correct Answer False Your Answer False 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 Examples of indirect material are Correct Answer Consumable stores , Glue used in book binding , Nails used in packing boxes Your Answer Consumable stores , Glue used in book binding , Nails used in packing boxes True/False Question If excess of cash is estimated in the cash budget, it may be possible to utilise it to give bonus to the employees. Correct Answer False 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 True/False 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 Your Answer True Multiple Choice Multiple Answer Question Select the items which may be classified as administration overheads. Correct Answer Depreciation on office furniture , Director's remuneration , Telephone expenses Your Answer Depreciation on office furniture , Director's remuneration , Telephone expenses Multiple Choice Single Answer Question Which of the following is a correct definition of the key factor? Correct Answer The factor which limits the activites of the undertaking Your Answer The factor which the top management feel is important Select The Blank Question The varinace that attempts to ascertain the effect of change in sales volume on the difference between actual and budgeted contribution is known as ________ variance. Correct Answer Sales margin volume Your Answer Total sales margin 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 Select The Blank Question Depreciation is caused by use factor, obsolescence and ________. Correct Answer Time factor Your Answer Time factor Multiple Choice Single Answer Question A business's telephone bill should nromally be classified into which one of the following categories? Correct Answer Semi-variable cost Your Answer Semi-variable cost Select The Blank Question If the ordering cost ________s, then the economic order quantity will Increase. Correct Answer Increase Your Answer Increase True/False Question Depreciation under Reducing Balance Method is calculated as (Number of units * Rate of depreciation per unit) Correct Answer False Your Answer False 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 favourable

Multiple Choice Single Answer Question Which system can assist in fixing a common selling price for the industry as a whole on the basis of cost of production of all units belonging to that industry ? Correct Answer Uniform costing Your Answer Uniform costing True/False Question All cash sales are recorded in the sales register. Correct Answer False Your Answer True Match The Following Question Correct Answer Your Answer Transport facilities to employees Preventive cost of labour turnover Preventive cost 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 Unavoidable cause of labour turnover Increased spoilage and defectives Replacement cost of labour turnover Replacement cost of labour turnover True/False Question Profitability statement indicates the amount of assets & liabilities. Correct Answer False Your Answer False LIST OF ATTEMPTED QUESTIONS AND ANSWERS KMA2

True/False Question Balance sheet indicates the expenditure & income from the business. Correct Answer False Your Answer True 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 True True/False Question Indirect material cost is an integral part of finished goods. Correct Answer False Your Answer False Multiple Choice Multiple Answer Question Select the various methods adopted for treatment of under or over absorbed overheads Correct Answer Use of supplementary rates , Carrying over the amount to remaining period , Writing off to the Costing Profit and Loss Account

Your Answer Use of supplementary rates , Carrying over the amount to remaining period , Writing off to the Costing Profit and Loss Account True/False Question Generally speaking income represents wealth increase and business success; higher the income, lower will be the success of a business. Correct Answer False Your Answer False 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 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 1) Financial statements are basically in two forms i.e. profitability statement and balance sheet. 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 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. Correct Answer Rs.180/Your Answer Rs.160/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 compile reliable cost data for inter-firm comparison of costs , To fix a common selling price so as to maximize profits of each unit Select The Blank Question Computation of gross wages, deductions and net wages payable is the function of the ________ department. Correct Answer Personnel Your Answer Cost accounting

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 True 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 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 Match The Following Question Correct Answer Your Answer Normal Standards Anticipated to be achieved in future Established for a longer period of time Basic Standards Established for a longer period of time Once established can never be altered Current Standards Established for a shorter period of time Established for a shorter period of time Expected Standards Anticipated to be achieved in the budget period Anticipated to be achieved in future 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 Trading account is an important account which will be used to analyse how successful and how efficiently the firm runs its business. 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 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 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 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/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 sales-office workers Multiple Choice Single Answer Question The present unit cost data for a product is as follows: selling price Rs.15/-, variable costs Rs.8/-. If selling prices are reduced by 10% and variable costs are increased by 12.5%. Which of the following is the amended contribution to sales ratio? Correct Answer 0.333 Your Answer 0.5 Multiple Choice Multiple Answer Question Select the correct statements. Ram's account.Dr. Rs.10,000 To Bank account Rs.10,000 Correct Answer Ram is a creditor , Rs.10,000/- has been paid to Ram , The payment is made by cheque Your Answer Ram is an employee , Rs.10,000/- has been paid to Ram , The payment is made by cheque Select The Blank Question Generally, all real accounts will have a ________ balance Correct Answer Debit Your Answer Debit 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 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/Match The Following

Question Correct Answer Your Answer Purchase budget Forecast of quantity and value of materials Forecast of quantity and value of materials Budget committee Analyses the performance of different budget centres Analyses the performance of different budget centres Cash budget Assists in predicting shortage of cash Assists in predicting shortage of cash Budget Objective is performance evaluation Objective is performance evaluation Multiple Choice Multiple Answer Question Contents of Uniform Cost Manual are Correct Answer Organization , Cost Accounting system , Presentation of information Your Answer Organization , Cost Accounting system , Presentation of information 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 - (maximum usage X maximum re-order period) Select The Blank Question The selection of ________ may depend upon the various factors like characteristics of the business organisation, tax considerations, statutory requirements etc. Correct Answer Accounting period Your Answer Accounting period 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 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 Inefficiency of new workers , Cost of selection and placement , Increased spoilage and defectives 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 The process of accounting split into three steams i.e. financial, cost, management accounting. Correct Answer True Your Answer True Select The Blank

Question Advance received from customers is ________ for the organisation. Correct Answer A liability Your Answer A liability True/False Question Variable cost + Profit = Sales Correct Answer False Your Answer False Select The Blank Question The ________ adjustment is necessary to relfect the cost for the use of fixed asset during the year. Correct Answer Depreciation Your Answer Depreciation 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 , Augments emplyees' efficiency True/False Question Cash account can have a credit balance. Correct Answer False Your Answer False 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 profit and loss 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 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 Single Answer Question The integrated form of all functional budgets is known as : Correct Answer Master budget Your Answer Master budget 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 Over-absorbed Select The Blank Question The final result disclosed by trading account is the ________profit earned by the

organization. Correct Answer Gross Your Answer Gross LIST OF ATTEMPTED QUESTIONS AND ANSWERS kma1

Select The Blank Question Number of days inventory is held can be calculated by dividing number of days in a year by ________. Correct Answer Inventory turnover ratio Your Answer Inventory turnover ratio True/False Question Budgetary control is one of the techniques of management accounting. Correct Answer True Your Answer True True/False Question All personal expenses of the owner should be debited to the organisation's profit and loss account. Correct Answer False Your Answer False Match The Following Question Correct Answer Your Answer Total cost Cost of finished goods Cost of finished goods Non operating income Profit on sale of investment Profit on sale of investment Selling and distribution overheads Advertisement expenses Advertisement expenses Factory overheads Repair for factory building Repair for factory building True/False Question The amount of profit which is retained by the organisation is transferred to 'Reserves and Surplus' in the balance sheet. Correct Answer True Your Answer True Select The Blank Question Purchase of national saving certificates by the company from its profits, should be debited to ________ account. Correct Answer Investments Your Answer Investments True/False Question Yield variance equal to zero indicates that the standard yield and actual yield are the same. Correct Answer True Your Answer True True/False Question Book keeping is clerical while accounting is managerial Correct Answer True

Your Answer True Match The Following Question Correct Answer Your Answer Advantageously applicable in similar industries Scope of uniform costing Scope of uniform costing Spirit of mutual trust Requisite for uniform costing Requisite for uniform costing Avoids cut throat competition Advantage of uniform costing Advantage of uniform costing Treatment given to research and development costs Fields covered by uniform costing Fields covered by uniform costing Multiple Choice Single Answer Question Calculate inventory holding period. Safety stock - 250 units; maximum stock - 6,500 units; re-order quantity - 3,800 units and material issued during 2003 is 24,000 units. Correct Answer 66.9 days Your Answer 67 days True/False Question Material mix and material yield variance can be calculated even when only one raw material is used for production. Correct Answer False Your Answer False Select The Blank Question A ________ inventory turnover period indicates efficient utilisation of material. Correct Answer Low Your Answer Low Multiple Choice Single Answer Question KDL Ltd. charges depreciation @ 20% on written down value method. The net book value of its machinery on 1st January, 2003 was Rs.125,000/-. What will be the net book value of its machinery on year end, i.e.31st December, 2003, assuming there were no additions or disposals during the year? Correct Answer Rs.100,000/Your Answer Rs.100,000/Multiple Choice Single Answer Question A lathe machine was purhcased 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 Nil Multiple Choice Single Answer Question A factory has 8 hours a day and the standard daily wage is Rs.80/-. Standard output per hour is 5 units. During a day worker P produced 30 units, Q produced 36 units and S produced 42 units. Calculate wages payable to P,Q and S under Merrick Multiple Piece Rate System. Correct Answer P - Rs.60/-; Q - Rs.79.20; S - Rs.100.80 Your Answer P - Rs.50/-; Q - Rs.69.20; S - Rs.79.80

Multiple Choice Single Answer Question A company budgets for a production of 150,000 units. The variable cost per unit is Rs.14/- and fixed cost is Rs.2/- per unit. The company fixes its selling price to fetch a profit of 15% on total cost. What is the break even point for the company? Correct Answer 68,182 units Your Answer 61,182 units True/False Question Management Accounting is not at all a legal requirement Correct Answer True Your Answer True Multiple Choice Multiple Answer 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 Your Answer Functional responsibility of different functional managers , Delegation of authority to various managers , Inter-functional relationships of these managers Multiple Choice Single 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/Your Answer Rs.49,248/Multiple Choice Multiple Answer Question Features of Taylor's differential piece rate system are as follows : Correct Answer Minima 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 Minima clerical work is involved in calculating the wages , Helps in building up an efficient labour force , Strong incentive to efficient and ambitious workers. 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 Variable cost , [Fixed cost / (Fixed cost + Net Profit)] X Sales Select The Blank Question The ________ variance is the difference between the actual variable overhead incurred and the standard variable overhead charged to production. Correct Answer Total variable overhead Your Answer Variable overhead volume 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 Multiple Choice Multiple Answer Question Management Accounting is Correct Answer Designed particularly for internal use , Helpful in estimating the future along with past period , Useful in furnishing the necessary information to the management

Your Answer Designed particularly for internal use , Helpful in estimating the future along with past period , Useful in furnishing the necessary information to the management Select The Blank Question Warehousing cost is an item of ________ Correct Answer Distribution overheads Your Answer Office overheads Select The Blank Question The lowest profit volume ratio can be ________%. Correct Answer 0 Your Answer 0.1 True/False Question Cost Accounting is a legal requirement. Correct Answer False Your Answer False True/False Question Management Accounting is a developed stage of Cost Accounting Correct Answer True Your Answer True True/False Question Trading account is used to analyse 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 Calculate the earnings of workers Monica and Sonica under Taylor's differential piece rate system. Hours in a day =8; normal rate per unit = Rs.12/-; standard time per unit = 30 seconds; rate differential : 80% of piece rate below standard, 120% of piece rate at or above standard. Monica produces 900 units per day and Sonica produces 1,100 units per day. Correct Answer Monica -Rs.72/-; Sonica - Rs.132/Your Answer Monica -Rs.110/-; Sonica - Rs.90/ 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 Multiple Choice Multiple Answer Question The factors that influence determination of budget period are : Correct Answer Type of budget, viz. Sales or capital expenditure budget , General economic conditions , Trade cycle of business Your Answer Type of budget, viz. Sales or capital expenditure budget , General economic conditions , Trade cycle of business 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 Rent of store house , Cost of material , Salary of store keeper 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 organised 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 organised sector is ready to share the technological improvements , Information furnished by the units is complete and correct True/False Question In marginal costing, under and over absorption of fixed overheads is bound to arise. Correct Answer False Your Answer True Multiple Choice Multiple Answer Question Piece rate systems are very useful in the following circumstances: Correct Answer Units of output are measurable , Job is standardised , The flow of work is regular Your Answer Units of output are measurable , Work delays are frequent , Job is standardised Multiple Choice Single Answer Question Judge the following narrative according to the criteria given : There are many organizations whose sales fluctuate with fluctuations in the weather, viz. ice-cream, sweaters, etc. Correct Answer The statement and the reason are both incorrect Your Answer The statement and the reason are both correct True/False Question New companies can adopt Uniform costing system as a ready-made system. Correct Answer True Your Answer False Select The Blank Question An amount of Rs.200/- is received from P and is credited to Q. The rectification entry would affect ________ Correct Answer P's A/c and Q's A/c Your Answer P's A/c and Q's A/c Multiple Choice Single Answer Question Trade Discount refers to the discount . . . Correct Answer received on purchases Your Answer received on purchases True/False Question Cost Accounting may be considered to be a part of management Accounting. Correct Answer True Your Answer True 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 Select The Blank Question In India, where public undertakings operate along with the private sector undertakings, ________ enables a comparative assessment to be made of the two sectors. Correct Answer uniform costing Your Answer uniform costing

Multiple Choice Single Answer Question A firm has monthly fixed cost commitment of Rs.200,000/-. It is producing only one product which is sold at a price of Rs.80/- per unit. Per unit variable cost is Rs.50/-. Calculate annual break even point. Correct Answer 80,000 units Your Answer 64,000 units True/False Question 1) Cost Accounting and Management Accounting are similar to each other in many respects. Correct Answer True Your Answer True Multiple Choice Single Answer Question Cool-wind Ltd., manufactures fans, which at 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/Your Answer Rs.452/True/False Question Credit balance in interest account indicates income for the organisation. Correct Answer True Your Answer True

LIST OF ATTEMPTED QUESTIONS AND ANSWERS 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 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

Profitability statement indicates the amount of assets & liabilities.

Correct Answer False Your Answer True/False Question False

Cost Accounting restrict itself with historical transactions

Correct Answer False Your Answer True/False True

Question

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

Multiple Choice Multiple Answer Question Financial Accounting ______________ Correct Answer Designed to supply information for internal/ external uses. , Deals with the transaction during specific period. , It is compulsory Your Answer Designed to supply information for internal/ external uses. , Deals with the transaction during specific period. Multiple Choice Multiple Answer Question Cost Accounting ______________. Correct Answer Concerned with specific activities. , Classified according to their nature. , It deals with both i.e. past & present. Your Answer Concerned with specific activities. , Classified according to their nature. , It covers whole business Match The Following Question Accounting Profitability statement Balance-sheet Book-Keeping Financial statement

Correct Answer Process of analyzing & interpretation Indicates the amount of profit earned Financial status Books of Accounts Profitability statement & Balance-sheet

Your Answer Process of analyzing & interpretation Indicates the amount of profit earned Financial status Books of Accounts Profitability statement & Balance-sheet

Multiple Choice Multiple Answer Question Features of double entry accounting system are . . . Correct Answer Every business transaction has two elements , When business receives something, it has to pay something , Every debit has a corresponding credit Your Answer Every business transaction has two elements , When business receives something, it has to pay something , Every debit has a corresponding credit 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/False Question True

Penalty paid for delay in payment to creditors represents uncontrollable cost. 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 Match The Following Question Cost Centre Cost Control Differential Cost Sunk Cost

Correct Answer Facilitate the fixation of responsibility Process of controlling costs of operations Increase or Decrease in cost Historical Cost

Your Answer Increase or Decrease in cost Facilitate the fixation of responsibility Increase or Decrease in cost Historical Cost

Multiple Choice Multiple Answer Question Features of a cost sheet are as follows Correct Answer Indicates the total cost of production during a given period , Indicates the unit cost of production during a given period , Helps the management in fixing the selling price to be quoted for the Your Answer Indicates the total cost of production during a given period , Indicates the unit cost of production during a given period , Helps the management in fixing the selling price to be quoted for the , Helps the management in taking 'make' or 'buy' decision for the Select The Blank Question ________ Accounting assists the management in establishing the plans to attain the economic objectives and take proper decisions for the attainment of its objectives. Correct Answer Management

Your Answer

Management

Select The Blank Question Depreciation charged on office furniture on straight line basis is an example of ________. Correct Answer Administration overheads Your Answer True/False Question Administration overheads

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

Correct Answer True Your Answer True/False Question True

Manufacturing overheads represents all costs incurred in the factory including direct material cost and direct labour cost. Correct Answer False Your Answer False

Multiple Choice Multiple Answer 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. Your Answer Single organization having number of branches. , Number of companies in same industry , Similar Industries such as cotton, jute etc. True/False Question

New companies can adopt Uniform costing system as a readymade system. Correct Answer True 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 purhases will increase by Rs.6,450/- , The closing stock will increase by Rs.6,450/- , The gross profit will not be affected

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

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 Donation

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 Single Answer Question A lathe machine was purhcased 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 True/False Question Nil

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 True

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 Copy of a firm's account in the bank's ledger is known as ________. Correct Answer Bank statement Your Answer Bank statement

Multiple Choice Single Answer Question A cheque of Rs.400/- received and deposited into bank on 26th September, was credited in the pass book but was omitted to be entered in the bank book: this error will result in : Correct Answer Difference in the balance as per bank book and as per pass book Your Answer Difference in the balance as per bank book and as per pass book Select The Blank Question The ________ is responsible for material losses while in storage. Correct Answer Store-keeper Your Answer True/False Question Store-keeper

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 Single 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 Your Answer True/False Question Direct labour

The cost of abnormal time may be recovered by inflating the hourly labour rate. Correct Answer True

Your Answer

True

Select The Blank Question The cost-volume-profit analysis basically highlights the effect of changes in sales volume on the profit of the company, in the ________. Correct Answer short run Your Answer short run

Select The Blank Question Contribution represents pool of resources available for meeting all costs other than ________. Correct Answer Variable costs Your Answer Variable costs

Multiple Choice Single Answer Question ABC Ltd. is planning to sell 200,000 units of product B. The fixed costs are Rs.400,000/- and the variable costs are 60% of the selling price. In order to realize a profit of Rs.100,000/-, the selling price per unit would have to be : Correct Answer Rs.6.25 Your Answer Rs.4.17

Multiple Choice Single Answer Question The total production cost for making 20,000 units was Rs.21,000/- and the total production cost for making 50,000 units was Rs.34,000/-. Once production exceeds 25,000 units, additional fixed costs of Rs.4,000/- are incurred. The full production cost per unit of making 30,000 units is: Correct Answer Re.0.98 Your Answer Re.0.84

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 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 , Capital expenditure budget 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 Multiple Answer Question Identify the budgets for which the production manager sould be held responsible : Correct Answer Production budget , Production overheads budget , Plant utilisation budget Your Answer Production budget , Production overheads budget , Plant utilisation budget Select The Blank Question The budget that represents the funds investment for expansion, diversification, etc. is known as ________. Correct Answer Capital expenditure budget Your Answer True/False Question Administrative expenses

Amortisation of goodwill should be considered while preparing cash budget. Correct Answer False Your Answer True

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 Select The Blank Question ________ variance represents the over or under utilisation of pland and machinery.

Correct Answer Capacity Your Answer Capacity

Select the correct formulae for calculating break even point.

a)

Fixed cost / (Selling b) price per unit - Variable c) cost per unit)

d)

[Fixed cost / Marginal contribution] X Sales [Fixed cost / Marginal contribution] X Variable cost [Fixed cost / (Fixed cost + Net Profit)] X Sales

Select the transactions which can be entered in the Journal proper.

a) b)

Opening entries Closing

c) entries d)

Average entries Rectification entries

Compound journal entry avoids duplication of effort.

True False
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.

a)

Labour cost variance b) -Rs.700/(Favourable)

c)

Labour yield variance d) -Rs.1,260/Labour yield variance is adverse Labour yield variance is favourable
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?

a) b) c) d)
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

Rs.29,200/Rs.26,000/Rs.26,545.45 Rs.26,788.99

category. Find the amount paid to

a) b) c) d)
A company budgets for a production of 150,000 units. The variable cost per unit is Rs.14/- and fixed cost is Rs.2/per unit. The company fixes its selling price to fetch a profit of 15% on total cost. What is the break even point for the company?

Rs.161,000/Rs.121,000/Rs.177,000/Rs.118,000/-

a) b) c) d)

68,182 units 68,100 units 61,182 units 61,100 units

LIST OF ATTEMPTED QUESTIONS AND ANSWERS Select The Blank Question Loss is equal to fixed cost minus ________

Correct Answer Contribution Your Answer Contribution

Select The Blank Question Profit = Contribution per unit X ________. Correct Answer Margin of safety (units) Your Answer Break even point (units)

Multiple Choice Multiple Answer Question The different purposes served by standard costing technique are : Correct Answer Cost control , Cost awareness , Performance appraisal Your Answer True/False Question Cost control , Cost awareness , Profit planning

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

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 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 Quantity requisitioned , Per unit material cost , Job number

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

Select The Blank Question The variance which measures the difference between what is paid for a given quantity of materials and what should have been paid for, is known as ________ variance. Correct Answer Direct material cost Your Answer True/False Question Direct material cost

Balance sheet indicates the expenditure & income from the business. Correct Answer False Your Answer False

Multiple Choice Single Answer Question It is said that adoption of uniform costing creates customer confidence because . . . Correct Answer Prices are reliable Your Answer True/False Question Prices are reliable

Deferred revenue expenditure written off account is a real account. Correct Answer False Your Answer False

Select The Blank Question In practical circumstances, the ________ are referred to as application of funds. Correct Answer Assets Your Answer Liabilities

Multiple Choice Single Answer Question The cost of fixed asset is Rs. 1,00,000. Rs. 17,000 is charged as depreciation. Calculate the rate of depreciation. Correct Answer 0.17 Your Answer True/False Question 0.17

Balance sheet is considered to be a part of the financial statements.

Correct Answer True Your Answer True

Select The Blank Question The cost-volume-profit analysis basically highlights the effect of changes in sales volume on the profit of the company, in the ________. Correct Answer short run Your Answer short run

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 0.7

Multiple Choice Single Answer Question Calculate the machine hour rate. The amount of overhead pertaining to June, 2004 to be apportioned is Rs.170,010/-. The machine cannot work without an operator. During the month June, 2004 the machine operator has been paid for 5,670 hours. Correct Answer Rs.29.98 Your Answer True/False Question Rs.29.98

Profitability statement indicates the amount of assets & liabilities. Correct Answer False Your Answer True

Multiple Choice Multiple Answer Question While preparing sales budget the following factors must be considered : Correct Answer The number and types of products sold by the organisation , Whether the organisation's market share is increasing or decreasing? , Details of seasonal fluctuations in sales Your Answer The number and types of products sold by the organisation , Whether the organisation's market share is increasing or decreasing? , Details of seasonal fluctuations in sales

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

Select The Blank Question Generally all the liabilities will have ________balance. Correct Answer Credit Your Answer True/False Question Credit

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

True/False Question

Error of commission refer to calculation errors, totaling errors, errors in carrying forward etc. Correct Answer True Your Answer True

Multiple Choice Multiple Answer Question Techniques of management accounting include: Correct Answer Marginal costing , Budgetary control , Standard costing Your Answer Marginal costing , Budgetary control , Standard costing

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 expenses relating to maintenance and creation of demand for the product should be included in the ________budget Correct Answer Selling expenses

Your Answer

Selling expenses

Multiple Choice Multiple Answer Question Management Accounting is Correct Answer Designed particularly for internal use , Helpful in estimating the future along with past period , Useful in furnishing the necessary information to the management Your Answer Designed particularly for internal use , Helpful in estimating the future along with past period , Useful in furnishing the necessary information to the management True/False 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 True

Multiple Choice Single Answer Question Flood occurred on 18th March, 2004 an d goods worth Rs.28,000/- were destroyed. The insurance company accepted on 28th March, 2004 the claim for Rs.10,000/- only. The claim amount was received on 2nd April, 2004. Find the impact of this transaction on net profit for the year ending 31st March, 2004. Correct Answer The net profit will decrease by Rs.18,000/Your Answer The net profit will decrease by Rs.18,000/-

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 Price quoted by the supplier , Goodwill of the supplier 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.7,520.55 and outstanding interest account should be credited with Rs.7,520.55

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

Match The Following Question Ledger Audit Accounting Journal True/False Question

Correct Answer Maintain all types of accounts

Your Answer Maintain all types of accounts

Reviewing internal control Reviewing internal control system system Process of analyzing & interpretation Book of original entry Process of analyzing & interpretation Book of original entry

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

Select The Blank Question If the firm is operating with zero margin of safety, decline of even a single unit in sales will result in ________. Correct Answer Loss Your Answer Loss

Multiple Choice Multiple Answer Question When bank balance as per bank book is considered for preparing bank reconciliation statement, then following items need to be added : Correct Answer Cheques issued but not presented , Direct deposit made by customer , Wrong credits given by bank Your Answer Cheques issued but not presented , Direct deposit made by customer , Wrong credits given by bank Select The Blank Question Uniform costing is not a separate method of ________. Correct Answer cost accounting Your Answer cost accounting

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 , Allowing free access to all the units to the collected data 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 The indirect material cost, indirect labour cost and indirect expenses cost, collectively are termed as ________. Correct Answer Overhead Your Answer True/False Question Overhead

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

Multiple Choice Single Answer Question Basic objective of Uniform Costing is . . . Correct Answer comparison Your Answer True/False Question comparison

Accounting refers to the process of analyzing & interpreting the information already recorded in the books of accounts. 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 favourable Select The Blank Question If the standard contribution is less than the actual contribution, then ________ variance arises. Correct Answer Favourable Your Answer Favourable

Match The Following Question Purchase budget Budget committee Cash budget Budget

Correct Answer Forecast of quantity and value of materials

Your Answer Forecast of quantity and value of materials

Analyses the performance Analyses the performance of different budget centres of different budget centres Assists in predicting shortage of cash Assists in predicting shortage of cash

Objective is performance Objective is performance evaluation evaluation

Multiple Choice Single Answer 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 Incremental cost

LIST OF ATTEMPTED QUESTIONS AND ANSWERS 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 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

Profitability statement indicates the amount of assets & liabilities. Correct Answer False Your Answer False

Match The Following

Question Accounting

Correct Answer Process of analyzing & interpretation Indicates the amount of profit earned Financial status

Your Answer Process of analyzing & interpretation Indicates the amount of profit earned Financial status

Profitability statement Balance-sheet Book-Keeping

Books of Accounts Books of Accounts Profitability statement & Balance-sheet

Financial statement Profitability statement & Balance-sheet Match The Following Question Correct Answer Bills Payable Bills Receivable Trade Discount Amount payable to supplier Amount received from the customer Not accounted for in the books of Accounts Accounted for in the books of Accounts Amount not received from customer

Your Answer Amount payable to supplier Amount received from the customer Not accounted for in the books of Accounts Accounted for in the books of Accounts Amount not received from customer

Cash Discount

Bad debts

True/False Question

Real Accounts may also consist the accounts of some intangible assets like Goodwill Account Correct Answer True

Your Answer True/False Question

True

The rate at which the depreciation is to be calculated are also specified in the Income Tax Act 1961. Correct Answer True Your Answer True

Multiple Choice Multiple Answer Question Cash and---------------are the two systems of accounting. Correct Answer Mercantile Your Answer Mercantile

Multiple Choice Multiple Answer Question P/L A/C debit side includes Correct Answer salary , discount allowed , postage & telegram Your Answer salary , postage & telegram Multiple Choice Multiple Answer Question Trading a/c credit side includes Correct Answer sales , goods lost by fire , closing stock Your Answer sales , goods lost by fire , closing stock

Multiple Choice Single Answer Question Amit sold Goods to Atul for Rs. 50,000 on cash & Rs. 50,000 on credit basis & allowed 10% discount on on the spot transaction. Cash Account debited to Rs. _____________ Correct Answer 45,000 Your Answer 45,000

Multiple Choice Single Answer Question A proprietor purchase goods worth Rs. 5500 & cash account credited to Rs. 5000 rectification of the suspense accounted debited to Rs Correct Answer 500 Your Answer 500

Multiple Choice Single Answer Question Amit purchase of Rs. 6710 had been posted to the debit of the creditors A/C as 6170 rectifying the transaction the creditor A/C is to be debited amount to Rs Correct Answer 540 Your Answer 540

Multiple Choice Multiple Answer Question Following error 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 Multiple Choice Multiple Answer Question Following error 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 True/False Question A bill of Rs. 500 for old furniture sold to Raj, was entered in the sales day book

Correct Answer False Your Answer True/False Question True

Abnormal cost indicates that cost which is normally incurred at a certain level of output under normal circumstances. Correct Answer False Your Answer False

Multiple Choice Single Answer Question This cost indicates increased or decreased cost due to the increased or decreased volume of operations. Correct Answer Differential cost Your Answer True/False Question Opportunity Cost

Indirect material cost assist the manufacturing process is an integral part of finish goods. Correct Answer False Your Answer True

Multiple Choice Single Answer Question The prime cost is Rs. 10,00,000 the factory cost is Rs. 13,00,000, the total administration overheads are 14,00,000 and having selling overhead of Rs. 86000. What is the Total cost? Correct Answer 37,86,000 Your Answer 37,86,000

Multiple Choice Multiple Answer Question Indirect Expenses includes

Correct Answer Rent , Telephone expenses , Insurance Your Answer True/False Question Rent , Telephone expenses , Insurance

Material cost is the first and probably the most important element of cost. Correct Answer True Your Answer True

Multiple Choice Multiple Answer Question Under stocking may have following consequences Correct Answer Payment for idle time to workers , Production hold ups resulting into disturbed delivery schedule , Eleventh hour purchase Your Answer Payment for idle time to workers , Production hold ups resulting into disturbed delivery schedule , Eleventh hour purchase Multiple Choice Multiple Answer Question Goods received note or goods received report is prepared in following copies Correct Answer One copy to Purchase department , One copy to Accounts department , One copy to Costing department Your Answer One copy to Purchase department , One copy to Accounts department , One copy to Costing department Multiple Choice Multiple Answer Question Valuation of material uses the following methods Correct Answer FIFO and LIFO , Average price method , Market price Your Answer FIFO and LIFO , Average price method , Market price Multiple Choice Single Answer

Question

Under Merrick Differential Piece rate System of wage payment up to 83% of efficiency following rate is offered. Correct Answer Normal Your Answer Normal

Multiple Choice Single Answer Question Under the Emersons Efficiency Bonus System at following efficiency level no bonus is payable. Correct Answer Below 66.66% Your Answer True/False Question Below 66.66%

If the organisation follows the policy of considering predetermined overhead absorption rates, it may face the problem of under or over absorption of overheads if the actual overheads to be absorbed o Correct Answer True Your Answer True

True/False Question

Fixed cost is the cost that varies in direct proportion with the level of activity or volume of operations. Correct Answer False Your Answer False

Multiple Choice Multiple Answer Question Limitations of marginal costing are Correct Answer difficult for classification as fixed cost and variable cost. , does not provide any standard for the evaluation of performance. , it is useful technique only in the short run. Your Answer difficult for classification as fixed cost and

variable cost. , does not provide any standard for the evaluation of performance. , it is useful technique only in the short run. Multiple Choice Multiple Answer Question Budgetory Control deals with Correct Answer Establishment of budgets , Comparison of budgeted results with actuals , Computation of variance. Your Answer Establishment of budgets , Comparison of budgeted results with actuals , Computation of variance. True/False Question The analysis of overhead variances is different and the most complex task. Correct Answer True Your Answer True/False Question True

Standard costing and Marginal Costing are the best possible tools available to the management for cost control Correct Answer False Your Answer False

Multiple Choice Multiple Answer Question Current standards includes Correct Answer Expected standards , Normal standards , Ideal standards Your Answer Expected standards , Normal standards , Ideal standards Multiple Choice Single Answer Question In case of industries where capital investment is very high, budget should be prepared for a

Correct Answer Longer period Your Answer Longer period

Select The Blank Question Financial Accounting protects the interest of outsiders . it considers ________ transaction and it is a ________ requirement Correct Answer historical Your Answer Your Answer historical legal Correct Answer legal

Select The Blank Question After material is received from the supplier, quantity actually received is compared with quantity ________-and ________-if any, are taken up with the supplier Correct Answer ordered Your Answer Your Answer ordered variation Correct Answer variation

Select The Blank Question Labour Turnover indicates ________ in labour force showing a highly increasing trend or highly ________ trend Correct Answer change Your Answer Your Answer change decreasing Correct Answer decreasing

Select The Blank Question Under Gannt Task bonus system where the

output is ________ payment is made as per minimum time rate, output is ________ payment is made as per time wages plus some increase in wage rates Correct Answer below standard Your Answer Your Answer below standard at standard Correct Answer at standard

Select The Blank Question ________ and ________ are non monetary incentives Correct Answer Safety services Your Answer Your Answer Safety services education facility Correct Answer education facility

Select The Blank Question Semi ________ overheads are neither ________ nor variable in nature. Correct Answer fixed Your Answer Your Answer fixed variable Correct Answer variable

Select The Blank Question Fixed overheads normally arise as a result of policy and are largely ________ in nature at the ________ level of the management Correct Answer uncontrollable Your Answer Your Answer controllable top Correct Answer lower

Select The Blank Question variable cost is the cost that tend to ________ in direct proportion with ________ Correct Answer vary Your Answer Your Answer vary level of activity Correct Answer level of activity

Select The Blank Question ________ and ________ are examples of semi- variable overheads. Correct Answer Maintenance cost Your Answer Your Answer Maintenance cost electricity Correct Answer electricity

Select The Blank Question Rs.5000 paid as ________ to ________ should be debited to salary account Correct Answer Mahesh Your Answer Your Answer Mahesh salary Correct Answer salary

LIST OF ATTEMPTED QUESTIONS AND ANSWERS Select The Blank Question Uniform costing is not a separate method of ________. Correct Answer cost accounting Your Answer cost accounting

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 Production capacity

Multiple Choice Multiple Answer Question The key factor determines the : Correct Answer Level of activity , Capacity utilization , Level of sales Your Answer Level of activity , Capacity utilization , Level of sales 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 Select The Blank Question Discount received from the creditor has been entered in the creditor's account but discount has not been credited; what type of error is this ________

Correct Answer Omission of posting an amount in the ledger Your Answer errors of principle True/False Question

Under some circumstances, it may be advisable to sell at prices equal to or below the marginal cost ignoring fixed cost. Correct Answer True Your Answer False

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

Select The Blank Question Interest on capital is an allowable expenditure for parntership firms, as per the provisions of the ________ . Correct Answer Income Tax Act, 1961 Your Answer The Partnership Act, 1956

Match The Following Question Correct Answer Book-Keeping

Your Answer

Books of Accounts Books of Accounts Profitability statement & Balance-sheet Process of analyzing & interpretation Indicates the

Financial statement Profitability statement & Balance-sheet Accounting Process of analyzing & interpretation Profitability Indicates the

statement Balance-sheet

amount of profit earned Financial status

amount of profit earned Financial status

Multiple Choice Single Answer Question Mixers Ltd. is engaged in producing a standard mix using 60kg of chemical X and 40 kg of chemical Y. The standard loss of production is 30%. The standard price of X is Rs.5/- per kg.and of Y Rs.10/- per kg. The actual mix and yield were as follows : X - 80 kg @ Rs.4.50 per kg; Y - 70 kg @ Rs.8/- per kg. Actual yield - 115 kg.Compute material yield variance. Correct Answer Rs.100/- (Favourable) Your Answer True/False Question Rs.50/- (Favourable)

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

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 , Capital expenditure budget

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 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/- , Repairs expenditure to the extent of Rs.30,160/- was wrongly transferred to Machinery account Multiple Choice Multiple Answer Question While preparing sales budget the following factors must be considered : Correct Answer The number and types of products sold by the organisation , Whether the organisation's market share is increasing or decreasing? , Details of seasonal fluctuations in sales Your Answer The number and types of products sold by the organisation , Whether the organisation's market share is increasing or decreasing? , Details of seasonal fluctuations in sales Multiple Choice Single Answer Question Sita and Gita are partners of SGL & Co. As on 1st August, 2003 Sita's capital stood as Rs.10,000/- and Gita's capital as Rs.18,000/-. If interest on capital is to be provided @ 10% p.a., what should be the

treatment of this interest in the profitability statement, assuming there were no additions to capital during this period? Correct Answer Profit and loss account should be debited with Rs.1,866.67 Your Answer Profit and loss account should be debited with Rs.1,866.67 Multiple Choice Single Answer Question KDL Ltd. charges depreciation @ 20% on written down value method. The net book value of its machinery on 1st January, 2003 was Rs.125,000/-. What will be the net book value of its machinery on year end, i.e.31st December, 2003, assuming there were no additions or disposals during the year? Correct Answer Rs.100,000/Your Answer Rs.100,000/-

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

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 False

Select The Blank Question An amount of Rs.200/- is received from P and is credited to Q. The rectification entry would affect ________ Correct Answer P's A/c and Q's A/c Your Answer True/False Question P's A/c and Q's A/c

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

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. , Excessive freight charges Multiple Choice Multiple Answer Question Select the items which may be classified as administration overheads. Correct Answer Depreciation on office furniture , Director's

remuneration , Telephone expenses Your Answer Depreciation on office furniture , Director's remuneration , Telephone expenses

Multiple Choice Single Answer Question Which of the following is the most efficient use of the clock card? Correct Answer To facilitate payment for time spend on the work premises Your Answer To allow labour time to be charged to individual jobs True/False Question Budgetary control system provides a basis for establishment of the incentive systems. Correct Answer True Your Answer True/False Question False

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

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

Select The Blank Question A low margin of safety indicates ________ fixed overheads. Correct Answer higher

Your Answer

lower

Select The Blank Question Category A items, as per ABC analysis, represent ________ % of the total number of items in inventory. Correct Answer less than 10 Your Answer 70 to 100

Multiple Choice Single Answer Question The gross profit transferred from the trading account is Rs.98,999/-. The expenses debited to the profit and loss account are salary Rs.12,000/-; advertisement expenses Rs.18,000/-; printing and stationery Rs.5,500/- and managing director's incentive Rs.28,000/-. It was noted that no entry was made for salary of one month which was due but not yet paid. Find the net profit of the company. Correct Answer Rs.34,408.09 Your Answer True/False Question Rs.35,499/-

Credit balances in all the Personal & Real accounts appear on asset side. Correct Answer False Your Answer False

Select The Blank Question A complete list of all material required, with quantities, for a particular job is given in the ________. Correct Answer Bill of material Your Answer Bill of material

True/False Question Your Answer True/False Question

Variable cost + Profit = Sales False

Correct Answer False

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

Select The Blank Question The term ________ indicates expenditure incurred on or attributable to a given thing. Correct Answer Cost Your Answer Expense

Multiple Choice Single Answer Question The budget manual must contain statement regarding: Correct Answer Objectives of the orgainsation Your Answer Working hours of the organisation

Multiple Choice Single 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 Your Answer Balance as per bank book < Balance as per pass book Select The Blank Question Entry for dishonour of cheque appears only

in the pass book, this entry should be ________ in the bank book. Correct Answer Passed Your Answer Passed

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 True/False Question Same

A pre-determined factory overhead rate holds up product costing. Correct Answer False Your Answer False

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

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 True/False Question Rent received in advance account

Bank reconciliation statement can be prepared on weekly basis. Correct Answer True Your Answer True

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.45,000/-

Match The Following Question Correct Answer Liabilities All the amount owed by the business Withdrawn for personal use Book of original entry Maintain all types of Accounts

Your Answer All the amount owed by the business Withdrawn for personal use Book of original entry Maintain all types of Accounts

Drawing Journal Ledger

Assets

All the properties owned by the business

All the properties owned by the business

LIST OF ATTEMPTED QUESTIONS AND ANSWERS True/False Question

Profitability statement indicates the amount of assets & liabilities. Correct Answer False Your Answer False

Select The Blank Question Advance received from customers is ________ for the organisation. Correct Answer A liability Your Answer A liability

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

Correct Answer True Your Answer True

Match The Following Question Liabilities Drawing Journal Ledger

Correct Answer

Your Answer

All the amount owed by All the properties owned the business by the business Withdrawn for personal Withdrawn for personal use use Book of original entry Book of original entry Maintain all types of Accounts Maintain all types of Accounts

Assets

All the properties owned All the amount owed by by the business the business

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

Multiple Choice Multiple Answer Question Identify the budgets for which the production manager sould be held responsible : Correct Answer Production budget , Production overheads budget , Plant utilisation budget Your Answer Materials budget , Production budget , Production overheads budget True/False Question 1) Financial statements are basically in two forms i.e. profitability statement and balance sheet. Correct Answer True Your Answer True

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 Sales Rs.128,000/- , Return on capital employed , Working capital Rs.32,000/Your Answer Working capital Rs.32,000/Multiple Choice Single Answer Question Select the cost that indicates increased or decreased total cost due to the increased or decreased volume of operations. Correct Answer Differential cost Your Answer Select The Blank Variable cost

Question

If the owner brings in personal calculator for office use, ________ account should be credited. Correct Answer Capital Your Answer True/False Question Capital

The process of accounting split into three steams i.e. financial, cost, management accounting. Correct Answer True Your Answer True

True/False Question

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

True/False Question

Variable cost + Profit = Sales

Correct Answer False Your Answer True/False Question False

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

Match The Following Question Advantageously applicable in similar industries Spirit of mutual trust Avoids cut throat competition

Correct Answer

Your Answer

Scope of uniform costing Fields covered by uniform costing Requisite for uniform costing Advantage of uniform costing Requisite for uniform costing Advantage of uniform costing

Treatment given to research and development costs

Fields covered by uniform costing

Scope of uniform costing

Multiple Choice Single Answer Question A firm employs ten workers at an hourly rate of Rs.20/-. They worked for 40 hours each and completed the job for which standard time was 48 hours for each worker. Calculate labour cost for the job under the Rowan Plan. Correct Answer Rs.9,333.33 Your Answer Rs.9,666.67

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 Treating capital receipt as revenue income is an example of errors of commission. Correct Answer False Your Answer True

Multiple Choice Single Answer Question Basic objective of Uniform Costing is . . . Correct Answer comparison Your Answer comparison

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 Two competing companies Hero Ltd. and Zero Ltd. sell the same type of product in the market. Their forecasted profit and loss accounts for the year ending December 2003 are as follows : Hero Ltd.: Sales Rs.500,000/-; Variable cost Rs.400,000/-; fixed costs Rs.50,000/-. Zero Ltd.:Sales Rs.500,000/-; Variable cost Rs.300,000/-; fixed costs Rs.150,000/-. You are Correct Answer Hero Ltd. Your Answer Both will earn profits

Multiple Choice Multiple Answer Question Features of Sunk cost are . . . Correct Answer Indicates historical cost , Not relevant in decision making process , Incurred in past Your Answer Indicates historical cost , Not relevant in decision making process , Incurred in past True/False Question For a manufacturing company, dividend received is a nonoperating income. Correct Answer True Your Answer False

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 reorder 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 reorder level. , Raised to intimate the supplierteh quantity and quality of new material required. , Indicates the type, quantity and quality of material required Multiple Choice Single Answer 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 Your Answer The assertion and the reason are both correct

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 employees working on the crane

Select The Blank Question Information as to the cost and profit / loss associated with the firm's operations is provided to the ________ by Management accounting. Correct Answer Management Your Answer Management

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 Select The Blank Question Uniform costing is not a separate method of ________. Correct Answer cost accounting Your Answer True/False Question costing

Suspense account is closed automatically after rectification of all the errors. Correct Answer True

Your Answer True/False Question

False

Manufacturing overheads represents all costs incurred in the factory including direct material cost and direct labour cost. Correct Answer False Your Answer True

Select The Blank Question Generally all the liabilities will have ________balance. Correct Answer Credit Your Answer Debit

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 True/False Question Over-absorbed

Balance sheet indicates the expenditure & income from the business. Correct Answer False 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/Your Answer Rs.500/-

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

Production capacity

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 , Machining department 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 Multiple Answer Question Pre-requisites of Uniform Costing are . . . Correct Answer Spirit of mutual trust , Free Exchange of ideas , No rivalry Your Answer Spirit of mutual trust , Free Exchange of ideas , No rivalry

Multiple Choice Multiple Answer Question You are using petrol as one of the raw materials. Daily you purchase 1,000 litres of petrol at Rs.28.50 per ltire. 5% of it generally gets lost due to spillage and evaporation. On a particular hot and dry day, the issue of petrol from 1,000 litres drum was as follows : To job X 200 litres; job Y 400 litres and job Z 320 litres. After these issues the drum was empty. Calculate per litre charge for use of petrol, quantum of loss and total quantum of petrol used for jobs X,Y and Z. Correct Answer Loss due to spillage and evaporation - 30 litres. , Rate of charge per litre of petrol - Rs.30/Your Answer Rate of charge per litre of petrol - Rs.30.98 , Total petrol used for jobs X, Y and Z - 920 litres True/False Question Error of commission refer to calculation errors, totaling errors, errors in carrying forward etc. Correct Answer True Your Answer True

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

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

Select The Blank Question The column which refers to the page number of the ledger is known as ________. Correct Answer Ledger folio Your Answer True/False Question Ledger folio

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

Multiple Choice Single Answer Question The direct material useage 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 A planned change in the level of material stock

LIST OF ATTEMPTED QUESTIONS AND ANSWERS 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

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 True

Multiple Choice Multiple Answer Question Limitations of Management Accounting includes-----------------Correct Answer Its wide scope , Possibility of intuitive decision , Requires elaborate organizational structure Your Answer Its wide scope , Possibility of intuitive decision , Requires elaborate organizational structure Match The Following Question Accounting

Correct Answer Process of analyzing &

Your Answer Process of analyzing &

interpretation Profitability statement Balance-sheet Book-Keeping Financial statement Indicates the amount of profit earned Financial status Books of Accounts

interpretation Indicates the amount of profit earned Financial status Books of Accounts

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

Multiple Choice Multiple Answer Question Business Entity Concept ______________. Correct Answer Business is separated from the owner. , The accounting process carried out for the business , Separate legal entity Your Answer Business is separated from the owner. , The accounting process carried out for the business Multiple Choice Multiple Answer Question Double Entry Accounting System__________________ Correct Answer Every business transactions have two elements , When business receives something, it has to pay something , Every debit has a corresponding credit Your Answer Every business transactions have two elements , When business receives something, it has to pay something , Every debit has a corresponding credit True/False Question Sundry creditors transfer to asset side.

Correct Answer False Your Answer False

Multiple Choice Single Answer Question Purchase Goods of Rs. 7500 on 10% cash discount. The discount amount is _______ Correct Answer 750 Your Answer 750

Multiple Choice Single Answer Question The cost of fixed asset is Rs. 1,00,000. Rs. 17,000 deducted as depreciation. Calculate the percentage

Correct Answer 17% Your Answer 17%

Multiple Choice Single Answer Question Amit sold Goods to Atul for Rs. 50,000 on cash & Rs. 50,000 on credit basis & allowed 10% discount on on the spot transaction. Cash Account debited to Rs. _____________ Correct Answer 45,000 Your Answer 45,000

Multiple Choice Single Answer Question Goods distributed as free sample amounted to Rs. 10,000. Prepare Neonboard Rs. 5000. The total amount transfer to advertisement account is Rs.____ Correct Answer 15,000 Your Answer True/False Question 15,000

A bank reconciliation statement is prepared on a particular date. Correct Answer True Your Answer True

Multiple Choice Multiple Answer Question When bank balance as per bank book is considered then following to be added. Correct Answer cheques issued but not presented , direct deposit by customer , wrong credits given by bank Your Answer cheques issued but not presented , direct deposit by customer , wrong credits given by bank True/False Question As soon as the suspense account balance is wiped out , it may be assumed that all mistakes have been corrected. Correct Answer False Your Answer True/False True

Question

Credit sale of Rs. 5000 to Bobby should be entered in the purchase book. Correct Answer False Your Answer False

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

Multiple Choice Multiple Answer Question Manufacturing process involves study of Correct Answer Designing the product , The quantity and quality , Material used Your Answer Designing the product , The quantity and quality , Material used Multiple Choice Multiple Answer Question LAST IN FIRST OUT (LIFO) Correct Answer The price of the latest available lot is considered first , If that lot is exhausted, the price of the 10% prior to that is considered , Physical issue of the material may not be made out of the said lot Your Answer The price of the latest available lot is considered first , Physical issue of the material may not be made out of the said lot , Only a and c Multiple Choice Multiple Answer Question The Bin card and stores ledges do not match due to the following reasons: Correct Answer Arithmetical errors in calculating , Non- posting a certain document , Posting a wrong Bin card Your Answer Arithmetical errors in calculating , Non- posting a certain document , Posting a wrong Bin card True/False Question Flux method is important method of wage payment.

Correct Answer False Your Answer False

Multiple Choice Multiple Answer Question The causes of idle time can be analysed as Correct Answer Administrative causes , Productive causes , economic causes Your Answer Administrative causes , Productive causes , economic causes

Multiple Choice Single Answer Question If production overheads to be absorbed are Rs. 50000/- and labour hours worked are 100000 then the labour hour rate will be, Correct Answer Re. 0.50 per labour hour. Your Answer True/False Question Re. 0.50 per labour hour.

Fixed cost tends to vary with time rather than with level of activity. Correct Answer True Your Answer True

Multiple Choice Multiple Answer Question Limitations of marginal costing are Correct Answer difficult for classification as fixed cost and variable cost. , does not provide any standard for the evaluation of performance. , it is useful technique only in the short run. Your Answer difficult for classification as fixed cost and variable cost. , does not provide any standard for the evaluation of performance. , it is useful technique only in the short run. True/False Question Flexible budget is an effective tool for evaluation of performance. Correct Answer True Your Answer True/False Question True

Material Mix Variance occurs where only one raw material is required Correct Answer False

Your Answer

False

Multiple Choice Multiple Answer Question In fixed overhead variance, the volume variance is further analyzed as Correct Answer Variance Efficiency Variance , Capacity Variance , Calendar Variance Your Answer Variance Efficiency Variance , Capacity Variance , Calendar Variance Multiple Choice Single Answer Question Calculate Efficiency Variance, If actual production is 22,000 units, Standard production in actual hours is 21,000 units and Standard rate per unit is Rs.1.5/-. Correct Answer Rs.1,500/-( Favorable ) Your Answer Rs.1,500/-( Favorable )

Multiple Choice Single Answer Question Calculate Sales Price Variance, If actual price is Rs.5.40/per unit, Standard price is Rs.5/- per unit and actual sales volume is 500 units. Correct Answer Rs.200/- ( Favorable ) Your Answer Rs.200/- ( Adverse )

Multiple Choice Single Answer Question Standard may not be necessarily useful for this purpose. Correct Answer Forecasting Your Answer Forecasting

Multiple Choice Multiple Answer Question In Cash budget , Non operating cash inflow includes Correct Answer Receipt of loan/borrowings , Issue of shares , Sale of fixed assets Your Answer Receipt of loan/borrowings , Issue of shares , Sale of fixed assets Multiple Choice Multiple Answer Question In Cash budget , Non-Operating cash outflow includesVarious kinds of over heads

Correct Answer Loan instalments , Taxes , Purchase of fixed assets. Your Answer Loan instalments , Taxes , Purchase of fixed assets.

Multiple Choice Single Answer Question During a month opening stock is 5,000 kg, closing stock is 6,000 kg and production is 21,000 kg , what is the quantity of sales Correct Answer 20,000 kg Your Answer 20,000 kg

Match The Following Question Ordering cost Carrying cost Total cost Inventory control E.O.Q

Correct Answer Associated with administrative efforts Cost of holding the inventory

Your Answer Associated with administrative efforts Cost of holding the inventory

Ordering cost + carrying Ordering cost + carrying cost cost Maintain the inventory of any kind Economic Ordering Quantity Maintain the inventory of any kind Economic Ordering Quantity

Select The Blank Question Generally accounts of the assets will have ________ balance and liabilities will have ________ balance Correct Answer debits Your Answer debits

Correct Answer credits Your Answer credits

Select The Blank Question Interest on overdraft charged by the bank is ________ to the pass book and ________ to the cash book Correct Answer debited Your Answer debited

Correct Answer credited Your Answer credited

Select The Blank Question While selecting source of supply ________ epartment may call for the ________ from the prospective suppliers Correct Answer purchase Your Answer purchase

Correct Answer quotation Your Answer quotation

Select The Blank Question After material is received from the supplier, quantity actually received is compared with quantity ________-and ________-if any, are taken up with the supplier Correct Answer ordered Your Answer ordered

Correct Answer variation Your Answer variation

Select The Blank Question Labour Turnover indicates ________ in labour force showing a highly increasing trend or highly ________ trend Correct Answer change Your Answer change

Correct Answer decreasing Your Answer decreasing

Select The Blank Question Administration overheads are ________ in nature and can be controlled mainly at ________ level of the management Correct Answer fixed Your Answer variable

Correct Answer top Your Answer top

Select The Blank Question Planning lays down the course of action to be taken in future. In case budgetary control, it is in the form of the ________ and in case of ________ costing, it is in the form of the standard cost Correct Answer budgets Your Answer budgets

Correct Answer standard Your Answer standard

Select The Blank Question Fixed cost is the cost that tend to remain ________ irrespective of ________ Correct Answer constant Your Answer constant

Correct Answer level of activity Your Answer level of activity

Select The Blank Question The process of Allocation & apportionment can followed to decide the ________ of overheads to each budget center Correct Answer Allocation & apportionment Your Answer Distribution

Correct Answer Loading Your Answer Select The Blank Question The ideal standards are generally ________ in nature and the variances always shows ________ trends Correct Answer theoretical Your Answer theoretical

Correct Answer unfavorable Your Answer Select The Blank unfavorable

Question

Bin card is maintained by ________ department whereas ________ is maintained by costing department. Correct Answer Stores Your Answer Stores

Correct Answer Store ledger Your Answer Store ledger

LIST OF ATTEMPTED QUESTIONS AND ANSWERS 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

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 True

Multiple Choice Multiple Answer Question Limitations of Management Accounting includes-----------------Correct Answer Its wide scope , Possibility of intuitive decision , Requires elaborate organizational structure Your Answer Its wide scope , Possibility of intuitive decision , Requires elaborate organizational structure Match The Following Question Accounting

Correct Answer Process of analyzing &

Your Answer Process of analyzing &

interpretation Profitability statement Balance-sheet Book-Keeping Financial statement Indicates the amount of profit earned Financial status Books of Accounts

interpretation Indicates the amount of profit earned Financial status Books of Accounts

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

Multiple Choice Multiple Answer Question Business Entity Concept ______________. Correct Answer Business is separated from the owner. , The accounting process carried out for the business , Separate legal entity Your Answer Business is separated from the owner. , The accounting process carried out for the business Multiple Choice Multiple Answer Question Double Entry Accounting System__________________ Correct Answer Every business transactions have two elements , When business receives something, it has to pay something , Every debit has a corresponding credit Your Answer Every business transactions have two elements , When business receives something, it has to pay something , Every debit has a corresponding credit True/False Question Sundry creditors transfer to asset side.

Correct Answer False Your Answer False

Multiple Choice Single Answer Question Purchase Goods of Rs. 7500 on 10% cash discount. The discount amount is _______ Correct Answer 750 Your Answer 750

Multiple Choice Single Answer Question The cost of fixed asset is Rs. 1,00,000. Rs. 17,000 deducted as depreciation. Calculate the percentage

Correct Answer 17% Your Answer 17%

Multiple Choice Single Answer Question Amit sold Goods to Atul for Rs. 50,000 on cash & Rs. 50,000 on credit basis & allowed 10% discount on on the spot transaction. Cash Account debited to Rs. _____________ Correct Answer 45,000 Your Answer 45,000

Multiple Choice Single Answer Question Goods distributed as free sample amounted to Rs. 10,000. Prepare Neonboard Rs. 5000. The total amount transfer to advertisement account is Rs.____ Correct Answer 15,000 Your Answer True/False Question 15,000

A bank reconciliation statement is prepared on a particular date. Correct Answer True Your Answer True

Multiple Choice Multiple Answer Question When bank balance as per bank book is considered then following to be added. Correct Answer cheques issued but not presented , direct deposit by customer , wrong credits given by bank Your Answer cheques issued but not presented , direct deposit by customer , wrong credits given by bank True/False Question As soon as the suspense account balance is wiped out , it may be assumed that all mistakes have been corrected. Correct Answer False Your Answer True/False True

Question

Credit sale of Rs. 5000 to Bobby should be entered in the purchase book. Correct Answer False Your Answer False

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

Multiple Choice Multiple Answer Question Manufacturing process involves study of Correct Answer Designing the product , The quantity and quality , Material used Your Answer Designing the product , The quantity and quality , Material used Multiple Choice Multiple Answer Question LAST IN FIRST OUT (LIFO) Correct Answer The price of the latest available lot is considered first , If that lot is exhausted, the price of the 10% prior to that is considered , Physical issue of the material may not be made out of the said lot Your Answer The price of the latest available lot is considered first , Physical issue of the material may not be made out of the said lot , Only a and c Multiple Choice Multiple Answer Question The Bin card and stores ledges do not match due to the following reasons: Correct Answer Arithmetical errors in calculating , Non- posting a certain document , Posting a wrong Bin card Your Answer Arithmetical errors in calculating , Non- posting a certain document , Posting a wrong Bin card True/False Question Flux method is important method of wage payment.

Correct Answer False Your Answer False

Multiple Choice Multiple Answer Question The causes of idle time can be analysed as Correct Answer Administrative causes , Productive causes , economic causes Your Answer Administrative causes , Productive causes , economic causes

Multiple Choice Single Answer Question If production overheads to be absorbed are Rs. 50000/- and labour hours worked are 100000 then the labour hour rate will be, Correct Answer Re. 0.50 per labour hour. Your Answer True/False Question Re. 0.50 per labour hour.

Fixed cost tends to vary with time rather than with level of activity. Correct Answer True Your Answer True

Multiple Choice Multiple Answer Question Limitations of marginal costing are Correct Answer difficult for classification as fixed cost and variable cost. , does not provide any standard for the evaluation of performance. , it is useful technique only in the short run. Your Answer difficult for classification as fixed cost and variable cost. , does not provide any standard for the evaluation of performance. , it is useful technique only in the short run. True/False Question Flexible budget is an effective tool for evaluation of performance. Correct Answer True Your Answer True/False Question True

Material Mix Variance occurs where only one raw material is required Correct Answer False

Your Answer

False

Multiple Choice Multiple Answer Question In fixed overhead variance, the volume variance is further analyzed as Correct Answer Variance Efficiency Variance , Capacity Variance , Calendar Variance Your Answer Variance Efficiency Variance , Capacity Variance , Calendar Variance Multiple Choice Single Answer Question Calculate Efficiency Variance, If actual production is 22,000 units, Standard production in actual hours is 21,000 units and Standard rate per unit is Rs.1.5/-. Correct Answer Rs.1,500/-( Favorable ) Your Answer Rs.1,500/-( Favorable )

Multiple Choice Single Answer Question Calculate Sales Price Variance, If actual price is Rs.5.40/per unit, Standard price is Rs.5/- per unit and actual sales volume is 500 units. Correct Answer Rs.200/- ( Favorable ) Your Answer Rs.200/- ( Adverse )

Multiple Choice Single Answer Question Standard may not be necessarily useful for this purpose. Correct Answer Forecasting Your Answer Forecasting

Multiple Choice Multiple Answer Question In Cash budget , Non operating cash inflow includes Correct Answer Receipt of loan/borrowings , Issue of shares , Sale of fixed assets Your Answer Receipt of loan/borrowings , Issue of shares , Sale of fixed assets Multiple Choice Multiple Answer Question In Cash budget , Non-Operating cash outflow includesVarious kinds of over heads

Correct Answer Loan instalments , Taxes , Purchase of fixed assets. Your Answer Loan instalments , Taxes , Purchase of fixed assets.

Multiple Choice Single Answer Question During a month opening stock is 5,000 kg, closing stock is 6,000 kg and production is 21,000 kg , what is the quantity of sales Correct Answer 20,000 kg Your Answer 20,000 kg

Match The Following Question Ordering cost Carrying cost Total cost Inventory control E.O.Q

Correct Answer Associated with administrative efforts Cost of holding the inventory

Your Answer Associated with administrative efforts Cost of holding the inventory

Ordering cost + carrying Ordering cost + carrying cost cost Maintain the inventory of any kind Economic Ordering Quantity Maintain the inventory of any kind Economic Ordering Quantity

Select The Blank Question Generally accounts of the assets will have ________ balance and liabilities will have ________ balance Correct Answer debits Your Answer debits

Correct Answer credits Your Answer credits

Select The Blank Question Interest on overdraft charged by the bank is ________ to the pass book and ________ to the cash book Correct Answer debited Your Answer debited

Correct Answer credited Your Answer credited

Select The Blank Question While selecting source of supply ________ epartment may call for the ________ from the prospective suppliers Correct Answer purchase Your Answer purchase

Correct Answer quotation Your Answer quotation

Select The Blank Question After material is received from the supplier, quantity actually received is compared with quantity ________-and ________-if any, are taken up with the supplier Correct Answer ordered Your Answer ordered

Correct Answer variation Your Answer variation

Select The Blank Question Labour Turnover indicates ________ in labour force showing a highly increasing trend or highly ________ trend Correct Answer change Your Answer change

Correct Answer decreasing Your Answer decreasing

Select The Blank Question Administration overheads are ________ in nature and can be controlled mainly at ________ level of the management Correct Answer fixed Your Answer variable

Correct Answer top Your Answer top

Select The Blank Question Planning lays down the course of action to be taken in future. In case budgetary control, it is in the form of the ________ and in case of ________ costing, it is in the form of the standard cost Correct Answer budgets Your Answer budgets

Correct Answer standard Your Answer standard

Select The Blank Question Fixed cost is the cost that tend to remain ________ irrespective of ________ Correct Answer constant Your Answer constant

Correct Answer level of activity Your Answer level of activity

Select The Blank Question The process of Allocation & apportionment can followed to decide the ________ of overheads to each budget center Correct Answer Allocation & apportionment Your Answer Distribution

Correct Answer Loading Your Answer Select The Blank Question The ideal standards are generally ________ in nature and the variances always shows ________ trends Correct Answer theoretical Your Answer theoretical

Correct Answer unfavorable Your Answer Select The Blank unfavorable

Question

Bin card is maintained by ________ department whereas ________ is maintained by costing department. Correct Answer Stores Your Answer Stores

Correct Answer Store ledger Your Answer Store ledger

LIST OF ATTEMPTED QUESTIONS AND ANSWERS 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 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

True/False Question

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

True/False Question

Cost Accounting restrict itself with historical transactions

Correct Answer False Your Answer True/False Question False

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

Multiple Choice Single Answer

Question

Journal is popularly known as 'Book of . . .

Correct Answer Original Entry Your Answer True/False Question Original Entry

In a Balance-Sheet right hand side is referred as assets side and left hand side is referred as liabilities. Correct Answer True Your Answer False

Multiple Choice Multiple Answer Question Locate the steps involved in rectifying the errors in the books of accounts Correct Answer Find the wrong entry passed , Find the correct entry to be passed , Find the entry that will resolve the mistake in the books Your Answer Find the wrong entry passed , Find the correct entry to be passed , Find the entry that will resolve the mistake in the books 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 Single Answer 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 Cost Accounting

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

Your Answer

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

Multiple Choice Multiple Answer Question Examples of indirect material are Correct Answer Consumable stores , Glue used in book binding , Nails used in packing boxes Your Answer Consumable stores , Nails used in packing boxes Select The Blank Question The principle of ________ is followed while preparing the financial statements. Correct Answer Going concern Your Answer Going concern

Select The Blank Question The process of attributing proportions of items of costs amongst const centres is called ________. Correct Answer Cost apportionment Your Answer True/False Question Cost allocation

Manufacturing overheads represents all costs incurred in the factory including direct material cost and direct labour cost. Correct Answer False Your Answer False

Match The Following Question Indirect Material

Correct Answer Element wise classification

Your Answer Element wise classification Function wise classification Variability wise classification Normality wise classification

Administration overheads Function wise classification Fixed overheads Abnormal overheads Variability wise classification Normality wise classification

Multiple Choice Single Answer Question It is said that adoption of uniform costing creates customer confidence because . . .

Correct Answer Prices are reliable Your Answer Prices are reliable

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 Spirit of mutual trust , Free Exchange of ideas , No rivalry

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 In India the gas industry and electricity industry, and ________ industry are examples of industries using the uniform costing system. Correct Answer fertilizer Your Answer True/False Question fertilizer

New companies can adopt Uniform costing system as a readymade system. Correct Answer True Your Answer True

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 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

Select The Blank Question Non-trading income is disclosed on the credit side of ________ account. Correct Answer Profit and loss Your Answer Profit and loss

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

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

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

Multiple Choice Single 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/Your Answer Rs.51,840/-

Multiple Choice Single Answer Question Goods kept in the godown were destroyed by fire on 18th June, 2004. The cost of such goods was Rs.18,950/-. The goods were not insured. Find the amont which should be debited to the profitability statement. Correct Answer Rs.18,950/Your Answer Rs.18,950/-

True/False Question

Generally speaking income represents wealth increase and business success; higher the income, lower will be the success of a business. Correct Answer False Your Answer False

Multiple Choice Single Answer Question While preparing the bank reconciliation statement as on 31st March, 2004 you find the following discrepancy : 'a cheque of Rs.3,700/- received and deposited in bank on 27th March, 2004 was entered credited in the pass book on 3rd April, 2004.' In this background, which of the following statement holds true as on 31st March, 2004? Correct Answer Balance as per pass book < Balance as per bank book Your Answer True/False Question Balance as per pass book < Balance as per bank book

Bank reconciliation statement is a systematic presentation of errors made by the accountant. Correct Answer False Your Answer False

Select The Blank Question The stores department is a ________ department. Correct Answer Service Your Answer Service

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 The ________ is a perpetual inventory record. Correct Answer Bin card Your Answer Goods received note

Multiple Choice Single Answer Question A written request sent to a supplier for specified goods at an agreed upon price is often called as : Correct Answer Purchase order Your Answer Purchase order

Multiple Choice Single Answer Question Selecting an appropriate method of valuation of inventory is important because : Correct Answer It influences the figure of gross profit Your Answer True/False Question It influences the figure of gross profit

Re-order level for materials is determined considering maximum consumption and maximum delivery period. Correct Answer True Your Answer True

True/False Question

Control on purchase of material is exercised by the storekeeper.

Correct Answer False Your Answer True

Multiple Choice Multiple Answer Question The disadvantages of time rate system are : Correct Answer Ignores the efficiency of workers , Higher labour cost , Lack of motivation to increase productivity Your Answer Ignores the efficiency of workers , Lack of motivation to increase productivity True/False Question

The best way to reduce labour cost is to recruit cheap labour.

Correct Answer False Your Answer True/False Question False

Under some circumstances, it may be advisable to sell at prices equal to or below the marginal cost ignoring fixed cost. Correct Answer True

Your Answer

True

Match The Following Question

Correct Answer

Your Answer Increase in break even point Increase in profit volume ratio Decrease in loss Decrease in break even point

Increase in fixed cost will Increase in break even lead to point Decrease in variable cost Increase in profit volume will lead to ratio Decrease in selling price will lead to Increase in contribution will lead to Decrease in contribution Increase in profits

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

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 Multiple Choice Single Answer Question Which variance is used to analyse 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

LIST OF ATTEMPTED QUESTIONS AND ANSWERS 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 Net book value of loose tools as on 1st April, 2003 was Rs.45,000/-. As on 31st March, 2004 the management felt that the real worth of these loose tools is only Rs.30,000/-. What can be done to achieve the desired reduction in the net book value of loose tools? Correct Answer By providing depreciation to the extent of Rs.15,000/Your Answer By providing depreciation to the extent of Rs.15,000/-

True/False Question

Overhead absorption rate will be different at different capacity levels.

Correct Answer True Your Answer True

Select The Blank Question The budget that represents the funds investment for expansion, diversification, etc. is known as ________. Correct Answer Capital expenditure budget Your Answer Capital expenditure budget

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

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

Select The Blank

Question

Information as to the cost and profit / loss associated with the firm's operations is provided to the ________ by Management accounting. Correct Answer Management Your Answer Management

Select The Blank Question Factory cost of a product is Rs.335,000/-, if the selling overheads are charged @25% of factory cost, then the amount of selling overheads should be Rs.________/Correct Answer 83750 Your Answer 83750

Select The Blank Question Uniform costing is not a separate method of ________. Correct Answer cost accounting Your Answer cost accounting

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 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 Single 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 Your Answer Direct labour

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

Correct Answer Number of female workers Your Answer Number of female workers

Multiple Choice Single Answer Question Opening stock of Rs.1,80,000/-, purchases Rs.8,00,000 /-, freight inward Rs.35,000/-, closing stock Rs.2,00,000/-, direct wages Rs.2,35,000/-. Calculate the prime cost. Correct Answer Rs.10,50,000/Your Answer Rs.10,70,000/-

Multiple Choice Multiple Answer Question Limitations of Management Accounting includes------------------Correct Answer Its wide scope , Possibility of intuitive decision , Requires elaborate organizational structure Yo ur Answer Its wide scope , Possibility of intuitive decision , Requires elaborate organizational structure Select The Blank Question Indirect Cost is termed as ________. Correct Answer Overhead Your Answer Overhead

Multiple Choice Multiple Answer Question Features of Financial Accounting includes----------------Correct Answer It is a legal requirement , It protects the interest of outsiders , It considers historical transactions Your Answer It is a legal requirement , It protects the interest of outsiders , It considers historical transactions Multiple Choice Multiple Answer Question Identify the budgets for which the production manager sould be held responsible : Correct Answer Production budget , Production overheads budget , Plant utilisation budget Your Answer Production budget , Production overheads budget , Plant utilisation budget 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.150/- (Favourable)

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

True/False Question

A grinding machine is an example of impersonal cost centre

Correct Answer True Your Answer True

True/False Question

Profitability statement indicates the amount of assets & liabilities.

Correct Answer False Your Answer False

Multiple Choice Single Answer Question Uniform costing system is useful in the following areas Correct Answer Classification of cost accounts Your Answer Preparing financial statements

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 True/False Question

Balance sheet indicates the expenditure & income from the business.

Correct Answer False Your Answer False

True/False

Question

Interim dividend paid by the company should be debited to the profit and loss appropriation account. 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 , Job number

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, labour cost and overheads Multiple Choice Single Answer Question Panna Ltd. temporarily has excess production capacity. The idle plant facilties can be used to manufacture a low-margin item. The low-margin item should be produced if it can be sold for more than its: Correct Answer Variable costs Your Answer Variable costs

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 selling price , Increase the sales volume , Reduce cost of sales True/False Question

Receipts and payments method of cash budget is useful for preparing long term estimates. Correct Answer False Your Answer False

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

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 False

Select The Blank Question In case of seasonal industry, the budget period may be taken as ________. Correct Answer One season Your Answer One season

True/False Question

Lack of efficient control on various aspects related to raw-material increases the material cost component of the finished product. Correct Answer True Your Answer True

True/False Question

Due to compensating errors the arithmetical accuracy of the trial balance is affected. Correct Answer False Your Answer False

Multiple Choice Single Answer Question Material price variance for a job is Rs.800/- (Favourable). Actual quantity of material used is 100 kg whereasthe standard quantity of material is 120% of actual quantity. Actual price paid for the material is 80% of the standard price. Calculate material cost variance. Correct Answer Rs.1,600/- (Favourable) Your Answer Rs.800/- (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 Profit and Loss Account

Match The Following

Question Daily Time sheets Time Keeping Department Time booking department Time Recording Clock Method True/False Question

Correct Answer

Your Answer

Time spent by worker on job Time spent by worker on job is recorded is recorded Recording of workers time Jobwise booking of time. Ticket number & clock card allotted to worker Recording of workers time Jobwise booking of time. Ticket number & clock card allotted to worker

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

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

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

Match The Following Question Book-Keeping Financial statement Accounting Profitability statement Balance-sheet

Correct Answer Books of Accounts Profitability statement & Balance- sheet Process of analyzing & interpretation

Your Answer Books of Accounts Profitability statement & Balance-sheet Process of analyzing & interpretation

Indicates the amount of profit Indicates the amount of profit earned earned Financial status Financial status

True/False

Question

The problem of multiple key factors can be solved with the help of techniques like linear programming, operations research, etc. Correct Answer True Your Answer True

Select The Blank Question The ________ books are preferred when the volume of transactions is very large. Correct Answer Subsidiary Your Answer Journal

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 , Allowing free access to all the units to the collected data True/False Question

All costs are controllable.

Correct Answer False Your Answer False

LIST OF ATTEMPTED QUESTIONS AND ANSWERS 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

Balance sheet indicates the expenditure & income from the business. Correct Answer False Your Answer False

True/False Question

The process of accounting split into three steams i.e. financial, cost, management accounting. Correct Answer True Your Answer True

Match The Following Question Personal A/C Real A/C Nominal A/C Tangible assets In tangible assets

Correct Answer

Your Answer

Debit the receiver, Credit Debit the receiver, Credit the giver the giver Debit what comes in, Credit what goes out Debit all the expenses, Credit all the incomes Building, Machinery Patents, Trade marks Debit what comes in, Credit what goes out Debit all the expenses, Credit all the incomes Building, Machinery Patents, Trade marks

Multiple Choice Multiple Answer

Question

Accounting period Concept________________

Correct Answer Longer life-span on business is divided into shorter segments , Each one being in the form of accounting period , Selection of accounting period may depend on various factors Your Answer Longer life-span on business is divided into shorter segments , Each one being in the form of accounting period , Selection of accounting period may depend on various factors Multiple Choice Multiple Answer Question Depreciation Correct Answer Amount charged on Fixed Assets. Your Answer Amount charged on Fixed Assets. , Amount charged on Current Assets.

True/False Question

Purchased computers of Rs. 50,000 come under the heading of fixed asset Correct Answer True Your Answer True

True/False Question

Amount with drawn for personal purpose drawing A/C to be debited. Correct Answer True Your Answer True

Multiple Choice Multiple Answer Question Profit & Loss A/C credit side has Correct Answer Gross profit , Commission received , Interested received Your Answer Gross profit

Multiple Choice Single Answer Question Purchase Goods of Rs. 7500 on 10% cash discount. The discount amount is _______ Correct Answer 750 Your Answer 750

Multiple Choice Multiple Answer Question When bank balance as per pass book is considered then following to be deducted.

Correct Answer cheques issued but not presented , direct deposit by customer , wrong credits given by bank Your Answer cheques issued but not presented , direct deposit by customer , wrong credits given by bank Multiple Choice Single Answer Question Rs. 2500 paid for the purchase of radio set for personal use of proprietor debited to general expenses account for rectifying the error, which A/C to be debited Correct Answer Drawing A/C Your Answer Purchase A/C

Multiple Choice Single Answer Question Discount received from the Creditors has been entered in the Creditors A/C but discount amount has not been credited, for rectifying such error which account to be debited. Correct Answer Suspense A/C Your Answer True/False Question Suspense A/C

Total of purchase register for the month of March is taken 50,000 instead of 55,000. Posting to individual A/C of supplier total to correct amount is 55,000 but purchase account is debited by Rs. 50,0 Correct Answer True Your Answer True

Multiple Choice Single Answer Question This cost indicates increased or decreased cost due to the increased or decreased volume of operations. Correct Answer Differential cost Your Answer Differential cost

Multiple Choice Multiple Answer Question Office & Administration overhead includes Correct Answer Salary , Rent & Taxes , Stationary & postage Your Answer True/False Question Salary , Rent & Taxes , Stationary & postage

There is reverse relationship between the ordering cost and carrying cost

Correct Answer True Your Answer True

Multiple Choice Multiple Answer Question Store ledger Correct Answer Record of all receipts and issue transactions , Financial expressions of all transactions , Maintenance of Store ledges provides a second check Your Answer Record of all receipts and issue transactions , Maintained in Stores department , Maintenance of Store ledges provides a second check Multiple Choice Multiple Answer Question Following points are taking into consideration for evaluation of receipts Correct Answer The Price , The trade discount is to be deducted , Other amounts such as sales tax, excise duty, octroi duty Your Answer The Price , The trade discount is to be deducted , Advertisement cost Multiple Choice Multiple Answer Question In EOQ, to express carrying cost as a percentage of the unit cost of purchases this is used in the formula----------Correct Answer i Your Answer A,O,C

Multiple Choice Single Answer Question Under the differential time rate method of wage payment between 90% to 100% of efficiency following rate is offered. Correct Answer Rs. 1.40 per hour Your Answer True/False Question Rs. 1.40 per hour

Where overheads chargeable to the department are Rs. 5000/- , direct labour hours worked are 24000 then labour hour rate is Re. 0.2083 labour hour. Correct Answer True Your Answer True

Multiple Choice Multiple Answer Question The selection of the base on which overheads should be apportioned depend on the following principles. Correct Answer service or use basis , survey basis , ability to pay basis

Your Answer True/False Question

service or use basis , survey basis , ability to pay basis

The Budget key factor may be in the form of sales, raw material, labour etc. Correct Answer True Your Answer True

Multiple Choice Single Answer Question For a material, if standard quantity is 500 kg and standard price is Rs.6/- per kg. Find out the Material Cost variance if actual quantity is 400 kg and actual price is Rs.6/- per kg. Correct Answer Rs.600/-( favorable ) Your Answer Rs.500/-( favorable )

Multiple Choice Single Answer Question Find out Labour Efficiency Variance, if Standard Rate is Rs.1.50/- per hour, Standard hours are 12,000 and Actual hours are 12,600. Correct Answer Rs.900/- ( Adverse ) Your Answer Rs.750/- ( Favorable )

Multiple Choice Single Answer Question Calculate Efficiency Variance, If actual production is 22,000 units, Standard production in actual hours is 21,000 units and Standard rate per unit is Rs.1.5/-. Correct Answer Rs.1,500/-( Favorable ) Your Answer Rs.1,500/-( Favorable )

Multiple Choice Single Answer Question Calculate Labour Mix Variance, If revised standard hours are 16,500/-, Standard rate is Rs.3/- and Actual hours are 13, 500. Correct Answer Rs.9,000/- ( favourable ) Your Answer Rs.9,000/- ( unfavorable )

Multiple Choice Single Answer Question Standard costs are the targets to be attained by the actual performance. Correct Answer Minimum Your Answer Minimum

Multiple Choice Single Answer Question Calendar Variance arises only if there is abnormal increase or decrease in Correct Answer Actual number of working days Your Answer Actual number of working days

Multiple Choice Multiple Answer Question The following factors affects the budgeted advertisement cost Correct Answer Percentage of profits , Availability of funds , Competitors policy Your Answer Percentage of profits , Availability of funds , Competitors policy

Match The Following Question Token or Disc Method

Correct Answer Token number & identification number allotted to worker Ticket number & clock card allotted to worker Time spent by worker on job is recorded Record of time for all the jobs during the week is made Attendance register

Your Answer Token number & identification number allotted to worker Ticket number & clock card allotted to worker Attendance register Record of time for all the jobs during the week is made Time spent by worker on job is recorded

Time Recording Clock Method Daily Time sheets Weekly Time sheets

Hand Written method

Select The Blank Question Accounting to the matching principles of accounting, the ________ incurred during an accounting period are required to be match with ________ during that period Correct Answer cost Your Answer liabilities

Correct Answer revenues Your Answer revenues

Select The Blank Question Management Accounting has a very ________ scope and it requires ________ organizational structure Correct Answer wide

Your Answer

wide

Correct Answer elaborate Your Answer elaborate

Select The Blank Question Along with financial accounting, ________ and ________ are the other streams of accounting Correct Answer Cost Accounting Your Answer Management Accounting

Correct Answer Management Accounting Your Answer Cost Accounting

Select The Blank Question The cost accountancy is defined as the application of costing principles,methods and techniques to the ________, art and practice of ________ ascertainment of the profitability and the presenta Correct Answer science Your Answer science

Correct Answer cost control Your Answer cost control

Select The Blank Question Preventive costs of labour turnover refers to all the costs which may be incurred by the organisation to keep workers happy and ________ them from ________ the job Correct Answer discourage Your Answer discourage

Correct Answer leaving Your Answer leaving

Select The Blank Question Replacement costs of labour turnover are ________ and ________ Correct Answer training Your Answer training

Correct Answer breakages of machine Your Answer medical services

Select The Blank Question Semi ________ overheads are neither ________ nor variable in nature. Correct Answer fixed Your Answer variable

Correct Answer variable Your Answer fixed

Select The Blank Question Break even point is a situation of no ________ no ________ Correct Answer profit Your Answer profit

Correct Answer loss Your Answer loss

Select The Blank Question The process of Allocation & apportionment can followed to decide the ________ of overheads to each budget center Correct Answer Allocation & apportionment Your Answer amount

Correct Answer Loading Your Answer Select The Blank Question Rs.5000 paid as ________ to ________ should be debited to salary account Correct Answer Mahesh Your Answer salary

Correct Answer salary Your Answer Mahesh

LIST OF ATTEMPTED QUESTIONS AND ANSWERS Select The Blank Question Over absorption of overheads may take place due to the reasons like ________ overheads being less than the ________ overheads Correct Answer actual Your Answer actual

Correct Answer estimated Your Answer estimated

Select The Blank Question ________ Legal charges and ________ are the accounts which are shown on the debit side of Profit & Loss Account Correct Answer Like office rent, Your Answer Depreciation on Machinery

Correct Answer Audit fees Your Answer Like office rent,

Select The Blank Question ________ of Trial Balance generally ensures ________ accuracy of the process of ledger posting . Correct Answer Talling Your Answer Talling

Correct Answer arithmetical Your Answer True/False Question arithmetical

While calculating the minimum level, normal lead time is not necessary Correct Answer False Your Answer False

True/ False Question

To Increase the existing production capacity, additional capital expenditure is required. Correct Answer True

Your Answer

True

Multiple Choice Single Answer Question Labour cost indicates that labour cost which cannot be identified with the individual cost centre and is incurred for those employees who are not engaged in the manufacturing process but only assist i Correct Answer Remuneration Your Answer Remuneration

Multiple Choice Single Answer Question During one week X makes 200 units. He receives wages for a guaranted 44hours per week at a rate of Rs. 1.50 per hour. Estimated time to produce one unit is 15 minutes. Time allowed is increased by 2 Correct Answer Rs. 83.60 Your Answer Rs. 78

Select The Blank Question Financial Accounting protects the interest of outsiders . it considers ________ transaction and it is a ________ requirement Correct Answer historical Your Answer historical

Correct Answer legal Your Answer legal

Select The Blank Question variable cost is the cost that tend to ________ in direct proportion with ________ Correct Answer vary Your Answer vary

Correct Answer level of activity Your Answer level of activity

Multiple Choice Multiple Answer Question Office & Administration overhead includes Correct Answer Salary , Rent & Taxes , Stationary & postage Your Answer Stationary & postage , Traveling Expenses

Multiple Choice Single Answer Question Calculate Labour Efficiency Variance, If actual rate per hour is Rs.3.50/- , Standard rate is Rs.3/- per unit and standard hours are 15,000 and Actual hours are 13, 500. Correct Answer Rs.4500/- ( Favorable ) Your Answer Rs.4500/- ( Favorable )

Multiple Choice Single Answer Question Cost-sheet may be prepared separately for each Correct Answer Different Cost Centre Your Answer Cost Centre

Multiple Choice Single Answer Question The prime cost is Rs. 10,00,000 the factory cost is Rs. 13,00,000, the total administration overheads are 14,00,000 and having selling overhead of Rs. 86000. What is the Total cost? Correct Answer 37,86,000 Your Answer 37,00,000

Multiple Choice Multiple Answer Question The cost of asset is Rs. 1,10,000, Estimated scrap value 10,000,estimated life 10 yrs. Calculate the depreciation according to straight line method Correct Answer 10,000 Your Answer 10,000

Select The Blank Question To ascertain the ________ of all the transactions recorded in the ledger account, the account is required to be ________ Correct Answer Net effect Your Answer Net effect

Correct Answer Balanced Your Answer Balanced

Multiple Choice Multiple Answer Question In fixed overhead variance, the volume variance is further analyzed as Correct Answer Variance Efficiency Variance , Capacity Variance , Calendar Variance

Your Answer

Variance Efficiency Variance , Capacity Variance , Calendar Variance

Multiple Choice Single Answer Question For a unit, if opening stock of raw material is 10,000 units, closing stock of raw material is 5,000 units and consumption is 3,20,000 units, what will be the quantum of raw material to be purchased Correct Answer 3,15,000 Your Answer 3,15,000

Multiple Choice Multiple Answer Question Accounts is a Correct Answer Record of all transaction Your Answer True/False Question Record of all transaction

Whatever is to be sold need not be produced.

Correct Answer True Your Answer True/False Question True

Patents and Trade Marks Account is a Real Account.

Correct Answer True Your Answer True

Multiple Choice Single Answer Question Budget is prepared in terms of Correct Answer Quantity and/or Money Your Answer True/False Question Quantity and/or Money

Favorable variances need on investigation

Correct Answer False Your Answer False

Multiple Choice Multiple Answer

Question

Standard Costing may not be useful in

Correct Answer Small concerns , Industries having non-standardized products , Contract jobs Your Answer Small concerns , Industries having non-standardized products , Contract jobs 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 Single Answer Question __________ Accounting becomes a source of information for Management Accounting. Correct Answer Financial Your Answer Financial

Select The Blank Question The levels indicated on the Bin card enables the ________ department to keep a watch on the balance and replace the material as soon as it reached at ________ level. Correct Answer Stores Your Answer Stores

Correct Answer Re-order level Your Answer Re-order level

Multiple Choice Single Answer Question Standard costs are the targets to be attained by the actual performance. Correct Answer Minimum Your Answer All the above

Multiple Choice Single Answer Question During one week X makes 200 units. He receives wages for a guaranted 44hours per week at a rate of Rs. 1.50 per hour. Estimated time to produce one unit is 15 minutes. Time allowed is increased by 2 Correct Answer Rs. 75 Your Answer Rs. 78

Accounting LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Multiple Answer Question The objects of cost accountancy are . . Correct Answer Your Answer True/False Question Correct Answer Your Answer Match The Following Question Book-Keeping Financial statement Accounting Profitability statement Balance-sheet To ascertain cost and profitability , Cost Control , Presentation of Information To ascertain cost and profitability , Cost Control , Presentation of Information

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

Correct Answer Books of Accounts Profitability statement & Balancesheet Process of analyzing & interpretation Indicates the amount of profit earned Financial status

Your Answer Process of analyzing & interpretation Profitability statement & Balance-sheet Books of Accounts Indicates the amount of profit earned Financial status

Multiple Choice Multiple Answer Question The principal functions of the cost accounting department are : Correct Answer 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. Preparation of different reports based on direct, indirect labour cost, etc. , To focus on areas where labour cost may be reduced. , Preparation of wage sheet and procedural aspects of wage payment.

Multiple Choice Multiple Answer Question Management Accounting is Correct Answer Your Answer True/False Question Correct Answer Your Answer True/False Designed particularly for internal use , Helpful in estimating the future along with past period , Useful in furnishing the necessary information to the management Designed particularly for internal use , Helpful in estimating the future along with past period , Useful in furnishing the necessary information to the management Balance sheet indicates the expenditure & income from the business. False False

Question Correct Answer Your Answer True/False Question Correct Answer Your Answer True/False Question Correct Answer Your Answer True/False Question Correct Answer Your Answer True/False Question Correct Answer Your Answer Select The Blank Question Correct Answer Your Answer

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

Match True True

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

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

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

The treatment of ________ time in cost accounting depends upon the distinction between normal and abnormal time. Idle Idle

Multiple Choice Multiple Answer Question Items debited to Profit & Loss Account are Correct Answer Your Answer True/False Salary , Discount allowed , Postage & telegram Salary , Purchases of raw material , Postage & telegram

Question Correct Answer Your Answer Select The Blank Question Correct Answer Your Answer

Profitability statement indicates the amount of assets & liabilities. False False

Budgeted profit and loss account and budgeted balance sheet are also known as ________. Master budget Master budget

Multiple Choice Single Answer Question Which system can assist in fixing a common selling price for the industry as a whole on the basis of cost of production of all units belonging to that industry ? Correct Answer Uniform costing Your Answer Marginal costing

Multiple Choice Single Answer Question A lathe machine was purhcased 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 True/False Question Correct Answer Your Answer Select The Blank Question Correct Answer Your Answer True/False Question Correct Answer Your Answer Rs.19.70

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

________ variance represents the over or under utilisation of pland and machinery. Capacity Efficiency

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

True/False Question Correct Answer Your Answer

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

Multiple Choice Multiple Answer Question The causes of idle time can be analysed as Correct Answer Your Answer Select The Blank Question Correct Answer Your Answer Administrative causes , Productive causes , Economic causes Administrative causes , Productive causes

The balance of the suspense account will ________ after all the errors are become zero become zero

Multiple Choice Single Answer Question If the quantity of material purchased and quantity used are different, then which quantity should be used to compute the material price variance? Correct Answer Quantity of material purchased Your Answer Average quantity

Multiple Choice Multiple Answer Question Uniform costing system can be successfully implemented in any industry only when : Correct Answer Your Answer Select The Blank Question Correct Answer Your 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 Information is freely supplied by all the units , Information furnished by the units is complete and correct Factory light, telephone expenses are examples of ________ expenses. Indirect Indirect

Multiple Choice Multiple Answer Question The components of the selling and distribution cost budget are : Correct Answer Your Answer Select The Blank Distribution expenses , Publicity expenditure , Salary of sales-office workers Distribution expenses , Publicity expenditure , Salary of sales-office workers

Question Correct Answer Your Answer Select The Blank Question Correct Answer Your Answer

For successful implementation of uniform costing system, it is very essential to devise ________, containing recommended cost accounting plan and procedures. cost manual cost manual

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

Multiple Choice Single Answer Question Which of the following is usually prepared daily by employees for each job worked on? Correct Answer Your Answer True/False Question Correct Answer Your Answer Job card Job card

Profit = Profit volume ratio X Margin of safety True True

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 trained personnel , Loss of regular customers , Expenditure required to restart the factory True/False Question Correct Answer Your Answer Indirect material cost is an integral part of finished goods. False True

Multiple Choice Multiple Answer Question Locate the error and its features in the following Correct Answer Your Answer Compensating errors , Trial balance will not be affected , Trial balance will be affected Compensating errors , Error of principle

Multiple Choice Single Answer

Question Correct Answer Your Answer Match The Following Question Liabilities Drawing Journal Ledger Assets True/False Question Correct Answer Your Answer

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

Correct Answer Your Answer All the amount owed by the business All the properties owned by the business Withdrawn for personal use Withdrawn for personal use Book of original entry Book of original entry Maintain all types of Accounts Maintain all types of Accounts All the properties owned by the All the amount owed by the business business Accounting refers to the process of analyzing & interpreting the information already recorded in the books of accounts. True True

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 True/False Question Correct Answer Your Answer Maintenance of machine account

Margin of safety = Contribution / Profit volume ratio False False

LIST OF ATTEMPTED QUESTIONS AND ANSWERS 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 0.75 True/False Question Under time rate system a worker is paid on the basis of production achieved by him in a given time. Correct Answer False Your Answer False Multiple Choice Multiple Answer Question Direct Cost includes Correct Answer Direct material , Direct labour , Direct expenses Your Answer Direct material , Direct labour , Direct expenses 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 paise 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 Material cost 12 paise per unit for the first 1,000 units followed by 10 paise per unit upto 2,000 units and 8 paise per unit thereafter. 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 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 True/False Question Piece rate system is suitable when quality of goods produced is of extreme importance. Correct Answer False Your Answer False True/False Question A firm earns profit when contribution is equal to fixed costs under variable costing. Correct Answer False Your Answer False

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 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. Correct Answer Rs.180/Your Answer Rs.180/Select The Blank Question Contribution represents pool of resources available for meeting all costs other than ________. Correct Answer Variable costs Your Answer Variable costs Multiple Choice Multiple Answer Question Locate the steps involved in rectifying the errors in the books of accounts Correct Answer Find the wrong entry passed , Find the correct entry to be passed , Find the entry that will resolve the mistake in the books Your Answer Find the wrong entry passed , Find the correct entry to be passed , Find the entry that will resolve the mistake in the books Multiple Choice Single Answer Question Judge the following narrative according to the criteria given : There are many organizations whose sales fluctuate with fluctuations in the weather, viz. ice-cream, sweaters, etc. Correct Answer The statement and the reason are both incorrect Your Answer The statement and the reason are both correct Select The Blank 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 Number of labour hours worked 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. , Excessive freight charges 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 , To fix a common selling price so as to maximize profits of each unit Multiple Choice Single Answer Question 200 units of material were purchased from X @ Rs.5/- per unit and 300 units were purchased from Y @ Rs.6/- per unit. The organisation follows FIFO system of pricing of issues and the above purchases have been recorded in stores ledger. 120 units have already been issued. 60 units received from X are defective and are therefore returned. Find the value of the material returned to X. Correct Answer Rs.300/Your Answer Rs.300/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 If the total manufacturing overhead of a tiles producing factory amounted to Rs.15 lakhs and the overhead rate was Rs.5/- per sq.ft, then the production for the period can be stated as ________ sq.ft. tiles. Correct Answer 300000 Your Answer 300000 True/False Question Balance sheet indicates the financial status of the business at given period. Correct Answer True Your Answer False True/False Question Profitability statement indicates the amount of assets & liabilities. Correct Answer False Your Answer False True/False Question Category C items, as per the ABC analysis, usually refers to indirect material. Correct Answer True Your Answer True True/False Question Balance sheet indicates the expenditure & income from the

business. Correct Answer False Your Answer False 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 True/False Question According to the standard costing principles, only adverse variance must be further investigated. Correct Answer False Your Answer True Select The Blank Question Education facility to workers and their children, pension, superannuation fund are examples of ________ incentives. Correct Answer Non-monetary Your Answer Motivational Match The Following Question Correct Answer Your Answer Closed the account with State Bank of India Henceforth, there shall be no difference in overdraft balances Henceforth, there shall be no difference in overdraft balances Debit side of bank book is overcast Overdraft as per bank book < Overdraft as per pass book Overdraft as per bank book < 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 Received sanction for a loan of Rs.10 lakhs Overdraft as per bank book = Overdraft as per pass book Henceforth, there shall be maximum differences in overdraft balances Select The Blank Question The ________ adjustment is necessary to relfect the cost for the use of fixed asset during the year. Correct Answer Depreciation Your Answer Depreciation 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 The purchase account should be debited when an order is placed with the supplier of material.

Correct Answer False Your Answer False Multiple Choice Single Answer Question The purchase budget for October is Rs.12,500/- and November is Rs.15,000/-. If the materials are purchased for cash the supplier is offering a rebate of 5%. If the materials are purchased on credit of 30 days, no rebate is offered. The company purchase Correct Answer October- NIL, November- Rs.26,750/Your Answer October- Rs.11,875/-, November- Rs.14,250/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 mix Multiple Choice Single Answer Question Which system can assist in fixing a common selling price for the industry as a whole on the basis of cost of production of all units belonging to that industry ? Correct Answer Uniform costing Your Answer Uniform costing 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 Control on purchase of material is exercised by the storekeeper. Correct Answer False Your Answer False Select The Blank Question In practical circumstances, the ________ are referred to as application of funds. Correct Answer Assets Your Answer Assets Multiple Choice Single Answer Question The composition of selling costs is given below : 1 salaries 4% of sales, travelling 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/Your Answer Rs.9,000/Match The Following Question Correct Answer Your Answer 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 Journal Book of original entry Book of original entry Select The Blank Question The document which lays down the cost accounting plans and procedures to be followed by the constituent units is known as ________. Correct Answer uniform cost manual Your Answer uniform cost manual 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 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 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 True/False Question Uniform Costing simplifies the work of wage boards of fixing minimum wages and fair wages. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Marginal costing is found to be unsuccessful in the following situations :Correct Answer Impossible to distinguish costs into fixed and variable component. , With respect to capital intensive industries where

fixed costs are very large and hence cannot be ignored , With respect to service industries where employee costs are very large and almost fixed in nature Your Answer Impossible to distinguish costs into fixed and variable component. , With respect to service industries where employee costs are very large and almost fixed in nature 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 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 True/False Question Accounting is an art of recording, classifying & summarizing in a significant manner. Correct Answer True Your Answer True

CHAP MATERIAL COST 1) EOQ = root (2AO) where C*i A = annual requirement O = cost of placing an order C = unit purchase price i = carrying cost expenditure as a % of unit purchase price 2) No of orders = 3) 4) 5) 6) 7) 8) A Order size Carrying cost = (Order size) * (cost price) * (carrying cost in %) 2 Total cost = carrying cost + Ordering cost Re-order level = Maximum lead time * Maximum usage Maximum level = Reorder level + Reorder quantity (Minimum Usage * Minimum lead time ) Minimum level = Reorder level (Normal lead time * Normal Usage) Average level = (Max. level + Min. level) 2 Or Safety stock + (Max. level or EOQ) 2 Danger level = Normal Usage * lead time for emergency purchases

9)

CHAP LABOUR COST A] Time Rate System: 1) High Wage Plan 2) Differential Time rate Efficiency Upto 80% Between 80% - 90% Between 90% - 100% Between 100% - 125% B] Payment by Results a) Straight Piece Rate System b) Piece Rate with Guaranteed Time Rate c) Differential Piece Rate System: Efficiency Upto 83.% Between 83% - 100 % Above 100% The above is again differentiated into Piece rate Normal piece rate 10% above normal piece rate 30% above normal piece rate

Normal day rate Re 1 (Normal rate) Rs 1.25 Rs 1.40 Rs 1.50

1) Taylor Differential Piece Rate 2) Merrick Differential Piece Rate: Efficiency Upto 83.% Between 83% - 100 % Above 100%

Piece rate Normal rate 110% above normal rate 130% above normal rate

3) Gantt Task Bonus System It is a combination of time rate and piece rate and provides for minimum time rate payment. The wage structure may be fixed as below: Output below standard Output at standard Output above standard C] Individual Incentive Systems: 1) Halsey Premium System (AR * HR) + {(SH AH) * HR} (assuming 50% - 50% sharing between the 2 worker and employer) 2) Halsey Weir Premium System 1/3:2/3 ratio between worker and the employer 3) Rowan Premium System (AH * HR) {1 + SH AH} SH D] Other methods of Premiums: 1) Barth Premium System Wages = HR * root (SH * AH) Applicable only for beginners or apprentices 2) Emersons Efficiency Bonus System Wages = {AH * HR + Bonus % of AH * HR} Efficiency Bonus Upto 63.333% No bonus 66.333% - 100% Increases from 20% to 100% Above 100% 20% + 1% bonus increase in every in efficiency Eg. 101% 21% bonus 120% 30% bonus 120% 40% & so on Suitable for non- efficient workers for improving their efficiency Minimum time rate payment Time wages + some increase in wage rates High piece rate for entire output

Calculation for efficiency % : On Time basis SH * 100 AH

On Output basis AH * 100 SH

3) Bedaux Point System SH is divided into standard minutes & each standard minute is called Bedaux point or B. Wages = AH * HR + 75% of Bs * HR 60 (Bs = no of Bs saved)

4) Accelerating Premium System Here incentive increase in a faster rate with an increase in output. Y = 0.8 X 2 where Y = earnings and X = efficiency Now Earnings = (Basic wages + bonus) in % [for eg. If earnings = 1.25 then 125% = 100 % basic wages + 25 % bonus] Basic wages = AH * HR Bonus = % of basic wages 5) Baum Differential Plan Also called Milwankee Plan. It is a combination of Taylor Differential Piece rate + Halsey System 6) Diemer System It is a combination of Halsey System + Gantt System Measurement of Labour Turnover: 1] Separation Method: No. of separations * 100 Average no of workers 2] Replacement Method: No. of replacements * 100 Average no of workers 3] Flux Method: No. of separations + No of replacements Average no of workers * 100

Treatment of Idle time: (Read all the cases) case III When idle time is normal and uncontrollable then, if attended time = x, time booked = y and labour cost = l then Idle time = lx /y

CHAP OVERHEAD COSTS 1] Direct Material Cost % Rate: Amount of overheads to be absorbed Direct Material Cost 2] Direct Wages Cost % Rate: Amount of overheads to be absorbed Direct wages Cost 3] Prime Cost % Rate: Amount of overheads to be absorbed Prime Cost 4] Labour Hour Rate: Amount of overheads to be absorbed Labour hours required for production 5] Machine Hour Rate: Amount of overheads to be absorbed No. of Machines hours Eg. period I II Overheads Absorbed (Rs) 7500 10000

* 100

* 100

* 100

* 100

* 100

Actual Overheads (Rs) 9000 8000

Remarks Under absorption Over absorption

LIST OF ATTEMPTED QUESTIONS AND ANSWERS 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 Profitability statement indicates the amount of assets & liabilities. Correct Answer False Your Answer False True/False Question Balance sheet indicates the expenditure & income from the business. Correct Answer False Your Answer False 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 Single Answer Question __________ Accounting becomes a source of information for Management Accounting. Correct Answer Financial

Your Answer Cost True/False Question Patents and Trade Marks Account is a Real Account. Correct Answer True Your Answer False Multiple Choice Multiple Answer Question Money Measurement Concept__________________ Correct Answer Only those transactions and facts expressed in terms of money , This Concept imposes severe restrictions on the kind of information available from financial statements , Due to several restrictions it becomes drawback of financial accounting Your Answer Only those transactions and facts expressed in terms of money , This Concept imposes severe restrictions on the kind of information available from financial statements , Due to several restrictions it becomes drawback of financial accounting Multiple Choice Multiple Answer Question P/L A/C debit side includes Correct Answer salary , discount allowed , postage & telegram Your Answer salary , discount allowed , postage & telegram Multiple Choice Multiple Answer Question Profit & Loss A/C credit side has Correct Answer Gross profit , Commission received , Interested received Your Answer Gross profit , Commission received , Interested received Multiple Choice Single Answer Question A started business with cash 5000, building 5000, furniture 2000, having depreciation of 10% on building. The total amount of capital comes to Rs. __________ Correct Answer 11500 Your Answer 12000 Multiple Choice Single Answer Question Goods distributed as free sample amounted to Rs. 10,000. Prepare Neonboard Rs. 5000. The total amount transfer to advertisement account is Rs.____ Correct Answer 15,000 Your Answer 15,000 Multiple Choice Single Answer Question The periodical total of sales book was cash short by Rs. 5000 for rectifying the same, which A/C to be debited Correct Answer Suspense A/C

Your Answer Suspense A/C Multiple Choice Multiple Answer Question Following errors do not affect the trial balance Correct Answer Error of Principle , Error of Omission , Error of Commission Your Answer Error of Principle , Error of Omission , Error of Commission Multiple Choice Multiple Answer Question Following error 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 Match The Following Question Correct Answer Your Answer Error of Principle Trial Balance does not get affected Wrong Posting Error of Omission The transaction is totally omitted The transaction is totally omitted Error of commission Wrong Posting Wrong classification Compensating Error Wrong classification Trial Balance does not get affected Difference in trial balance Transferred to suspense account Transferred to suspense account True/False Question There is no need to open a suspense account if the trial balance does not agree. Correct Answer False Your Answer False True/False Question A contractors bill for the extension of premises amounting to Rs. 2750 has been debited to building repair account Correct Answer False Your Answer False Match The Following Question Correct Answer Your Answer Opportunity Cost Cost can be controlled Return or yield Differential Cost Historical Cost Increase or Decrease in cost

Sunk Cost Cannot be controlled Historical Cost Controllable Cost Increase or Decrease in cost Cost can be controlled Uncontrollable Cost Return or yield Cannot be controlled True/False Question Indirect material cost assist the manufacturing process is an integral part of finish goods. Correct Answer False Your Answer True True/False Question Dividend received is a Non-operating Income. Correct Answer True Your Answer True Multiple Choice Single Answer Question Company having opening stock of Rs. 1,80,000 purchase Rs. 8,00,000. Freight Inward Rs, 35000 & closing stock Rs. 2,00,000, having direct wages Rs. 2,35,000. What will be prime cost. Correct Answer 10,50,000 Your Answer 10,50,000 Multiple Choice Single Answer Question A Co. having factory cost of Rs. 13,10,800. The administrative overheads are salaries 40,000, rent & rates 6400, Traveling expenses 12,400, Depreciation 2400, Directors fees 24,000, General Charges 2 Correct Answer 14,59,200 Your Answer none of above Multiple Choice Multiple Answer Question Indirect Labour Cost Correct Answer Wages paid to storekeeper , Salary of works manager , Wages paid to gatekeeper Your Answer Wages paid to storekeeper , Salary of works manager , Wages paid to gatekeeper Multiple Choice Multiple Answer Question Factory overheads are termed as Correct Answer Production overheads , Works overheads , Manufacturing overheads Your Answer Works overheads Multiple Choice Multiple Answer

Question Selling and distribution overheads includes Correct Answer Indirect Material such as packing material, samples etc., , Indirect labour like salaries to sales personnel manager , Indirect expenses like warehouse charges, advertisement Your Answer Indirect expenses like warehouse charges, advertisement Multiple Choice Multiple Answer Question The aims of perpetual inventory system are as follows Correct Answer Maintaining Bin cards , Maintaining store ledger , Continuous verification of physical stock Your Answer Maintaining Bin cards , Maintaining store ledger , Continuous verification of physical stock Multiple Choice Multiple 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 Your Answer Cost of medical services , training costs , cost of welfare facilities Multiple Choice Multiple Answer Question These are the features of variable overheads Correct Answer vary directly in proportion to volume of output. , per unit cost remains the same , total overheads may increase or decrease as per volume of output. Your Answer vary directly in proportion to volume of output. , per unit cost remains the same , total overheads may increase or decrease as per volume of output. True/False Question To take make or buy decision under the marginal costing , if purchase price of the product is less than its variable cost it is advisable to go for manufacturing proposition. Correct Answer False Your Answer False Multiple Choice Single Answer Question The cost that varies in direct proportion with the level of activity is called Correct Answer variable cost Your Answer variable cost True/False Question The ultimate incorporation of all functional budgets takes the form of budgeted Profit & Loss Account and Balance Sheet. Correct Answer True Your Answer True

True/False Question Flexible budget is an effective tool for evaluation of performance. Correct Answer True Your Answer True Multiple Choice Single Answer Question Calendar Variance arises only if there is abnormal increase or decrease in Correct Answer Actual number of working days Your Answer Actual number of working days Multiple Choice Single Answer Question Standard may not be necessarily useful for this purpose. Correct Answer Forecasting Your Answer Coordinating Multiple Choice Single Answer Question If during a month anticipated sales are 5,000 kg, opening stock is 1,000 kg and closing stock is 500 kg then what will be the quantity of production Correct Answer 4,500 kg Your Answer 4,500 kg Multiple Choice Single Answer Question For a unit, if opening stock of raw material is 10,000 units, closing stock of raw material is 5,000 units and consumption is 3,20,000 units, what will be the quantum of raw material to be purchased Correct Answer 3,15,000 Your Answer 3,15,000 Select The Blank Question Interest on overdraft charged by the bank is ________ to the pass book and ________ to the cash book Correct Answer debited Your Answer debited Correct Answer credited Your Answer credited Select The Blank Question While selecting source of supply ________ epartment may call for the ________ from the prospective suppliers Correct Answer purchase Your Answer production Correct Answer quotation Your Answer quotation

Select The Blank Question After material is received from the supplier, quantity actually received is compared with quantity ________-and ________-if any, are taken up with the supplier Correct Answer ordered Your Answer variation Correct Answer variation Your Answer ordered Select The Blank Question ________ and ________ are non monetary incentives Correct Answer Safety services Your Answer Safety services Correct Answer education facility Your Answer education facility Select The Blank Question Under the repeated distribution method the overheads of ________ department are distributed to other departments on agreed ________ Correct Answer service Your Answer production Correct Answer percentage Your Answer percentage Select The Blank Question variable cost is the cost that tend to ________ in direct proportion with ________ Correct Answer vary Your Answer vary Correct Answer level of activity Your Answer level of activity Select The Blank Question Variable costs are the controllable costs at the ________ level of the management whereas fixed costs can be controlled only on the ________ level of the management Correct Answer Lower Your Answer Lower Correct Answer Top Your Answer Top Select The Blank Question ________ Legal charges and ________ are the accounts which are shown on the debit side of Profit & Loss Account Correct Answer Like office rent, Your Answer Audit fees

Correct Answer Audit fees Your Answer Depreciation on Machinery

Management Accounting
Question Bank 1 QUESTION BANK (TOTAL MARKS: 100) Note : (1) Attempt any Ten questions. (2) All questions carry equal marks. 1. Explain the term Accounting. What are the different streams of accounting ? How are they related to each other ? 2. Explain step-by-step process of Financial Accounting with the intention to prepare the financial statements.

3. Write an essay on Depreciation. 4. What do you mean by Financial Statements ? What are the limitations of the Financial Statements ? Give the standard format of the Financial Statement and explain each item appearing in the Financial Statement. 5. What do you mean by Bank Reconciliation Statement ? Why is it prepared ? Give a standard format of a Bank Reconciliation Statement. 6. What do you mean by Elements of Cost ? How the cost is classified into various elements of cost. Draft a standard format of a cost sheet for a machine tool manufacturing company. Make the necessary assumptions. 7. Explain step-by-step procedure of identifying the direct material cost with the individual cost center. Give the formats of various documents which are prepared in the process. 8. Explain step-by-step procedure of identifying the direct labour cost with the individual cost center. Give the formats of various documents which are prepared in the process. 9. Explain step-by-step procedure of identifying the overheads with the individual cost center.

10. Explain the terms Marginal Cost and Marginal Costing. State the various application areas of Marginal Costing for the managerial decision-making. 11. With the help of a Simple Break Even Chart and Contribution Break Even Chart, explain the significance and method of calculation of the following terms _ Contribution _ Profit Volume Ratio _ Break Even Point _ Margin of Safety _ Angle of Incidence 12. Explain the advantages and disadvantages of Standard Costing as a cost control technique. How Standard Costing is related to Budgetary Control ? 13. What do you mean by Uniform Costing ? Explain the various areas covered by Uniform Costing. Explain the prerequisites for the success of Uniform Costing as a cost control technique. 14. Write short notes on any Three of the following _ Labour Turnover _ Accounting for Idle Time _ Under Absorption and Over Absorption of Overheads _ Flexible Budget _ Cash Budget Note : Even if the Question Bank consists of only theory questions, in the final examination you can expect problems as well.

LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Multiple Answer Question Business Entity Concept ______________. Correct Answer Business is separated from the owner. , The accounting process carried out for the business , Separate legal entity Your Answer The accounting process carried out for the business , Separate legal entity , Business & person treated as one and same Multiple Choice Single Answer Question Standard Costs are used as tool for Correct Answer Cost Control Your Answer Price fixation True/False Question The danger level fixed below maximum level Correct Answer False Your Answer False Multiple Choice Multiple Answer Question Following example comes under service cost centre Correct Answer Store department , Internal Transport department , Accounting/Costing department Your Answer Store department , Internal Transport department , Accounting/Costing department Multiple Choice Single Answer Question The material physically received is compared with material ordered as per the this order Correct Answer Purchase order Your Answer Goods received note Match The Following Question Correct Answer Your Answer Straight Piece rate system The rate of payment is fixed per piece The rate of payment is fixed per piece Diemer system Halsey system & Gantt System Halsey system & Gantt System Time rate System Worker is paid on the basis of time attended by him. Worker is paid on the basis of time attended by him. Payment by Result Workers are paid according to the production achieved by him Workers are paid according to the production achieved by him Differential Time rate Different hourly rates are fixed for different levels of efficiency Different hourly rates are fixed for different levels of efficiency Multiple Choice Multiple Answer Question When bank balance as per pass book is considered then following to be added. Correct Answer cheques deposited but not cleared , Interest debited by bank , bank charges debited by bank Your Answer wrong credit given by bank

True/False Question Accounting refers to the process of analyzing & interpr eting the information already recorded in the books of accounts. Correct Answer True Your Answer True True/False Question (No. of unit * Rate of depreciation per unit ) this formula is used for written down value method. Correct Answer False Your Answer False Multiple Choice Single Answer Question Sold Goods of Amitabh worth Rs. 15,000 against 15% Trade discount. The Goods worth appear on account ___________ Correct Answer 12750 Your Answer 12750 Multiple Choice Multiple Answer Question Cash and---------------are the two systems of accounting. Correct Answer Mercantile Your Answer Credit Multiple Choice Single Answer Question This cost indicates increased or decreased cost due to the increased or decreased volume of operations. Correct Answer Differential cost Your Answer Differential cost Match The Following Question Correct Answer Your Answer Fixed cost + variable cost Total cost Total cost Total cost fixed cost variable cost variable cost sales- variable cost contribution contribution contribution fixed cost profit profit Total cost + profit Sales Sales Multiple Choice Single Answer Question Under the differential time rate method of wage payment between 90% to 100% of efficiency following rate is offered. Correct Answer Rs. 1.40 per hour Your Answer Rs. 1.40 per hour Multiple Choice Multiple Answer Question Important advantages of Uniform Costing can be said to be Correct Answer It is a useful tool for management control , It avoids cut throat competition , Weaker units can take advantage of settled systems of better managed units Your Answer It is a useful tool for management control , It avoids cut throat competition , Weaker units can take advantage of settled systems of better managed units

Select The Blank Question Along with financial accounting, ________ and ________ are the other streams of accounting Correct Answer Cost Accounting Your Answer Cost Accounting Correct Answer Management Accounting Your Answer Management Accounting Multiple Choice Single Answer Question Margin of safety are the sales beyond Correct Answer break even point Your Answer break even point Multiple Choice Multiple Answer Question Indirect Labour Cost Correct Answer Wages paid to storekeeper , Salary of works manager , Wages paid to gatekeeper Your Answer Wages paid to storekeeper , Salary of works manager , Wages paid to gatekeeper Select The Blank Question The difference between sales and factory/ works cost is termed as ________ the difference between sales and ________ ermed as net profit Correct Answer gross profit Your Answer gross profit Correct Answer cost of sales Your Answer cost of production Multiple Choice Single Answer Question Labour cost is the cost of __________ paid to employees of the organization. Correct Answer Remuneration Your Answer Remuneration Multiple Choice Single Answer Question For a material, if standard quantity is 400 kg and standard price is Rs.3.75/- per kg. Find out the Material Usage variance if actual quantity is 500 kg and actual price is Rs.3.60/- per kg. Correct Answer Rs.375/ -( Adverse ) Your Answer Rs.375/-( Adverse ) Multiple Choice Multiple Answer Question Labour Efficiency Standards are decided by considering following factors Correct Answer Records of past performance , Time & Motion Study , Trial Runs Your Answer Records of past performance , Time & Motion Study , Trial Runs Select The Blank Question A budget manual is a document setting out the ________ of the persons and ________ required for the budget control. Correct Answer Responsibilities Your Answer Responsibilities Correct Answer Forms and procedures Your Answer Forms and procedures

Select The Blank Question Accounting to the matching principles of accounting, the ________ incurred during an accounting period are required to be match with ________ during that period Correct Answer cost Your Answer cost Correct Answer revenues Your Answer revenues Multiple Choice Single Answer Question Selling price per tonne is Rs. 69.50 , variable cost per tonne is Rs. 35.50 and fixed cost is Rs. 18,02000. Find out the BEP in units, Correct Answer 53000 Your Answer 53000 Select The Blank Question To ascertain the ________ of all the transactions recorded in the ledger account, the account is required to be ________ Correct Answer Net effect Your Answer Net effect Correct Answer Balanced Your Answer Balanced True/False Question Depreciation does not involve cash out flow Correct Answer True Your Answer True True/False Question The difference between standard cost and actual cost is termed as Variance. Correct Answer True Your Answer True True/False Question Wage payment system should be properly tied up with quality control procedures to ensure that the workers are paid only for good and quality production. Correct Answer True Your Answer True Select The Blank Question Preventive costs of labour turnover refers to all the costs which may be incurred by the organisation to keep workers happy and ________ them from ________ the job Correct Answer discourage Your Answer discourage Correct Answer leaving Your Answer leaving Select The Blank Question Semi ________ overheads are neither ________ nor variable in nature. Correct Answer fixed Your Answer variable Correct Answer variable Your Answer fixed

Multiple Choice Multiple Answer Question In Cash budget Operating cash inflow includes Correct Answer Cash Sales , Collection from De btors , Interest/Dividend received Your Answer Cash Sales , Collection from Debtors , Interest/Dividend received True/False Question If the product is labour intensive, more stress may be necessary on inventory control procedure. Correct Answer False 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 A good wage payment system will not punish the workers for the matters beyond the control of the workers. Correct Answer True Your Answer True True/False Question Fixed assets do not give the returns during the same period during which they are paid for Correct Answer True Your Answer True Multiple Choice Single Answer Question The material issued to production department may be returned back to the stores because material issued in excess requirement and Correct Answer Material issued is defective Your Answer Material issued is defective 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 Following are called the element of Cost Correct Answer Material , Labour , Expenses Your Answer Material , Labour , Expenses Select The Blank Question ________ of Trial Balance generally ensures ________ accuracy of the process of ledger posting . Correct Answer Talling Your Answer Talling Correct Answer arithmetical Your Answer arithmetical

Multiple Choice Multiple Answer Question Convention of Materiality __________________ Correct Answer Only those transactions will be considered which have material impact on profitability , Insignificant transaction will be ignored , The cost of non-used should not be considered as the item of cost Your Answer Only those transactions will be considered which have material impact on profitability , Insignificant transaction will be ignored , The cost of non-used should not be considered as the item of cost True/False Question Amount with drawn for personal purpose drawing A/C to be debited. Correct Answer True Your Answer True Select The Blank Question Under the repeated distribution method the overheads of ________ department are distributed to other departments on agreed ________ Correct Answer service Your Answer service Correct Answer percentage Your Answer percentage True/False Question Under time rate system a worker is paid on the basis of production achieved by him. Correct Answer False Your Answer True Multiple Choice Single Answer Question Calculate Labour Rate Variance, If actual rate per hour is Rs.3.50/- , Standard rate is Rs.3/- per unit and actual hours are 13, 500. Correct Answer Rs.6750/- ( Adverse ) Your Answer Rs.6750/- ( Adverse ) Multiple Choice Multiple Answer Question The causes of idle time can be analysed as Correct Answer Administrative causes , Productive causes , economic causes Your Answer Administrative causes , Productive causes , economic causes Multiple Choice Multiple Answer Question Cost Accountancy is a science, art and practice of a cost Accountant. Correct Answer Science indicates the possession and the application of relevant systematic knowledge. , Art indicates the skill and ability. , Practice indicates continuous effects on the part of cost accountant. Your Answer Science indicates the possession and the application of relevant systematic knowledge. , Art indicates the skill and ability. , Practice indicates continuous effects on the part of cost accountant.

MA 7 LIST OF ATTEMPTED QUESTIONS AND ANSWERS 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 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 statement True/False Question Accounting is an art of recording, classifying & summarizing in a significant manner. Correct Answer True Your Answer True True/False Question Profitability statement indicates the amount of assets & liabilities. Correct Answer False Your Answer False Select The Blank Question If the firm is operating with zero margin of safety, decline of even a single unit in sales will result in ________. Correct Answer Loss Your Answer Net profit Match The Following Question Correct Answer Your Answer Liabilities All the amount owed by the business All the amount owed by the business Drawing Withdrawn for personal use Withdrawn for personal use Journal Book of original entry Maintain all types of Accounts Ledger Maintain all types of Accounts Book of original entry Page 1

MA 7 Assets All the properties owned by the business All the properties owned by the business 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.? Correct Answer Rs.6,450/Your Answer Rs.6,450/True/False Question Balance sheet indicates the expenditure & income from the business. Correct Answer False Your Answer False True/False Question Generally speaking income represents wealth increase and business success; higher the income, lower will be the success of a business. Correct Answer False Your Answer False Multiple Choice Multiple Answer Question Select the steps to be followed while preparing bank reconciliation statement. Correct Answer Compare the transactions in the bank book and the pass book , Check the totals and the balancing of both the books , Confirm that the opening balances of both the books are tallying Your Answer Compare the transactions in the bank book and the pass book , Check the totals and the balancing of both the books , Confirm that the opening balances of both the books are tallying , Confirm that the closing balances of both the books are tallying Multiple Choice Multiple 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 Page 2

MA 7 Multiple Choice Multiple Answer Question Accounting is the art where transactions are Correct Answer Summarized , Classified , Recorded Your Answer Summarized , Classified , Recorded Multiple Choice Single Answer Question An order for goods worth Rs.18,000/- was placed on 25th March, 2004. The goods were received on 1st April, 2004. Calculate the impact of this transaction on the final statements of accounts for the year ended 31st March, 2004. Correct Answer The net profit will not be affected Your Answer The net profit will not be affected True/False Question Error of commission refer to calculation errors, totaling errors, errors in carrying forward etc. Correct Answer True Your Answer True 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 Select The Blank Question Under the Merrick's differential piece rate system of wage payment if the efficiency level of a worker is below 83%, then he is paid wages at ________ piece rate. Correct Answer Normal Your Answer Normal Select The Blank Question A standard that is never altered, after being established, is known as ________ standard. Correct Answer Ideal Your Answer Ideal Multiple Choice Single Answer Question Benefits available from revenue expenditure are received in the : Correct Answer Same year Your Answer Next year Page 3

MA 7 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 accounting manual Multiple Choice Single Answer 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 Your Answer The assertion and the reason are both correct True/False Question Profit and loss account indicates the profit earned as on a particular date. Correct Answer False Your Answer True Multiple Choice Single Answer Question Judge the statement in italics based on the criteria given. On 31st March, 2004 Sita Enterprises sent goods worth Rs.30,000/- on approval basis to Mr.Ram. These goods should be included in the closing stock as on 31st March, 2004 because the ownership is still with the seller, viz.Sita Enterprise. Correct Answer The statement and the reason both are correct Your Answer The statement and the reason both are correct Multiple Choice Multiple Answer Question Select the appropriate rectification entries for the following transactions (i) Rs.200/- received in respect of a bad debt previously written off was credited to Debtors account. (ii) Paid Rs.6,000/- to a Mr. Rao, clerk, as salary in lieu of notice. This amount was debited to his personal account (iii) Interest @ 5% p.a. on a loan of Rs.5,000/- was debited to general expenses account. Correct Answer Debtors A/c ..........Dr. Rs.200/- to bad debts recovered A/c Rs.200/- , Rs.6,000/- to Rao's A/c Rs.6,000/- , Rs.250/- to General Expenses A/c Rs.250/Your Answer Debtors A/c ..........Dr. Rs.200/- to bad debts recovered A/c Rs.200/- , Rs.6,000/- to Rao's A/c Rs.6,000/- , Rs.250/- to General Expenses Page 4

MA 7 A/c Rs.250/Select The Blank Question The indirect material cost, indirect labour cost and indirect expenses cost, collectively are termed as ________. Correct Answer Overhead Your Answer Overhead 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 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 Multiple Choice Multiple Answer Question These are the replacement costs of labour turnover. Correct Answer Increased spoilage and defectives , Inefficiency of new workers , Cost of selection and placement Your Answer Inefficiency of new workers , Cost of selection and placement , Increased spoilage and defectives 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 Multiple Choice Single Answer Question Interest on drawings of partners should be credited to which account? Page 5

MA 7 Correct Answer Profit and loss account Your Answer Profit and loss account True/False Question Balance sheet indicates the financial status of the business at given period. Correct Answer True Your Answer True 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 True True/False Question Time rate system is suitable for workers of the maintenance department. Correct Answer True Your Answer True Match The Following Question Correct Answer Your Answer Balance-sheet Financial status Books of Accounts Book-Keeping Books of Accounts Profitability statement & Balance-sheet Financial statement Profitability statement & Balance-sheet Financial status Accounting Process of analyzing & interpretation Process of analyzing & interpretation Profitability statement Indicates the amount of profit earned Indicates the amount of profit earned Multiple Choice Multiple Answer Question Accounting is the art where transactions are Correct Answer Summarized , Classified , Recorded Your Answer Summarized , Classified , Recorded Page 6

MA 7 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 Machine hours True/False Question The perpetual inventory system enables management to ascertain stock without physical verification. Correct Answer True Your Answer True True/False Question Long term loan borrowed from financial institution comes under the heading of long term liabilities. Correct Answer True Your Answer True Multiple Choice Single Answer Question A business's telephone bill should nromally be classified into which one of the following categories? Correct Answer Semi-variable cost Your Answer Semi-variable cost Select The Blank Question A forecast is mere estimate of what is likely to happen, but ________ is the action plan to be followed. Correct Answer Budget Your Answer Budget Multiple Choice Single Answer Question Select the cost that indicates increased or decreased total cost due to the increased or decreased volume of operations. Correct Answer Differential cost Your Answer Differential cost Multiple Choice Multiple Answer Question Locate the error and its features in the following Correct Answer Compensating errors , Trial balance will not be affected , Trial balance will be affected Your Answer Compensating errors , Trial balance will not be affected , Error of principle Page 7

MA 7 True/False Question Uniform Costing simplifies the work of wage boards of fixing minimum wages and fair wages. 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 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 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 Accounting refers to the process of analyzing & interpreting the information already recorded in the books of accounts. Correct Answer True Your Answer True

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ma vish LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Single 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/Your Answer Rs.49,248/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 sum of indirect material cost, indirect labour cost and indirect expenses is termed as Overheads. Correct Answer True 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 Match The Following Question Correct Answer Your Answer 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 Page 1

ma vish Multiple Choice Single Answer Question Goods kept in the godown were destroyed by fire on 18th June, 2004. The cost of such goods was Rs.18,950/-. The goods were not insured. Find the amount which should be debited to the profitability statement. Correct Answer Rs.18,950/Your Answer Rs.18,950/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 Select The Blank Question The cost-volume-profit analysis basically highlights the effect of changes in sales volume on the profit of the company, in the ________. Correct Answer Short run Your Answer Short run True/False Question Margin of safety = Contribution / Profit volume ratio Correct Answer False Your Answer False Multiple Choice Multiple Answer Question From the following, select current assets:Correct Answer Sundry debtors , Stock , Pre paid expenses Your Answer Stock , Pre paid expenses 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 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 Page 2

ma vish Your Answer Bedaux point or B True/False Question A pre-determined factory overhead rate holds up product costing. Correct Answer False Your Answer False 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 selling price , Reduce cost of sales , Increase the selling efforts Multiple Choice Multiple Answer Question Select the appropriate rectification entries for the following transactions (i) Rs.200/- received in respect of a bad debt previously written off was credited to Debtors account. (ii) Paid Rs.6,000/- to a Mr. Rao, clerk, as salary in lieu of notice. This amount was debited to his personal account (iii) Interest @ 5% p.a. on a loan of Rs.5,000/- was debited to general expenses account. Correct Answer Debtors A/c ..........Dr. Rs.200/- to bad debts recovered A/c Rs.200/- , Rs.6,000/- to Rao's A/c Rs.6,000/- , Rs.250/- to General Expenses A/c Rs.250/Your Answer Debtors A/c ..........Dr. Rs.200/- to bad debts recovered A/c Rs.200/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 True True/False Question Financial Accounting primarily protects the interests of the outsiders dealing with organization in various capacities. Correct Answer True Your Answer True Page 3

ma vish 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 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 True/False Question Provision for discount on debtors account should be credited to the Profit and Loss Account. Correct Answer False Your Answer False Multiple Choice Single Answer Question Select the cost that indicates increased or decreased total cost due to the increased or decreased volume of operations :Correct Answer Differential cost Your Answer Differential cost Multiple Choice Single Answer Question A factory has 8 hours a day and the standard daily wage is Rs.80/-. Standard output per hour is 5 units. During a day worker P produced 30 units, Q produced 36 units and S produced 42 units. Calculate wages payable to P,Q and S under Merrick Multiple Piece Rate System. Correct Answer P - Rs.60/-; Q - Rs.79.20; S - Rs.100.80 Your Answer P - Rs.60/-; Q - Rs.79.20; S - Rs.100.80 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 Interest on ________ is credited to Capital account. Correct Answer Capital Your Answer Capital Page 4

ma vish 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 Select The Blank Question If the ordering cost ________s, then the economic order quantity will Increase. Correct Answer Increase Your Answer Increase True/False Question The process of recording attendance time of the workers is known as time booking. Correct Answer False Your Answer False True/False Question Financial Accounting discloses the financial performance & financial statements of the business as a whole. Correct Answer True Your Answer True True/False Question Larger the size of the purchase order, smaller will be the number of orders required to be placed in a year. Correct Answer True Your Answer True True/False Question High time wages means necessarily high cost of production. Correct Answer False Your Answer True Multiple Choice Single Answer Question The statement, mainly applicable to company form of organization, which discloses the manner in which the profit after tax is distributed is known as: Correct Answer Profit & Loss Account Appropriation Account Your Answer Profit & Loss Account Page 5

ma vish Select The Blank Question In case of seasonal industry, the budget period may be taken as ________. Correct Answer One season Your Answer One season 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 Select The Blank Question ________ Accounting is the process of analysis and interpretation of financial data collected with help of financial accounting & cost accounting Correct Answer Management Your Answer Management Multiple Choice Multiple Answer Question Select the steps to be followed while preparing bank reconciliation statement :Correct Answer Compare the transactions in the bank book and the pass book , Check the totals and the balancing of both the books , Confirm that the opening balances of both the books are tallying Your Answer Compare the transactions in the bank book and the pass book , Check the totals and the balancing of both the books , Confirm that the opening balances of both the books are tallying Select The Blank Question Generally, all real accounts will have a ________ balance. Correct Answer Debit Your Answer Debit 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 Page 6

ma vish comparison of financial statements on period-to-period basis 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 Single Answer Question Calculate the earnings of workers Monica and Sonica under Taylor's differential piece rate system. Hours in a day =8; normal rate per unit = Rs.12/-; standard time per unit = 30 seconds; rate differential : 80% of piece rate below standard, 120% of piece rate at or above standard. Monica produces 900 units per day and Sonica produces 1,100 units per day. Correct Answer Monica -Rs.72/-; Sonica - Rs.132/Your Answer Monica -Rs.72/-; Sonica - Rs.132/Multiple Choice Single Answer Question The integrated form of all functional budgets is known as :Correct Answer Master budget Your Answer Master budget True/False Question Depreciation on assets is credited to the trading account. Correct Answer False Your Answer True Match The Following Question Correct Answer Your Answer Accounting Art of interpreting & classifying business transaction Systematic recording of business transactions Book Keeping Recording of business transactions Recording of business transactions Financial Accounting Systematic recording of business transactions Art of interpreting & classifying business transaction Cost Accounting Ascertainment of cost Ascertainment of cost Page 7

ma vish Management Accounting Analyzing & interpretation of financial data Analyzing & interpretation of financial data 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 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 Select The Blank Question The handloom industry will have ________ fixed cost and high variable cost. Correct Answer Low Your Answer Low Multiple Choice Multiple Answer Question The reasons and objectives of budgets may be stated as :Correct Answer To aid the planning of annual operations , To communicate the organizational plans to the different departments , To motivate the managers to strive for attainment of the organizational goals Your Answer To aid the planning of annual operations , To communicate the organizational plans to the different departments , To motivate the managers to strive for attainment of the organizational goals True/False Question Variable cost + Profit = Sales. Correct Answer False Your Answer False

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