101 MA (Account) Heavy Merge 3032 Pages (Sppu - Mba)

MCQs
101 – MANAGERIAL ACCOUNTING
1. Managerial accounting information is generally prepared for …………………
a. Shareholders
b. Creditors
c. Managers
d. Regulatory agencies
2. Which of the following is not an internal user of management information?
a. Creditor
b Department manager
c. Controller
d. Treasurer
3. Management accounting is applicable to
a. Service entities
b. Manufacturing entities
c. Non profit entities
d. All of
4. Creating Provision against fluctuation in the price of investment is an example of which
accounting convention.
a. Convention of conservatism
b. Convention of full disclosure
c. Convention of materiality
d. Convention of consistency
5. The work of factory employees that can be physically associated with converting raw
material into finished goods is classified as

a. Manufacturing overhead
b. Indirect materials
c. Indirect labour
d. Direct labour
6. Double entry system is used in which type of accounting
a. Cost
b. Financial
c. Management
d. All
7. Management accounting concentrates on_____________
a. Opening books of account+
b. Preparation of financial statements
c. Control of business activities
d. None of these
8. Which type of asset class includes those assets which have only definite use and
Become valueless when the yield is over?
a. Fixed asset
b. Current asset
c. Fictitious asset
d. Wasting asset
9. An accounting that deals with the accounting and reporting of information to management
regarding the detail information is
a. Financial accounting
b. Management accounting
c. Cost accounting
d. Real Accounting
10. The primary objective of management accounting is
a. Prepare final a/c
b. Provide management complete and true information
c. Both (a) & (b)
d. None of these
11. Bad debt amount should be credited to
a. Debtors account
b. Bad debts account
c. Sales account
d. Creditors account
12. Identify which is wrong rule
a. the Nominal account- debit all expenses & losses
b. Real account- credit what comes in
c. Nominal account- credit all incomes & gains
d. Personal account- debit the receiver
13. Cost of goods sold= opening stock+ net purchases+ expenses on Purchases – sales
Which part of formula is wrong?
a. opening stock
b. net purchases
c. expenses on Purchases
d. sales
14. Return of goods by a customer should be debited to___________
a. Customers account
b. Sales return account
c. Goods account
d. Purchase account
15. Sales made to Mahesh for cash should be debited to________________
a. Cash account
b. Mahesh Account
c. Sales account
d. Purchase account
16. Rent paid to landlord should be credited to
a. Landlords account
b. Rent account
c. Cash account
d. Expense account
17. Cash discount allowed to a debtor should be credited to
a. Discount account
b. Customer’s account
c. Sales account
d. Cash account
18. Opening stock + …………………+ Direct Expenses (Carriage on Raw material)-Closing
Stock = …………………
a. Sales, Purchases
b. Sales, Sales return
c. Purchases, Cost of goods produced
d. Purchases, Cost of goods sold
19. Financial accounting is concerned with –
a. Recording of business expenses and revenue
b. Recording of costs of products and services

c. Recording of day to day business transactions
d. None of the above
20. The nature of financial accounting is:
a. Historical
b. Forward looking
c. Analytical
d. Social
21. The main object of cost accounting is:
a. To record day to day transactions of the business
b. To reveal managerial efficiency
c. To ascertain true cost of products and services
d. To determine tender price
22. Cost accounting emerged mainly on account of:
a. Statutory requirements
b. Competition in the market
c. Labour unrest
d. Limitations of financial accounting
23. Advantages of cost accounting accrue :
a. Only to workers
b. Only to government
c. Only to consumers
d. To management, workers, consumers and government
24. Cost accounting is applied to :
a. Public undertakings only
b. Large business enterprise only
c. Small business concerns only
d. Manufacturing and service concern
25. Marginal costing is concerned with:
a. Fixed cost
b. Variable cost
c. Semi variable cost
26. ………………..is a person or item for which cost may be ascertained.
a. Cost unit
b. Cost centre
c. Cost object
d. Cost estimation
27. Salary paid to factory manager is an item of:
a. Prime cost
b. Factory overhead
c. Selling overhead
d. Office overhead
28. ………………cost refers to those cost which have already been incurred and cannot be
altered by any decision in the future.
a. Opportunity cost
b. Sunk Cost
c. Incremental cost
d. Decremental cost
29. Amortization of intangible Asset Such as Goodwill which has indefinite life is an example
of accounting concept
a. Conservatism Concept
b. Continuity Concept
c. Realisation Concept
d. Measurement Concept
30. If loan have been guaranteed by managers and directors is called as
a. Loan
b. Unsecured Loan
c. Secured Loan
d. Advance by Manager & director
31. ………………cost will still be incurred although a plant is shut down temporarily.
a. Cost of raw material
b. Advertising
c. Depreciation
d. Carriage
32. Accounting principles are generally based upon:
a. Practicability
b. Subjectivity
c. Convenience in recording
33. The system of recording based on dual aspect concept is called:
a. Double account system
b. Double entry system
c. Single entry system
d. All the above
34. The practice of appending notes regarding contingent liabilities in accounting statements
is in pursuance to:
a. Convention of consistency
b. Money measurement concept
c. Convention of conservatism
d. Convention of disclosure
35. Sales are equal to:
a. Cost of goods sold + gross profit
b. Cost of goods sold - gross profit
c. Gross profit- Cost of goods sold
36. Interest on drawings is:
a. Expenditure for the business

b. Cost for the business
c. Gain for the business
37. Goods given as samples should be credited to:
a. Advertisement account
b. Sales account
c. Purchase account
38. Outstanding salaries are shown as:
a. Added to Salaries while preparing P & La/c
b. Shown in liability side of Balance sheet under current Liability
c. (a) &(b) above
39. Income tax paid by a sole proprietor on his business income should be:
a. Debited to trading account
b. Debited to profit and loss account
c. Deducted from capital account in the balance sheet
40. All direct & indirect expenses related to business are charged:
a. Profit and loss account
b. Trading account
c. Trading account Profit and Loss account
d. Directly to Balance sheet
41. According to schedule VI Companies Act which item is not shown on Asset side of
Balance sheet
a. Investment
b. Current Loan & Advances
c. Provision
d. Lease Holds
42. Trade Payables are recorded in…………….
a. Asset side of B/S
b. Liability side of B/S
c. P & L a/c
43. Investment of X company profit in shares of other company PQR Pvt. ltd are recorded
in……………….
a. Asset side of Balance Sheet
b. Liability side of Balance Sheet
c. Profit & Loss a/c
d. Not recorded in Balance Sheet
44. Preliminary expenses are recorded in………………..
a. Equity and liabilities-Liability side of B/S
b. Current liabilities- Liability side of B/S
c. Fixed assets- Asset side of B/S
d. Asset side of B/S.
45. Variable cost per unit
a. Remains fixed
b. Fluctuates with volume of production
c. Varies in consideration with the volume of sales
46. The books to be compulsorily maintained by a company are:
a. The Cash book and ledger
b. Sales and purchase book
c. Journal
d. Both a and b
e. All of a, b, c above
47. Carriage outward is charged to
a. Debit side Profit & Loss a/c

b. Debit side Trading a/c
c. Credit side of Profit & Loss a/c
d. Credit side of trading a/c
48. Cash Purchases:
a. Increases assets
b. Results in no change in the total assets
c. Decreases assets
d. Increases liability
49. Purchases of goods on credit from A is recorded as:
a. Debit purchases a/c; credit cash a/c
b. Debit A a/c ;credit purchases a/c
c. Debit purchases a/c ; credit A a/c
d. Debit A a/c ; credit stock a/c
50. Which of the following is not an example of real a/c:
a. Machinery
b. Building
c. Cash
d. Creditor
51. Payment received from debtor:
a. Decreases the total assets
b. Increases the total assets
c. Results in no change in total assets
d. Increase the total liabilities
52. Payment of salary is recorded by:
a. Debiting salary a/c; crediting cash a/c
b. Debiting cash a/c; crediting salary a/c
c. Debiting employee a/c ; crediting cash a/c
d. Debiting employee a/c ; crediting salary a/c
53. Cost of asset should always be equal to the cost of the liabilities. This concept is
a. Double Entry Bookkeeping
b. Matching Concept
c. Consistency
d. Money measurement Concept
54. Which of the following is not a fixed asset?
a. Building
b. Bank Balance
c. Plant Patents
d. Goodwill
55. The basic concepts related to p& l a/c are:
a. Realization Concept
b. Matching Concept
c. Cost Concept
d. Both a and b above
56. P& l a/c is prepared for a period of one year by following:
a. Consistency concept
b. Conservatism concept
c. Accounting period concept
d. Cost Concept
57. Insurance prepaid is shown as:
a. Current assets
b. Current liabilities
c. Fixed asset
d. Fixed liability
58. Outstanding salary is shown as:
a. An asset in the balance sheet
b. A liability
c. By adjusting it in the P & L a/c
d. Both a and c above

e. Both b and c above
59. Reserve for doubtful debts appearing in the trial balance should be:
a. credited to P & L a/c
b. Shown as liability side in balance sheet
c. Reduced from related asset in the balance sheet
d. Both a and b
e. Both a and c
60. All those to whom business owes money are:
a. Dual concept
b. Divider concept
c. Entity concept
d. Landlord concept
61. According to which concept business is treated as a unit apart from owner
a. Limited resources for training and development
b. Organisational culture
c. Failure of management
d. Inability to access learning material
62. Authorized capital, also known as
a. Nominal Capital
b. Primary Paid up capital
c. Issues capital
d. None of these
63. True & fair profit and loss a/c of a company know by
a. Preparing trial balance
b. Preparing respective ledger of account
c. Preparing trading a/c
d. Preparing trading & profit & loss a/c
64. Credit balance of profit & loss a/c shown on
a. Asset side of balance sheet

b. Liability side of balance sheet
c. c) Not shown in balance sheet
d. d) Half on asset side and half on liability sides
65. Under which concept it is assumed that the enterprises has neither the intention nor the
necessity of liquidation or of curtailing materiality the scale of operation
a. Revenue realization concept
b. Matching cost concept
c. Going concern concept
d. None of these
66. Making the provision for doubtful debts and discount on debtors in anticipation of actual
bad debts and discount is an example for which concept
a. Conservatism concept
b. Continuity concept
c. Realization concept
d. All of these
67. Financial accounting use data
a. Projected data
b. External data only
c. Historic data
d. Manager data only
68. Payment received from Debtor
a. Decreases the Total Assets
b. Increases the Total Assets
c. Results in no change in the Total Assets
d. Increases the Total Liabilities
69. Bookkeeping is an……………………of correctly recording of business transition.
a. Art and Science
b. Art
c. Science
d. Art or Science
70. Journal Entries are known as book of ………………Entry.
a. Original
b. Duplicate
c. Personal
d. Nominal
71. What comes in is to be debited, what goes out is to be credited.
a. Rules of Personal
b. Rules of Real
c. Rules of Nominal
d. All of these
72. Which of the following account balance will be shown on debit side of Trial Balance?
a. Outstanding expenses
b. Cash a/c
c. Short term loan
d. creditors
73. The reduction in the value of the fixed assets which can arise due to time factor is
a. Discount
b. Depreciation
c. Reduction
74. If closing stock appears in the trial balance, it should be
a. Credited to the trading account
b. Credited to the profit and loss account
c. Deducted from the purchases in the trading account
d. Shown on the liability side of the Balance sheet
75. Outstanding expenses are charged to

c. Not charged to balance sheet
d. None of these
76. liabilities in balance sheet include the following items
a. Long term loan
b. Short term loan
c. Owner’s fund
d. All of these
77. prepaid expense is treated as
a. Current asset
b. Current liability
c. Short term liability
d. None of these
78. Cost accounting aims at ascertain ………………. of product
a. Cost
b. Net profit
c. Gross profit
d. Selling price
79. The purpose of financial accounts is reporting to
a. Management only
b. Government only
c. Investor only
d. All of these
80. Accounting does not record non-financial transactions because of:
a. Provision
b. Reserves and Surplus
c. Current Liabilities
d. Other Liabilities
81. Proposed dividends" is shown in the Balance Sheet of a company under the head:
a. Provision
82. Fixed assets and current assets are categorized as per concept of:
a. Separate entity
b. Going concern
c. Consistency
d. Time period
83. Proprietor (owner) is treated as creditor of business due to:
a. Periodicity concept
b. Materiality Principle
c. Entity Concept
d. Consistency concept
84. Which financial statement represents the accounting equation ASSETS = LIABILITIES +
OWNER'S EQUITY
a. Income Statement
b. Cash Flow Statement
c. Balance Sheet
d. Fund Flow Statement
85. Which of the following is a liability?
a. Loan from Mr.Y
b. loan to Mr.y
c. Both (a) (b)
d. None of these
86. Which of the following are correct? Account to be debited Account to be credited
Bought office wooden table for cash office wooden table cash
Ramesh sold goods on credited to Ram sales cash
Introduce capital by cheque capital Bank
Paid to creditor Sita by cheque Sita Bank

a. (ii) (iii)(i)
b. (iii)(iv)(ii)
c. (i)(iii)(iv) Wide
d. (i)(iv)
a. Accrual concept
b. Cost concept
c. Continuity concept
d. Money measurement concept
a. Separate entity
b. Going concern
c. Consistency
d. Time period
89. Which of the following is correct
a. Profit does not alter capital
b. Capital can only come from profit
c. Profit reduces capital
d. Profit increases capital
90. Which of the following best describes a trial balance?
a. It is a list of balances on the books
b. It is a special account
c. Shows the financial position of a business
d. Shows all the entries in the books
91. Net profit is calculated in
a. Trading a/c
b. Balance sheet
c. Profit & loss a/c
d. Trial balance.
92. The concept of separate entity is applicable to which of following types of businesses?
a. Sole proprietorship
b. Corporation
c. Partnership
d. All of them
93. Which of the following is time span into which the total life of a business is divided for
the purpose of preparing financial statements?
a. Fiscal year
b. Calendar year
c. Accounting period
d. Accrual period
94. Interest , rent, electricity bill are types of account
a. Personal a/c
b. Impersonal a/c
c. Real a/c
d. Nominal a/c
95. Which of the following should not be called sales?
a. Good sold on credit
b. Office fixtures sold
c. Sale of item previously included in purchase
d. Good sold for cash
96. Material concept tell about
a. Disclosure of loss
b. Disclosure of profit
c. Disclosure of all information which are important for investor
d. Disclosure of all information which are important for management
97. Which of the following is not regarded as the fundamental accounting concept?
a. The going concern concept
b. The separate entity concept

c. The prudence (conservatism) concept
d. Correction concept
98. Using "lower of cost and net realisable value(Market Value)" for the purpose of inventory
valuation is the implementation of which of the following concepts?
c. The prudence concept
d. Matching concept
b. Corporation
c. Partnership
d. All of them
100.The revenue recognition principal dictates that all types of incomes should be recorded or
recognized when
a. Cash is received
b. At the end of accounting period
c. When they are earned
d. When interest is paid
101. The allocation of owner's private expenses to his/her business violates which of the
following?
a. Accurual concept
b. Matching concept
c. Separate business entity concept
102. The going concern concept assumes that
a. The entity continue running for foreseeable future
b. The entity continue running until the end of accounting period
c. The entity will close its operating in 10 years

d. The entity can't be liquidated
a. Fiscal year
b. Calendar year
d. Accrual period
104. Showing purchased office equipment’s in financial statements is the application of which
accounting concept?
a. Historical cost convention
b. Materiality
c. Prudence
d. Matching concept
105. Information about an item is ________ if its omission or misstatement might influence the
financial decision of the users taken on the basis of that information
a. Concrete
b. Complete
c. Immaterial
d. Material
106. "Financial information should be neutral and bias free" is the dictation of which one of the
following?
a. Completeness concept
b. Faithful representation Concept
c. Objectivity Concept
d. Duality Concept
107. Accounting principles are divided into two types. These are ---
a. Accounting Concepts
b. Accounting Conventions
c. Accounting Standards
d. Accounting Concepts &Accounting Conventions
108. Which of the following is not related with Money Measurement Concept?
a. All business transaction should be expressed only in money
b. The transactions which cannot be expressed in money, will not be recorded in accounting books
c. Business is treated as separate from the proprietor
d. None of These
109. Which of the following equation is related with Dual Aspect Concept?
a. Total Assets = Total Liabilities
b. Total Assets = Capital + Outsider’s Liabilities
c. Capital = Total Assets - Outsider’s Liabilities
d. All of the above
110. If the total assets of the company amount to Rs 1,50,000 and owner’s equity is Rs.
70,000,the amount of liabilities will be –
a. Rs 70,000
b. Rs 80,000
c. Rs 90,000
d. Rs 1,00,000
111. Profit from sale of assets is example for –
a. Revenue Profit
b. Capital Profit 18
c. Loss
d. None of these
112. Depreciation is a charge against –
a. Profit
b. Assets
c. Company
d. Books of A/c
113. Which expenses is a Capital Nature?
a. Depreciation
b. Wages
c. Salary
d. Stationary
114. Balance Sheet is a statement of…………….
a. Assets
b. Liabilities
c. Capital
d. All of these
115. Accounting is the process of matching……..
a. Benefits & Costs
b. Revenues & Costs
c. Cash Inflow & Cash Outflow
d. Potential & Real Performance
116. Which one of the following is not an example of Intangible Assets?
a. Patents
b. Trade Marks
c. Copyright
d. Land
117. The prime function of accounting is to
a. To record economic data
b. Provide the information basis of action
c. Classifying and recording business transaction
d. Attainment of economic goal
118. The basic function of financial accounting is to
a. Record all business transaction
b. Interpret financial data
c. Assist the management in performing function effectively
119. Management Accounting provides invaluable services to management in performing
a. All management function

c. Controlling function
d. None of these
120. Book keeping is mainly concerned with
a. Recording of financial data relating to business operation
b. Designing the systems in recording classifying, summarizing the recorded data
c. Interpreting the data for internal and external users
121. Accounting principles are generally based on
a. Practicability
b. Subjectivity
d. None of these
122. The system of recording transaction based on dual aspect concept is called
d. None of these
123. The practice of appending notes regarding contingent liabilities in accounting statement is
pursuant of
124. According to the money measurement concept the following will be recorded in the books
of accounts of the business
a. Health of the managing director of the company
b. Quality of company goods
c. Value of plant and machinery
d. Health of labour in factory

125. The convention of conservatism when applied to the balance sheet result in.
a. Understand the asset
b. Understand the liabilities
c. Overstatement of capital
d. None of these
126. The convention of conservatism is applicable
a. In providing for discount on creditors
b. In making provision for bad doubtful debts
c. Providing depreciation
d. None of these
127. The amount brought in by the proprietor in the business should be credited to
a. Cash a/c
b. Capital a/c
c. Drawing a/c
d. Bank a/c
128. The amount of salary paid to Suresh should be debited to
a. The account of Suresh
b. Salaries a/c
c. Cash a/c
d. Bank a/c
129. The return of goods by the customer should be debited to
a. Customer a/c
b. Sales return a/c
c. Goods a/c
d. Purchase return a/c
130. sales made by Mahesh for cash should be debited to
a. Cash a/c
b. Mahesh a/c
c. Sales a/c
d. Sales return a/c
131. The rent paid to land lord to be credited to
a. Land lord a/c
b. Rent a/c
c. Cash a/c
d. Tenant a/c
132. The cash discount allowed to a debtor should be credited to
a. Discount a/c
b. Customer a/c
c. Sales a/c
d. None of these
133. In case of a debt becoming bad, the amount should be credited to
a. Debtors Accounts
b. Bad debts a/c
c. Sales a/c
134. The primary objective of cost accounting is
a. Ascertain the cost of goods and services
b. Ascertain the profit
c. Presentation of all data
d. None of these
135. Creating provision against fluctuation in the price of investment is application of
accounting concept
c. Convention of consistency
d. None of these
136. Accountant should follow the same principles of accounting continuously is as per which
accounting convention
d. None of these
137. Accounting principles are …………………………. which are adopted by the accountant
universally while recording accounting transaction.
a. Rules of action or conduct
b. Which u can change as per accountant
c. Which keep changing every year
d. None of these
138. The convention of disclosure implies that all material information should be
a. Disclosed in the account
b. Disclosed in the accounts which is required to owner
c. Not disclosed
d. None of these
139. In accounting all business transaction are recorded as having
a. Single aspect
b. Dual aspect
c. Triple aspect
d. None of these
140. Custom and traditions which guide the accountant while preparing the accounting
Statements
a. Accounting convention
b. Accounting concepts
c. Accounting principles
d. None of these
141. Rules of action or conduct adopted by the accountants universally while recording
accounting transaction
d. None of these
142. Basic assumptions or conditions upon which the science of accounting is based.
d. None of these.
143. A system in which accounting entries are made on the basis of amounts having become
due for payment or receipt is called
a. Cash concept
b. Accrual concept
c. Matching concept
d. On-going concept
144. Debit the receiver credit the giver rule for
a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these
145. Debit what come in Credit what goes out rule for
a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these
146. Debit all expenses and losses Credit all gains and income.
a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these
147. A book containing a chronological record of business transaction & original record
a. Journal
b. Ledger
c. Trial balance
d. None of these
148. Transferring the debit and credit item from the journal to the respective accounts is called
a. Compound Journal
b. Ledger
c. Trial balance
d. None of these
149. A statement containing the various ledgers balances on particular date
a. Compound Journal
b. Ledger
c. Trial balance
d. None of these
150. The transferring of debit and credit items from journal to the respective accounts in the
ledger is called as
a. Ledger
b. Posting
c. Forward journal
d. None of these
151. Which of the following items would not fall under the definition of an asset?
a. Land
b. Machine
c. Cash
d. Owner Equity
152. Which one of the following items would fall under the definition of a liability
a. Cash
b. Debtor
c. Owner’s equity
d. None of these
153. Which of the following statements are false?
a. All liability is a debt for your business
b. Debtor are a asset for business
c. The accounting equation shows how much of your assets belong to the owner, and how
much belong to people outside business
154. business has the following items in it: Land Rs.1,000,000 Machinery Rs.20,000 Cash
Rs.10,000 Debt Rs.0 Owner’s equity ? What is the valve of owner’s equity?
a. Rs.1020000
b. Rs.1010000
c. Rs.1030000
155. A business has the following items in it: Owners’ equity Rs.6,00,000 Liabilities
Rs.14,00,000. What is the value of Assets……………
a. 600,000
b. 1,400,000
c. 2,000,000
d. None of these
156. A business has the following items in it: Land Rs.1, 500,000 Machinery Rs.80, 000
Cash Rs.20, 000 Owners equity Rs.900, 000 Loan Rs.500, 000 Creditors?
a. Rs.200, 000
b. Rs.700, 000
c. Rs.800, 000
d. Rs1, 100,000
157. A business has following items in itLand ? Vehicles Rs.600,000 Debtors Rs. 1,20,000
Cash Rs.30,000 Owners ‘Equity Rs.1,000,000 Loan 5,00,000 Creditors Rs.50,000
What is the value of the land…………………..
a. 000,000
b. 1,550,000
c. 800,000
d. None of these
158. Which of the following equations properly represents a derivation of the fundamental
accounting equation? a) Assets + liabilities = Owner Equity b) Asset = Owner Equity c) Cash =
Assets d) Assets – Liabilities = Owner Equity
a. Only (a)
b. Both (a) (b)
c. All (a)(b)(c)(d)
d. None of these
159. Retained earnings will change over time because of several factors. Which of the
following factors would explain an increase in retained earnings?
a. Net Loss
b. Net income
c. Dividend
d. Investment by share holder.
160. Which of these items would be accounted for as an expense?
a. Repayment of bank Loan
b. Dividend to stock holders
c. The purchase of land
d. Payment of current period rent
161. Which of the following would not be included on a balance sheet?
a. Accounts payable
b. Accounts receivable
c. Sales
d. Cash
162. XYZltd.has provided the following information about its balance sheet: Cash Rs.100
Accounts Receivable Rs.500 Stock holder equity Rs.700 Accounts Payable Rs.200
Bank Loan Rs.1,000. Based on the information provided, how much are XYZ ltd.Total
liabilities?
a. Rs.200
b. Rs.1900
c. Rs.1200
d. Rs.1700
163. The full disclosure principle, as adopted by the accounting profession, is best described by
which of the following?
a. All information related to an entity's business and operating objectives is required to be
disclosed in the financial statements.
b. Information about each account balance appearing in the financial statements is to be
included in the notes to the financial statements.
c. Enough information should be disclosed in the financial statements so a person wishing
to invest in the stock of the company can make a profitable decision.
d. Disclosure of any financial facts significant enough to influence the judgment of an
informed reader
164. Which of the following is a real (permanent) account?
a. Goodwill
b. Sales
c. Accounts Receivable
d. Both Goodwill and Accounts Receivable
165. Which of the following statements is not an objective of financial reporting?
a. Provide information that is useful in investment and credit decisions.
b. Provide information regarding policy of organisation
c. Provide information that is useful in assessing cash flow prospective
d. None of theses
166. The Cash account on the balance sheet should not include which of the following items?
a. Travel advances to employees
b. Currency
c. Money orders
d. Deposits in transit
167. Of the following account types, which would be increased by a debit?
a. Liabilities and expenses.
b. Assets and equity.
c. Assets and expenses.
d. Equity and revenues.
168. The following comments all relate to the recording process. Which of these statements is
correct?
a. The general ledger is a chronological record of transactions.
b. The general ledger is posted from transactions recorded in the general journal.
c. The trial balance provides the primary source document for recording transactions into
the general journal.
d. Transposition is the transfer of information from the general journal to the general
ledger.
169. The following comments each relate to the recording of journal entries. Which statement
is true?
a. For any given journal entry, debits must exceed credits.
b. It is customary to record credits on the left and debits on the right.
c. The chart of accounts reveals the amount to debit and credit to the affected accounts.
d. Journalization is the process of converting transactions and events into
debit/credit format.
170. The trial balance is …………………………..
a. Is a formal financial statement.
b. Is used to prove that there are no errors in the journal or ledger.
c. Provides a listing of every account in the chart of accounts.
d. Provides a listing of the balance of each account in active use.
171. Which of the following errors will be disclosed in the preparation of a trial balance?
a. Recording transactions in the wrong account.
b. Duplication of a transaction in the accounting records.

c. Posting only the debit portion of a particular journal entry.
d. Recording the wrong amount for a transaction to both the account debited and the
account credited.
172. The basic sequence in the accounting process can best be described as:
a. Transaction, journal entry, source document, ledger account, trial balance.
b. Source document, transaction, ledger account, journal entry, trial balance.
c. Transaction, source document, journal entry, trial balance, ledger account.
d. Transaction, source document, journal entry, ledger account, trial balance.
173. Inventory accounts should be classified in which section of a balance sheet?
a. Current assets
b. Investments
c. Property, plant, and equipment
d. Intangible assets
174. Investment in Bonds should be disclosed on the balance sheet.
a. On liability side of balance sheet
b. On Assets side of balance sheet
c. On both side of Balance sheet
d. None of these
175. Contingent liabilities should be recorded in the accounts when:
a. It is probable that the future event will occur.
b. The amount of the liability can be reasonably estimated.
c. Both (a) and (b).
d. Either (a) or (b).
176. Which of the following functions is managerial accounting intended to facilitate?
a. Planning
b. Decision making
c. Control
d. All of these
177. Which of the following statements about differences between financial and managerial
accounting is incorrect?
a. Managerial accounting information is prepared primarily for external parties
such as stockholders and creditors; financial accounting is directed at internal users.
b. Financial accounting is aggregated; managerial accounting is focused on products and
departments.
c. Managerial accounting pertains to both past and future items; financial accounting
focuses primarily on past transactions and events.
d. Financial accounting is based on generally accepted accounting practices; managerial
accounting faces no similar constraining factors.
178. Cost accounting information can be used for:
a. Budget control and evaluation.
b. Determining standard costs and variances.
c. Pricing and inventory valuation decisions.
d. All of these
179. Manufacturing costs are also known as product costs. Which of the following best
describes those costs which are considered to be manufacturing costs?
a. Direct materials, direct labor, and factory overhead.
b. Direct materials and direct labor only.
c. Direct materials, direct labor, factory overhead, and administrative overhead.
d. Direct labor and factory overhead.
180. A company's telephone bill consisting of a Rs.200 monthly base amount, plus long
distance charges, would be classified as a:
a. Variable cost
b. Committed fixed cost
c. Direct cost
d. Semi variable cost
181. Accounting principles are
a. As definite as principles of physics and chemistry
b. Unlike principles of physical sciences.

c. Verifiable through observations and records
d. Thoughts of accountant
182. Accounting concepts are based on
a. Certain assumptions
b. Certain facts and figures
c. Certain accounting records
d. Practice experience
183. Business entity concept distinguishes between:
a. Individual and business
b. Business and business
c. Owners
d. Debtors and creditors
184. The cost concept records the figures at
a. Market values
b. Actual amount paid
c. Actual amount or market values whichever is less.
d. MRP maximum retail price
185. Going concern concept assumes
a. Business as a dissolving concern
b. Business on relishing values
c. Business as a going concern
d. Asset = liability
186. Financial account provide summary of:
a. Asset
b. Liability
c. Accounts
187. Financial statements are:
a. Estimates of facets
b. Anticipated facts
c. recorded facts
188. Retained earnings statement depicts:
a. Appropriation of profits
b. Estimates of profits
c. Estimates of costs
189. User of financial statement is:
a. Management
b. Creditors
c. Bankers
d. All of the above
190. Current liability does not include
a. Sundry creditors
b. Acceptances
c. Unclaimed dividend
d. Short term investment
191. Financial accounting deals with:
a. Determination of cost
b. Determination of profit
c. Determination of price
d. Determination of selling price
192. Financial account record only
a. Actual figures
b. Budgeted figures
c. Standard figures
d. Management Figure
193. The term Management Accounting was first used in
a. 1910
b. 1939
c. 1950
d. 1960
194. Management Accounting relates to
a. Recording of accounting data
b. Recording of cost data
c. Presentation of account data
195. The use of management accounting is
a. Compulsory
b. Optional
c. Obligation
d. Statutory requirement
196. Content of income statement
a. Trading account
b. Profit and loss account
c. Balance sheet
d. All of the above
197. Which does not comes under the head of asset:
a. Fixed asset
b. Investment
c. Current asset
d. Owners equity.
198. Financial account state the…………………..position of a concern.
a. Financial
b. Economic
c. Non financial
d. None of these.
199. Which items does not come under the balance sheet
a. sales
b. Share capital
c. Reserves and surplus
d. Unsecured loan
200. The word accounting can be classified in to:
a. Financial accounting and management accounting
b. Financial accounting and cost accounting
c. Financial accounting, management accounting and cost accounting
d. Cannot be classified
201. If a company has contingent liabilities, they appear in the …………..
a. Balance Sheet
b. Director’s Report
c. Foot note down the balance sheet
d. Chairman’s report
202. Modern Method of Accounting was introduced by
a. M. S. Gosav
b. Wheldon
c. LucoPacioli
d. R. N. Carter
203. The work of a book keeper is ____________ in nature.
a. Analytical
b. Clerical
c. Executive
d. Non- executive
204. Depreciation is a ____________.
a. Cash operating expenditure
b. Non cash operating expenditure
c. Cash non-operating expenditure
d. Non cash non-operating expenditure
205. _____________ system records only actual cash receipts and payments
a. Cash basis
b. Accrual basis
c. Mercantile basis
d. Single entry basis
206. Which of the following is true for: -“In accounts recording is done of_ _ _ _ _”
a. only financial transaction
b. only non- financial transaction
c. Both
d. Personal transaction of Proprietor
207. Salary is one of the ___________ expenses
a. Capital
b. Revenue
c. Direct
d. Non- cash
208. Outstanding salary account is a _______________ account
a) Nominal account
b) Real Account
c) Artificial person’s account
d) Representative personal account
209. _______________ is a summary of all transactions relating to particular account
a) Balance sheet
b) Trial Balance
c) Ledger
d) Journal
210. Amount brought in by proprietor should be credited to
a. cash account
b. capital account
c. drawings account
d. creditors account
211. Amount of salary paid to Suresh should be debited to __________

a. Account of Suresh
b. Salaries account
c. Cash account
d. Outstanding expenses
212. All costs other than direct materials cost, direct labour cost and direct expenses are known
as:
a. Indirect material cost
b. Overhead
c. Indirect labour cost
d. Indirect expenses
213. A company's telephone bill consisting of a Rs.200 monthly base amount, plus long distance
charges, would be classified as a:
a. Variable cost
c. Direct cost
d. All of these
material into finished goods is classified ase)
c. Indirect labour
d. Direct labour
216. Which one of the following would not be classified as manufacturing overhead?
a. Indirect labour
b. Direct materials
c. Insurance on factory building
d. Indirect materials
217. In manufacturing a product, prime costs are:
a. Raw materials and manufacturing overhead
b. Indirect materials and manufacturing overhead
c. Indirect labour and manufacturing overhead
d. Direct materials and direct labour
218. A manufacturing process requires small amounts of glue. The glue used in the process is
classified as
a. A prime cost
b. An indirect material
c. A direct material
d. Miscellaneous expense
219. Lubricants, used regularly in a production process, are classified as
a. Miscellaneous expense
b. Direct materials
c. Indirect materials
d. Immaterial items
220. Because of automation, which component of product cost is declining?
a. Direct labour
b. Direct materials
c. Manufacturing overhead
d. Advertising
221. Aggregate of direct costs is known as:
a. Direct material costs
b. Direct Wages
c. Direct Expenses
d. Prime Cost
222. Aggregate of prime cost and Factory overhead is known as:
a. Work on cost
b. Work Cost
c. Cost of Production
d. Direct Cost
223. Salary paid to factory manager is an item of :
a. Prime Cost
b. Factory Overhead
c. Selling overhead
d. Office overhead
224. Aggregate of cost of goods sold and selling and distribution overheads is known as:
a. Total Cost
b. Office Cost
c. Cost of sales
d. Selling overhead
225. Conversion cost includes cost of converting……….into……..
a. Raw material, WIP
b. Raw material, Finished goods
c. WIP, Finished goods
d. Finished goods, Saleable goods
226. Sunk costs are:
a. relevant for decision making
b. Not relevant for decision making
c. cost to be incurred in future
d. future costs
227. Calculate the prime cost from the following information: Direct material purchased: Rs.
1,00,000 Direct material consumed: Rs. 90,000 Direct labour: Rs. 60,000 Direct expenses: Rs.
20,000 Manufacturing overheads: Rs. 30,000
a. Rs. 1,80,000
b. Rs. 2,00,000
c. Rs. 1,70,000
d. Rs. 2,10,000
Answers
1. (c) 2. (a) 3. (d) 4. (a) 5. (d) 6. (b) 7. (c) 8. (d) 9. (b) 10. (b)
11. (a) 12. (b) 13. (d) 14. (b) 15. (a) 16. (c) 17. (b) 18. (c) 19. (c) 20. (a)
21. (c) 22. (d) 23. (d) 24. (d) 25. (b) 26. (b) 27. (b) 28. (b) 29. (a) 30. (c)
31. (c) 32, (c) 33. (a) 34. (b) 35. (a) 36. (c) 37. (c) 38. (c) 39. (c) 40. (c)
41. (c) 42. (b) 43. (a) 44. (b) 45. (d) 46. (e) 47. (a) 48. (c) 49. (c) 50. (d)
51. (c) 52. (a) 53. (b) 54. (b) 55. (d) 56. (c) 57. (a) 58. (e) 59. (e) 60. (a)
61. (c) 62. (a) 63. (a) 64. (d) 65. (b) 66. (c) 67. (a) 68. (c) 69. (c) 70. (b)
71. (b) 72. (b) 73. (e) 74. (d) 75. (d) 76. (e) 77. (a) 78. (a) 79. (d) 80. (d)
81. (a) 82. (b) 83. (c) 84. (c) 85. (a) 86. (d) 87. (d) 88. (b) 89. (d) 90. (a)
91. (c) 92. (d) 93. (c) 94. (d) 95. (b) 96. (c) 97. (d) 98. (c) 99. (d) 100. (c)
101.(c) 102.(a) 103.(c) 104.(d) 105.(b) 106.(c) 107.(d) 108.(b) 109.(d) 110.(b)
111.(b) 112.(a) 113.(a) 114.(d) 115.(b) 116.(d) 117.(c) 118.(b) 119.(a) 120.(a)
121.(a) 122.(b) 123.(c) 124.(c) 125.(a) 126.(b) 127.(b) 128.(b) 129.(b) 130.(a)
131.(c) 132.(c) 133.(a) 134.(a) 135.(a) 136.(c) 137.(a) 138.(a) 139.(b) 140.(c)
141.(c) 142.(b) 143.(b) 144.(b) 145.(a) 146.(c) 147.(a) 148.(b) 149.(c) 150.(b)
151.(d) 152.(c) 153.(d) 154.(c) 155.(c) 156.(a) 157.(c) 158.(d) 159.(b) 160.(d)
161.(c) 162.(b) 163.(d) 164.(d) 165.(b) 166.(a) 167.(c) 168.(b) 169.(d) 170.(d)
171.(c) 172.(d) 173.(a) 174.() 175.(b) 176.(c) 177.(d) 178.(a) 179.(d) 180.(c)
181.(d) 182.(b) 183.(b) 184.(a) 185.(b) 186.(c) 187.(c) 188.(a) 189.(d) 190.(d)
191.(b) 192.(a) 193.(c) 194.(c) 195.(b) 196.(d) 197.(d) 198.(a) 199.(a) 200.(c)
201.(a) 202.(c) 203.(b) 204.(b) 205.(a) 206.(a) 207.(b) 208.(d) 209.(c) 210.(b)
211.(b) 212.(b) 213.(d) 214.(d) 215.(d) 216.(b) 217.(d) 218.(b) 219.(c) 220.(a)
221.(d) 222.(b) 223.(b) 224.(a) 225.(b) 226.(b) 227.(c)

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Managerial Accounting (IMP)
1. In marginal costing technique, fixed costs are sometimes called as___?
A) Period cost
B) Prime cost
C) Overhead cost
D) Variable cost
2. Of the following____: provides strategic, decision based financial and operative information to the
board of directors.
A) Management Accountant
B) Cost Accountant
C) Financial Accountant
D) Accounts Clerk
3. The difference between fixed and Variable cost has a special significance in the preparation of____?
A) Flexible Budget
B) Master Budget
C) Cash Budget
D) Sales Budget
4. If fixed costs decrease while the variable cost per unit remains constant, the new contribution margin in
relation to the old contribution margin will be____?
A) Lower
B) Unchanged
C) Higher
D) Indeterminate
5. marginal costing is a___?
A) A technique of costing
B) Method of costing
C) A system of costing
D) A stage in Accounting process
6. The prime objective of marginal costing is to___?
A) Make decisions & control costs
B) Prepare final Accounts
C) make report to statutory authorities
D) Predict profits
7. A Budget which is designed to remain unchanged in respect of the level of activity actually attained is
called_____?
A) Flexible Budget
B) Cash Budget
C) Fixed Budget
D) Master Budget
8. Management Accounting communicates relevant information to the management to perform their
function of___?
A) Decision Making
B) Planning
C) Controlling
D) All Managerial Functions
9. Percentage of level of activity attained over a period of time is called___?
A) Budgeted Ratio
B) Capacity Ratio
C) Activity Ratio
D) Efficiency Ratio
10. An increase in variable costs____?
A) Reduces contribution
B) Increases the profit
C) Increases P/V ratio
D) Decreases Break even point
11. Management Accounting deals with___?
A) Nothing
B) Quantitative information
C) Qualitative information
D) both quantitative and qualitative information
12. Budgetary controls helps management to plan &___?
A) Control
B) Generate losses
C) Increase losses
D) Dissolve
13. A Large Margin of Safety indicates___?
A) Soundness of business
B) Over production
C) Under production
D) Over capitalization
14. Amount of sales Rs. 50000 Variable cost are Rs. 30000 find P/V ratio ?
A) 40 percentage
B) 30 percentage
C) 50 percentage
D) 60 percentage
15. An estimate made about future production, sales and financial requirements in the specific period is
called as___?
A) Forecasting
B) Planning
C) Budgeting
D) Decision making
16. Accounting designed to serve management in decision making process is called as___?
A) Cost accounting
B) Financial accounting
C) Management accounting
D) Trusteeship accounting
17. Cash budget starts with opening balance of___?
A) Cash in hand and at Bank
B) Fixed assets
C) Creditors
D) Expenses
18. Cost accounting is one of the subdivision of___?
A) Management accounting
B) Cost accounting
C) Financial accounting
D) Responsibility accounting
19. A Budget is a____?

A) Plan and blueprint for the future action
B) Technique and analysing historical records
C) Projection of past experience
D) Interpretation of date
20. In case of material the key factor may be___?
A) Insufficient advertising
B) Restrictions imposed by quota
C) Government Policy
D) Low market demand
21. Marginal costing is known as____?
A) Variable costing
B) Fixed costing
C) Standard costing
D) Semi fixed costing
22. Margin of safety means____?
A) Sales made above BEP
B) Sales made below BEP
C) Safety operation
D) Marginal costs
23. The basic function of accounting is to_____?
A) Classify and record business transactions
B) Record economic data
C) Attain non economic goals
D) Record non monetary business transactions
24. A plan and blueprint for future period is called as____?
A) Estimate
B) Future plan
C) Long term plan
D) Budget
25. The factors whose influence should be measured before preparing Budget is called as___?
A) Important factor
B) Influential factor
C) Key factor
D) Economic factor
26. Break even point is that level of sales where_____?
A) Total sales is equal to the total cost
B) The fixed cost is equal to the variable cost

C) Total sales is equal to the fixed cost
D) Contribution is equal to the net profit
27. Cash Budget is prepared by____?
A) Cashier
B) Sales manager
C) Production manager
D) Chief Accountant
28. Production cost under marginal costing includes___?
A) Prime cost and variable overheads
B) Prime cost only
C) Prime cost and fixed overheads
D) Prime cost plus variable overheads plus fix overheads
29. Break Even Point is a point___?
A) When total cost is equal to total sales
B) When there is increase in sales
C) When there is increase in cost
D) None of these
30. An increase in selling price without increase in cost___?

A) Increases Break even point
B) Decreases Break even point
C) Does not effect on the Break even point
D) Decreases the margin of safety
31. Master budget incorporates all_____Budgets.
A) Distribution
B) Functional
C) Production
D) Selling
32. Contribution margin of safety is equal to the____?
A) Sales
B) Variable costs
C) Fixed cost
D) Profit
33. management accounting usually provides information to____?
A) The Managers to achieve organizational goals
B) The government on tax dues
C) The shareholders on investment planning
D) The financial accountant for preparing accounts

34. Angle of incidence is the angle between___?
A) The sales line and The total cost line
B) The sales line and The X axis
C) The sales line and The Y axis
D) The sales line and fixed cost line
35. Under marginal costing method, cost per unit ascertained only on the basis of____?
A) Fixed cost
B) Variable cost
C) Semi fixed cost
D) None of these
101. An increase in selling price ____.
A. increases the break-even point.
B. decreases the break-even point.
C. does not affect the break-even point.
D. optimize the break-even point.
ANSWER: B
102. A high margin of safety indicates __.
A. overproduction.
B. overcapitalization.
C. the soundness of the business.
D. undercapitalization.
ANSWER: C
103. Angle of incidence is ____.
A. the angle between the sales line and the total cost line.
B. the angle between the sales line and the y-axis.
C. the angle between the sale and the x-axis.
D. the angle between the sale and total.
ANSWER: A
104. CVP analysis is most important for the determination of ___.
A. relationship between revenues and costs at various levels of operations.
B. sales revenue necessary to equal fixed costs.
C. variable revenues necessary to equal fixed costs.
D. volume of operations necessary to Break even.
ANSWER: B
105. The capital of the company is divided into two categories ——— and fluctuating capital.
A. fixed
B. equity
C. preference
D. variable
ANSWER: A
106. 1f` fixed costs decrease while variable cost per unit remains constant, the new B.E.P in relation to
the old B.E.P will be ___.
A. lower.
B. higher.
C. unchanged.
D. indeterminate.
ANSWER: B
107. If fixed costs decrease while the variable cost per unit remains constant, the new contribution margin
in relation to the old contribution margin will be __.
A. lower.
B. unchanged.
C. higher.
D. indeterminate.
ANSWER: B
108. Selling price per unit Rs. 10; Variable cost Rs. 8 per unit; Fixed cost Rs. 20,000; Break-even
production
in units ___.
A. 10,000.
B. 16,300.
C. 2,000.
D. 2,500.
ANSWER: A
109. Sales Rs. 25,000; Variable cost Rs. 8,000; Fixed cost Rs. 5,000; Break-even sales in value ____.
A. Rs. 7,936.
B. Rs. 7,353.
C. Rs. 8,333.
D. Rs. 9,090.
ANSWER: B
110. Fixed cost Rs. 80,000; Variable cost Rs. 2 per unit; Selling price_Rs. 10 per unit; Turnover required
for a
profit target of Rs. 60,000 will be ___.
A. Rs. 1,75,000.
B. Rs. 1,17,400.
C. Rs. .57,000.
D. Rs. 1,86,667.
ANSWER: A
111. Sales Rs. 25,000; Variable cost Rs. 15,000; Fixed cost Rs .4,000; P/V Ratio is __.
A. 40 percent
B. 80 percent
C. 15 percent
D. 30 percent
ANSWER: A
112. Sales Rs. 50,000; Variable cost Rs. 30,000; Net profit Rs. 6,000; fixed cost is____.
A. Rs. I0,000.
B. Rs.l4,000.
C. Rs. 12,000.
D. Rs. 8,000.
ANSWER: B
113. Actual sales Rs .4,00,000; Break-even sales Rs. 2,50,000; Margin of Safety in percentage is___.
A. 33.3 percent
B. 66.67 percent
C. 37.5 percent
D. 76.33 percent
ANSWER: C
114. P/V Ratio 50%; Variable cost of the produce Rs. 25; Selling price is ____.
A. Rs. 50.
B. Rs. 40.
C. Rs. 30.
D. Rs. 55.
ANSWER: A
115. Fixed cost Rs. 2,00,000; Sales Rs. 8,00,000; P/V Ratio 30%; the amount of’ profit is____.
A. Rs. 50,000.
B. Rs. 40,000.
C. Rs. 35,000.
D. Rs. 45,000.
ANSWER: B
116. P/V Ratio is 25% and Margin of Safety is Rs; 3,00,000, the amount of profit is___.
A. Rs. 1,00,000.
B. Rs. 80,000.
C. Rs. 75,000.
D. Rs. 60,000.
ANSWER: C
117. Total sales Rs. 20,00,000; Fixed expenses Rs. 4,00,000; P/V Ratio 40 percent Break-even capacity in
percentage is___.
A. 40
B. 60
C. 50
D. 45
ANSWER: C
118. Break-even point occurs at 40 percent of total capacity, margin of safety will be ___ percent.
A. 40
B. 60
C. 80
D. 85
ANSWER: B
119. If the P/V Ratio of a product is 30 percent and selling price is Rs. 25 per unit, the marginal cost of
the product would be _____.
A. Rs.18.75.
B. Rs.16.
C. Rs. 15.
D. Rs.20.
ANSWER: A
120. Absorption costing is also known as __.
A. historical costing.
B. real costing.
C. marginal costing.
D. real costing.
ANSWER: A
121. Under marginal costing, stock are valued at ___.
A. cost less
B. cost more.
C. variable cost.
D. market price.
ANSWER: C
122. Absorption costing lays emphasis on ___.
A. production.
B. sales.
C. marketing.
D. advertising.
ANSWER: A
123. Marginal costing lays emphasis on _____.
A. production.
B. sales.
C. marketing.
D. advertising.
ANSWER: B
124. Selling price – marginal cost =____.
A. fixed cost.
B. semi-variable cost.
C. contribution.
D. break-even point.
ANSWER: C
125. Total sales – total variable cost ____.
A. fixed cost.
C. contribution.
ANSWER: C
126. Fixed cost + net profit =____.
A. BEP
C. margin of safety.
D. contribution.
ANSWER: D
127. A high P/V ratio indicates___.
A. high profitability.
B. low profitability.
C. high loss.
D. break even.
ANSWER: A
128. Fixed cost / P/V ratio =_____.

A. Contribution
B. Margin of safety.
C. Break-even point.
D. Variable cost.
ANSWER: C
129. Profit / P/V ratio =_____.
A. Break-even point.
C. Contribution.
D. Variable cost.
ANSWER: B
130. Marginal costing is a technique of ___.
A. cost reduction.
B. cost control.
C. budgeting.
D. standard costing.
ANSWER: B
131. The budget is a____.
A. post-mortem analysis.
B. substitute of management.
C. an aid to management.
D. calculation.
ANSWER: C
132. One of the most important tools of cost planning is_____.
A. budget.
B. direct cost.
C. unit cost.
D. cost sheet.
ANSWER: A
133. Sales budget is a____.
A. functional budget.
B. expenditure budget.
C. master budget.
D. flexible budget.
ANSWER: A
134. The budget which usually takes the form of budgeted profit and loss account and balance sheet is
known as ___.
A. flexible budget.
B. master budget.
C. cash budget.
D. purchase budget.
ANSWER: B
135. Which of the following is usually a long-term budget?
A. Fixed budget.
B. Cash budget.
C. Sales budget.
D. Capital expenditure budget.
ANSWER: D
136. The fixed and variable cost classification has a special significance in the preparation of __.
A. capital budget.
B. cash budget.
C. master budget.
D. flexible budget.
ANSWER: D
137. The budget, which is prepared first of all is_____.
A. master budget.
B. cash budget.
C. budget for key factor.
D. none of these.
ANSWER: C
138. Preparing budget figures for different levels of activity within a range under flexible budgeting
is_____.
A. formula method.
B. multi-activity method.
C. budget cost allowance method.
D. none of these.
ANSWER: B
139. What type of budget is designed to take into account forecast change in costs, prices, etc?
A. master budget.
B. rolling budget.
C. flexible budget.
D. functional budget.
ANSWER: B
140. Operation budgets normally cover a period of ____.
A. one to ten years.
B. one to two years.
C. one to five years.
D. one year or less.
ANSWER: D
141. The entire process of preparing the budgets is known as ___.

A. planning.
B. organizing.
C. budgeting.
D. controlling.
ANSWER: C
142. Budgetary control starts with ____.
A. planning.
B. organizing.
C. budgeting.
D. controlling.
ANSWER: C
143. Budgetary control ends with ___.
A. planning.
B. organizing.
C. budgeting.
D. control.
ANSWER: D
144. Budget designed to remain constant irrespective of the level of activity attained is called ____.
A. fixed budget.
B. flexible budget
C. sales budget.
D. production budget.
ANSWER: A
145. Long-term budgets are prepared for ____.
A. 1 year.
B. 1-3 years
C. 1-5 years.
D. 5-10 years.
ANSWER: D
146. The budget prepared for various levels of activity by classification of expenditure under fixed,
variable and semi-fixed categories is ____.
A. fixed budget.
B. flexible budget.
C. sales budget.
ANSWER: B
147. Budget which shows the quantity of finished products to be sold and the price at which they are to be
sold is______.
A. fixed budget.
B. flexible budget.
C. sales budget.
ANSWER: C
148. The budget which shows the budgeted quantity of output to be produced during a specific period
is_____.
A. fixed budget
B. flexible budget.
C. sales budget.
ANSWER: D
149. Material consumption budget is prepared on the basis of ____.
A. sales budget.
B. production budget.
C. fixed budget.
D. flexible budget.
ANSWER: B
150. Budget of indirect costs in the form of indirect wages, indirect material and indirect expenses in the
factory is __.
A. production overhead budget.
B. administration overhead budget.
C. selling and distribution overhead budget.
D. master budget.
ANSWER: A
VIM101 Name : ______________________________________________________
Marks: 441 Roll No : ______________________________________________________
Duration: 20.0 Minutes Total : ______________________________________________________
Date : ______________________ Signature : ______________________
Q1) The main purpose of Cost Accounting is to Marks : 1.0
Id: 44690
1) assist management in decision making 2) maximise profits and minimise losses
3) comply norms issued by the Government of 4) prepare cost accounts in line with the
India from time to time accounting standards
Explanation:
Q2) SoleTrade Organization Is Also Called As ______. Marks : 1.0
Id: 44573
1) Individual Proprietorship. 2) Partnership.
3) Joint Stock Company. 4) CoOperative Society.
Explanation:
Q3) Prereceived income is written on: Marks : 1.0
Id: 44433
1) Liabilities 2) Assets
3) Credit 4) Debit
Explanation:
Q4) Only the significant events which affect the business must be recorded as per the Marks : 1.0
principle of Id: 44702
1) Separate Entity 2) Accrual
3) Materiality 4) Going Concern
Explanation:
Q5) Management accounting is................ Marks : 1.0
Id: 44507
1) Extension of financial accounting 2) Extension of Financial Management
3) Accounting of Management 4) Concerned with the provision of information to
people within the organisation to help them to
make better decisions.
Explanation:
Q6) Which of the following highlights the correct order of the stages in the accounting Marks : 1.0
cycle Id: 38724
1) Journalizing, final accounts, posting to the 2) Journalizing, posting to the ledger, trial
ledger and trial balance balance and final accounts
3) Posting to the ledger, trial balance, final 4) Posting to the ledger, journalizing, final
accounts and journalizing accounts and trial balance
Explanation:
Q7) In accounting an Economic event is referred to as: Marks : 1.0
Id: 44452
1) Exchange of money 2) Transaction
3) Bank statement 4) Cash
Explanation:
Q8) A second hand car is purchased for Rs. 10000 the amount of Rs. 1000 is spent on its Marks : 1.0
repairs Rs 500 is incurred to get the car registered in owner’s name and Rs. 1200 is Id: 44551
paid dealer’s commission. The amount debited to car account will be
1) 10000 2) 10500
3) 11500 4) 12700
Explanation:
Q9) Which of the following statements best describes a limited liability company? Marks : 1.0
Id: 44563
1) It is normally owned and managed by the same 2) It is normally a nonprofit making organization
persons
3) In law it is regarded as having a separate
existence from its owners
4) It is normally owned by just one person
Explanation:
Q10) The opening stock of company is Rs. 40,000 and closing stock is Rs. 50,000. If the Marks : 1.0
purchases during the year are Rs. 2,00,000 the cost of goods sold will be: Id: 44399
1) Rs. 2,10,000 2) Rs. 1,90,000
3) Rs. 2,00,000 4) Rs. 1,80,000
Explanation:
Q11) In which type of expenditure the organization receives return during the same period Marks : 1.0
they paid for? Id: 44569
1) Capital Expenditure 2) Revenue Expenditure
3) Deferred Revenue Expenditure 4) Both (b) and (c)
Explanation:
Q12) A company gave in its balance sheet an foot note a case has been filed for which Marks : 1.0
they may have to pay 10 lakhs as damages. This is called : Id: 44616
1) revenue expenditure 2) capital expenditure
3) contingent liability 4) future liability
Explanation:
Q13) Four Accounts are given : Marks : 1.0
Id: 44400
A) Machinery Account, B) Ram's Account, C) Purchases Account, D) Bank of
Maharashtra's Account.
Which of the given is/are personal Account?
1) Option A ONLY 2) Options A and B
3) Options A, B and C 4) Options B and D
Explanation:
Q14) Management Accounting involves _______for management decision making. Marks : 1.0
Id: 44428
1) preparation of Financial statements 2) Recording of Cost
3) analysis & Interpretation of Data 4) None of these
Explanation:
Q15) Debtors always show which balance Marks : 1.0
Id: 44497
1) Debit 2) Credit
3) Nominal 4) Real
Explanation:
Q16) Which of the following is one of the basic accounting principles? Marks : 1.0
Id: 44642
1) Profit concern 2) Going concern
3) Online concern 4) Own concern
Explanation:
Q17) Accounting standards are Marks : 1.0
Id: 44777
1) Basis for selection of accounting policy. 2) Set of broad accounting policies to be
followed by an entity.
3) Basis for establishing and managing an entity. 4) All of the above.
Explanation:
Q18) Trail balance is_____. Marks : 1.0
Id: 44425
1) statement, records all balances of Ledger A/c 2) Records all the transactions
3) A/c, records all balances of Ledger A/c 4) None of these
Explanation:
Q19) What is important object of accounting ? Marks : 1.0
Id: 44432
1) To maintain record 2) Depiction of financial position
3) Make information available to various groups 4) All of three
and users
Explanation:
Q20) 'Business will always go on'' which principle describe this Marks : 1.0
Id: 44448
1) accounting period concept 2) conservatism concept
3) going concern concept 4) consistency principle
Explanation:
Q21) New provision for PBDD is 7000, old provision 3000, old bad debts 2000 amount Marks : 1.0
accounted in P&L A/c is Id: 44430
1) 12000 dr side 2) 12000 cr side
3) 6000 dr side 4) 2000 cr side
Explanation:
Q22) Closing stock was not taken on 31.3.2006 but only on 7.4.2006. Following Marks : 1.0
transactions had taken place during the period from 1.4.2006 to 7.4.2006. Sales Id: 44766
Rs.2,50,000, purchases Rs.1,50,000, stock on 7.4.2006 was Rs.1,80,000 and the rate of
gross profit on sales was 20%. Closing stock on 31.3.2006 will be
1) Rs.3,80,000. 2) Rs.4,00,000.
3) Rs.2,30,000. 4) Rs.1,50,000.
Explanation:
Q23) Which aspect of financial accounting assumes importance because of the limitation Marks : 1.0
of human memory. Id: 44470
1) Classification 2) Recording
3) Summarising 4) Interpretation
Explanation:
Q24) The full disclosure principle, as adopted by the accounting profession, is best Marks : 1.0
described by which of the following? Id: 44447
1) All information related to an entity's business 2) Information about each account balance
and operating objectives is required to be appearing in the financial statements is to be
disclosed in the financial statements. included in the notes to the financial
statements.
3) Enough information should be disclosed in the 4) Disclosure of any financial facts significant
financial statements so a person wishing to enough to influence the judgment of an
invest in the stock of the company can make a informed reader
profitable decision.
Explanation:
Q25) Closing entries are used to transfer the net income or net loss for the accounting Marks : 1.0
period to the ____. Id: 44621
1) Cash in Bank account 2) revenue account
3) expense accounts 4) capital account
Explanation:
Q26) The final accounts of a manufacturing company generally include the following Marks : 1.0
statements : Id: 44697
(i) Balance Sheet
(ii) Manufacturing Account
(iii) Profit and Loss Account
(iv) Trading Account
(v) Profit and Loss Appropriation Account
The correct sequence in which the statements are prepared is :
1) (i), (ii), (iii), (iv), (v) 2) (ii), (iv), (iii), (v), (i)
3) (v), (ii), (iv), (iii), (i) 4) (i), (iv), (iii), (ii), (v)
Explanation:
Q27) Benefit of revenue expenses extends to Marks : 1.0
Id: 44729
1) 10 Years 2) 5 Years
3) One accounting year 4) As long as the business continues
Explanation:
Q28) Which of the following is an example of business liability? Marks : 1.0
Id: 44561
1) Building 2) Creditors
3) Cash 4) Plant & Machinery
Explanation:
Q29) Identify the correct statement Marks : 1.0
Id: 44645
1) Capital is equal to assets minus liabilities 2) Capital is equal to assets plus liabilities
3) Assets are equal to liabilities minus capital 4) Liabilities is equal to capital plus assets
Explanation:
Q30) The disclosure of all accounting procedures has to be done by company according Marks : 1.0
to which standards Id: 44515
1) AS1 2) AS2
3) AS7 4) AS10
Explanation:
Q31) In the absence of any provision in the partnership agreement, profits and losses are Marks : 1.0
shared Id: 44741
1) In the ratio of capitals. 2) Equally.
3) In the ratio of loans given by them to the 4) None of the above.
partnership firm.
Explanation:
Q32) Real Accounts means _____. Marks : 1.0
Id: 44409
1) The accounts of individuals, firms, limited 2) The accounts of properties, assets or
companies, local authorities, associations with professionals of the businessman.
whom the businessman deals.
3) Accounts representing incomes and expenses
or profits and gains.
4) The accounts which relate to things other than
persons.
Explanation:
Q33) Which of the following is not an internal user of management information? Marks : 1.0
Id: 44466
1) Creditor 2) Department manager
3) Controller 4) Treasurer
Explanation:
Q34) Which is the key factor that an entrepreneur should focus on, in ensuring survival of Marks : 1.0
his enterprises? Id: 44667
1) Profits 2) Cash Flow
3) Margin 4) Market Share
Explanation:
Q35) Identify the external user of financial information or financial statements Marks : 1.0
Id: 38723
1) Management 2) CFO
3) Employee 4) investor
Explanation:
Q36) A change in accounting policy is justified Marks : 1.0
Id: 44434
1) To comply with accounting standards 2) To ensure more appropriate presentation of
the financial statement of the enterprise
3) To comply with law 4) All of the above
Explanation:
Q37) Suppose revenue is recognised and earned but was not realised in cash, according Marks : 1.0
to accrual concept it will give rise to Id: 44738
1) A liability 2) An asset
3) A expense 4) None of the above
Explanation:
Q38) Which of the following best describes the meaning of ‘Purchases’? Marks : 1.0
Id: 44570
1) Goods bought for resale 2) Goods bought on credit
3) Items bought 4) Goods paid for
Explanation:
Q39) Profit / Loss is calculated at the stage of ____ Marks : 1.0
Id: 44733
1) Recording 2) Classifying
3) Interpretation 4) Summarising
Explanation:
Q40) Interest on drawings is: Marks : 1.0
Id: 44583
1) Expenditure for the business 2) Cost for the business
3) Gain for the business 4) None of the above
Explanation:
Q41) The term accounts receivable is shown in the balance sheet under: Marks : 1.0
Id: 44694
1) Fixed assets 2) Current assets
3) Current liabilities 4) Miscellaneous expenditure
Explanation:
Q42) Present liability of uncertain amount, which can be measured reliably by using a Marks : 1.0
substantial degree of estimation, is termed as ________ Id: 44747
1) Provision 2) Liability
3) Contingent Liability 4) None of the above
Explanation:
Q43) Sales are 300000 gross profit 30% cost of goods sold is Marks : 1.0
Id: 44543
1) 90000 2) 210000
3) 180000 4) 270000
Explanation:
Q44) Which of the following should be considered while selecting and applying Marks : 1.0
accounting policies? Id: 44644
1) Consistency 2) Going concern
3) Substance over form 4) All of the above
Explanation:
Q45) Management accounting is applicable to Marks : 1.0
Id: 44480
1) Service entities 2) Manufacturing entities
3) Notforprofit entities 4) All of these
Explanation:
Q46) Which of the below statement is false? Marks : 1.0
Id: 44406
1) Financial accounting data and statements are 2) Management accounting reports and
developed for the definite period. statements are prepared whenever needed.
3) Financial Acconting provides detailed and 4) It is more or less obligatory on the part of
disaggregated information about products, every business concern to adopt financial
individual activities, division or plant. accounting.
Explanation:
Q47) Owners' equity in a business comes from which of the following? Marks : 1.0
Id: 44786
1) Investments in cash by the owners 2) Investments in assets other than cash by the
owners
3) Earnings from profitable operation of the 4) All of the above
business
Explanation:
Q48) Prime Cost Consist of ______. Marks : 1.0
Id: 44421
1) All Indirect Exp. 2) Material+Overhead+Exp
3) All Direct Exp(Material+Labour+Exp) 4) None of these
Explanation:
Q49) Profit and loss account would not include? Marks : 1.0
Id: 44796
1) Salaries 2) Drawings.
3) Rent received. 4) Carriage outwards.
Explanation:
Q50) The maximum amount beyond which a company is not allowed to raise funds, by Marks : 1.0
issue of share is Id: 44722
1) Issued Capital 2) Nominal Capital
3) Subscribed Capital 4) Reserve Capital
Explanation:
Q51) Convention of accounting says that Marks : 1.0
Id: 44514
1) All expenses to be accounted when occurred 2) All incomes to be accounted when received
3) All incomes to be accounted when received 4) All expenses accounted if arising during said
period a& all incomes only when received
Explanation:
Q52) How are the following items arranged on the liability side of the Balance Sheet of a Marks : 1.0
Company? Id: 44678
i. Current liability
ii. Unsecured loan
iii. Share capital
iv. Reserves and surplus
v. Secured loan
1) (v) (iv) (iii) (ii) (i) 2) (ii) (iii) (i) (iv) (v)
3) (iii) (iv) (v) (ii) (i) 4) (iii) (iv) (ii) (v) (i)
Explanation:
Q53) Accounting has certain norms to be observed by the accountants in recording of Marks : 1.0
transactions and preparation of financial statements. These norms reduce the Id: 44753
vagueness and chances of misunderstanding by harmonizing the varied accounting
practices. These norms are
1) Accounting regulations. 2) Accounting guidance notes.
3) Accounting standards. 4) Accounting framework.
Explanation:
Q54) The liability of the partners in a Limited Liability Partnership is ____________. Marks : 1.0
Id: 44811
1) zero 2) proportionate
3) unlimited 4) limited
Explanation:
Q55) Which of the following is a Revenue Expenditure? Marks : 1.0
Id: 44518
1) Construction of Factory shed 2) Sales Tax paid in connection with purchase of
Office Equipment
3) Legal Expenses in connection with defending 4) Installation of new Machinery
a title to firm’s property
Explanation:
Q56) Right shares enjoy preferential rights with regard to Marks : 1.0
Id: 44688
1) Payment of dividend 2) Payment of retained earnings
3) Repayment of capital 4) None of the above
Explanation:
Q57) Which of the following is the source of short term finance? Marks : 1.0
Id: 44683
1) Trade credit 2) Short term borrowing
3) Bank credit 4) All of above
Explanation:
Q58) All of the following have debit balance except one. That account is Marks : 1.0
Id: 44619
1) Wages a/c 2) Debtors a/c
3) Bills payable a/c 4) Goodwill
Explanation:
Q59) A Partner In A Firm _______. Marks : 1.0
Id: 44439
1) Cannot Transfer His Share To An Outsider. 2) Can Transfer His Share To An Outsider With
The Consent Of Majority Partners.
3) Can Transfer His Share To An Outsider 4) Can Transfer His Share To An Outsider With
Without The Consent Of Any Other Partners. The Consent Of All Other Partners.
Explanation:
Q60) Which of the following is a revenue expenses Marks : 1.0
Id: 44730
1) Raw material consumed 2) Plant purchased
3) Long term loan raised from bank 4) Share Capital
Explanation:
Q61) Financial information should be neutral and bias free" is the dictation of which one of Marks : 1.0
the following? Id: 44632
1) Completeness concept 2) Faithful representation Concept
3) Objectivity Concept 4) Duality Concept
Explanation:
Q62) Accounting is Marks : 1.0
Id: 44526
1) The art of recording, classifying and 2) A systematic and regular record of events
summarizing in a significant manner and in affecting a firm with a view to obtaining a clear
terms of money, transactions and events financial picture.
which are in part at best financial in character
and interpreting thereof.
3) Preparation of various financial statements
over a period of time of firm to measure its
performance in monetary terms.
4)
Nothing but Book keeping.
Explanation:
Q63) A partner who lends only his name to the firm is called as ____________ partner. Marks : 1.0
Id: 44810
1) active 2) nominal
3) slipping 4) minor
Explanation:
Q64) Which of the following is a noncurrent asset? Marks : 1.0
Id: 44684
1) Sundry debtors 2) Goodwill
3) Advance expenses 4) Inventory
Explanation:
Q65) During the lifetime of entity, accountants produce financial statement at arbitrary Marks : 1.0
points in time in accordance with which basic accounting principle? Id: 44506
1) Matching 2) Periodicity
3) Conservatism 4) None of these
Explanation:
Q66) Using "lower of cost and net realisable value" for the purpose of inventory valuation Marks : 1.0
is the implementation of which of the following concept? Id: 38731
1) The going concern concept 2) The separate entity concept
3) The prudence concept 4) Matching concept
Explanation:
Q67) Which of the following branches of accounting provides information that helps Marks : 1.0
planning, control and decision making? Id: 44529
1) Cost Accounting 2) Inflation Accounting
3) Financial Accounting 4) Management Accounting
Explanation:
Q68) Calculate inventory Current ratio is 2.6:1 Liquid ratio is 1.5:1 and Current liabilities Marks : 1.0
40000 Id: 44536
1) 40000 2) 42000
3) 44000 4) 48000
Explanation:
Q69) In double entity book keeping system, every transaction affects at least Marks : 1.0
______account(s). Id: 44762
1) One 2) Two
3) Three 4) Four
Explanation:
Q70) Capital structure designing has nothing to do with: Marks : 1.0
Id: 44682
1) Profitability 2) Solvency
3) Flexibility 4) Transferability
Explanation:
Q71) A businessman who cannot pay his debt is called as _________. Marks : 1.0
Id: 44614
1) Insolvent 2) Solvent
3) Book Debt 4) Bank Debt
Explanation:
Q72) If two or more transactions of the same nature are journalized together having either Marks : 1.0
the debit or the credit account common is known as Id: 44654
1) Compound journal entry 2) Separate journal entry
3) Posting 4) None of the above
Explanation:
Q73) Ram and Gopal are partners sharing profits and losses in the ratio of 2:1. Gopal gave Marks : 1.0
a loan of Rs.12,000 to the firm. They did not have any specific agreement about Id: 44754
interest on loan mentioned in the partnership deed. Gopal claims interest on loan @
10% p.a. The interest on loan as per rules of Partnership Act, 1932 will be:
1) 840 2) 820
3) 720 4) 960
Explanation:
Q74) Which of the following is not a transaction? Marks : 1.0
Id: 44758
1) Goods are purchased on cash basis for 2) Salaries paid for the month of May, 2006.
Rs.1,000.
3) Land is purchased for Rs.10 lacs.
4) An employee dismissed from the job.
Explanation:
Q75) Mr. XYZ buys clothing of Rs. 50,000 paying cash Rs. 20,000. What is the amount of Marks : 1.0
expense as per the accrual concept? Id: 44776
1) 50000 2) 20000
3) 30000 4) Nil.
Explanation:
Q76) Effective management of liquidity and financial risk in business is known as Marks : 1.0
management Id: 44668
1) Risk 2) Financial
3) Cash 4) Treasury
Explanation:
Q77) A ________ debt is a debt which cannot be recovered. Marks : 1.0
Id: 44578
1) Good 2) Book
3) Recoverable 4) Bad
Explanation:
Q78) Balance Sheet is a Marks : 1.0
Id: 44736
1) Statement showing financial effect of recorded 2) Statement of assets and liabilities on a
transactions particular point of time
3) Is one of the accounting reports 4) Both (b) and (c) above
Explanation:
Q79) Depreciation arises because of Marks : 1.0
Id: 44774
1) Fall in the market value of the asset. 2) Fall in the value of money.
3) Physical wear and tear of the asset. 4) None of the three.
Explanation:
Q80) The accounting measurement that is not consistent with the Going Concern concept Marks : 1.0
is Id: 44708
1) Historical Cost 2) Realization
3) The Transaction Approach 4) Liquidation Value
Explanation:
Q81) A change in accounting policy is justified when Marks : 1.0
Id: 44643
1) To comply with accounting standard 2) To ensure more appropriate presentation of
Explanation:
Q82) Match the following: Marks : 1.0
Id: 44528
Accounting Function Branch of Accounting
(1) Preparation of Financial Statements (a) Management Accounting
(2) Determination of Cost of Product (b) Financial Accounting
(3) Making Managerial Decisions (c) Cost Accounting
1) (1) c (2) a (3) b 2) (1) b (2) c (3) a
3) (1) a (2) c (4) b 4) (1) c (2) b (3) a
Explanation:
Q83) Which of the following are correct? Marks : 1.0
Id: 44553
Account to be debited Account to be credited
1) (ii) (iii)(i) 2) (iii)(iv)(ii)
3) (i)(iii)(iv) 4) (i)(iv)
Explanation:
Q84) Which of the following is NOT Capital Expenditure? Marks : 1.0
Id: 44401
1) Expenditure incurred to acquire a tangible 2) Expenditure incurred to acquire the right to
asset carry on business
3) Expenses incurred for repairs and 4) Expenditure for the extension of or
maintenance of fixed asset improvement, modification in fixed asset
Explanation:
Q85) Which of the following is correct Marks : 1.0
Id: 44555
1) Assets = Liabilities + Capital 2) Assets = Liabilities Capital
3) Assets = external equities 4) Assets + Liabilities = Capital
Explanation:
Q86) If partnership deed remains silent on interest on partner’s loan, it should be paid @ Marks : 1.0
_____. Id: 44813
1) 0.09 2) 0.06
3) 0.07 4) 0.1
Explanation:
Q87) Which one of the following statement is false: Marks : 1.0
Id: 44806
1) A transaction is concerned with money and 2) Solvent person is a person whose assets are
money’s worth. more than his liabilities.
3) Bookkeeping and accounting is one and the 4) The double entry systems is based on “Dual
same thing. Aspect” concept.
Explanation:
Q88) Economic life of an enterprise is split into the periodic interval as per Marks : 1.0
___________________ concept. Id: 44803
1) Money Measurment 2) Matching
3) Going Concern 4) Accrual
Explanation:
Q89) A balance sheet is useful because Marks : 1.0
Id: 44584
1) Indicates how much finance is required by the 2) Indicates the profitability of the firm
firm.
3) Helps in assessment of financial position of
the firm.
4) Tells about current asset and current liability
Explanation:
Q90) Which of the following activities is NOT an accounting function? Marks : 1.0
Id: 44463
1) Management consultancy 2) Taxation
3) Costing 4) Auditing
Explanation:
Q91) A company sells goods on credit valued at Rs. 2,50,000 to a customer. At what point Marks : 1.0
in the sales cycle should this sale be recognized in the accounts? Id: 44488
1) When the customer’s order is received 2) When the goods are ready for dispatch to the
customer
3) When the goods are sent, accepted and 4) When the customer pays
invoiced
Explanation:
Q92) Management accounting is concerned with Marks : 1.0
Id: 44483
1) Recording of transactions 2) Reporting of costs
3) Preparation of financial statements 4) Analysis and interpretation of data
Explanation:
Q93) In Accounting 'Money measurement Concept' means ____. Marks : 1.0
Id: 44412
1) A firm or business is regarded as separate & 2) All business transactions are regarded as
distinct from the owner. having a dual aspect.
3) All transactions are recorded in terms of 4) Accounting is made on the assumption that a
money. business will continue in future and will use its
property in operations rather than sell them.
Explanation:
Q94) Opening stock of the year is Rs.20,000, Goods purchased during the year is Marks : 1.0
Rs.1,00,000, Carriage Rs.2,000 and Selling expenses Rs.2,000.Sales during the year is Id: 44765
Rs.1,50,000 and closing stock is Rs.25,000. The gross profit will be
1) 53000 2) 55000
3) 80000 4) 51000
Explanation:
Q95) Planning and forecasting is the functions of Marks : 1.0
Id: 44636
1) Financial accounting 2) Bookkeeping
3) cost accounting 4) Management accounting
Explanation:
Q96) Accounting does not record non financial transactions because of Marks : 1.0
Id: 44711
1) Entity Concept 2) Accrual Concept
3) Cost Concept 4) Money Measurement Concept
Explanation:
Q97) Calculate current liabilities if Current ratio is 2:1 and current assets are 2200000 Marks : 1.0
Id: 44542
1) 1100000 2) 1125000
3) 1175000 4) 1130000
Explanation:
Q98) Which of the following is time span into which the total life of a business is divided Marks : 1.0
for the purpose of preparing financial statements? Id: 44454
1) Fiscal year 2) Accrual period
3) Accounting period 4) Calendar year
Explanation:
Q99) Which of the following shows summary of a company's financial position at a Marks : 1.0
specific date Id: 38727
1) Profit & Loss Account 2) ) Cash Flow Statement
3) Balance Sheet 4) Income & Expenditure Account
Explanation:
Q100) Following is the example of external users Marks : 1.0
Id: 44655
1) Government 2) Owners
3) Management 4) Employees
Explanation:
Q101) The money spent on heavy advertising, whose benefit is continues for 3 years to Marks : 1.0
come, is a ______. Id: 44385
3) Deferred revenue expenditure 4) Income
Explanation:
Q102) fundamental accounting equation, Assets = Equities is the formal expression of Marks : 1.0
Id: 44478
1) Dual aspect 2) Matching concept
3) Going concern concept 4) Money measurement concept
Explanation:
Q103) Which of the following characteristics of accounting information primarily allows Marks : 1.0
users of financial statements to generate predictions about an organization Id: 44456
1) Reliability 2) Timeliness
3) Neutrality 4) Relevance
Explanation:
Q104) Which of the below statement is correct? Marks : 1.0
Id: 44393
1) Debtors are liability. 2) Capital is an asset.
3) Goodwill is current asset. 4) Bills payables are liabilities
Explanation:
Q105) The basic concepts related to P & L Account are Marks : 1.0
Id: 44700
1) Realization Concept 2) Matching Concept
3) Cost Concept 4) Both (a) and (b) above
Explanation:
Q106) Accounting concepts are based on Marks : 1.0
Id: 44689
1) Certain assumptions 2) Certain facts and figures
3) Certain accounting records 4) Government guidelines
Explanation:
Q107) Balance sheet is used to ascertain the financial position Marks : 1.0
Id: 44556
1) For a particular period 2) For the accounting period of the firm
3) For a period of one year 4) On a particular date
Explanation:
Q108) Which of the following equation is INCORRECT? Marks : 1.0
Id: 44489
1) Liabilities + Capital = Assets 2) Liabilities + Assets = Capital
3) Assets Liabilities = Capital 4) Assets Capital = Liabilities
Explanation:
Q109) Journal is _____________Books of account is Marks : 1.0
Id: 44419
1) Basic 2) Primary
3) Secondary 4) None of these
Explanation:
Q110) Diya & Co. Is a Marks : 1.0
Id: 44775
1) Personal A/c 2) Real account
3) Nominal account 4) None of the above
Explanation:
Q111) Ledger is also called Marks : 1.0
Id: 44572
1) Principle book 2) Subsidiary book
3) Day book 4) Proper book
Explanation:
Q112) If during the accounting period the assets increased by Rs. 10,000, and equity Marks : 1.0
increased by Rs. 2,000, then how did liabilities change? Id: 44795
1) Increased by Rs. 8,000 2) Increased by Rs. 12,000
3) Decreased by Rs. 8,000 4) Decreased by Rs. 12,000
Explanation:
Q113) Features of Partnership firm are Marks : 1.0
Id: 44511
1) Two or more persons carrying common 2) Sharing profit and losses in agreed ratio
business under an agreement
3) Business carried by all or one of them acting
for all
4) All the above
Explanation:
Q114) The information provided in the annual financial statements of an enterprise pertains Marks : 1.0
to Id: 44554
1) industry as a whole 2) Individual organisation
3) Global economy 4) Economy as a whole
Explanation:
Q115) Managerial Accounting Information Marks : 1.0
Id: 44503
1) Relates To The Entity As A Whole And Is 2) Relates To SubUnits Of The Entity And May
Highly Aggregated Be Very Detailed
3) Is Prepared Only Once A Year 4) Is Constrained By The Requirements Of
Generally Accepted Accounting Principles
Explanation:
Q116) Bad debts means ____. Marks : 1.0
Id: 44416
1) goods unsold lying with a business on any 2) an allowance given on the sales price of
given date. goods.
3) debts which are due by the firm 4) debts which are irrecoverable.
Explanation:
Q117) When an owner credits or debits any amount, he cannot put that transaction in Marks : 1.0
financial account records of organisation. This is known as .............. Id: 44457
1) Money Measurement Concept 2) Cost Concept
3) Business Entity Concept 4) Conservatism
Explanation:
Q118) Standard Gross Profit ratio is between Marks : 1.0
Id: 44597
1) 10% to 20% 2) 15% to 25%
3) 30% to 40% 4) 20% to 30%
Explanation:
Q119) If current ratio is less than 1 it can be definitely said that Marks : 1.0
Id: 44605
1) Net working capital is negative 2) Net working capital is positive
3) Inventories are in adequate 4) Cash in hand is inadequate
Explanation:
Q120) During the life time of an entity, accountants produce financial statements at Marks : 1.0
arbitrary points in time in accordance with which basic accounting principle Id: 44450
1) Conservatism 2) Going Concern
3) Materiality 4) Periodicity
Explanation:
Q121) A business transaction that involves a purchase on account is considered to be a(n) Marks : 1.0
____. Id: 44622
1) cash transaction 2) credit transaction
3) investment by the owner 4) expense transaction
Explanation:
Q122) As production increases, fixed cost per unit _____. Marks : 1.0
Id: 44387
1) Decreases 2) Increases
3) We can’t tell 4) Do not change
Explanation:
Q123) Management accounting provides invaluable services to management in performing Marks : 1.0
……….. Id: 44505
1) All Management functions 2) Controlling functions
3) Interpret the financial data 4) None of these
Explanation:
Q124) Which of following is/are problems in Financial statement analysis Marks : 1.0
Id: 44604
1) Window dressing 2) Price level changes l
3) Interpretation of results 4) All of the above
Explanation:
Q125) If the profit sharing ratio of partners is not given than partner share profit Marks : 1.0
Id: 44618
1) As per capital ratio 2) equally
3) as per work load 4) None of the above
Explanation:
Q126) Who are the customers of cost and management accounting? Marks : 1.0
Id: 44675
1) Managers 2) Creditors
3) Lenders 4) Consumers
Explanation:
Q127) Loss on issue of debenture is treated as Marks : 1.0
Id: 44657
1) Intangible Asset 2) Current Asset
3) Current Liability 4) Miscellaneous Expenditure
Explanation:
Q128) Which of the following is not a concept of financial accounting Marks : 1.0
Id: 44451
1) Single aspect concept 2) Accrual concept
3) Going concern concept 4) Separate entity concept
Explanation:
Q129) Management accounting does not encompass Marks : 1.0
Id: 44467
1) Calculating product cost 2) Calculating earnings per share
3) Determining cost behavior 4) Profit planning
Explanation:
Q130) How are the following items arranged on the asset side of the Balance Sheet of a Marks : 1.0
Company? Id: 44679
i. Profit and loss A/c
ii. Miscellaneous expenditure
iii. Fixed assets
iv. Current assets, loans and advances
v. Investments
1) (iii) (v) (iv) (i) (ii) 2) (iii) (iv) (v) (i) (ii)
3) (iii) (i) (ii) (v) (iv) 4) (iii) (v) (iv) (ii) (i)
Explanation:
Q131) ____________principle requires that the same accounting method should be used Marks : 1.0
from one accounting period to the next. Id: 44761
1) Conservatism. 2) Consistency.
3) Business entity. 4) Money measurement.
Explanation:
Q132) which of the following should be deducted in balance sheet of a company from the Marks : 1.0
share capital to find out paid up capital Id: 44562
1) calls in advance 2) calls in arreas
3) share forfeiture 4) discount on issue of shares
Explanation:
Q133) Which of the following is a capital expenditure? Marks : 1.0
Id: 44685
1) Wages paid for production of goods in the 2) Wages paid for installation of machinery
works
3) None of the above
4) Both of the above
Explanation:
Q134) The basic accounting principle/concept according to which business record must be Marks : 1.0
kept separate from the personal records of the owner is known as: Id: 44512
1) Goingconcern concept 2) Separate Business entity
3) Realization Concept 4) Conservatism
Explanation:
Q135) When benefit of a revenue expense extend beyond an accounting year, it is called Marks : 1.0
Id: 44721
1) Revenue Expenditure 2) Capital expenditure
3) Deferred Revenue Expenditure 4) Recurring profit
Explanation:
Q136) All the Incomes and Expensees of revenue nature are credited or debited to Marks : 1.0
Id: 44664
1) Trading A/c 2) Profit & Loss A/c
3) Balance Sheet 4) Either (a) or (b)
Explanation:
Q137) Bank overdraft is shown as Marks : 1.0
Id: 44509
1) Current Liability 2) Current asset
3) Unsecured loan 4) Purchases
Explanation:
Q138) Net Profit Ratio Signifies Marks : 1.0
Id: 44568
1) Operational Profitability 2) Liquidity Position
3) Bigterm Solvency 4) Profit for Lenders.
Explanation:
Q139) Accounting principles must satisfy following condition Marks : 1.0
Id: 44640
1) Reflect future predictions 2) Simple and explanatory
3) Based on real assumptions 4) All of the above
Explanation:
Q140) The entity of a business is different from its owners Assumption is from Marks : 1.0
Id: 44649
1) Business entity Assumption 2) Going concern Assumption
3) Accounting period Assumption 4) Money Measurement Assumption
Explanation:
Q141) Transactions between owner and business are recorded as per Marks : 1.0
Id: 44756
1) Periodicity. 2) Going concern.
3) Prudence 4) Business Entity.
Explanation:
Q142) If you only knew a company’s total assets and total debt, which item could you easily Marks : 1.0
calculate? Id: 44565
1) Sales 2) Depreciation
3) Total equity 4) Inventory
Explanation:
Q143) The amount or goods taken by the proprietor for his personal use is called Marks : 1.0
Id: 44580
1) Additional capital 2) Fresh capital
3) Drawings 4) Personal expenses
Explanation:
Q144) The convention that states that the accounting practice should be followed Marks : 1.0
consistently over the years Id: 44720
1) Consistency 2) Conservation
3) Materiality 4) Disclosure
Explanation:
Q145) A business has prepared its accounts for a financial year and these show a profit of Marks : 1.0
Rs. 5,00,000. What profit amount will be after considering the following items which Id: 44429
are not included in the account?
• A likely loss on a contract of Rs. 25,000
• A possible Court ruling in favour of the company which is likely to increase profits
by Rs.10,000
• A possible Court ruling against the company which could result in damages of
between Rs.5,000 to Rs.15,000.
1) Rs. 4,80,000 2) Rs. 4,60,000
3) Rs. 4,75,000 4) Rs. 5,10,000
Explanation:
Q146) Calculate total assets if total sales 270000 and assets turn over is 0.30 times Marks : 1.0
Id: 44538
1) 700000 2) 800000
3) 900000 4) 1000000
Explanation:
Q147) Under which of the following concepts are shareholders treated as creditors for the Marks : 1.0
amount they paid on the shares they subscribed to? Id: 44706
1) Cost Concept 2) Duality Concept
3) Business Entity Concept 4) Since the shareholders own the business, they
are not treated as creditors
Explanation:
Q148) If debentures are issued at a discount of 20%, the discount on issue of debentures is Marks : 1.0
shown as: Id: 44732
1) Current asset 2) Interest asset
3) Current liabilities 4) Miscellaneous expenses
Explanation:
Q149) The companies act 1956 requires that the period of at least ________month must be Marks : 1.0
there between two calls Id: 44547
1) Three 2) One
3) Two 4) Five
Explanation:
Q150) Accounting Principles represent Marks : 1.0
Id: 44524
1) A consensus at a particular time to the 2) Inviolable laws fixed by a legal board
recording of accounting transactions
3) Laws fixed by accounting expert
4) Laws fixed by the respective governments
Explanation:
Q151) Business Entity assumption is applicable to ________ type of business enterprise Marks : 1.0
Id: 44477
1) Selected 2) Unique
3) Every 4) None of these
Explanation:
Q152) Which of the following is not an objective of accounting Marks : 1.0
Id: 44587
1) To provide information on the performance of 2) To provide information on the owner’s assets,
enterprise. liabilities and capital
3) To provide information on the enterprise, 4) To maintain records of business.
assets, liabilities and capital
Explanation:
Q153) The item “Interest accrued on Investment” appears in the Balance Sheet of a Marks : 1.0
Company under the category of ____________ Id: 44544
1) Secured Loan 2) Current assets, loans and advances
3) Investments 4) Current liabilities
Explanation:
Q154) Bank A/c is an Example of_____ Marks : 1.0
Id: 44424
1) Ledger 2) Balance Sheet
3) Jounal 4) None of these
Explanation:
Q155) Calculate Current assets : Current ratio is 2.6:1 , Current Liabilities 40000 Marks : 1.0
Id: 44534
1) 104000 2) 140000
3) 114000 4) 124000
Explanation:
Q156) Stock of Rs.12,500 was destroyed by fire occurred on 31st December, 2008 in the Marks : 1.0
godown of X Ltd.. Insurance company accepted Rs.9,500 in full settlement of claim. Id: 44784
The loss on account of fire is recorded by:
1) Debiting Profit and loss account for Rs. 12,500. 2) Crediting the trading account for Rs. 12,500.
3) Debiting Profit and loss account for Rs. 3,000. 4) Both (b) and (c)
Explanation:
Q157) Creditors for goods purchased come within the category of ______. Marks : 1.0
Id: 44402
1) Current liability 2) Fixed liability
3) Capital 4) Current asset
Explanation:
Q158) Long term solvency is indicated by Marks : 1.0
Id: 44574
1) Liquidity ratio 2) DebtEquity ratio
3) Interest coverage ratio 4) Return on capital employed
Explanation:
Q159) College fees of owners son paid and accounted in books, 10000, then Marks : 1.0
Id: 44499
1) profit increased by 10000 2) profits decreased by 10000
3) profits decreased by 10000 and capital 4) profits increased by 10000 and capital
increased by 10000 decreased by 10000
Explanation:
Q160) Outstanding salaries are shown as: Marks : 1.0
Id: 44626
1) Added to Salaries while preparing P & La/c 2) Shown in liability side of Balance sheet under
current Liability
3) (a) &(b) above 4) None of the above
Explanation:
Q161) Which of the following statements about differences between financial and Marks : 1.0
managerial accounting is incorrect? Id: 44446
1) Managerial accounting information is prepared 2) Financial accounting is aggregated;
primarily for external parties such as managerial accounting is focused on products
stockholders and creditors; financial and departments.
accounting is directed at internal users.
3) Managerial accounting pertains to both past
and future items; financial accounting focuses
primarily on past transactions and events.
4) Financial accounting is based on generally
accepted accounting practices; managerial
accounting faces no similar constraining
factors
Explanation:
Q162) The allocation of owner's private expenses to his/her business violates which of the Marks : 1.0
following? Id: 44635
1) Accrual concept 2) Matching concept
3) Separate business entity concept 4) Consistency concept
Explanation:
Q163) Discount on issue of debentures is Marks : 1.0
Id: 44656
1) Revenue Loss to be charged in the year of 2) Capital loss to be written off from capital
issue reserve
3) Capital loss to be written off over the tenure of 4) Capital loss to be shown as goodwill
the debentures
Explanation:
Q164) The asset that can be seen and touched is ____________ asset. Marks : 1.0
Id: 44613
1) Intangible 2) Tangible
3) Business 4) Current
Explanation:
Q165) From following find out sales : Gross profit margin is 20% gross profit 54000 Marks : 1.0
Id: 44537
1) 250000 2) 260000
3) 270000 4) 280000
Explanation:
Q166) The Amount which the firm has to pay others is known as Marks : 1.0
Id: 44650
1) Assets 2) Liabilities
3) Capital 4) None of these
Explanation:
Q167) Which of the following is not an objective of Financial Accounting? Marks : 1.0
Id: 44405
1) To identify financial events and transactions 2) To ensure the effecient cost control by
that occur in an organization. communicating essential data costs at regular
intervals.
3) To measure the value of the occurrences in 4) To organize the accumulated data into
terms of money. meaningful information.
Explanation:
Q168) Loss by fire A/c is classified as _________________ A/c. Marks : 1.0
Id: 44804
1) real 2) nominal
3) personal 4) current
Explanation:
Q169) Journal book is written in which order Marks : 1.0
Id: 44496
1) Chronological order 2) As per accountant
3) As per amount 4) As per owners instructions
Explanation:
Q170) The purchase of a desk on account will increase Office Furniture and will also Marks : 1.0
increase ____. Id: 44623
1) Cash in Bank 2) Accounts Payable
3) Accounts Receivable 4) Capital
Explanation:
Q171) The capital gearing ratio is high for a company.It indicates a position of Marks : 1.0
Id: 44545
1) Low debts 2) high preference capital
3) high equity 4) low debt equity ratio
Explanation:
Q172) The whole process of classifying, summarizing, analyzing and interpreting the Marks : 1.0
results of business transaction is known as Id: 44476
1) Accounting 2) Determination
3) Recording 4) Coding
Explanation:
Q173) In Accounting 'Going Concern Concept' means ____. Marks : 1.0
Id: 44413
Explanation:
Q174) In financial accounting classification of recorded facts, with entries of one nature at Marks : 1.0
one place is done in the book called Id: 44532
1) Trial Balance 2) Journal
3) Income statement 4) Ledger
Explanation:
Q175) Whenever errors are noticed in the accounting records, they should be rectified Marks : 1.0
Id: 44750
1) At the time of preparation of the trial balance. 2) Without waiting the accounting year to end.
3) After the preparation of final accounts. 4) In the next accounting year.
Explanation:
Q176) Global Depository Receipt is an instrument for: Marks : 1.0
Id: 44672
1) Foreign direct investment 2) Public bonds
3) Foreign institutional investment 4) All of above
Explanation:
Q177) The Financial Statement reveals the following data Marks : 1.0
Id: 44420
1) Important 2) Valuable
3) Financial 4) No of these
Explanation:
Q178) If cost of goods sold is Rs.1,00,000, sales is Rs.1,25,000, closing stock is Rs.20,000, Marks : 1.0
the gross profit will be Id: 44769
1) 45000 2) 5000
3) 25000 4) None of the above
Explanation:
Q179) Capital means ____. Marks : 1.0
Id: 44415
1) all the properties, possessions and debits 2) expenditure whose benefit has been received.
owing to a business house.
3) total amount invested in the business by the
proprietor.
4) a person who owes something.
Explanation:
Q180) Cost refer to........ Marks : 1.0
Id: 44608
1) The present value of future benefits 2) All assets which has given benefit and is now
expired
3) The value of sacrifice made to get some goods 4) All the above
or services
Explanation:
Q181) Personal Accounts means _____. Marks : 1.0
Id: 44407
persons.
Explanation:
Q182) Cost Accounting is different from financial accounting in respect of Marks : 1.0
Id: 44492
1) Inventory valuation 2) Ascertainment of cost
3) Recording of cost 4) Reporting of cost
Explanation:
Q183) What is more important for every business to achieve at the earliest? Marks : 1.0
Id: 44676
1) Budgeted Sales 2) Profits
3) Break Even Point 4) Market Share
Explanation:
Q184) The areas where in different accounting policies can be adopted are Marks : 1.0
Id: 44437
1) Providing depreciation 2) Valuation of inventories
3) Valuation of investment 4) All of the above
Explanation:
Q185) Calculate liquid assets Liquid Ratio is 1.5:1 Current liabilities 40000 Marks : 1.0
Id: 44535
1) 50000 2) 60000
3) 70000 4) 80000
Explanation:
Q186) Goods or amount taken by proprietor for his personal use should be debited to: Marks : 1.0
Id: 44461
1) Sales 2) Drawings
3) Purchase 4) d) Cash
Explanation:
Q187) Which of the following is an example of Capital Expenditure? Marks : 1.0
Id: 44714
1) Insurance Premium 2) Taxes and Legal expenses
3) Discount allowed 4) Customs duty on Import of Machinery
Explanation:
Q188) ''Business will always go on'' which principle describe this Marks : 1.0
Id: 38725
Explanation:
Q189) The document used by account holder to deposit cash/cheque in to bank is called Marks : 1.0
Id: 44460
1) Receipt 2) Voucher
3) Payinslip 4) Withdrawal slip
Explanation:
Q190) Which accounting is concerned with the collecting, recording, classification and Marks : 1.0
interpretation of financial data to serve the purpose of management. Id: 44469
1) Cost accounting. 2) Management accounting.
3) Financial accounting…… 4) Business accounting.
Explanation:
Q191) Basic assumption in accounting principles is Marks : 1.0
Id: 44501
1) Prudence 2) consistency
3) materiality 4) ongoing concern
Explanation:
Q192) Which of the following is not a conventions of financial accounting? Marks : 1.0
Id: 44493
1) Consistency 2) NonMateriality
3) Full Disclosure 4) Conservatism
Explanation:
Q193) Current Ratio is ratio of Marks : 1.0
Id: 44602
1) Current assets to total assets 2) Current Liabilities to total liabilities
3) Current assets to Current Liabilities 4) Current assets to Fixed assets
Explanation:
Q194) Goods costing Rs. 10,000 is supplied to Ram at an invoice price of 10% above cost Marks : 1.0
and a trade discount of 5%. The amount of sales is Id: 44772
1) 11000 2) 10450
Explanation:
Q195) Management accounting information Marks : 1.0
Id: 44465
1) Relates to the entity as a whole and is highly 2) Relates to subunits of the entity and may be
aggregated very detailed
3) Is prepared only once a year 4) is constrained by the requirements of
generally accepted accounting principles
Explanation:
Q196) Which account will be debited, if Mohsin commenced business with cash? Marks : 1.0
Id: 44389
1) Cash account 2) Capital account
3) Mohsin’s account 4) Drawings account
Explanation:
Q197) Office equipment was purchased for cash. What effect did this transaction have on Marks : 1.0
the financial position of the company? Id: 44788
1) Assets, no change; Liabilities, no change; 2) Assets, decrease; Liabilities, increase;
Owners' Equity, no change Owners' Equity, no change
3) Assets, increase; Liabilities, increase; Owners' 4) Assets, no change; Liabilities, no change;
Equity, no change Owners' Equity, increase
Explanation:
Q198) Overdraft is short term finance to: Marks : 1.0
Id: 44674
1) Pay income, excise and VAT 2) Repay term loan
3) Purchase capital equipments 4) Meet circulating capital requirements
Explanation:
Q199) Which type of expenditure is done for making assets? Marks : 1.0
Id: 44571
1) Revenue Expenditure 2) Deferred Revenue Expenditure
3) Capital Expenditure 4) All of the above
Explanation:
Q200) Which phrase best describes the current role of the managerial accountant? Marks : 1.0
Id: 44728
1) Managerial accountants prepare the financial 2) Managerial accountants facilitate the decision
statements for an organization. making process within an organization.
3) Managerial accountants make the key 4) Managerial accountants are primarily
decisions within an organization. information collectors.
Explanation:
Q201) Financial accounting provides financial information to all of the following external Marks : 1.0
users except: Id: 44453
1) Managers 2) Government agencies
3) Creditors 4) investors
Explanation:
Q202) The Term ‘Cost’ is refer as _________ incurred to produce particular Product. Marks : 1.0
Id: 44418
1) Value 2) Expenses
3) Price 4) All of these
Explanation:
Q203) Which of the following is not an Accounting concept? Marks : 1.0
Id: 44696
1) Matching concept 2) Dual Aspect concept
3) True and Fair concept 4) Going concern concept
Explanation:
Q204) Capital expenditure is an expenditure which Marks : 1.0
Id: 44718
1) Benefits the current accounting period 2) Will benefit the next accounting period
3) Results in the acquisition of a permanent asset 4) Results in the acquisition of a current asset
Explanation:
Q205) Creating Provision against fluctuation in the price of investment is an example of Marks : 1.0
which accounting convention Id: 44523
1) Convention of conservatism 2) Convention of full disclosure
3) Convention of materiality 4) Convention of consistency
Explanation:
Q206) Debit side is greater than credit side in trading account then it is Marks : 1.0
Id: 44550
1) Loss 2) Profit
3) Balanced 4) None
Explanation:
Q207) “Inventories should be out of godown in the sequence in which they arrive” is based Marks : 1.0
on Id: 44764
1) HIFO 2) LIFO
3) FIFO 4) Weighted Average
Explanation:
Q208) How do we calculate a company’s operating cash flow? Marks : 1.0
Id: 44567
1) EBIT taxes + depreciation 2) EBIT taxes depreciation
3) EBIT + taxes + depreciation 4) EBIT Sales
Explanation:
Q209) The amount of owner's equity in a business is not affected by: Marks : 1.0
Id: 44785
1) The percentage of total assets held in cash. 2) Investments made in the business by the
owner.
3) The profitability of the business. 4) The amount of dividends paid to stockholders.
Explanation:
Q210) ignore all profit and consider for all possible losses it is a philosophy of which Marks : 1.0
convention : Id: 44455
1) conservatism 2) consisteny
3) full disclosure 4) materiality
Explanation:
Q211) The reporting standard for external financial reports is Marks : 1.0
Id: 44598
1) Industryspecific 2) Companyspecific
3) Generally accepted accounting principles 4) Departmentspecific
Explanation:
Q212) Statements: Marks : 1.0
Id: 44695
i) Dividends can be paid only when there are profits
ii) Dividends can be paid when there are losses
1) Both are correct 2) Both are incorrect
3) (i) is correct and (ii) is incorrect 4) (ii) is correct and (i) is incorrect
Explanation:
Q213) A business owned by its stockholders and organized as a legal entity separate from Marks : 1.0
its stockholders is referred to as an: Id: 44600
1) partnership. 2) corporation.
3) proprietorship. 4) entrepreneurship.
Explanation:
Q214) Dividend is paid as a percentage of Marks : 1.0
Id: 44658
1) Nominal Share Capital 2) Net Profit
3) Paid up Capital 4) Called up Capital
Explanation:
Q215) Small scale industry is defined in terms of: Marks : 1.0
Id: 44673
1) Volume by production 2) Number of employees
3) Amount of investment in plant and machinery 4) Sales turnover
Explanation:
Q216) Objective of cost accounting is........... Marks : 1.0
Id: 44508
1) To keep the management fully informed about 2) To summarise the financial performance of the
the latest position of concern business for external stakeholders
3) To create a common internal global language 4) To ascertain the profitability of the activities by
in decision making controlling the cost
Explanation:
Q217) Outstanding expense term in accounting comes primarily because of Marks : 1.0
Id: 44639
1) Periodicity 2) Matching
3) Accrual 4) None of the above
Explanation:
Q218) Divya purchased a computer costing Rs.10,000. Repairing expenses Rs.1,000 and Marks : 1.0
miscellaneous expenses Rs.500 were incurred by her. She sold the computer at 20% Id: 44755
margin on selling price. The sales value will be
1) 12500 2) 11000
3) 14375 4) 13800
Explanation:
Q219) Business unit is separate and distinct from the person who supply capital to it. It is Marks : 1.0
based on Id: 44662
1) Money Measurement Concept 2) Going Concern Concept
3) Business Entity Concept 4) Dual Aspect Concept
Explanation:
Q220) Which of the following best describe the Conservatism convention? Marks : 1.0
Id: 44458
1) Assets to be reported at the highest possible 2) Profits to be reported at the highest possible
values values
3) Liabilities and expenses are to be reported at 4) All anticipated losses to be reported even
the lowest possible value before they occur
Explanation:
Q221) Which accounting principle differentiates between owners and managers: Marks : 1.0
Id: 44681
1) Going concern 2) Dual aspect
3) Separate entity 4) Conservatism
Explanation:
Q222) In financial accounting, a record is made only of information that can be expressed in Marks : 1.0
monetary terms. This is known as: Id: 44629
1) Historic cost convention 2) Business entity convention
3) Dualaspect concept 4) Money measurement convention
Explanation:
Q223) Book Keeping Includes Marks : 1.0
Id: 44641
1) Recording and Classifying 2) Recording and Summarizing
3) Recording and Analysis 4) None of the above is wholly correct
Explanation:
Q224) Sole traders differ from other types of trading organizations. Which of the following Marks : 1.0
statements correctly summarizes the key characteristics of a sole trader’s business? Id: 44530
1) Liability is limited to the providers of loan 2) The trader has unlimited liability and runs the
finance and only the trader takes an active part business in conjunction with the providers of
in managing the business loan finance
3) The trader has unlimited liability and must 4) The trader has unlimited liability, takes sole
have the business accounts audited responsibility for management of the business
and no audit is needed
Explanation:
Q225) The interest on capital is ____________ of the partnership firm. Marks : 1.0
Id: 44812
1) an income 2) gain
3) an expenditure 4) an asset
Explanation:
Q226) Journal is a book of _______ entries Marks : 1.0
Id: 44560
1) Generic 2) Duplicate
3) Original 4) Secondary
Explanation:
Q227) It is essential to standardize the accounting principles and policies in order to ensure Marks : 1.0
Id: 44435
1) Transparency 2) Consistency
3) Comparability 4) All of the above
Explanation:
Q228) A business is in profit, when: Marks : 1.0
Id: 44557
1) Assets exceed Expenditure 2) Income exceeds Expenditure
3) Income exceeds Liabilities 4) Income exceeds Liabilities
Explanation:
Q229) The expenses and incomes pertaining to full trading period are taken to the Profit Marks : 1.0
and Loss Account of a business, irrespective of their payment or receipt. This is in Id: 44713
recognition of
1) Time period Concept 2) Going Concern Concept
3) Accrual Concept 4) Duality Concept
Explanation:
1) Fiscal year 2) Calendar year
3) Accounting period 4) Accrual period
Explanation:
Q231) The underlying accounting principle(s) necessitating amortization of intangible Marks : 1.0
asset(s) is/are Id: 44705
1) Cost Concept 2) Realization Concept
3) Matching Concept 4) Both (a) and (c) above
Explanation:
Q232) Matching concept means Marks : 1.0
Id: 44444
1) assets = capital –liabilities 2) Assets = Liabilities
3) period of expenses = period of income 4) source of income & expenses are same
Explanation:
Q233) The accounting equation is....... Marks : 1.0
Id: 44472
1) Net income = Net expenses – Net revenues 2) Assets = Capital – Liabilties
3) Assets = Liabilities + Capital 4) None of the above
Explanation:
Q234) Which of the following combination is CORRECT for Partnership Firm? (Minimum Marks : 1.0
and Maximum members) Id: 44596
1) Minimum 2 and Maximum 50 for nonbanking 2) Minimum 2 and Maximum 20 for all types of
business business
3) Minimum 2 and Maximum 20 for banking 4) Minimum 2 and Maximum 10 for banking
business business
Explanation:
Q235) Is it true that the trial balance totals should agree? Marks : 1.0
Id: 44591
1) No, there are sometimes good reasons why 2) No, because it is not a balance sheet
they differ
3) Yes, always
4) Yes, except where the trial balance is extracted
at the year end
Explanation:
Q236) Which of the following is not an accounting convention? Marks : 1.0
Id: 44794
1) Substance over form 2) Consistency
3) Depreciation 4) Matching
Explanation:
Q237) Which of the following are of capital nature? Marks : 1.0
Id: 44742
1) Purchase of a goods 2) Cost of repair
3) Wages paid for installation of machinery 4) Rent of a factory
Explanation:
Q238) Writing of transaction in the ledger is called________________ Marks : 1.0
Id: 44752
1) Costing 2) Balancing
3) Journalizing 4) Posting
Explanation:
Q239) A new firm commenced business on 1st January, 2006 and purchased goods costing Marks : 1.0
Rs. 90,000 during the year. A sum of Rs. 6,000 was spent on carriage inwards. At the Id: 44660
end of the year the cost of goods still unsold was Rs. 12,000. Sales during the year
was Rs.1,20,000. What is the gross profit earned by the firm?
1) 36000 2) 30000
3) 42000 4) 38000
Explanation:
Q240) “Assets should be valued at the price paid to acquire them“ is based on Marks : 1.0
Id: 44436
1) Accrual concept 2) Cost concept
3) Money measurement concept 4) Realization concept
Explanation:
Q241) Which of the following is taken into account while totaling the liabilities side of the Marks : 1.0
balance sheet? Id: 44546
1) Authorized Capital 2) Issued Capital
3) Subscribed Share Capital 4) Paidup capital
Explanation:
Q242) The accounting principle which refers to tendency of accountants to resolve Marks : 1.0
uncertainty and doubt in favour of understanding assets and revenues and Id: 44441
overstating the liabilities and expenses is known as
1) Conservatism 2) Materiality
3) Consistency 4) None of these
Explanation:
Q243) All the following statements are objectives of accounting except Marks : 1.0
Id: 44759
1) Providing details about the personal assets 2) Maintaining records of business.
and liabilities of the owner.
3) Providing information about the performance
of business entity.
4) Providing information about the assets,
liabilities and capital of business entity.
Explanation:
Q244) Owners and the business are separate as per the Marks : 1.0
Id: 38728
1) Seperate entity concept 2) Dual Aspect
3) Money measurement concept 4) None
Explanation:
Q245) State the case where the going concern concept is applied? Marks : 1.0
Id: 44663
1) When an enterprise was set up for a particular 2) When a receiver or liquidator has been
purpose, which has been achieved, or to be appointed in case of as a company which is to
achieved shortly be liquidated
3) Fixed assets are acquired for use in the 4) When an enterprise is declared sick
business for earning revenues and are not
meant for resale
Explanation:
Q246) Holding all other things constant, which of the following represents a cash outflow? Marks : 1.0
Id: 44566
1) The company sells a machine 2) The company acquires inventory
3) The company receives a bank loan 4) The company increases accounts payable.
Explanation:
Q247) Which of the following records is not a book of prime entry? Marks : 1.0
Id: 44799
1) Bank statements 2) Petty cash book
3) Journal 4) Sales returns day book.
Explanation:
Q248) Concept of similar accounts being treated similarly year after year is due to Marks : 1.0
Id: 44513
3) materiality 4) on going concern
Explanation:
Q249) Following is the external user of accounting information Marks : 1.0
Id: 44482
1) Manager 2) Creditor
3) Employee 4) Owner
Explanation:
Q250) The convention of consistency refers to consistent use of accounting principles: Marks : 1.0
Id: 44801
1) Within industries 2) Throughout the accounting period
3) Among enterprises belonging to different 4) Across accounting periods
industries
Explanation:
Q251) Payment of personal expenses of the owners of the business need to be recorded as Marks : 1.0
Id: 44760
1) Drawings 2) Liability
3) Expenses 4) None of the three.
Explanation:
Q252) Below are 4 statements: Marks : 1.0
Id: 44403
A) Vehicle used for business purpose is an asset of business,
B) Cash withdrew for personal use is drawings from business,
C) Bad debts should be deducted from debtors,
D) Interest received is expenditure.
Which of the above statements are true?
1) Statement A ONLY 2) Statements A and B
3) Statements A, B and C 4) Statements A and C
Explanation:
Q253) In Double Entry System of Bookkeeping every business transaction affects Marks : 1.0
Id: 44653
1) Two accounts 2) Two sides of the same account
3) The same account on two different dates 4) All of the above
Explanation:
Q254) Three fundamental accounting assumptions are Marks : 1.0
Id: 44638
1) Going concern, accrual and dual aspect 2) Going concern, dual aspect and consistency
3) consistency, dual aspect and going concern 4) Consistency, accrual and going concern
Explanation:
Q255) While finalizing the current year’s profit, the company realized that there was an error Marks : 1.0
in the valuation of closing stock of the previous year. In the previous year, closing Id: 44740
stock was valued more by Rs.50,000. As a result
1) Previous year’s profit is overstated and 2) Previous year’s profit is understated and
current year’s profit is also overstated current year’s profit is overstated
3) Previous year’s profit is understated and 4) Previous year’s profit is overstated and
current year’s profit is also understated current year’s profit is understated
Explanation:
Q256) Which of the following does not appear under the head “Share Capital”of a Balance Marks : 1.0
Sheet. a.Preference Share Capital b.Minority interest in subsidiaries c.Equity Share Id: 44552
Capital d.Capital Reserve Account
1) a&b 2) b&c
3) c&d 4) b&d
Explanation:
Q257) Which one of the following is not an example of Intangible Assets? Marks : 1.0
Id: 44633
1) Patents and Trade Marks 2) Copyright
3) Slogan 4) Land
Explanation:
Q258) Which of the following financial statements reflects the overall financial position of Marks : 1.0
the business? Id: 44599
1) Statement of cash flows 2) Income Statement
3) Balance Sheet 4) Statement of owner’s equity
Explanation:
Q259) In Accounting 'Dual aspect Concept' means ____. Marks : 1.0
Id: 44411
Explanation:
Q260) A company has received a penalty order from excise department. Penalty imposed is Marks : 1.0
Rs. 15.00 Lacs. Order was received on 15.01.2008 and company has filed appeal on Id: 44782
10.02.2008, result of which is pending as on 31.03.2008. The company should
1) Disclose the fact in financial statements by 2) Not disclose anything
recognizing liability
3) Disclose it as contingent liability
4) Should put this matter in Board of directors
meeting
Explanation:
Q261) Salary has been paid for 11 months from April 2005 to February, 2006 amounting Marks : 1.0
Rs.22,000. The amount of outstanding salary shown in the balance sheet will be: Id: 44770
1) 1833 2) 2000
Explanation:
Q262) Every entry recorded in Journal, must be posted into Marks : 1.0
Id: 38729
1) Day Book 2) Cash Book
3) Ledger 4) Sales Books
Explanation:
Q263) After preparing the trial balance, the accountant finds that the total of a credit side is Marks : 1.0
short by RS 1500. This difference will be Id: 44549
1) Credited to suspense a/c 2) Debited to suspense a/c
3) Adjusted to any of the debit balance account 4) Adjusted to any of the credit balance account
Explanation:
Q264) Which of the following transactions represent an expense? Marks : 1.0
Id: 44431
1) The owner withdrew Rs. 1,600 from the 2) Purchased a photocopying machine for Rs.
business for personal use 2,750 cash
3) Purchased medical supplies for cash from 4) Received a telephone bill amounting to Rs. 550
Healthcare Labs. Rs. 1,630 to be paid within ten days.
Explanation:
Q265) In Accounting 'Business entity Concept' means ____. Marks : 1.0
Id: 44410
Explanation:
Q266) A business was commenced on 1st January and it purchased 5 vehicles, each Marks : 1.0
costing Rs.5000. During the year the business managed to sell 2 vehicles at the price Id: 38732
of Rs.12000. How should the remaining 3 vehicles be valued if the business is going
to continue its operations in the next year?
1) At the breakup value 2) On the basis of going concern
3) Liquidation value 4) More than market value
Explanation:
Q267) Purchases book records: Marks : 1.0
Id: 44739
1) All cash purchases. 2) All credit purchases.
3) Credit purchases of goods in trade. 4) None of the above.
Explanation:
Q268) An old furniture was purchased for Rs. 10,000 , it was repaired for Rs. 100.The repairs Marks : 1.0
account should be debited by Id: 44773
1) 10000 2) 10100
3) 100 4) NIL
Explanation:
Q269) While putting the value or price of an entity in financial records the lowest price is Marks : 1.0
recorded not the current price or current market value. This is known as........... Id: 44487
1) Business Entity Concept 2) Conservatism Concept
Explanation:
Q270) The financial statement that reports the financial position of a business is the Marks : 1.0
Id: 44624
1) income statement. 2) balance sheet.
3) statement of cash flows. 4) footnotes to the financial statements.
Explanation:
Q271) Following is the example of external users: Marks : 1.0
Id: 44749
1) Government. 2) Owners.
3) Management. 4) Employees.
Explanation:
Q272) Retained earnings is classified as a part of — Marks : 1.0
Id: 44723
1) Owners Fund 2) Gross Block
3) Capital Working Progress 4) Stock in Trade
Explanation:
Q273) Which of the following statement is true regarding call in arrears? Marks : 1.0
Id: 44615
1) Calls in arrears are that part of called up 2) It is shown in theProfit & Loss A/c until the
capital remaining unpaid. defaulted shares are forfeited
3) The rate of interest on calls in arrears is 4) Charging of interest on calls in arrears need
chargeable at 9% p.a. if a company adopts not be permitted by the Articles of Association
Table A
Explanation:
Q274) Sold goods to Kamat for Rs. 50000 @ 2% TD & 5% CD. He paid 60% of the amount Marks : 1.0
immediately. Find the amount of cash paid by Kamat. Id: 44661
1) ` 26950 2) ` 27930
3) ` 29400 4) ` 28812
Explanation:
Q275) In financial statements of a company, Material Supplier preferably looks for....... Marks : 1.0
Id: 44595
1) Profitability of our company 2) Liquidity position of our company
3) Long Term Viability of our company 4) Fixed Asset base of our company
Explanation:
Q276) X Ltd., purchased goods for ` 5 lakh and sold 9/10th of the value of goods for ` 6 lakh. Marks : 1.0
Net expenses during the year were ` 25, 000. The company reported its net profit as ` Id: 44710
75,000. Which of the following concept is violated by the company?
1) Realization 2) Conservation
3) Matching 4) Accrual
Explanation:
Q277) The term depletion is used for Marks : 1.0
Id: 44767
1) Fixed assets. 2) Natural resources.
3) Intangible assets. 4) None of the three.
Explanation:
Q278) The market for long term loanable funds is Marks : 1.0
Id: 44692
1) Bond market 2) Money market
3) Capital market 4) None of the above
Explanation:
Q279) If Assets = Rs. 98,500 and Owner's equity = Rs. 50,500 then Liabilities = ? Marks : 1.0
Id: 44590
1) 57000 2) 105700
3) 48000 4) Rs. 148, 500
Explanation:
Q280) Rent paid for owner's residence is debited to drawing account and not to rent Marks : 1.0
account , is based on which principle? Id: 44494
1) Going concern concept 2) Separate Entity concept
3) Money Measurement concept 4) Daul aspect concept
Explanation:
Q281) Calculate inventory if Cost of goods sold is 216000 and inventory turn over is 4 times Marks : 1.0
Id: 44539
1) 50000 2) 54000
3) 60000 4) 64000
Explanation:
Q282) Material Cost can be classify on the basis of Relationship as______. Marks : 1.0
Id: 44427
1) Fixed & Variable 2) Direct & Indirect
3) Raw Material & WIP 4) None of these
Explanation:
Q283) “Assets should be valued at the price paid to acquire them” is based on Marks : 1.0
Id: 44763
1) Accrual concept. 2) Cost concept.
3) Money measurement concept. 4) Realisation concept.
Explanation:
Q284) Sales accounts appears on ______ Marks : 1.0
Id: 44394
1) Trading account debit side 2) P&L account credit side
3) Balancesheet asset side 4) Trading account credit side
Explanation:
Q285) Which of the following concept is not considered as basic principle of accounting? Marks : 1.0
Id: 44715
1) Logical Concept 2) Consistency Concept
3) Matching Concept 4) Materiality Concept
Explanation:
Q286) Calculate Fixed assets is 2600000 and fixed to current assets is 13:11 Marks : 1.0
Id: 44541
1) 2000000 2) 2200000
3) 2800000 4) 3000000
Explanation:
Q287) Low assets turnover may indicate Marks : 1.0
Id: 44577
1) Low assets 2) High cost of maintenance
3) Idle assets 4) Higher sales
Explanation:
Q288) Current ratio indicates Marks : 1.0
Id: 44606
1) amount of cash with company 2) Ability to repay debt installment
3) Capacity to meet current Liabilities 4) Non of above
Explanation:
Q289) From the accounting point of view, loss means Marks : 1.0
Id: 44719
1) Increase in Liability 2) Decrease in asset
3) Increase in owner’s equity 4) Decrease in Owner’s equity
Explanation:
Q290) The account Accounts Receivable is an example of a(n) ____. Marks : 1.0
Id: 44521
1) asset 2) liability
3) owner's equity 4) none of the above
Explanation:
Q291) External liabilities plus capital is equal to ______________. Marks : 1.0
Id: 44809
1) assets 2) net worth
3) net profit 4) gross profit
Explanation:
Q292) Which of the following is not a function of Cost Accounting ? Marks : 1.0
Id: 44724
1) Cost ascertainment 2) Planning and control
3) Decisionmaking 4) External reporting
Explanation:
Q293) A list of assets, liabilities and owner's equity of a business enterprise as of a specific Marks : 1.0
date is: Id: 44781
1) Income Statement 2) Cash Flow Statement
3) Balance sheet. 4) Profit and Loss Account
Explanation:
Q294) Sunk costs are: Marks : 1.0
Id: 44620
1) usually relevant 2) costs that will occur in the future.
3) not relevant. 4) costs that can be avoided.
Explanation:
Q295) Cost information facilitates many important decisions except : Marks : 1.0
Id: 44726
1) Introduction of a product 2) Whether to make or buy
3) Retention of profit 4) Exploration of an additional market
Explanation:
Q296) Which of the following statements is false? Marks : 1.0
Id: 44731
1) Issued capital can never be more than 2) In case of under subscription, issued capital
authorized capital will be less than the subscribed capital
3) Uncalled capital may be converted into reserve 4) Paid up capital is equal to called up capital
capital less calls in arrears
Explanation:
Q297) Reporting on the performance of the firm to essential external users is done through Marks : 1.0
which type of accounting: Id: 44485
1) Managerial accounting 2) Financial accounting
3) Internal accounting 4) Cost accounting
Explanation:
Q298) A bank that offers wide range of financial services including commercial and Marks : 1.0
investment banking is termed as Id: 44669
1) Universal Bank 2) Unit Bank
3) Multinational Bank 4) Merchant Bank
Explanation:
Q299) Depreciation of Fixed Assets is an example of Marks : 1.0
Id: 44665
1) Deferred Revenue Expenditure 2) Revenue Expenditure
3) Capital Expenditure 4) Capital Receipts
Explanation:
Q300) All the following statements are objective of accounting except Marks : 1.0
Id: 44517
1) Providing information about the assets, 2) Maintaining records of business
liabilities and capital of business entity
of business entity
4) Providing details about the personal assets
and liability of the owner
Explanation:
Q301) Which of the following term is used to represent the proportionate relationship Marks : 1.0
between debt and equity ? Id: 44698
1) Cost of Capital 2) Capital Budgeting
3) Assets Structure 4) Capital Structure
Explanation:
Q302) In Bookkeeping only ____________ transactions are recorded. Marks : 1.0
Id: 44611
1) Monetary 2) Nonmonetary
3) Monetary & Nonmonetary 4) Private
Explanation:
Q303) Provision for bad debt is made as per the Marks : 1.0
Id: 44712
1) Entity Concept 2) Conservatism Concept
3) Cost Concept 4) Going Concern Concept
Explanation:
Q304) Accounting is defined as? Marks : 1.0
Id: 44474
1) An art of recording, classifying and 2) A systematic and regular record of events
summarizing in a significant manner and in clear financial picture
terms of money, transactions and events
which are in part at least, of a financial
character and interpreting the results thereof. 3) A method of ascertaining profits & loss
4) Noting but book keeping
Explanation:
Q305) The bonds that are issued at heavy discount and pay no interest but are redeemable Marks : 1.0
at par at future date are Id: 44670
1) Convertible debentures 2) Green bonds
3) Zero Coupon Bonds 4) Govt. Security Bonds
Explanation:
Q306) Maximum __________ persons are required to form a partnership having trading Marks : 1.0
business. Id: 44815
1) 15 2) 8
3) 12 4) 20
Explanation:
Q307) Management Accounting seeks to serve the purpose of management to run a Marks : 1.0
business more efficiently and thus uses the techniques of : Id: 44725
1) Financial Accounting 2) Cost Accounting
3) Mathematics and Statistics 4) All of the above
Explanation:
Q308) According to which of the following accounting principles, the owners of the Marks : 1.0
business are considered as creditors? Id: 44691
1) Money measurement 2) Separate Entity
3) Dual Aspect 4) Cost
Explanation:
Q309) A business's assets are Marks : 1.0
Id: 44625
1) equal to liabilities minus stockholders' equity. 2) the economic resources of the business.
3) Reported at current cost. 4) Reported on the income statement.
Explanation:
Q310) Which of the following transactions would increase Cash and cash equivalents and Marks : 1.0
increase Noncurrent liabilities? Id: 44628
1) A bank loan 2) Payment to a supplier
3) Purchasing goods on credit 4) Payment from a customer
Explanation:
Q311) Credit purchases entered in cash book it is called which error Marks : 1.0
Id: 44500
1) errors of omission 2) error of commission
3) compensation error 4) error of principle
Explanation:
Q312) comes in is to be debited, what goes out is to be credited. Marks : 1.0
Id: 44525
1) Rules of Personal 2) Rules of Real
3) Rules of Nominal 4) All of these
Explanation:
Q313) Managerial accounting information is generally prepared for Marks : 1.0
Id: 44473
1) Shareholders 2) Creditors
3) Regulatory agencies 4) Management
Explanation:
Q314) Financial Accounting ends with Marks : 1.0
Id: 44735
1) Preparation of Financial Statements 2) Preparation of Trial Balance
3) Preparation of P& L A/c 4) Preparation of Balance Sheet
Explanation:
Q315) Which one of the following qualities of useful accounting information requires such Marks : 1.0
information to (1) be capable of influencing a decision, (2) be timely, and (3) have Id: 44737
predictive and/or feedback value?
1) Understandable 2) Relevant
3) Reliable 4) Verifiable
Explanation:
Q316) Outstanding salary account is: Marks : 1.0
Id: 44768
1) Real account 2) Personal account
Explanation:
Q317) Sales are equal to: Marks : 1.0
Id: 44527
1) Cost of goods sold + gross profit 2) Cost of goods sold gross profit
3) Gross profit Cost of goods sold 4) None of the above
Explanation:
Q318) Withdrawals by proprietor would Marks : 1.0
Id: 44717
1) Reduce both Assets and Owner’s Equity 2) Reduce Assets and increase Liabilities
3) Reduce Owner’s Equity and increase 4) Have no affect on the Balance Sheet
Liabilities
Explanation:
Q319) What are the considerations in designing the capital structure of a company Marks : 1.0
Id: 44677
1) Trading on equity 2) Cost of capital
3) Profitability 4) All of above
Explanation:
Q320) Which of the following would NOT be a goal of external users reading a company’s Marks : 1.0
financial statement? Id: 44396
1) Understanding the current financial state of 2) Assessing the company's contribution to
the company social and environmental policies
3) Predicting the company's future financial 4) Evaluating the company's ability to generate
performance cash from sales
Explanation:
Q321) Which of the following is not an asset ? Marks : 1.0
Id: 44609
1) Land and Building 2) Sundry Debtors
3) Loan from Shri Kulkarni 4) Cash balance
Explanation:
Q322) Accounting means recording of _________________ Marks : 1.0
Id: 44647
1) Transactions 2) Events
3) Both (a) and (b) 4) Neither (a) nor (b)
Explanation:
Q323) Bank overdraft is shown as a Marks : 1.0
Id: 44586
1) Current liability 2) Fixed asset
3) Contingent liability 4) Current asset
Explanation:
Q324) Which of the following is not an example of intangible assets? Marks : 1.0
Id: 44588
1) Patents 2) Plant & Machinery
3) Franchise rights 4) Goodwill
Explanation:
Q325) The charging of depreciation expense over the life of an asset rather than the Marks : 1.0
immediate full expensing of its costs is an example of: Id: 44800
1) Reliability 2) Consistency
3) Prudence 4) Matching
Explanation:
Q326) Accounting means_________ Marks : 1.0
Id: 44417
1) Summarizing the Business transactions 2) Recording of business transactions.
3) identifying& Communicating economic 4) All of these
information
Explanation:
Q327) Normally, the following accounts are balanced Marks : 1.0
Id: 44440
1) Real a/c and nominal a/c 2) Personal a/c and real a/c
3) Only nominal a/c 4) All a/c
Explanation:
Q328) If Cost of goods sold is Rs.80,700, Opening stock Rs.5,800 and Closing stock Marks : 1.0
Rs.6,000. Then the amount of purchase will be Id: 44743
1) 80500 2) 74900
3) 74700 4) 80900
Explanation:
Q329) The financial statement that shows the financial position of an enterprise at a Marks : 1.0
particular point in time is the: Id: 44630
1) Explanatory notes to the financial statements 2) Statement of changes in equity
3) Balance sheet 4) Cash flow statement
Explanation:
Q330) On 31st march while closing accounts COGS=35000, closing stock 8000/, opening Marks : 1.0
stock 10000/ purchase returns 5000/ then cost of goods purchased is Id: 44498
1) 35000 2) 38000
3) 5000 4) 27000
Explanation:
Q331) The functions planning and forecasting are attributed to Marks : 1.0
Id: 44481
1) Cost Accounting 2) Financial Accounting
3) Management Accounting 4) Book Keeping
Explanation:
Q332) Outstanding salaries are shown as _____. Marks : 1.0
Id: 44392
1) An expense 2) A liability
3) An asset 4) An income
Explanation:
Q333) Accounting Starts where Marks : 1.0
Id: 44648
1) Book keeping ends 2) Business ends
3) Accounting period ends 4) None of above
Explanation:
Q334) If a business suffers a loss, the _________ of the proprietor decreases. Marks : 1.0
Id: 44612
1) Profit 2) Drawings
3) Capital 4) Expenditure
Explanation:
Q335) If the Going Concern concept is no longer valid, which of the following is true? Marks : 1.0
Id: 44704
1) All prepaid assets would be completely 2) Total contributed Capital and Retained
writtenoff immediately Earnings would remain unchanged
3) Intangible Assets would continue to be carried 4) Land held as an Investment would be valued at
at net Amortized historical cost its realizable value
Explanation:
Q336) Which of the following is a noncurrent liability? Marks : 1.0
Id: 44780
1) Bills Payable 2) Sundry Creditors
3) Bank Overdraft 4) Long term Loans
Explanation:
Q337) A company forfeited 2,000 shares of Rs.10 each (which were issued at par) held by Marks : 1.0
Mr. John for nonpayment of allotment money of Rs.4 per share. The calledup value Id: 44745
per share was Rs.9. They were reissued as fully paid to Mr. Mathews for Rs. 7. What
is the profit on reissue of shares to the company?
1) 2000 2) 4000
Explanation:
Q338) Accounting records Marks : 1.0
Id: 44471
1) Qualitative aspects of business 2) Economic aspects of business
3) Financial aspects of business 4) Quantitative aspects of business
Explanation:
Q339) For assessing future market value of company it is best to depend on Marks : 1.0
Id: 44607
1) turn over ratios 2) Earning ratios
3) profitability ratios 4) Liquidity ratios
Explanation:
Q340) The rent paid to the landlord should be debited to _____________ A/c. Marks : 1.0
Id: 44808
1) rent 2) drawings
3) cash 4) land
Explanation:
Q341) Which of the following statements best describes the purpose of financial accounting Marks : 1.0
in a limited liability company? Id: 44531
1) To assist in the daytoday management of the 2) To enable the business to pay the correct
company amount of tax
3) To ensure that the business pays the correct 4) To help the directors discharge their
dividend obligations to the shareholders
Explanation:
Q342) At the end of the accounting period the provision is made for the amount outstanding Marks : 1.0
for the electricity that has been consumed during the said period the statement is Id: 44445
based on
1) accrual concept 2) matching
3) realization 4) money measurement
Explanation:
Q343) The accounting equation can be expressed as which of the following? Marks : 1.0
Id: 44787
1) Assets plus liabilities equal owners' equity 2) Assets plus owners' equity equals liabilities
3) Assets equal liabilities plus owners' equity 4) Either A or C
Explanation:
Q344) Which financial statement can be compared to a still photograph: Marks : 1.0
Id: 44693
1) Income statement 2) Balance sheet
3) Cash flow statement 4) Fund flow statement
Explanation:
Q345) The separate entity concept is applicable to which of following types of businesses? Marks : 1.0
Id: 44484
1) Partnership 2) Sole proprietorship
3) Corporation 4) All the above
Explanation:
Q346) Overstating ending inventory will understate: Marks : 1.0
Id: 44798
1) assets. 2) cost of goods sold.
3) net income. 4) owner's equity.
Explanation:
Q347) According to schedule VI Companies Act which item is not shown on Asset side of Marks : 1.0
Balance sheet Id: 44627
1) Investment 2) Current Loan & Advances
3) Provision 4) Lease Holds
Explanation:
Q348) What is the order in which the accounting transactions and events are recorded in Marks : 1.0
the books? Id: 44778
1) Journal, Subsidiary books, Ledger, Balance 2) Ledger, Journal, Ledger, Balance sheet , Profit
sheet , Profit and loss account. and loss account
3) Journal, Ledger, Profit and loss account, 4) Profit and loss account, Ledger, Balance
Balance sheet . sheet, Journal.
Explanation:
Q349) Management Accounting Reports Can Be Described As Marks : 1.0
Id: 44504
1) GeneralPurpose 2) MacroReports
3) SpecialPurpose 4) Classified Financial Statements
Explanation:
Q350) Double entry bookkeeping was fathered by: Marks : 1.0
Id: 44502
1) F.W.Taylor 2) Henry Fayol
3) Lucas Pacioli. 4) Peter Drucker
Explanation:
Q351) A very high current ratio indicates Marks : 1.0
Id: 44548
1) High efficiency 2) flabby inventory
3) position of more short term funds 4) B or C
Explanation:
Q352) For which step of accounting process the accountants of business entity prepare Marks : 1.0
financial statements? Id: 44533
1) Identification of economic event 2) Communication of financial information
3) Recording financial information 4) Making decisions about business
Explanation:
Q353) A expense that gives benefit for a period of less than twelve months is known as Marks : 1.0
Id: 44589
1) Capital Expense 2) Deferred Expense
3) Revenue Receipt 4) Revenue Expense
Explanation:
Q354) Which of the following is false regarding the balance sheet? Marks : 1.0
Id: 44734
1) The accounts shown on a balance sheet does 2) The retained earnings balance shown on the
not represent the basic accounting equation balance sheet must agree with the ending
for a particular business entity. retained earnings balance shown on the
statement of retained earnings.
3) The balance sheet reports the changes in 4) The balance sheet reports the amount of
specific account balances over a period of assets, liabilities, and stockholders’ equity of
time. an accounting entity at a point in time.
Explanation:
Q355) Wages paid for installation of machinery should be debited to: Marks : 1.0
Id: 44462
1) Wages 2) Machinery
3) Cash 4) Installatio
Explanation:
Q356) When units produce increase, total variable costs ______. Marks : 1.0
Id: 44386
1) Increase in proportion of units produced 2) Increase at a greater rate than units produced
3) Increase at a lesser rate than units produced 4) Do not change
Explanation:
Q357) Rs.5,000 was spent by Mrs. Saroj for addition to machinery in order to increase the Marks : 1.0
production capacity. The amount is: Id: 44771
1) Capital in nature. 2) Deferred revenue in nature.
3) Revenue in nature. 4) Liability in nature.
Explanation:
Q358) The main focus of managerial accounting is: Marks : 1.0
Id: 44520
1) decision making. 2) the preparation of financial statements.
3) the preparation of budgets. 4) documenting cash flows.
Explanation:
Q359) Management accounting involves Marks : 1.0
Id: 44443
1) Recording of costs 2) Recording of transactions
3) Preparation of financial statement 4) Analysis and interpretation of data
Explanation:
1) Accounting Regulations 2) Accounting Guidance Notes
3) Accounting Standards 4) Accounting Framework
Explanation:
Q361) If the realized collection period is more than term of trade it can be said that Marks : 1.0
Id: 44576
1) Collection job is poor 2) The quality of debtor is poor
3) Average daily sales are low 4) both A& B above
Explanation:
Q362) In cost sheet Carriage outward cost relates with______ Marks : 1.0
Id: 44423
1) Selling &Distribution 2) Prime Cost
3) direct Material cost 4) Factory Cost
Explanation:
Q363) Which of the following concepts assumes that a business will last indefinitely? Marks : 1.0
Id: 44716
1) Business Entity 2) Going Concern
3) Periodicity 4) Consistency
Explanation:
Q364) The short term solvency ratio is Marks : 1.0
Id: 44779
1) Current Ratio 2) Proprietory Ratio
3) Net Profit Ratio 4) Debtors Turnvover Ratio
Explanation:
Q365) Conservatism principle says Marks : 1.0
Id: 38726
1) Anticipate losses not profit 2) Anticipate profit
3) Anticipate profit and losses 4) None
Explanation:
Q366) Calculate debtors if credit sales are 216000 and debtors turn over is 18 Marks : 1.0
Id: 44540
1) 12000 2) 15000
3) 18000 4) 20000
Explanation:
Q367) Under which form of business are the owners directly responsible for the debts of Marks : 1.0
1) Sole proprietorship 2) Partnership
3) A and B 4) Corporation
Explanation:
Q368) The assumption that the business enterprise would not be sold or liquidated in the Marks : 1.0
near future is known as the Id: 44449
3) Going concern 4) Matching
Explanation:
Q369) Financial statements for external users can be described as Marks : 1.0
Id: 44468
1) Userspecific 2) Generalpurpose
3) Specialpurpose 4) Specialpurpose
Explanation:
Q370) As per the Double entry concept Marks : 1.0
Id: 44701
1) Assets+ Liabilities = Capital 2) Capital = Assets – Liabilities
3) Capital – Liabilities = Assets 4) Capital + Assets = Liabilities
Explanation:
Q371) A land purchased at a price of Rs. 5,00,000 has a market value of Rs 10,00,000. While Marks : 1.0
recording in the books of accounts it is shown at the purchase price of Rs 5,00,000 Id: 44495
This is the application of which principle?
1) Separate entity concept 2) Historical cost concept
3) Principle of conservatism 4) Materiality concept
Explanation:
Q372) Fundamental accounting assumptions are Marks : 1.0
Id: 44637
1) Materiality 2) Business entity
Explanation:
Q373) Assets Less Liabilities = ___________. Marks : 1.0
Id: 44579
1) Drawings 2) Capital
3) Profit 4) Loss
Explanation:
Q374) Which account is the odd one out? Marks : 1.0
Id: 44652
1) Office Furniture & Equipment 2) Freehold Land and Buildings
3) Stock of raw materials 4) Plant and Machinery
Explanation:
Q375) Purchases of raw materials for cash results in Marks : 1.0
Id: 44651
1) No change in Current Assets 2) Increase in Assets
3) Decrease in capital 4) Decrease in Liabilities
Explanation:
Q376) A second hand car is purchased for Rs. 10,000, the amount of Rs. 1,000 is spent on Marks : 1.0
its repairs, Rs. 500 is incurred to get the car registered in owner’s name and Rs. 1,200 Id: 44744
is paid as dealer’s commission. The amount debited to car account will be
1) 10000 2) 10500
3) 11500 4) 12700
Explanation:
Q377) A company's telephone bill consisting of a Rs.200 monthly base amount, plus long Marks : 1.0
distance charges, would be classified as a: Id: 44479
1) Variable cost 2) Committed fixed cost
3) Direct cost 4) Semi variable cost
Explanation:
Q378) Management accounting information is generally prepared for Marks : 1.0
Id: 44464
3) Managers 4) Regulatory agencies
Explanation:
Q379) Which of the following is a liability Marks : 1.0
Id: 44610
1) Motor Vehicles 2) Machinery
3) Creditors for goods 4) Cash at Bank
Explanation:
Q380) Drawings A/c is classified as __________________ A/c. Marks : 1.0
Id: 44807
1) Real 2) Nominal
3) Personal 4) Impersonal
Explanation:
Q381) The basic concepts related to Balance Sheet are Marks : 1.0
Id: 44699
1) Cost Concept 2) Business Entity Concept
3) Accounting Period Concept 4) Both (a) and (b) above
Explanation:
Q382) When money is withdrawn from bank, the bank: Marks : 1.0
Id: 44783
1) Credits Customer’s Account 2) Credit and debit Customers Account
3) Debits Customers Account 4) None of these
Explanation:
Q383) Revenue from sale of products, is generally, realized in the period in which Marks : 1.0
Id: 44746
1) Cash is collected. 2) Sale is made.
3) Products are manufactured. 4) None of the above.
Explanation:
Q384) Which is the non monetory transaction? Marks : 1.0
Id: 44414
1) Payment of wages of Rs.500 to a worker. 2) Ramesh gives his cycle to his friend Suresh
for a single day use.
3) Ramesh gives his cycle to his friend Suresh on 4) Shankar gives his bullock to gopal in
hire basis for a day. exchange of horse.
Explanation:
Q385) The company collected an account receivable of Rs.4,200. What effect did this Marks : 1.0
transaction have on the financial position of the company? Id: 44791
3) Assets, increase; Liabilities, increase; Owners' 4) Assets, decrease; Liabilities, no change;
Equity, no change Owners' Equity, decrease
Explanation:
Q386) If sales are Rs. 2,000 and the rate of gross profit on cost of goods sold is 25%, then Marks : 1.0
the cost of goods sold will be Id: 44748
1) 2000 2) 1500
3) 1600 4) None of the above.
Explanation:
Q387) What will be debited, if Arun commenced business with cash? Marks : 1.0
Id: 44559
1) Capital account 2) Proprietor account
3) Cash account 4) Drawings account
Explanation:
Q388) Periodical ascertainment of profit helps in judging the______ of a business unit. Marks : 1.0
Id: 44581
1) Profit 2) Capability
3) Performance 4) Accuracy
Explanation:
Q389) Which of the following is not the financial statement Marks : 1.0
Id: 44510
1) Profit & Loss account 2) Trial Balance
3) Profit & Loss appropriation account 4) Balance sheet
Explanation:
Q390) Sweat equity shares are equity shares issued by a company to its ____________. Marks : 1.0
Id: 44814
1) debtors 2) creditors
3) employees 4) lenders
Explanation:
Q391) Cost = Material+_______+Expenses Marks : 1.0
Id: 44422
1) Overhead 2) Direct Exp
3) Labour 4) None of these
Explanation:
Q392) The immediate recognition of loss is supported by the concept/convention of Marks : 1.0
Id: 44805
1) materiality 2) objective
3) consistency 4) conservatism
Explanation:
Q393) Which of the following regarding retained earnings is false? Marks : 1.0
Id: 44398
1) Retained earnings is increased by net income 2) Retained earnings is a component of
stockholders' equity on the balance sheet
3) Retained earnings is an asset on the balance 4) Retained earnings represents earnings not
sheet distributed to stockholders in the form of
dividends
Explanation:
Q394) As a gesture of goodwill, office supplies of Rs.1,000 were sold to a neighboring Marks : 1.0
business that paid cash for the supplies. What effect did this transaction have on the Id: 44790
financial position of the company?
Explanation:
Q395) A company at the start of a financial period had a provision for doubtful debts of Marks : 1.0
Rs.7,000. By the end of the year the provision for doubtful debts was Rs.5,000. The Id: 44397
relevant entry in the profit and loss account would be:
1) Profit decreases by Rs. 2,000 2) Profit decreases by Rs. 5,000
3) Profit decreases by Rs. 12,000 4) Profit increases by Rs. 2,000
Explanation:
Q396) Omission of paise and showing the round figures in financial statements is based on Marks : 1.0
Id: 44709
1) Conservatism Concept 2) Consistency Concept
3) Materiality Concept 4) Realization Concept
Explanation:
Q397) Accounting has certain norms to be observed by the accountant in recording of Marks : 1.0
transaction and preparation of financial statement. These norms reduce the Id: 44438
vagueness and chance of misunderstanding the varied accounting practices. These
norms are
1) Accounting standards 2) Accounting frame work
3) Accounting regulation 4) Accounting guidance notes
Explanation:
Q398) Sales are equal to _____. Marks : 1.0
Id: 44391
1) Cost of goods sold + Profit 2) Cost of goods sold Gross Profit
3) Gross Profit – Cost of goods sold 4) Gross profit – net profit
Explanation:
Q399) Which of the following have some similarities? Marks : 1.0
Id: 44486
1) Financial Accounting & Management 2) Cost Accounting and Management Accounting
Accounting
3) Financial Accounting & Cost Accounting
Explanation:
Q400) The long term solvency position are measured by Marks : 1.0
Id: 44601
1) Coverage Ratio 2) Earning Ratio
3) Structural Ratios 4) Both A&C
Explanation:
Q401) Which of the following should NOT be called ‘Sales’? Marks : 1.0
Id: 44593
1) Goods sold for cash 2) Goods sold on credit
3) Sale of item previously included in ‘Purchases’ 4) Office fixtures sold
Explanation:
Q402) What is the minimum number of partners required to commence a partnership Marks : 1.0
business? Id: 44558
1) 20 2) 4
3) 10 4) 2
Explanation:
Id: 44687
i. Agency theory relates to the relationship between management and employees
ii. Agency theory relates to middlemen
Explanation:
Q404) Furniture for a cloth dealer is a ______. Marks : 1.0
Id: 44390
1) Wasting Asset 2) Current Asset
3) Current Liability 4) Fixed Asset
Explanation:
Q405) The information provided in the annual financial statements of an enterprise pertain Marks : 1.0
to Id: 44757
1) Business Industry. 2) Individual business entity.
3) Economy. 4) None of the three.
Explanation:
Q406) Mr. A purchased a machinery costing `1,00,000 on 1st October, 2005. Transportation Marks : 1.0
and installation charges were incurred amounting `10,000 and ` 4,000 respectively. Id: 44659
Market value of the machine was estimated at ` 1,20,000 on 31st March 2006. While
finalising the annual accounts, A values the machinery at ` 1,20,000 in his books.
Which of the following concepts was violated by A?
1) Historical Cost Concept 2) Matching Concept
3) Realization Concept 4) Periodicity Concept
Explanation:
Q407) Four accounts are given below: Marks : 1.0
Id: 44404
A) Sales Account, B) Interest Account, C) Rent Account, D) Furniture Account.
Which of the above is/ are NOT nominal accounts?
1) Option D ONLY 2) Option A ONLY
3) Options A, B and C 4) Options A and C
Explanation:
Q408) Prepaid expenses are ______. Marks : 1.0
Id: 44395
1) Assets of business 2) Liabilities of business
3) Expenses of business 4) Earnings for business
Explanation:
Q409) Which of the following is not a subfield of accounting? Marks : 1.0
Id: 44516
1) Management accounting 2) Cost accounting
3) Financial accounting 4) Book keeping
Explanation:
Q410) A person sells goods to another on credit basis then he becomes what for business: Marks : 1.0
Id: 44459
1) Creditor 2) Debtor
3) Both of above 4) None of above
Explanation:
Q411) All the expenditures and receipts of revenue nature go to Marks : 1.0
Id: 44751
1) Trading account. 2) Profit and loss account.
3) Balance sheet. 4) Either to (a) or (b)
Explanation:
Q412) The main purpose of cost accounting is to : Marks : 1.0
Id: 44727
1) Maximize profits 2) Help in inventory valuation
3) Provide information to management for 4) Aid in the fixation of selling price
decision making
Explanation:
Q413) __________ is the art of recording, classifying and summarizing the transactions and Marks : 1.0
events of a business and interpreting the results thereof. Id: 44388
1) Management 2) Accounting
3) Auditing 4) Bookkeeping
Explanation:
Q414) Which of the following is a source of own long term finance? Marks : 1.0
Id: 44686
1) Share capital 2) Term loan
3) Debentures 4) Bank credit
Explanation:
Q415) P & L Account is prepared for a period of one year by following Marks : 1.0
Id: 44703
1) Consistency Concept 2) Conservatism Concept
3) Accounting Period Concept 4) Cost Concept
Explanation:
Q416) Which of the following is an example of current asset Marks : 1.0
Id: 44585
1) Long term loan 2) Accounts payable
3) Land and building 4) Accounts receivable
Explanation:
Q417) Which of the following practices is not in consonance with the convention of Marks : 1.0
conservatism? Id: 44707
1) Creating Provision for Bad debts 2) Creating Provision for Discount on Creditors
3) Creating Provision for Discount on Debtors 4) Creating Provision for tax
Explanation:
Q418) Office equipment was purchased by issuing a check for Rs.5,000 and a bills payable Marks : 1.0
for the balance of Rs.45,000. What effect did this transaction have on the financial Id: 44789
position of the company?
Explanation:
Q419) Notes to the financial statements about law suits, pledged assets, contractual Marks : 1.0
commitments, and due dates on large liabilities that help the users interpret the Id: 44793
financial statements are required under an important generally accepted accounting
principle (GAAP) known as which of the following?
1) Window dressing 2) Disclosure
3) Goingconcern 4) Cost
Explanation:
Q420) The going concern concept assumes that Marks : 1.0
Id: 44634
1) The entity continue running for foreseeable 2) The entity continue running until the end of
future accounting period
3) The entity will close its operating in 10 years 4) The entity can't be liquidated
Explanation:
Q421) Management Accounting is Marks : 1.0
Id: 44491
1) Extension of Financial Accounting 2) Extension of Financial Management
3) Accounting for Management 4) Concerned with the provision of information to
people within the organization to help them to
make better decisions
Explanation:
Q422) In financial accounting _______ is prepared for the calculation of business income Marks : 1.0
Id: 44582
1) Trading A/C 2) Balance sheet
3) Profit & Loss A/C 4) Fund flow statement
Explanation:
Id: 44680
1) Matching principle i. Ignores future profit estimates
2) Materiality principle ii. Normal basis for valuing assets
3) Conservatism principle iii. Revenues and expenses of a particular period
4) Cost principle iv. Relates to relative size or importance of item or event
1) [ 1 – i], [2 – ii], [3 – iii], [4 – iv] 2) [1 ii ], [2 i], [3 iv], [4 iii]
3) [1 iv ], [2 i], [3 ii], [4 iii ] 4) [1 iii], [2 iv], [3 i], [4 ii]
Explanation:
Q424) Management accounting and cost accounting are.... Marks : 1.0
Id: 44442
1) Supplementary to each other 2) Complementary to each other
3) Dependent of each other 4) Opposite of each other
Explanation:
Q425) Prepaid insurance premium should be classified as a : Marks : 1.0
Id: 44519
1) Current asset. 2) Fictitious asset.
3) Noncurrent asset. 4) None of the above.
Explanation:
Q426) Which of the following is a perfect Accounting Process? Marks : 1.0
Id: 44490
1) Identification of Transaction – Preparation of 2) Preparation of Business Documents –
Business Documents – Recording of Identification of Transaction – Recording of
Transaction in Journal – Posting to Ledger – Transaction in Journal – Posting to Ledger –
Preparation of Unadjusted Trial Balance – Preparation of Unadjusted Trial Balance –
Passing Adjusting Entries – Preparation of Passing Adjusting Entries – Preparation of
Adjusted Trial Balance – Preparation of Adjusted Trial Balance – Preparation of
Financial Statements Financial Statements
3) Preparation of Unadjusted Trial Balance – 4) Identification of Transaction – Preparation of
Identification of Transaction – Preparation of Business Documents – Preparation of
Business Documents – Recording of Unadjusted Trial Balance – Passing Adjusting
Transaction in Journal – Posting to Ledger – Entries – Recording of Transaction in Journal
Passing Adjusting Entries – Preparation of – Posting to Ledger – Preparation of Adjusted
Adjusted Trial Balance – Preparation of Trial Balance – Preparation of Financial
Financial Statements Statements
Explanation:
Q427) Which of the following accounting information is correct? Marks : 1.0
Id: 38722
1) Assests=Liabilities+capital 2) Assests=Liabilities
3) Assests=Liabilitiescapital 4) None
Explanation:
Q428) A company is said to be multinational if: Marks : 1.0
Id: 44671
1) Production and marketing are done in many 2) Domestically produced items are sold round
countries the world
3) Workers are hired from all countries 4) Raw materials are acquired from many
countries
Explanation:
Q429) It is generally assumed that business will not liquidate in the near foreseeable future Marks : 1.0
because of Id: 44646
1) Periodicity 2) Materiality
3) Matching 4) Going concern
Explanation:
Q430) Accrued expenses affects: Marks : 1.0
Id: 44797
1) assets and expenses. 2) liabilities and revenues.
3) assets and revenues. 4) expenses and liabilities.
Explanation:
Q431) Interest on drawings in normal course is calculated for Marks : 1.0
Id: 44617
1) 12 months 2) 6 months
3) 6.5 months 4) 5 months
Explanation:
Q432) Current ratio is used to assess Marks : 1.0
Id: 44575
1) Effective utilization of capital 2) Application of debt
3) Liquidity position 4) Levels of inventory
Explanation:
Q433) Which of the following account need to prepare separately in Partnership? Marks : 1.0
Id: 44594
1) Trading Account 2) Profit & Loss Account / Income Statement
3) Capital Account 4) Assets Account
Explanation:
Q434) Modern Method of Accounting was introduced by Marks : 1.0
Id: 44802
1) R.N.Carter 2) Luco Pacioli
3) J.R. Batlibai 4) M.S. Gosav
Explanation:
Q435) A business has the following items in it: Owners equity Rs.600,000 Total liabilities Marks : 1.0
Rs.1,400,000. Assets.What is the value of Assets…………… Id: 44522
1) 600000 2) 1400000
3) 2000000 4) None of these
Explanation:
Q436) Nominal Accounts means ____. Marks : 1.0
Id: 44408
persons.
Explanation:
Q437) The Final Accounts (or Financial Statements) of a Sole Trader comprise Marks : 1.0
Id: 38730
1) b, c and d 2) Trading Account
3) Profit and Loss Account 4) Balance Sheet
Explanation:
Q438) Internal users of accounting information are Marks : 1.0
Id: 44475
1) Owners 2) Creditors
3) Management 4) Government
Explanation:
Q439) _____ Discount is not recorded in the books of Accounts. Marks : 1.0
Id: 44426
1) Cash 2) Trade
3) Both A & B 4) None of these
Explanation:
Q440) Which of the following items can be found on an income statement? Marks : 1.0
Id: 44564
1) Accounts receivable 2) Longterm debt
3) Sales 4) Inventory
Explanation:
Q441) An assets liquidity measures Marks : 1.0
Id: 44603
1) Its potential to generate a profit 2) its usefulness to organization
3) Its ease and cost of being converted into cash 4) Proportion of Equity financing
Explanation:
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DNYANSAGAR INSTITUTE OF MANAGEMENT AND RESEARCH
MCQs: [101] – [ACCOUNTING FOR BUSINESS DECISION]
Q. no Question Answer
1. Managerial accounting information is generally prepared for C
…………………
a. Shareholders
b. Creditors
c. Managers
2. Which of the following is not an internal user of management A

information?
a. Creditor
b. Department manager
c. Controller
d. Treasurer
3. Management accounting is applicable to- D
a. Service entities
d. All of these
4. Creating Provision against fluctuation in the price of investment is A

an example of whichaccounting convention
Prof. Swati Bhalerao www.dimr.edu.in

5. The work of factory employees that can be physically associated with D

converting rawmaterial into finished goods is classified as-
c. Indirect labour
d. Direct labour
6. Double entry system is used in which type of accounting.

a. Cost
b. Financial
c. Management
d. All
7. Management accounting concentrates on C

a. Opening books of account
d. None of these
8 Which type of asset class includes those assets which have only D
definite use and become valueless when the yield is over?
a. Fixed asset
b. Current asset
c. Fictitious asset
d. Wasting asset
9 An accounting that deals with the accounting and reporting of B
information to managementregarding the detail information is
c. Cost accounting
d. Real Accounting
10

The primary objective of management accounting is B

c. Both (a) & (b)
d. None of these
11. Bad debt amount should be credited to A

a. Debtors account
c. Sales account
12. Identify which is wrong rule B
a. Nominal account- debit all expenses & losses

13. Cost of goods sold= opening stock+ net purchases+ expenses on Purchases – D
sales Which part of formula is wrong?
a. opening stock
b. net purchases
d. sales
14. Return of goods by a customer should be debited to B

a. Customer’s account
c. Goods account
d. Purchase account
15. Sales made to Mahesh for cash should be debited to A

a. Cash account
b. Mahesh Account
c. Sales account
d. Purchase account

16. Rent paid to landlord should be credited to C

b. Rent account
c. Cash account
d. Expense account
17. Cash discount allowed to a debtor should be credited to B

a. Discount account
c. Sales account
d. Cash account
18. Opening stock + + Direct Expenses (Carriage on Raw material)-Closing C
Stock = …………………
a. Sales, Purchases
19. Financial accounting is concerned with – C
20. The nature of financial accounting is: A
a. Historical
b. Forward looking
c. Analytical
d. Social
21. The main object of cost accounting is: C

22. Cost accounting emerged mainly on account of: D
c. Labour unrest
23. Advantages of cost accounting accrue : D
a. Only to workers

24. Cost accounting is applied to : D

25. Marginal costing is concerned with: B

a. Fixed cost
b. Variable cost
26. Is a person or item for which cost may be ascertained? B

a. Cost unit
b. Cost Centre
c. Cost object
d. Cost estimation
27 Salary paid to factory manager is an item of: B

a. Prime cost
b. Factory overhead
c. Selling overhead
d. Office overhead
28 cost refers to those cost which have already been incurred and cannot be B
a. Opportunity cost
b. Sunk Cost
c. Incremental cost
d. Decremental cost
29 Amortization of intangible Asset Such as Goodwill which has indefinite life is A

an example of accounting concept
30 If loan have been guaranteed by managers and directors is called as C

a. Loan
b. Unsecured Loan
c. Secured Loan

31. cost will still be incurred although a plant is shut down temporarily. C
b. Advertising
c. Depreciation
d. Carriage
32 Accounting principles are generally based upon: A
a. Practicability
b. Subjectivity
33 The system of recording based on dual aspect concept is called: B
d. All the above
34 The practice of appending notes regarding contingent liabilities in accounting D
statements is in pursuance to:
35 Sales are equal to: A
36 Interest on drawings is: C
37 Goods given as samples should be credited to: C
b. Sales account
c. Purchase account
38. Outstanding salaries are shown as: C
b. Shown in liability side of Balance sheet under current Liability.
c. (a) &(b) above
39 Income tax paid by a sole proprietor on his business income should be: C

40. All direct & indirect expenses related to business are charged: C
b. Trading account
41 According to schedule VI Companies Act which item is not shown on Asset C

side of Balance sheet
a. Investment
c. Provision
d. Lease Holds
42 Trade Payables are recorded in……………. B
c. P & L a/c
43 Investment of X company profit in shares of other company PQR Pvt. ltd are A
recorded in……………….
44 Preliminary expenses are recorded in……………….. D

d. Asset side of B/S
45 Variable cost per unit B
a. Remains fixed

56 The books to be compulsorily maintained by a company are: E
a. Cash book and ledger

c. Journal
d. Both a and b
57 Carriage outward is charged to B

58 Cash Purchases: C
a. Increases assets
c. Decreases assets
59 Purchases of goods on credit from A is recorded as: C

60 Which of the following is not an example of real a/c: D
a. Machinery
b. Building
c. Cash
d. Creditor
61 Payment received from debtor: C
62 Payment of salary is recorded by: A


63 Cost of asset should always be equal to the cost of the liabilities. This concept B
is

b. Matching Concept
c. Consistency
64 Which of the following is not a fixed asset? B
a. Building
b. Bank Balance
c. Plant Patents
d. Goodwill
65 The basic concepts related to p& l a/c are: D
b. Matching Concept
c. Cost Concept
66 P& l a/c is prepared for a period of one year by following: C
d. Cost Concept
67 Insurance prepaid is shown as: A
a. Current assets
c. Fixed asset
d. Fixed liability
68 Outstanding salary is shown as: E

b. A liability

69 Reserve for doubtful debts appearing in the trial balance should be: E

d. Both a and b
e. Both a and c
70 All those to whom business owes money are: C
a. Debtors
b. Investors
c. Creditors
d. Shareholders
71 According to which concept business is treated as a unit apart from owner C
a. Dual concept
b. Divider concept
c. Entity concept
d. Landlord concept
72 Authorized capital, also known as A
a. Nominal capital
b. Paid up capital
c. Issues capital
d. None of these
73 True & fair profit and loss a/c of a company know by D
74 Credit balance of profit & loss a/c shown on B
c. Not shown in balance sheet
d. Half on asset side and half on liability side
75 Under which concept it is assumed that the enterprises has neither the C
intention nor the necessity of liquidation or of curtailing materiality the scale
of operation
d. None of these
76 Making the provision for doubtful debts and discount on debtors in A
anticipation of actual bad debts and discount is an example for which concept
d. All of these

77 Financial accounting use data C

a. Projected data
c. Historic data
78 Payment received from Debtor C

79 Bookkeeping is an……………………of correctly recording of business transition. B

a. Art and Science
b. Art
c. Science
d. Art or Science
80 Journal Entries are known as book of Entry. A
a. Original
b. Duplicate
c. Personal
d. Nominal
81 What comes in is to be debited, what goes out is to be credited. B

b. Rules of Real
c. Rules of Nominal
d. All of these
82 Which of the following account balance will be shown on debit side of Trial D
Balance?
b. Cash a/c
c. Short term loan
d. creditors
83 The reduction in the value of the fixed assets which can arise due to time B
factor is
a. Discount
b. Depreciation
c. Reduction

84 If closing stock appears in the trial balance, it should be A

85 Outstanding expenses are charged to B

d. None of these
86 liabilities in balance sheet include the following items D

a. Long term loan
b. Short term loan
c. Owner’s fund
d. All of these
87 prepaid expense is treated as A

a. Current asset
d. None of these
88 Cost accounting aims at ascertain ………….of product A

a. Cost
b. Net profit
c. Gross profit
d. Selling price
89 The purpose of financial accounts is reporting to C

a. Management only
b. Government only
c. Investor only
d. All of these

90 Accounting does not record non-financial transactions because of: D

a. Accrual concept
b. Cost concept
91 Proposed dividends" is shown in the Balance Sheet of a company under the A

head:
a. Provisions
92 Fixed assets and current assets are categorized as per concept of: B
a. Separate entity
b. Going concern
c. Consistency
d. Time period
93 Proprietor (owner) is treated as creditor of business due to: C

c. Entity Concept
94 Which financial statement represents the accounting equation ASSETS = C

LIABILITIES + OWNER'S EQUITY
a. Income Statement
c. Balance Sheet
95 Which of the following is a liability? A
a. Loan from Mr.Y
b. loan to Mr.y
c. Both (a) (b)
d. None of these

a. Accrual concept
b. Cost concept


e. Accrual concept
f. Cost concept
g. Continuity concept
h. Money measurement concept

head:
e. Provisions
f. Reserves and Surplus
g. Current Liabilities
h. Other Liabilities
e. Separate entity
f. Going concern
g. Consistency
h. Time period

e. Periodicity concept
f. Materiality Principle
g. Entity Concept
h. Consistency concept

e. Income Statement
f. Cash Flow Statement
g. Balance Sheet
h. Fund Flow Statement
e. Loan from Mr.Y
f. loan to Mr.y
g. Both (a) (b)
h. None of these

e. Accrual concept
f. Cost concept

a. Separate entity
b. Going concern
c. Consistency
d. Time period
98 Which of the following is correct D

99 Which of the following best describes a trial balance? A

100 Net profit is calculated in C

a. Trading a/c
b. Balance sheet
d. Trial balance.
101 The concept of separate entity is applicable to which of following types of D

businesses?
b. Corporation
c. Partnership
d. All of them
102 Which of the following is time span into which the total life of a business C
is divided for the purpose of preparing financial statements?
a. Fiscal year
b. Calendar year
d. Accrual period

103 Interest , rent, electricity bill are types of account D

a. Personal a/c
b. Impersonal a/c
c. Real a/c
d. Nominal a/c
104 Which of the following should not be called sales? B
105 Material concept tell about C

106 Which of the following is not regarded as the fundamental accounting D

concept?
107 Using "lower of cost and net realisable value(Market Value)" for the purpose C
of inventory valuation is the implementation of which of the following
concepts?
d. Matching concept
108 The concept of separate entity is applicable to which of following D
types of businesses?
b. Corporation
c. Partnership
d. All of them
109 The revenue recognition principal dictates that all types of incomes should be C
recorded or recognized when
a. Cash is received

110 The allocation of owner's private expenses to his/her business violates which C
of the following?
a. Accrual concept
b. Matching concept
111 The going concern concept assumes that A

112 Which of the following is time span into which the total life of a C
business is divided for the purpose of preparing financial statements?
a. Fiscal year
b. Calendar year
d. Accrual period
113 Showing purchased office equipments in financial statements is the B
application of which accounting concept?
b. Materiality
c. Prudence
d. Matching concept
114 Information about an item is if its omission or misstatement might D
influence the financial decision of the users taken on the basis of that
information
a. Concrete
b. Complete
c. Immaterial
d. Material
115 "Financial information should be neutral and bias free" is the dictation of C
which one of the following?
d. Duality Concept

116 Accounting principles are divided into two types. These are --- D
117 Which of the following is not related with Money Measurement Concept ? B
b. The transactions which cannot be expressed in money, will not be
recorded in accounting books
d. None of These
118 Which of the following equation is related with Dual Aspect Concept ? D
d. All of the above
119 If the total assets of the company amount to Rs 1,50,000 and owner’s B
equity is Rs 70,000, the amount of liabilities will be –
a. Rs 70,000
b. Rs 80,000
c. Rs 90,000
d. Rs 1,00,000
120 Profit from sale of assets is example for – B

a. Revenue Profit
b. Capital Profit
c. Loss
d. None of these
121 Depreciation is a charge against – A

a. Profit
b. Assets
c. Company
d. Books of A/c

122 Which expenses is a Capital Nature? A

a. Depreciation
b. Wages
c. Salary
d. Stationary
123 Balance Sheet is a statement of……………. D

a. Assets
b. Liabilities
c. Capital
d. All of these
124 Accounting is the process of matching…….. B

a. Benefits & Costs
b. Revenues & Costs
125 Which one of the following is not an example of Intangible Assets? D

a. Patents
b. Trade Marks
c. Copyright
d. Land
126 The prime function of accounting is to C

b. Provide the information basis of action.
127 The basic function of financial accounting is to B

128 Management Accounting provides invaluable services to management in A

performing
d. None of these

129 Book keeping is mainly concerned with A

b. Designing the systems in recording classifying,summarizing the
recorded data
130 According to the money measurement concept the following will be recorded C
in the books of accounts of the business
131 The convention of conservatism when applied to the balance sheet result A
in.
d. None of these
132 The convention of conservatism is applicable a) B

d. None of these
133 The amount brought in by the proprietor in the business should be credited B
to
a. Cash a/c
b. Capital a/c
c. Drawing a/c
d. Bank a/c
134 The amount of salary paid to Suresh should be debited to B
b. Salaries a/c
c. Cash a/c
d. Bank a/c
135 The return of goods by the customer should be debited to B

a. Customer a/c
b. Sales return a/c
c. Goods a/c

136 sales made by Mahesh for cash should be debited to A

a. Cash a/c
b. Mahesh a/c
c. Sales a/c
d. Sales return a/c
137 The rent paid to land lord to be credited to C

a. Land lord a/c
b. Rent a/c
c. Cash a/c
d. Tenant a/c
138 To make simulation more popular, we need to avoid D

a. Large cost over runs
b. Prolonged delays
c. User dissatisfaction with simulation results
d. All of the above
139 The cash discount allowed to a debtor should be credited to B

a. Discount a/c
b. Customer a/c
c. Sales a/c
d. None of these
140 The primary objective of cost accounting is A

d. None of these
141 The convention of disclosure implies that all material information should be A
c. Not disclosed
d. None of these

142 In accounting all business transaction are recorded as having B

a. Single aspect
b. Dual aspect
c. Triple aspect
d. None of these
143 Custom and traditions which guide the accountant while preparing the C
accounting statements
d. None of these
144 Rules of action or conduct adopted by the accountants universally while C

recording accounting transaction
d. None of these
145 system in which accounting entries are made on the basis of amounts having B
become due for payment or receipt is called
a. Cash concept
b. Accrual concept
c. Matching concept
d. On-going concept
146 Debit the receiver credit the giver rule for B

a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these
147 Debit what come in Credit what goes out rule for A
a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these

148 Debit all expenses and losses Credit all gains and income. C
a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these
149 A book containing a chronological record of business transaction & original A

record
a. Journal
b. Ledger
c. Trial balance
d. None of these
150 Transferring the debit and credit item from the journal to the respective B
accounts is called
a. Compound Journal
b. Ledger
c. Trial balance
d. None of these
151 A statement containing the various ledgers balances on particular date C

a. Compound Journal
b. Ledger
c. Trial balance
d. None of these
152 The transferring of debit and credit items from journal to the respective B
accounts in the ledger is called as
a. Ledger
b. Posting
c. Forward journal
d. None of these
153 Which of the following items would not fall under the definition of an asset? D
a. Land
b. Machine
c. Cash
d. Owner Equity

154 Which one of the following items would fall under the definition of a C
liability
a. Cash
b. Debtor
c. Owner’s equity
d. None of these
155 Which of the following statements are false? D

c. The accounting equation shows how much of your assets belong to
the owner, and how much belong to people outside business
156 A business has the following items in it: C

Land Rs.1,000,000
Machinery Rs.20,000 Cash Rs.10,000 Debt Rs.0
Owner’s equity ?
What is the valve of owner’sequity?
a. Rs.1020000
b. Rs.1010000
c. Rs.1030000
157 A business has the following items in it: Owners’ equity Rs.6,00, 000 C
Liabilities Rs.14,00,000.
What is the value of Assets……………
a. 600,000
b. 1,400,000
c. 2,000,000
d. None of these
158 A business has the following items in it: A
Land Rs.1, 500,000
Machinery Rs.80, 000
Cash Rs.20, 000
Owners equity Rs.900, 000 Loan Rs.500, 000
Creditors?
a. Rs.200, 000
b. Rs.700, 000
c. Rs.800, 000
d. Rs1, 100,000

159 A business has following items in it Land ? C

Vehicles Rs.600,000 Debtors Rs. 1,20,000 Cash Rs.30,000
Owners’Equity Rs.1,000,000 Loan 5,00,000
Creditors Rs.50,000
a. 1,000,000
b. 1,550,000
c. 800,000
d. None of these
160 Which of the following equations properly represents a derivation of the D
fundamental accounting equation?
a) Assets + liabilities = Owner Equity

b) Asset = OwnerEquity
c) Cash = Assets
d) Assets – Liabilities = Owner Equity
a. Only (a)
b. Both (a) (b)
c. All (a)(b)(c)(d)
d. d) None of these
161 Retained earnings will change over time because of several factors. Which B
of the following factors would explain an increase in retained earnings?
a. Net Loss
b. Net income
c. Dividend
162 Which of these items would be accounted for as an expense? D

163 Which of the following would not be included on a balance sheet? C

a. Accounts payable
c. Sales
d. Cash

164 XYZltd.has provided the following information about its balance sheet: B
Cash Rs.100
Accounts Receivable Rs.500 Stock holder equity Rs.700 Accounts Payable

Rs.200 Bank Loan Rs.1,000
Based on the information provided, how much are XYZ ltd.Totalliabilities?
a. Rs.200
b. Rs.1900
c. Rs.1200
d. Rs.1700
165 The full disclosure principle, as adopted by the accounting profession, is D
best described by which of the following?
a. All information related to an entity's business and operating
objectives is required to be disclosed in the financial statements.
b. Information about each account balance appearing in the financial
statements is to be included in the notes to the financial
statements.
c. Enough information should be disclosed in the financial statements
so a person wishing to invest in the stock of the company can make
a profitable decision.
d. Disclosure of any financial facts significant enough to influence the
judgment of an informed reader
166 Which of the following is a real (permanent) account? D
a. Goodwill
b. Sales
167 Which of the following statements is not an objective of financial B
reporting?
a. Provide information that is useful in investment and credit
decisions.
b. Provide information regarding policy of organization
c. Provide information that is useful in assessing cash flow
prospective
d. None of theses
168 The Cash account on the balance sheet should not include which of the A
following items?
b. Currency
c. Money orders

169 Of the following account types, which would be increased by a debit? C

d. Equity and revenues
170 The following comments all relate to the recording process. Which of these B
statements is correct?
b. The general ledger is posted from transactions recorded in the general
journal.
c. The trial balance provides the primary source document for recording
transactions into the general journal.
d. Transposition is the transfer of information from the general journal to
the general ledger.
171 The following comments each relate to the recording of journal entries. Which D
statement is true?
c. The chart of accounts reveals the amount to debit and credit to the
affected accounts.
172 The trial balance is ………………………….. D

173 Which of the following errors will be disclosed in the preparation of a trial C
balance?
d. Recording the wrong amount for a transaction to both the account
debited and the account credited.
174 The basic sequence in the accounting process can best be described as: D
a. Transaction, journal entry, source document, ledger account, trial
balance.
b. Source document, transaction, ledger account, journal entry, trial
balance.
c. Transaction, source document, journal entry, trial balance, ledger
account.
d. d. Transaction, source document, journal entry, ledger account,
trial balance.

175 Inventory accounts should be classified in which section of a balance A

sheet?
a. Current assets
b. Investments
176 Investment in Bonds should be disclosed on the balance sheet. B

d. None of these
177 Contingent liabilities should be recorded in the accounts when: C

178 Which of the following functions is managerial accounting intended to D

facilitate?
a. Planning
b. Decision making
c. Control
d. All of these
179 Which of the following statements about differences between financial A

and managerial accounting is incorrect?
a. Managerial accounting information is prepared primarily for external

parties such as stockholders and creditors; financial accounting is
directed at internal users.
b. Financial accounting is aggregated; managerial accounting is focused
on products and departments.
c. Managerial accounting pertains to both past and future items; financial
accounting focuses primarily on past transactions and events.
d. Financial accounting is based on generally accepted accounting
practices; managerial accounting faces no similar constraining factors.
180 Cost accounting information can be used for: D

d. All of these

181 Manufacturing costs are also known as product costs. Which of the C
following best describes those costs which are considered to be
manufacturing costs?
c. Direct materials, direct labor, factory overhead, and administrative
overhead.
182 A company's telephone bill consisting of a Rs.200 monthly base amount, D
plus long distance charges, would be classified as a:
a. Variable cost
c. Direct cost
183 Accounting principles are B

184 Accounting concepts are based on B

185 Business entity concept distinguishes between: A

c. Owners
186 The cost concept records the figures at B
a. Market values

187 Going concern concept assumes C

188 Financial account provide summary of: C

a. Asset
b. Liability
c. Accounts
189 Financial statements are: C
c. recorded facts
190 Retained earnings statement depicts: A
191 User of financial statement is: D
a. Management
b. Creditors
c. Bankers
d. All of the above
192 Current liability does not include D
a. Sundry creditors
b. Acceptances
193 Financial accounting deals with: B
194 Financial account record only A
a. Actual figures
b. Budgeted figures
c. Standard figures
195 The term Management Accounting was first used in C
a. 1910
b. 1939
c. 1950
d. 1960

196 Management Accounting relates to C

197 Content of income statement D
a. Trading account
c. Balance sheet
d. All of the above
198 Which does not comes under the head of asset: D
a. Fixed asset
b. Investment
c. Current asset
d. Owners equity
199 Which items does not come under the balance sheet A
a. sales
b. Share capital
d. Unsecured loan
200 The word accounting can be classified in to: C
201 If a company has contingent liabilities, they appear in the ………….. A
.
a. Balance Sheet
202 Modern Method of Accounting was introduced by C

a. M. S. Gosav
b. Wheldon
c. Luco Pacioli
d. R. N. Carter
203 A budget is a plan of action expressed in… C
a. Financial terms
b. Non‐financial terms
c. Both
d. Subjective matter
204 Budget is prepared for a… B
a. Indefinite period
b. Definite period
c. Period of one year

d. Six months
205 A budget is tool which helps the management in planning and control of… A
a. All business activities
b. Production activities
c. Purchase activities
d. Sales activities
206 Budgetary control system acts as a friend, philosopher and guide to the… A
a. Management
b. Share holders
c. Creditors
d. Employees
207 Budgetary control system defines the objectives and policies of the… D
a. Production department
b. Finance department
c. Marketing department
d. All
208 Budgetary control system facilitates centralized control with… C
a. Decentralized activity
b. Centralized activity
c. Both
d. None
209 Budgetary control facilitates easy introduction of the… C
a. Marginal costing
b. Ratio analysis
c. Standard costing
210 Budgetary control helps the management in… A
a. Obtaining bank credit
b. Issue of shares
c. Getting grants from government
d. All of these
211 Budgetary control system helps the management to eliminate… C
a. Undercapitalization
b. Overcapitalization
c. Both
212 Budgetary control provides a basis for… C
a. Bonus shares
b. Rights shares
c. Remuneration plans
d. None
213 Budgetary control helps to introduce a suitable incentive and B
remuneration based
on…
a. Changes in government policies

b. Inflationary conditions
c. Both
d. None
214 Budgetary control __________ replace management in decision‐making. B

a. Can
b. Cannot
c. Sometimes
d. Inadequate data
215 The success of budgetary control system depends upon the willing D
cooperation of…
a. Shareholders
b. Management
c. Creditors
d. All the functional areas of management
216 Recording of actual performance is…. B
a. An advantage of budgetary control
b. A step in budgetary control
c. A limitation of budgetary control
d. None
217 Revision of budgets is… C
a. Unnecessary
b. Can’t determine
c. Necessary
d. Inadequate data
218 Frequent revision of budgets will… A
a. Affects its reliability
b. Increase the accuracy
c. Both
219 Usually the production budget is stated in terms of… C
a. Money
b. Quantity
c. Both
d. None
220 .Budget period is the… C
a. Period of budget committee
b. Period of budget centres
c. Period for which a budget is prepared
d. Period of budget officer
221 Budget period depends upon… D
a. The type of budget
b. The nature of business
c. The length of trade cycles
d. All of these

222 .A key factor is one which restricts… A

a. The volume of production
b. The volume of sales
c. The volume of purchase
d. All of the above
223 ……………….plan serving as a pattern for and a control over future B
operations is
known as budget.
a. Operational
b. Financial
c. Functional
224 ………………… control is the most useful technique in implementing the A
objectives of
the company with minimum possible cost and maximum possible
efficiency.
a. Budgetary
b. Inventory
c. Capability
225 ………………….Co-ordination and control are three basis aspects concerned C
with
budgetary control.
a. Centralizing
b. De-centralizing
c. Planning
226 ………………..is a section of the organisation of an undertaking defined for B
the
purpose of budgetary control.
a. Cost centre
b. Budget centre
c. Cost Unit
227 A document which sets out the responsibilities of the persons engaged in C
the routine
of and the forms and records required for budgetary control is known as
________ .
a. Budget Policy
b. Budget Book
c. Budget Manual
228 On the basis of ______ , budget is classified into long term budget, short C
term
budget and current budget.
a. Functions
b. Control
c. Time

229 On the basis of flexibility budget is classified into two types such as fixed A
budget and
________ budget.
a. variable
b. Semi-variable
c. Constant
230 Variable budget is also known as _______ budget. C
a. Fixed
b. Semi-variable
c. Flexible
231 The budget prepared according to ________ is known as functional C
budgets.
a. Period
b. Controls
c. Functions
232 ……………….. budget is a budget which is designed to remain unchanged C
irrespective of the volume of output or turnover achieved.
a. Flexible
b. Cash
c. Fixed
233 A Flexible budget is one which permits the change in accordance with the B
changes
in the level of activity.
a. Fixed
b. Flexible
c. Sales
234 Flexible budgets are more useful in actual practice because it is more A
realistic and
has great practical utility in the business.
a. realistic
b. non-realistic
c. Predictable
235 A _______ budget is the budget which shows the quantity and value of C
goods to be
purchased during the budget period to meet the day-to-day needs of the
business.
a. Sales
b. Cash
c. Purchase
236 One of the basic purpose to prepare _______ budget is to estimate the A
cash
requirements for the purchases to be made during the budgeted period.
a. purchase
b. cash
c. sales

237 Purchase budget is prepared by the ________ manager. C

a. Finance
b. Stores
c. Purchase
238 Plant utilization budget and Manufacturing overhead budgets are types of A
a. Production budget
b. Sales budget
c. Cost budget
239 A factory produces two types of articles Y and Z. Article Y takes 8 hours to C
make
and Z takes 16 hours. In a month ( 25 days * 8 hours) 600 units of X and
400 units of Z
are produced. Given budgeted hours 8000 per month and men employed
are 50.
Determine Activity ratio, Capacity ratio and efficiency ratio.
a. 112%, 140%, 140%
b. 140%, 112%, 140%
c. 140%, 140%, 112%
240 R&D budget and Capital expenditure budget are examples of C
a. Short-term budget
b. Current budget
c. Long-term budget
241 Capacity ratio * Efficiency ratio = Activity ratio. A
a. True
b. False
242 The scare factors is also known as A

a. Key factor
b. Abnormal factor
c. Linking factor
243 A budgeting process which demands each manager to justify his entire C
budget in
detail from beginning is
a. Functional budget
b. Master budget
c. Zero base budgeting
244 Activity Ratio -------------------- i) (Actual hours worked / Budgeted hours) * C
100
B) Capacity Ratio ------------------ ii) (Standard hours of actual production /
Actual hours
worked) * 100

C) Efficiency Ratio ----------------- iii) (Standard hours for actual output /

BBudgeted hours)
* 100
A-ii, B-iii, C-i
b. A-i, B-ii, C-iii
c. A-iii, B-i, C-ii
245 Given Production at 60% activity, 600 units, Material Rs 50 per unit, Labour B
Rs 20
per unit, Direct expenses Rs 5 per unit, Factory overheads Rs 20,000 ( 60%
variable)
and Administration expenses Rs 15,000 ( 60% fixed). What will be the total
cost per unit
for production at 80% capacity?
a. Rs 1,01,000
b. Rs 126.25
c. Rs 122
d. Rs 1,22,000
246 In fixed budgets costs are classified according to their nature. B
a. True
b. False
247 Given the budgeted output in second quarter is 8,000 units. In the first A
quarter,
Fixed overheads were Rs 40,000 Variable overheads were Rs 5 per unit ( Rs
40,000)
and semi variable were 20,000 ( 60% varying @ Rs 3 per unit). Determine
the total
manufacturing overhead budget for the second quarter.
a. Rs 1,12,000
b. 1,12,000 units
c. Insufficient data
d. All
c. Both
d. None


c. Both

…………………
a. Shareholders
b. Creditors
c. Managers

information?
a. Creditor
c. Controller
d. Treasurer
a. Service entities
d. All of these



c. Indirect labour
d. Direct labour

a. Cost
b. Financial
c. Management
d. All

d. None of these
a. Fixed asset
b. Current asset
c. Fictitious asset
d. Wasting asset
c. Cost accounting
d. Real Accounting
10


c. Both (a) & (b)
d. None of these

a. Debtors account
c. Sales account

a. opening stock
b. net purchases
d. sales

c. Goods account
d. Purchase account

a. Cash account
b. Mahesh Account
c. Sales account
d. Purchase account


b. Rent account
c. Cash account
d. Expense account

a. Discount account
c. Sales account
d. Cash account
Stock = …………………
a. Sales, Purchases
a. Historical
b. Forward looking
c. Analytical
d. Social

c. Labour unrest
a. Only to workers



a. Fixed cost
b. Variable cost

a. Cost unit
b. Cost Centre
c. Cost object
d. Cost estimation

a. Prime cost
b. Factory overhead
c. Selling overhead
d. Office overhead
a. Opportunity cost
b. Sunk Cost
c. Incremental cost
d. Decremental cost


a. Loan
b. Unsecured Loan
c. Secured Loan

b. Advertising
c. Depreciation
d. Carriage
a. Practicability
b. Subjectivity
d. All the above
b. Sales account
c. Purchase account
c. (a) &(b) above

b. Trading account

a. Investment
c. Provision
d. Lease Holds
c. P & L a/c

a. Remains fixed


c. Journal
d. Both a and b

a. Increases assets
c. Decreases assets

a. Machinery
b. Building
c. Cash
d. Creditor


is

b. Matching Concept
c. Consistency
a. Building
b. Bank Balance
c. Plant Patents
d. Goodwill
b. Matching Concept
c. Cost Concept
d. Cost Concept
a. Current assets
c. Fixed asset
d. Fixed liability

b. A liability


d. Both a and b
e. Both a and c
a. Debtors
b. Investors
c. Creditors
d. Shareholders
a. Dual concept
b. Divider concept
c. Entity concept
d. Landlord concept
a. Nominal capital
b. Paid up capital
c. Issues capital
d. None of these
of operation
d. None of these
d. All of these


a. Projected data
c. Historic data


a. Art and Science
b. Art
c. Science
d. Art or Science
a. Original
b. Duplicate
c. Personal
d. Nominal

b. Rules of Real
c. Rules of Nominal
d. All of these
Balance?
b. Cash a/c
c. Short term loan
d. creditors
factor is
a. Discount
b. Depreciation
c. Reduction



d. None of these

a. Long term loan
b. Short term loan
c. Owner’s fund
d. All of these

a. Current asset
d. None of these

a. Cost
b. Net profit
c. Gross profit
d. Selling price

a. Management only
b. Government only
c. Investor only
d. All of these


a. Accrual concept
b. Cost concept

head:
a. Provisions
a. Separate entity
b. Going concern
c. Consistency
d. Time period

c. Entity Concept

a. Income Statement
c. Balance Sheet
a. Loan from Mr.Y
b. loan to Mr.y
c. Both (a) (b)
d. None of these

a. Accrual concept
b. Cost concept


e. Accrual concept
f. Cost concept

head:
e. Provisions
e. Separate entity
f. Going concern
g. Consistency
h. Time period

g. Entity Concept

e. Income Statement
g. Balance Sheet
e. Loan from Mr.Y
f. loan to Mr.y
g. Both (a) (b)
h. None of these

e. Accrual concept
f. Cost concept

a. Separate entity
b. Going concern
c. Consistency
d. Time period



a. Trading a/c
b. Balance sheet
d. Trial balance.

businesses?
b. Corporation
c. Partnership
d. All of them
a. Fiscal year
b. Calendar year
d. Accrual period


a. Personal a/c
b. Impersonal a/c
c. Real a/c
d. Nominal a/c


concept?
concepts?
d. Matching concept
b. Corporation
c. Partnership
d. All of them
a. Cash is received

of the following?
a. Accrual concept
b. Matching concept

a. Fiscal year
b. Calendar year
d. Accrual period
b. Materiality
c. Prudence
d. Matching concept
information
a. Concrete
b. Complete
c. Immaterial
d. Material
d. Duality Concept

d. None of These
d. All of the above
a. Rs 70,000
b. Rs 80,000
c. Rs 90,000
d. Rs 1,00,000

a. Revenue Profit
b. Capital Profit
c. Loss
d. None of these

a. Profit
b. Assets
c. Company
d. Books of A/c


a. Depreciation
b. Wages
c. Salary
d. Stationary

a. Assets
b. Liabilities
c. Capital
d. All of these

a. Benefits & Costs
b. Revenues & Costs

a. Patents
b. Trade Marks
c. Copyright
d. Land



performing
d. None of these


recorded data
in.
d. None of these

d. None of these
to
a. Cash a/c
b. Capital a/c
c. Drawing a/c
d. Bank a/c
b. Salaries a/c
c. Cash a/c
d. Bank a/c

a. Customer a/c
b. Sales return a/c
c. Goods a/c


a. Cash a/c
b. Mahesh a/c
c. Sales a/c
d. Sales return a/c

a. Land lord a/c
b. Rent a/c
c. Cash a/c
d. Tenant a/c

b. Prolonged delays
d. All of the above

a. Discount a/c
b. Customer a/c
c. Sales a/c
d. None of these

d. None of these
c. Not disclosed
d. None of these


a. Single aspect
b. Dual aspect
c. Triple aspect
d. None of these
d. None of these

d. None of these
a. Cash concept
b. Accrual concept
c. Matching concept
d. On-going concept

a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these
a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these

a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these

record
a. Journal
b. Ledger
c. Trial balance
d. None of these
accounts is called
a. Compound Journal
b. Ledger
c. Trial balance
d. None of these

a. Compound Journal
b. Ledger
c. Trial balance
d. None of these
a. Ledger
b. Posting
c. Forward journal
d. None of these
a. Land
b. Machine
c. Cash
d. Owner Equity

liability
a. Cash
b. Debtor
c. Owner’s equity
d. None of these


Land Rs.1,000,000
Owner’s equity ?
a. Rs.1020000
b. Rs.1010000
c. Rs.1030000
a. 600,000
b. 1,400,000
c. 2,000,000
d. None of these
Land Rs.1, 500,000
Cash Rs.20, 000
Creditors?
a. Rs.200, 000
b. Rs.700, 000
c. Rs.800, 000
d. Rs1, 100,000


Creditors Rs.50,000
a. 1,000,000
b. 1,550,000
c. 800,000
d. None of these

c) Cash = Assets
a. Only (a)
b. Both (a) (b)
c. All (a)(b)(c)(d)
d. d) None of these
a. Net Loss
b. Net income
c. Dividend


a. Accounts payable
c. Sales
d. Cash

Cash Rs.100

a. Rs.200
b. Rs.1900
c. Rs.1200
d. Rs.1700
statements.
a. Goodwill
b. Sales
reporting?
decisions.
prospective
d. None of theses
following items?
b. Currency
c. Money orders


journal.
the general ledger.
statement is true?
affected accounts.

balance?
balance.
balance.
account.
trial balance.


sheet?
a. Current assets
b. Investments

d. None of these


facilitate?
a. Planning
b. Decision making
c. Control
d. All of these



d. All of these

overhead.
a. Variable cost
c. Direct cost



c. Owners
a. Market values



a. Asset
b. Liability
c. Accounts
c. recorded facts
a. Management
b. Creditors
c. Bankers
d. All of the above
a. Sundry creditors
b. Acceptances
a. Actual figures
b. Budgeted figures
c. Standard figures
a. 1910
b. 1939
c. 1950
d. 1960


a. Trading account
c. Balance sheet
d. All of the above
a. Fixed asset
b. Investment
c. Current asset
d. Owners equity
a. sales
b. Share capital
d. Unsecured loan
.
a. Balance Sheet

a. M. S. Gosav
b. Wheldon
c. Luco Pacioli
d. R. N. Carter
a. Financial terms
c. Both
b. Definite period

d. Six months
d. Sales activities
a. Management
b. Share holders
c. Creditors
d. Employees
d. All
c. Both
d. None
a. Marginal costing
b. Ratio analysis
c. Standard costing
b. Issue of shares
d. All of these
c. Both
a. Bonus shares
b. Rights shares
d. None
remuneration based
on…

c. Both
d. None

a. Can
b. Cannot
c. Sometimes
d. Inadequate data
cooperation of…
a. Shareholders
b. Management
c. Creditors
d. None
a. Unnecessary
c. Necessary
d. Inadequate data
c. Both
a. Money
b. Quantity
c. Both
d. None
d. All of these


d. All of the above
operations is
known as budget.
a. Operational
b. Financial
c. Functional
objectives of
efficiency.
a. Budgetary
b. Inventory
c. Capability
with
budgetary control.
a. Centralizing
b. De-centralizing
c. Planning
the
a. Cost centre
b. Budget centre
c. Cost Unit
the routine
________ .
a. Budget Policy
b. Budget Book
c. Budget Manual
term
a. Functions
b. Control
c. Time

budget and
________ budget.
a. variable
b. Semi-variable
c. Constant
a. Fixed
b. Semi-variable
c. Flexible
budgets.
a. Period
b. Controls
c. Functions
a. Flexible
b. Cash
c. Fixed
changes
a. Fixed
b. Flexible
c. Sales
realistic and
a. realistic
b. non-realistic
c. Predictable
goods to be
business.
a. Sales
b. Cash
c. Purchase
cash
a. purchase
b. cash
c. sales


a. Finance
b. Stores
c. Purchase
b. Sales budget
c. Cost budget
make
400 units of Z
are 50.
a. 112%, 140%, 140%
b. 140%, 112%, 140%
c. 140%, 140%, 112%
b. Current budget
c. Long-term budget
a. True
b. False

a. Key factor
b. Abnormal factor
c. Linking factor
budget in
b. Master budget
100
Actual hours
worked) * 100


BBudgeted hours)
* 100
A-ii, B-iii, C-i
b. A-i, B-ii, C-iii
c. A-iii, B-i, C-ii
Rs 20
variable)
cost per unit
a. Rs 1,01,000
b. Rs 126.25
c. Rs 122
d. Rs 1,22,000
a. True
b. False
quarter,
40,000)
the total
a. Rs 1,12,000
b. 1,12,000 units
d. All
c. Both
d. None


c. Both

BBA Semester-VI
Subject : Management Accounting
Multiple Choice Questions
Sr. No. Multiple Choice Questions
1 The cost that tends to remain constant irrespective of the level of activity is called
_______.
(a) Variable cost
(b) Fixed cost
(c) Total cost
(d) All of the above
2 Cost Accounting restrict itself with _______ transactions.
(a) Financial
(b) Spot
(c) Historical
(d) Administrative
3 Following is (are) the method(s) of measuring labour turnover.
(a) Replacement Method
(b) Separation Method
(c) Flux Method
4 Following is (are) the example(s) of semi-variable overheads.
(a) Maintenance cost
(b) Electricity
(c) Health and Accident Insurance
5 _________ indicates the financial status of the business at given period.
(a) Balance sheet
(b) Accounting ledger
(c) General ledger
6 In Cash budget, Non operating cash inflow include(s)
(a) Receipt of loan/borrowings
(b) Issue of shares
(c) Sale of fixed assets
7 Sales Budget is a forecast expressed in -
(a) Quantity
(b) Money
(c) Both (a) and (b)
(d) None of the above
8 Following is used as tool for Cost Control
(a) Marginal cost
(b) Historical cost
(c) Standard cost
9 Management accounting assists the management
(a) Only in control
(b) Only in direction
(c) Only in planning
(d) In planning, direction and control
10 Management accounting is deals with -
(a) Quantitative Information
(b) Qualitative Information
11 Which of the following is an advantage of standard costing?
(a) Measuring efficiency
(b) Facilitates cost control
(c) Determination of variance
12 Which of the following is not a functional budget?
(a) Labour budget
(b) Cash budget
(c) Materials budget
(d) Expenses budget
13 Which is the mostly likely purpose of budgeting?
(a) Planning and control of an organization's income and expenditure
(b) Preparation of a five-year business plan
(c) Company valuation
(d) Assess the non-financial performance of an organization
14 __________ Accounting becomes a source of information for Management Accounting.
(a) Financial
(b) Cost
15 Calculate the production budget from the following data: sales 89,350 units; opening
inventory 23,864 units; closing inventory 33,156 units.
(a) 80,058 units
(b) 1,46,370 units
(c) 32,320 units
(d) 98,642 units
16 Fixed budget is useless for comparison when the level of activity -
(a) Increases
(b) Fluctuates both ways
(c) Decreases
(d) Constant
17 The budget committee consists of -
(a) Managers
(b) Budget officers
(c) Creditors
18 A budget centre is -
(a) Department or part of the department
(b) Meeting place for budget committee
(c) Office of the budget officer
19 The main objective of budgetary control is -
(a) To define the goal of the firm
(b) To coordinate different departments
(c) To plan to achieve its goals
20 Production budget is -
(a) Dependent on purchase budget
(b) Dependent on sales budget
(c) Dependent on cash budget
21 Sales budget shows the sales details as -
(a) Month wise
(b) Product wise
(c) Area wise
22 An example of long period budget is -
(a) R & D budget
(b) Master budget
(c) Sales budget
(d) Personnel budget
23 The budgets are classified on the basis of -
(a) Time
(b) Function
(c) Flexibility
24 Budget relating to the key factor is prepared -
(a) After other budgets
(b) With other budgets
(c) Before other budgets
25 Key factor is also known as -
(a) Limiting factor
(b) Governing factor
(c) Principal factor
26 In responsibility accounting system -
(a) Budgets are prepared
(b) Actual performance is recorded
(c) The performance is reported
27 The responsibility accounting emphasizes the performance of -
(a) System
(b) Men
(d) None of these
28 The responsibility accounting is also called -
(a) Profitability accounting
(b) Activity accounting
(d) None of these
29 The responsibility accounting is the part of -
(a) Financial accounting
(b) Management accounting
(c) Mechanized accounting
(d) None of these
30 The responsibility accounting is a controlling tool for -
(a) Top‐level management
(b) Lower level management
(c) Middle level management
(d) None of these
31 Which of the following system emphasizes on cost control ?
(a) Cost accounting
(b) Responsibility accounting
(c) Financial accounting
(d) None of these
32 The responsibility centres come under the responsibility of -
(a) Cost accountants
(b) Management accountant
(c) Responsibility managers
(d) Auditor
33 The subdivision of responsibility centre is -
(a) Expense centre
(b) Profit centre
(c) Investment centre
34 The accounting department in an organization is -
(a) Investment centre
(b) Expense centre
(c) Profit centre
35 What is the main advantage of responsibility accounting ?
(a) Improves performance
(b) It fixes responsibility
(c) Helpful in decision making
36 The responsibility accounting is a system by which the responsibility is assigned to the
concerned persons -
(a) To increase sales
(b) To control cash
(c) To increase production
37 The contribution of accounting department in an organization -
(a) Cannot be measured in monetary terms
(b) Can be measured in monetary terms
(c) May or may not be measured in monetary terms
38 According to responsibility accounting, the entire organization is divided into various -
(a) Business centre
(b) Profit centre
(c) Responsibility centre
39 It may not be ______ to measure exactly the output of service departments in an
organization.
(a) Feasible
(b) Necessary
(c) Either (a) or (b)
(d) None of these
40 Internal transfer of process at profit _________ of the company.
(a) Will not increase the asset
(b) Will increase the asset
(c) Can’t say
(d) Inadequate information
41 Budgetary control __________ replace management in decision‐making.
(a) Can
(b) Cannot
(c) Sometimes
(d) Inadequate data
42 The success of budgetary control system depends upon the willing cooperation of ….…
(a) Shareholders
(b) Management
(c) Creditors
(d) All the functional areas of management
43 A key factor is one which restricts ……
(a) The volume of production
(b) The volume of sales
(c) The volume of purchase
44 The classification of fixed and variable cost is useful for the preparation of ……
(a) Master budget
(b) Flexible budget
(c) Cash budget
(d) Capital budget
45 The primary objective of management accounting is –
(a) To provide shareholders and potential investors with useful information for decision
making
(b) To provide banks and other creditors with information useful in making credit
decisions
(c) To provide management with information useful for planning and control of
operations
(d) To provide the relevant taxation authorities with information about taxable income
46 In ‘make or buy’ decision, it is profitable to buy from outside only when the supplier’s
price is below the firm’s own ___________.
(a) Fixed Cost
(b) Variable Cost
(c) Total Cost
(d) Prime Cost
47 __________ is a detailed budget of cash receipts and cash expenditure incorporating
both revenue and capital items.
(a) Cash Budget
(b) Capital Expenditure Budget
(c) Sales Budget
(d) Overhead Budget
48 Sunk costs are __________.
(a) Relevant for decision making
(b) Not relevant for decision making
(c) Cost to be incurred in future
(d) Future costs
49 Abnormal cost is the cost ___________.
(a) Cost normally incurred at a given level of output
(b) Cost not normally incurred at a given level of output
(c) Cost which is charged to customer
(d) Cost which is included in the cost of the product
50 Responsibility Centre can be categorised into ___________.
(a) Cost Centres only
(b) Profit Centres only
(c) Investment Centres only
51 A profit centre is a centre ___________.
(a) Where the manager has the responsibility of generating and maximising profits
(b) Which is concerned with earning an adequate Return on Investment
(d) Which manages cost
52 Management Accounting is and financial accounting differ in that management
accounting information is prepared –
(a) Following prescribed rules
(b) Using whatever methods the company finds beneficial
(c) For shareholders
(d) To summarize the whole company with little detail
53 Purpose of Management Accounting is to –
(a) Past orientation
(b) Help banks make decisions
(c) Help managers make decisions
(d) Help investors make decisions
54 Management Accounting is the branch of accounting concerned with reporting to –
(a) Internal Managers
(b) Shareholders
(c) The Government
(d) Bankers
55 Which of the following does NOT describe management accounting?
(a) Evaluation of segments or products within the firm
(b) Emphasis on the future
(c) Externally focused
(d) Detailed information
56 Management accounting reports are prepared
(a) To meet the needs of decision makers within the firm
(b) Whenever shareholders request them
(c) According to guidelines prepared by the shares and Financial Services Authority
(d) According to financial accounting standards
57 Management accounting is primarily concerned with -
(a) Providing investors with useful information for valuing securities.
(b) Providing creditors information on the status of their loans.
(c) Providing managers with relevant information to help achieve organizational goals.
(d) Providing the relevant taxation authorities with information to determine the amount
of taxes owed.
58 Which matters are taken into consideration while preparing production budget ?
(a) The estimate of the number of units to be produced during the budget period.
(b) Estimate of number of units to be sold.
(c) Policy regarding the wage fixation for labourers.
(d) Policy regarding the selection of suppliers from whom materials would be purchased.
59 Which of the following matter is to be taken into account which preparing Material
Purchase Budget ?
(a) The supplier from whom materials are to be purchased.
(b) The procedure of storing and preserving materials after they are received.
(c) The prices at which receipts and issues of materials are to be recorded in stores
ledger.
(d) The maximum and minimum quantities of materials to be purchased.
60 Which of the following matter is relevant with cash receipts and disbursement method of
preparing Cash Budget ?
(a) While determining the cash payments, it is necessary to estimate the credit sales.
(b) While estimating cash receipts, it is not necessary to estimate the figure of credit
sales.
(c) Debtors Ratio is used to estimate the timings when cash collections would be
obtained from credit sales.
(d) While estimating the total amount of cash payment for purchases, it is necessary to
decide from which suppliers materials are to be purchased.
61 Budget period depends upon -
(a) The type of budget
(b) The nature of business
(c) The length of trade cycles
62 Usually the production budget is stated in terms of -
(a) Money
(b) Quantity
(d) None
63 Recording of actual performance is -
(a) An advantage of budgetary control
(b) A step in budgetary control
(c) A limitation of budgetary control
64 Budgetary control system helps the management to eliminate -
(a) Undercapitalization
(b) Overcapitalization
(d) None
65 Budgetary control facilitates easy introduction of the -
(a) Marginal costing
(b) Ratio analysis
(c) Standard costing
(d) Subjective matter
66 Budgetary control system acts as a friend, philosopher and guide to the -
(a) Management
(b) Share holders
(c) Creditors
(d) Employees
67 Budgetary control system defines the objectives and policies of the -
(a) Production department
(b) Finance department
(c) Marketing department
68 A budget is tool which helps the management in planning and control of -
(a) All business activities
(b) Production activities
(c) Purchase activities
(d) Sales activities
69 In responsibility centre, the output is called as -
(a) Revenue
(b) Cost
(d) None
70 If the responsibility centre gets more revenue from output, then it is called -
(b) Cost centre
(c) Profit centre
(d) Expense centre
71 Cost Unit is defined as -
(a) Unit of quantity of product, service or time in relation to which costs may be
ascertained or expressed
(b) A location, person or an item of equipment or a group of these for which costs are
ascertained and used for cost control.
(c) Centres having the responsibility of generating and maximising profits
(d) Centres concerned with earning an adequate return on investment
72 Fixed cost is a cost -
(a) Which changes in total in proportion to changes in output
(b) Which is partly fixed and partly variable in relation to output
(c) Which do not change in total during a given period despise changes in output
(d) Which remains same for each unit of output
73 Uncontrollable costs are the costs which be influenced by the action of a specified
member of an undertaking. -
(a) can not
(b) can
(c) may or may not
(d) must
74 Element/s of Cost of a product are -
(a) Material only
(b) Labour only
(c) Expenses only
(d) Material, Labour and expenses
75 Overhead refers to -
(a) Direct or Prime Cost
(b) All Indirect costs
(c) Only Factory indirect costs
(d) Only indirect expenses
76 Which of the following is not a method of cost absorption?
(a) Percentage of direct material cost
(b) Machine hour rate
(c) Labour hour rate
(d) Repeated distribution method
77 A Local Authority is preparing cash Budget for its refuse disposal department. Which of
the following items would not be included in the cash budget?
(a) Capital cost of a new collection vehicle
(b) Depreciation of the machinery
(c) Operatives wages
(d) Fuel for the collection Vehicles
78 Which of the following characteristics does NOT pertain to management accounting?
(a) Provides information and estimates about future activity
(b) Generates specific-purpose financial statements and reports
(c) Provides financial and operating data multidisciplinary in scope
(d) Has externally imposed standards
79 A budget which is prepared in a manner so as to give the budgeted cost for any level of
activity is known as -
(a) Master budget
(b) Zero base budget
(c) Functional budget
(d) Flexible budget
80 ___________ is a summary of all functional budgets in a capsule form.
(a) Functional Budget
(b) Master Budget
(c) Long Period Budget
(d) Flexible Budget
81 When the sales increase from Rs. 40,000 to Rs. 60,000 and profit increases by Rs. 5,000,
the P/V ratio is -
(a) 20%
(b) 30%
(c) 25%
(d) 40%
82 From following which is not a principle of good reporting ?
(a) Simplicity
(b) Accountability
(c) Promptness
(d) Accuracy
83 From day to day operation which report is prepare ?
(a) Routine
(b) Special
(c) Investigative
(d) External
84 Any special event happen into the business then which report is prepared ?
(a) Routine
(b) Special
(c) External
(d) Control
85 Internal report use for _______________ .
(a) Share holders
(b) Government
(c) Managerial personnel
(d) Creditors
86 External report use for _______________ .
(a) Top level management
(b) Middle level management
(c) Lower level management
(d) Shareholders
87 From following which is not a routine report ?
(a) Production report
(b) Sales report
(c) Investigation
(d) Administration report
88. _______ is devoted to providing information for external users.

a. Management accounting
b. Financial accounting
c. Internal accounting
d. Cost accounting
89. Financial accounting is primarily concerned with providing financial reports to all of
the following EXCEPT
a. creditors such as banks and other financial institutions.
b. creditors such as suppliers.
c. shareholders of the company.
d. management of the firm.
90. Management accounting and financial accounting differ in that management accounting
information is prepared
a. following prescribed rules.
b. using whatever methods the company finds beneficial.
c. for shareholders.
d. to summarize the whole company with little detail.

a. to provide shareholders and potential investors with useful information for
decision making.
b. to provide banks and other creditors with information useful in making credit
decisions.
c. to provide management with information useful for planning and control of
operations.
d. to provide the relevant taxation authorities with information about taxable
income.
92. Management accounting is the branch of accounting concerned with reporting to

a. internal managers.
b. shareholders.
c. the government.
d. bankers.
93. Which of the following characteristics does NOT pertain to management accounting?
a. provides information and estimates about future activity
b. generates specific-purpose financial statements and reports
c. provides financial and operating data multidisciplinary in scope
d. has externally imposed standards
94. Which of the following does NOT describe management accounting?

a. evaluation of segments or products within the firm
b. emphasis on the future
c. externally focused
d. detailed information
95. Management accounting reports are prepared

a. to meet the needs of decision makers within the firm.
b. whenever shareholders request them.
c. according to guidelines prepared by the shares and Financial Services Authority.
d. according to financial accounting standards.
96. Cost accounting
a. is concerned with assigning costs to various cost objects.
b. attempts to satisfy the costing objectives of both financial accounting and
management accounting.
c. provides cost information that supports planning, controlling, and decision
making.
d. All of the above descriptions are true.
97. Which of the following costing activities is associated with the financial accounting
system?
a. determining the cost of a department
b. determining the cost of goods sold for financial statements
c. preparing budgets
d. determining the cost of a customer
98. Which of the following activities is NOT associated with the financial accounting
information system?
a. reporting on the cost of quality
b. reporting to the shareholders
c. preparing reports for the tax authorities
d. preparing a statement of cash flows
99. Which of the following cost management tools supports the firm's concentration on the
delivery of value to the customer?
a. service industry growth
b. global competition
c. preparing an earnings report for external reporting
d. value-chain analysis
100. Factors that have led to a global market for manufacturing and service firms are
a. improved transportation and communications systems.
b. improved telemarketing and communications.
c. improved distribution and transportation systems.
d. None of these factors have contributed.
101. Which of the following activities is NOT significant to the advancement of information
technology?
a. enterprise resource planning software
b. emergence of electronic commerce
c. theory of constraints
d. decision support systems
102. Software that has integrated system capability using real time data is
a. enterprise resource planning software.
b. on-line analytic programs.
c. computer-assisted engineering software.
d. none of the above.
103. Automation of the manufacturing environment is associated with increases in
a. inventory.
b. capacity.
c. processing time.
d. none of these.
104. Total quality management emphasizes
a. zero defects.
b. continual improvement.
c. elimination of waste.
d. all of the above.
105. Which of the following emerging themes in cost accounting deals with managers striving
to create an environment that will enable workers to manufacture perfect (zero-defect)
products?
a. advances in information technology
b. time as a competitive element
c. global competition
d. total quality management
106. Competitive advantage is established by
a. providing more customer products than competitors.
b. providing better quality than competitors.
c. providing greater customer value for less cost than competitors.
d. providing greater efficiencies than competitors.
107. Improvement in time performance is most likely NOT enhanced by

a. redesign of products.
b. adding processes in production.
c. eliminating waste.
d. eliminating nonvalue-added activities.
108. Which of the following statements is NOT true about world-class firms?
a. World-class firms are firms that are poor in customer support.
b. World-class firms know their market and their products.
c. World-class firms strive continually to improve product design, manufacture,
and delivery.
d. World-class firms can compete with the best of the best in a global environment.
109. Monitoring the number of defects produced is an example of the management function of
a. planning.
b. control.
c. decision making.
d. both a and c.
110. Performance reports are accounting reports that compare

a. planned data with actual data.
b. audited data with actual data.
c. managers' bonuses with performance ratings by supervisors.
d. actual data with industry standards.
111. Which of the following statements correctly distinguishes between financial and
management accounting?
a. Management accounting reports on the whole organization.
b. Financial accounting is oriented toward the future.
c. Financial accounting is primarily concerned with providing information for
internal users.
d. Management accounting is oriented more toward the planning and control
aspects of management.
112. Setting the company's profit targets for the upcoming year is an example of the
management function of
a. planning.
b. control.
c. variance analysis.
d. internal auditing.
113. The planning process includes

a. setting objectives.
b. identifying means of achieving the objectives.
c. making decisions.
114. Management accounting is concerned with which kind of decision?

a. product costing and pricing
b. continuous operational improvement
c. financial control
d. all of the above
115. Management accounting:

a. provides a framework to evaluate information in light of an organization's goals.
b. provides relevant information to managers.
c. provides relevant information to meet specific needs of persons inside the
organization.
d. all of the above
116. Management accounting is primarily concerned with:

a. providing investors with useful information for valuing securities.
b. providing creditors information on the status of their loans.
c. providing managers with relevant information to help achieve organizational
goals.
d. providing the relevant taxation authorities with information to determine the
amount of taxes owed.
Multiple Choice Questions Answers
Question Answer Question Answer Question Answer Question Answer
No. No. No. No.
1 B 31 B 61 D 91 C
2 C 32 C 62 C 92 A
3 D 33 D 63 B 93 D
4 D 34 A 64 C 94 C
5 A 35 D 65 C 95 A
6 D 36 B 66 A 96 D
7 C 37 A 67 D 97 B
8 C 38 C 68 A 98 A
9 D 39 C 69 A 99 D
10 C 40 A 70 C 100 A
11 D 41 B 71 A 101 C
12 A 42 D 72 C 102 A
13 A 43 A 73 A 103 B
14 C 44 B 74 D 104 D
15 D 45 C 75 B 105 D
16 B 46 B 76 D 106 C
17 B 47 A 77 B 107 B
18 A 48 B 78 D 108 A
19 C 49 B 79 D 109 B
20 B 50 D 80 B 110 A
21 D 51 A 81 C 111 D
22 A 52 B 82 B 112 A
23 D 53 C 83 A 113 D
24 C 54 A 84 B 114 D
25 D 55 C 85 C 115 D
26 D 56 A 86 D 116 C
27 B 57 C 87 C
28 C 58 A 88 B
29 B 59 D 89 D
30 A 60 C 90 B
101-Managerial Accounting
Chapter 1
Basic Concepts of Accounting
1. is nothing but the right process of selecting an appropriate, logical, practical
and achievable option from the available alternatives.
(a) Business Decision (b) Planning
(c) Organizing (d) Strategy
2. is a person who carried on business exclusively by and for himself.
(a) Partner (b) Sole-trader
(c) Executive (d) Manager
3. The relationship between persons who agree to carry on business in a common with a view to
private gain.
(a) Partnership Firm (b) Sole-trading Firm
(c) Joint Stock Company (d) Co-operative Society
4. A is a form of business organization in which the funds of large number of
investors are managed by a few persons for the purpose of earning profits.
5. is the language of business.
(a) Marketing (b) Profit Earning Capacity
(c) Accounting (d) Selling
6. The object/s of accounting .
(a) To calculate net profit or net loss of the business.
(b) To know the financial condition of the firm.
(c) To provide information to the management for important managerial decisions.
7. Out of the following, which is not the branch of Accounting.
(a) Financial Accounting (b) Management Accounting
(c) Human Resource Accounting (d) Cost Accounting
8. Accounting are the Rules of Action or the Methods and Procedures of
Accounting commonly adopted while recording Business transactions.
(a) Principles (b) Concepts
(c) Conventions (d) Systems
9. According to concept, assets purchased are generally recorded in

accounting books at the cost at which they are purchase(d)
(a) Business Entity Concept (b) Going Concern Concept
(c) Money Measurement Concept (d) Cost Concept
10. According to concept, revenue is recognized only when the sale is
performed.
(c) Money Measurement Concept (d) Realization Concept
11. Accounting are the traditions, usage and customs which are in used since long.
12. Out of the following, which is not the convention of Accounting.
(a) Convention of Consistency (b) Convention of Disclosure
(c) Convention of Conservatism (d) Convention of Realization
13. Out of the following, which is not the System of Accounting.
(a) Non-Cash Entry System (b) Cash System
(c) Single Entry System (d) Double Entry System
14. Out of the following, which Transactions are not to be recorded in the Books of Accounts
(a) Cash Transaction (b) Credit Transaction
(c) Financial Transaction (d) Ordinary Transaction
15. Accounts in the names of persons are known as .
(a) Personal Account (b) Real Account
(c) Nominal Account (d) Individual Account
16. Accounts in the names of assets are known as .
17. Accounts in the respect of expenses and incomes are known as .
18. Every transaction must have aspects and involve accounts.
(a) two, two (b) one, one
(c) one, two (d) two, one
19. A is an accounting entry that either increases an asset or expense account,
or decreases a liability or equity account.
(a) Debit (b) Credit
(c) Sales (d) Purchase
20. A is an accounting entry that either increases a liability or equity account,
or decreases an asset or expense account.
21. Debit the receiver, credit the giver is the rule of .
22. Debit what comes in, credit what goes out is the rule of .
23. Debit all expenses and losses, credit all incomes and gains is the rule of .
24. is a record of transaction in the books of Accounts.
(a) Entry (b) Recording
(c) Monetary Transaction (d) Ledger
25. is an exchange of money or money’s worth.
(c) Transaction (d) Ledger
26. is a book of original entry.
(a) Journal (b) Ledger
(c) Cash Book (d) Subsidiary Book
27. is a bound book of different accounts.
28. is a summarized record of transactions related to one person, one asset, one
head of expense/loss and one head of income/gain.
(c) Cash Book (d) Account
29. means totaling of sums in the books of accounts.
(a) Casting (b) Summarizing
(c) Journalizing (d) Ledger Posting
30. are obligations or debts that the enterprise must pay in money or services at
some time in the future.
(a) Assets (b) Liabilities
(c) Responsibilities (d) Salaries
31. are economic resources of an enterprise that can be usefully expressed in
monetary terms.
(c) Cash & Bank Balance (d) Funds
32. are commodities, purchased or manufactured for resale with a view to earn
profit.
(a) Assets (b) Goods
(c) Investments (d) Resources
33. are the amounts the business earns by selling its products or providing
services to customers.
(c) Investments (d) Revenues
34. are the costs incurred by a business in the process of earning revenue.
(a) Assets (b) Expenses
35. are persons and/or other entities who owe to an enterprise an amount for
receiving goods and services on credit.
(a) Debtors (b) Creditors
(c) Shareholders (d) Suppliers
36. are persons and/or other entities that have to be paid by an enterprise an
amount for providing the enterprise goods and services on credit.
(c) Shareholders (d) Customers
37. is a list of the entire general ledger account names and balances; it is
prepared to prove the ledger.
(c) Cash Book (d) Trial Balance
38. The difference of two sides of an account is called as .
(c) Balance (d) Cash
39. deals with expenses related to or identified with products, which may only
be a part of the organization.
40. In stocks are valued at lower of cost or market value.
41. The primary objective of is to provide necessary information to the
management in the process of its planning, controlling, and performance evaluation, and
decision-making.
42. The Success of does not depend upon Management Accounting system.
43. In no statutory requirement of audit for reports.
44. Which is the most popular and acceptable software?
(a) Tally (b) Marg
(c) Saral (d) SAP
45. The Advantage/s of Accounting Software .
(a) Accounting softwares save Time and Money.
(b) No scope for mistakes and errors.
(c) Provides accurate and updated information as and when require(d)
46. Internal and external parties are the users of .
47. Capital A/c generally shows balance.
(a) Cash (b) Debit
(c) Credit (d) Overdraft
48. Asset A/c shows balance.
(a) Cash (b) Debit
49. There are columns in Journal.
(a) Two (b) Three
(c) Four (d) Five
50. Explanatory note written below an entry recorded in the Journal is called as .
(a) Narration (b) Explanation
(c) Brief information (d) Detail information
Answer Key of Chapter 1
1. (a) 11. (a) 21. (a) 31. (a) 41. (b)

2. (b) 12. (d) 22. (b) 32. (b) 42. (d)
3. (a) 13. (a) 23. (c) 33. (d) 43. (b)
4. (c) 14. (d) 24. (a) 34. (b) 44. (a)
5. (c) 15. (a) 25. (c) 35. (a) 45. (d)
6. (d) 16. (b) 26. (a) 36. (b) 46. (a)
7. (c) 17. (c) 27. (b) 37. (d) 47. (c)
8. (a) 18. (a) 28. (d) 38. (c) 48. (b)
9. (d) 19. (a) 29. (a) 39. (d) 49. (d)
10. (d) 20. (b) 30. (b) 40. (a) 50. (a)
Chapter 2
Understanding of Financial Statements
1. shows the firm’s assets, liabilities, and stockholders’ equity as of the report date.
(a) Cash Flow (b) Funds Flow
(c) Income Statement (d) Balance Sheet
2. shows the results of the firm’s operations and financial activities for thereporting period.
(a) Trading and Profit & Loss Account (b) Expense Statement
3. includes explanations of various activities, additional details of someaccounts, and other
items as mandated by the regulatory authorities, bodies from time to time.
(c) Income Statement (d) Supplementary Note
4. is a formal official record of the financial activities and position of abusiness, person, or other
entity.
(a) Financial Statement (b) Trading Account
(c) Profit & Loss Account (d) Supplementary Note
5. provides the vital information related to the profitability, liquidity andsolvency of the
business.
(c) Profit & Loss Account (d) Cash Flow & Funds Flow
6. is the simplest business form under which one can operate a business.
(a) Partnership Firm (b) Sole Trading Firm
(c) Private Ltd. Company (d) Public Company
7. is not a separate legal entity.
(a) Partnership Firm (b) Sole Proprietorship Firm
(c) Private Ltd. Company (d) One Man Company
8. For every item given in Trial Balance, effect should be given.
(a) Dual (b) Single
(c) Triple (d) None of the above
9. For every item given in Adjustment, effect should be given.
(a) Dual (b) Single
10. are nothing but the entries which are not included in the original TrialBalance.
(a) Journal Proper (b) Ledger
(c) Adjustments (d) None of the above
11. Every adjustment has two effects, i.e., .
(a) One Debit & One Credit (b) Debit
(c) Credit (d) None of the above
12. Depreciation is debited to .
(a) BRS (b) Balance Sheet
(c) Trading A/c (d) Profit and Loss A/c
13. Income Accrued but Not Received is recorded to .
(a) Profit and Loss A/c Debit Side (b) Profit and Loss A/c Credit Side
(c) Trading A/c Debit Side (d) Trading A/c Credit Side
14. Prepaid Expenses shown at .
(a) Balance Sheet Asset Side (b) Profit and Loss A/c Credit Side
15. Closing Stock is recorded to .
16. Outstanding Expenses shown at .
(a) Balance Sheet Liability Side (b) Profit and Loss A/c Credit Side
(c) Balance Sheet Asset Side (d) Trading A/c Credit Side
17. Goods Withdrawn from business is considered as .
(a) Sales (b) Purchases
(c) Capital (d) Drawings
18. Interest on Capital is debited to .
(a) Capital A/c (b) Balance Sheet
19. Interest on Drawings is credited to .
(a) Journal A/c (b) Balance Sheet
20. Goods Distributed as Free Samples is debited to .
(a) Capital A/c (b) Personal A/c
21. Reserve for Discount on Creditors is credited to .
22. information is ignored in the financial statements.
(a) Cash (b) Credit
(c) Qualitative (d) Quantitative
23. The financial statements are based on the accounting .
(a) Accounting Concepts and Conventions (c) Accounting Conventions
(b) Accounting Concepts (d) None of the above
24. Accounting year starts from .
(a) 1st January (c) 1st March
(b) 1st April (d) 1st June
25. Accounting year ends on___ .
(a) 31st January (c) 31st March
(b) 31st August (d) 31st December
26. Returns outwards are deducted from .
a) Sales c) Stock
b) Purchases d) Closing stock
27. Returns inwards are deducted from .
(c) Stock (d) Closing stock
28. Carriage inward is debited to .
29. Carriage outward is debited to .
30. Goodwill is recorded to .
(a) Capital A/c (b) Balance Sheet Asset Side
31. Depreciation is in/from asset.
(a) Added (b) Deducted
(c) Not Added (d) Not deducted
32. In business, all incomes and losses are taxed on the individual’s personal
income tax return.
(a) Sole Proprietorship (b) Partnership
(c) Cooperative (d) Departmental
33. Freight is recorded to .
34. Outstanding Expenses are always .
(a) Added in respective asset (b) Added in respective liability
(c) Added in respective expense (d) Added in respective income
35. Prepaid Expenses are always .
(a) Deducted from respective asset (b) Added in respective liability
(c) Deducted from respective expense (d) Added in respective income
36. Gross Profit is transferred to .
37. Goods Withdrawn for Personal Use by Proprietor is treated as .
(a) Income (b) Expense
(c) Liability (d) Asset
38. Royalty is recorded to .
39. Purchase Return is also called as .
(a) Inward (b) Outward
(c) Return Inward (d) Return Outward
40. Sales Return is also called as .
41. RDD is deducted from_ .
(c) Creditors (d) Debtors
42. is a non cash expense.
(a) Depreciation (b) Discount
(c) Purchases (d) Creditors
43. Income Received in Advance is considered as .
(c) Asset (d) Liability
44. An insurance charge of goods is recorded to .
45. Wages and Salaries item is recorded to .
46. Patents item is recorded at .
(c) Balance Sheet Liability Side (d) Balance Sheet Asset Side
47. is not a current asset.
(a) Stock (b) Investment
(c) Cash (d) Goodwill
48. is not a fixed asset.
(a) Land (b) Building
(c) Machinery (d) Debtors
49. is not a current liability.

(a) Capital (b) Loan
(c) Bills Payable (d) Creditors
50. Net Profit is added in .
(a) Trading A/c (b) Income A/c
(c) Capital A/c (d) Asset A/c
1. (d) 11. (a) 21. (d) 31. (a) 41. (d)

2. (a) 12. (d) 22. (c) 32. (a) 42. (a)
3. (d) 13. (b) 23. (a) 33. (c) 43. (d)
4. (a) 14. (a) 24. (b) 34. (c) 44. (a)
5. (a) 15. (d) 25. (c) 35. (c) 45. (c)
6. (b) 16. (a) 26. (b) 36. (d) 46. (d)
7. (b) 17. (d) 27. (a) 37. (b) 47. (d)
8. (b) 18. (d) 28. (c) 38. (c) 48. (d)
9. (a) 19. (d) 29. (d) 39. (d) 49. (a)
10. (c) 20. (d) 30. (b) 40. (c) 50. (c)
Chapter 3 Cost Accounting
1. provides a specialized technique, which provides prompt and accurate
information regarding the cost of producing and selling an article.
(a) Cost Accounting (b) Financial Accounting
(c) Management Accounting (d) Cost & Financial Accounting
2. The amount of expenditure incurred on, or attributable to a given thing is called as
.
(a) Cost (b) Price
(c) Expense (d) Fixed Cost
3. The techniques and process of ascertaining cost is called as .
(a) Costing (b) Accounting
(c) Financing (d) Management Accounting
4. With the help of , we can control the cost.
(a) Costing Methods (b) Cost Accounting
(c) Management Accounting (d) Costing Techniques
5. With the help of , we can find out the cost.
6. The total of Direct Material + Direct Labour + Direct Expenses is called as .
(a) Total Cost (b) Factory Cost
(c) Prime Cost (d) Main Cost
7. Direct Expenses are also called as .
(a) Chargeable Expenses (b) Factory Expenses
(c) Works Expenses (d) General Expenses
8. Depreciation is an example of .
(a) Direct Expenses (b) Factory Expenses
(c) General Expenses (d) Indirect Expenses
9. The aggregate of all indirect expenses is .
(a) Total Cost (b) Total Expense
(c) Overheads (d) Factory Overheads
10. Factory Cost is also called as .
(a) Total Cost (b) Cost of Production
(c) Works Cost (d) Factory Overheads
11. Cost of Sales is also called as .
(c) Works Cost (d) Factory Cost
12. Telephone bill, Electricity bill is an example of .

(a) Total Cost (b) Fixed Overheads
(c) Variable Overheads (d) Semi-variable Overheads
13. Fixed Cost is also called as .
(a) Total Cost (b) Direct Cost
(c) Works Cost (d) Period Cost
14. Material and Labour is an example of .
(a) Fixed Cost (b) Controllable Cost
(c) Non-controllable Cost (d) Period Cost
15. Repairs and Maintenance is an example of .
(a) Fixed Cost (b) Avoidable Cost
(c) Non-controllable Cost (d) Normal Cost
16. Cost incurred because of lock outs is an example of .
(a) Fixed Cost (b) Unavoidable Cost
(c) Abnormal Cost (d) Normal Cost
17. One-time set-up cost of a plant or project is called as .
(a) Fixed Cost (b) Direct Cost
(c) Capital Cost (d) Normal Cost
18. Standard Cost is also called as .
(a) Predetermined Cost (b) Direct Cost
(c) Capital Cost (d) Fixed Cost
19. Variable Cost is also called as .
(c) Marginal Cost (d) Fixed Cost
20. Rent is an example of .
(c) Unavoidable Cost (d) Standard Cost
21. is the difference between the costs of two alternatives.
(a) Differential Cost (b) Semi-variable Cost
(c) Variable Cost (d) Standard Cost
22. Cost incurred as per policy of top management is called as .
(a) Differential Cost (b) Programmed Cost
(c) Normal Cost (d) Fixed Cost
23. Notional cost is nothing but .
(a) Standard Cost (b) Programmed Cost
(c) Normal Cost (d) Imaginary Cost
24. Depreciation on Plant and Rent is an example .
(a) Committed Cost (b) Programmed Cost
(c) General Cost (d) Imaginary Cost
25. A Location, person, or item of equipment (or a group of these) for which costs may be
ascertained and used for the purpose of control is called as .
(a) Cost Unit (b) Cost Centre
(c) Cost Department (d) Cost Division
26. a statement, which shows various components of total cost of a product.
(a) Cost Sheet (b) Cost Account
(c) Cost Report (d) Cost Classification
27. is prepared on the basis of actual cost incurred.
(a) Historical Cost Sheet (b) Cost Account
(c) Cost Report (d) Estimated Cost Sheet
28. Haulage Charges is an example of .
(a) Fixed Overheads (b) Direct Cost
(c) Factory Overheads (d) Administration Overheads
29. Counting House Salaries is an example of .
(a) Fixed Overheads (b) Selling Overheads
30. Carriage Outward is an example of .
31. Opening Stock of Finished Goods is added in .
(a) Factory Cost (b) Prime Cost
(c) Cost of Production (d) Works Cost
32. Direct Labour Charges is also called as .
(c) Fixed Wages (d) Productive Wages
33. Cost unit is divided into .
(a) Units of Production (b) Units of Services
(c) Both a and b (d) None of the above
34. Cost of converting raw material into finished goods is also called as .
(c) Conversion Cost (d) Productive Cost
35. According to Elements, Cost is divided into categories.
(a) One (b) Two
(c) Three (d) Four
36. means the amount spent to sell a company’s products.
(a) Revenue Cost (b) Differential Cost
(c) Fixed Cost (d) Variable Cost
37. Insurance is an example of .

38. cost directly varies with volume of output.
39. The Expenditure which has been incurred in an accounting period but it is applicable further
periods also is .
(c) Differed Revenue Cost (d) Variable Cost
40. The estimate of expenditure for different business operations for a specific period is
.
(a) Budgeted Cost (b) Differential Cost
41. An up-gradation of Machine, Change in Service/Distribution Channel are the examples of
.
(a) Incremental Cost (b) Differential Cost
(c) Opportunity Cost (d) Future Cost
42. The value of benefit sacrificed in favour of an alternative course of action is
cost.
(a) Incremental (b) Fixed
(c) Opportunity (d) Future
43. Opening Stock of WIP & Closing Stock of WIP is added and deducted after addition of
in Prime Cost.
(a) Direct Expenses (b) Factory Overheads
(c) Office Overheads (d) Selling Overheads
44. Carriage Inward is added while calculating .
(a) Cost of Direct Expenses (b) Cost of Direct Overheads
(c) Cost of Direct Labour (d) Cost of Direct Material
45. Profit Margin is added in .
(a) Cost of Sales (b) Fixed Cost
(c) Cost of Production (d) Cost of Goods Sold
46. Abnormal Wastage of Material is added in .
(a) Cost of Sales (b) Cost of Production
(c) Cost of Goods Sold (d) None of the above
47. Discount allowed is an example of .
48. Sale of Scrap is after addition of factory overheads in Prime Cost.
(c) Not Considered (d) None of the above
49. Cleaning Charges is an example of .
50. is the process of ascertaining costs whereas is the process
of recording various costs in a systematic manner, in order to prepare statistical date to
ascertain cost.
(a) Costing, Cost Accounting (b) Cost Accounting, Costing
(c) Costing and Allocation Cost (d) Costing and Absorption of Cost
1. (a) 11. (a) 21. (a) 31. (c) 41. (a)

2. (a) 12. (d) 22. (b) 32. (d) 42. (c)
3. (a) 13. (d) 23. (d) 33. (c) 43. (b)
4. (d) 14. (b) 24. (a) 34. (c) 44. (d)
5. (a) 15. (d) 25. (b) 35. (c) 45. (a)
6. (c) 16. (c) 26. (a) 36. (a) 46. (d)
7. (a) 17. (c) 27. (a) 37. (c) 47. (d)
8. (d) 18. (a) 28. (c) 38. (d) 48. (b)
9. (c) 19. (c) 29. (d) 39. (c) 49. (b)
10. (c) 20. (c) 30. (b) 40. (a) 50. (a)
1. Basic objectives of cost accounting is .
A. tax compliance.
B. financial audit.
C. cost ascertainment.
D. profit analysis.
ANSWER: C
2. Direct cost incurred can be identified with .

A. each department.
B. each unit of output.
C. each month.
D. each executive.
ANSWER: B
3. Overhead cost is the total of .

A. all indirect costs.
B. all direct costs.
C. indirect and direct costs.
D. all specific costs.
ANSWER: A
4. Imputed cost is a .
A. notional cost.
B. real cost.
C. normal cost.
D. variable cost.
ANSWER: A
5. Cost classification can be done in .

A. two ways.
B. three ways.
C. four ways.
D. several ways.
ANSWER: D
6. Costing refers to the techniques and processes of

A. ascertainment of costs.
B. allocation of costs.
C. apportion of costs.
D. distribution of costs.
ANSWER: A
7. Cost accounting was developed because of the .

A. limitations of the financial accounting.
B. limitations of the management accounting.
C. limitations of the human resource accounting.
D. limitations of the double entry accounting.
ANSWER: A
8. Wages paid to a labour who was engaged in production activities can be termed as.
A. direct cost.
B. indirect cost.
C. sunk cost.
D. imputed cost.
ANSWER: A
9. The cost which is to be incurred even when a business unit is closed is a.

A. imputed cost.
B. historical cost.
C. sunk cost.
D. shutdown cost.
ANSWER: D
10. Classification of cost is useful .

A. to find gross profit.
B. to find net profit.
C. to identify costs.
D. to identify efficiency.
ANSWER: C
11. Elements of costs are.

A. three types.
B. four types.
C. five types.
D. seven types.
ANSWER: A
12. Direct expenses are also called .

A. major expenses.
B. chargeable expenses.
C. overhead expenses.
D. sundry expenses.
ANSWER: B
13. Indirect material used in production is classified as.

A. office overhead.
B. selling overhead.
C. distribution overhead.
D. production overhead.
ANSWER: D
14. Warehouse rent is a part of .

A. prime cost.
B. factory cost.
C. distribution cost.
D. production cost.
ANSWER: C
15. Indirect material scrap is adjusted along with .

A. prime cost.
B. factory cost.
C. labour cost.
D. cost of goods sold.
ANSWER: B
16. Which one of the following is not considered for preparation of cost sheet?
A. Factory cost.
B. Goodwill written off.
C. Selling cost.
D. Labour cost.
ANSWER: B
17. Sale of defectives is reduced from .

A. prime cost.
B. works cost.
C. cost of production.
D. cost of sales.
ANSWER: C
18. Tender is an.

A. estimation of profit.
B. estimation of cost.
C. estimation of selling price.
D. estimation of units.
ANSWER: C
19. Cost of sales plus profit is .

A. selling price.
B. value of finished product.
C. value of goods produced.
D. value of stocks.
ANSWER: A
20. Prime cost includes.

A. direct materials, direct wages and indirect expenses .
B. indirect materials and indirect labour and indirect expenses.
C. direct materials, direct wages and direct expenses.
D. direct materials, indirect wages and indirect expenses.
ANSWER: C
21. Total of all direct costs is termed as .

A. prime cost.
B. works cost.
C. cost of sales.
D. cost of production.
ANSWER: A
22. Depreciation of plant and machinery is a part of .

A. factory overhead.
D. administration overhead.
ANSWER: A
23. Audit fess is a part of .

A. works on cost.
ANSWER: D
24. Salary is part of .

ANSWER: D
25. Factory overhead can be charged on the basis of -.

A. material cost.
B. labour cost.
C. prime cost.
D. direct expenses
ANSWER: A
26. Office and administrative expenses can be charged on the basis of .

A. material cost.
B. labour cost.
C. prime cost.
D. factory cost.
ANSWER: C
27. Selling and distribution expenses can be charged on the basis of .

A. material cost.
B. labour cost.
C. prime cost.
D. factory cost.
ANSWER: C
28. Sales – Gross Profit = .

A. net profit.
B. administrative expenses.
ANSWER: D
29. Opening stock + purchases + direct expenses – closing stock =

A. net profit.
B. cost of production
C. administrative expenses.
ANSWER: D
30. Production cost under marginal costing includes .
A. prime cost only .
B. prime cost and fixed overhead .
C. prime cost and variable overhead.
D. prime cost, variable overhead and fixed overhead.
ANSWER: C
31. One of the primary differences between marginal costing and absorption costing regarding the
treatment of_____.
A. Prime cost .
B. Fixed overheads.
C. Variable overheads .
D. Direct materials.
ANSWER: B
32. Absorption costing differs from marginal costing is the .

A. Fact that standard costs can be used with absorption costing but not with marginal
costing.
B. Amount of costs assigned to individual units of products .
C. Kind of activities for which each can be used .
D. Amount of fixed costs that will be incurred.
ANSWER: B
33. Period costs are .

A. overhead costs .
B. prime cost.
C. variable cost.
D. fixed costs.
ANSWER: D

Chapter 4
Decision-making Tools
1. Marginal Costing is also called as .
(a) Variable Costing (b) Standard Costing
(c) Material Costing (d) Job Costing
2. In total costs cannot be easily segregated into fixed costs and variable costs.
(a) Marginal Costing (b) Standard Costing
3. P/V Ratio is mainly known as .
(a) Contribution to Sales Ratio (b) Contribution Margin Ratio
(c) Variable Profit Ratio (d) All of the above
4. analysis classifies all costs as either fixed or variable.
(a) CVP (b) ABC
(c) JIT (d) HML
5. that point where no profit or no loss position is observed.
(a) Centre Point (b) BEP
(c) Starting Point (d) Ending Point
6. is the difference between sales revenue and variable cost.
(a) P/V Ratio (b) BEP
(c) MOS (d) Contribution
7. Contribution is also called as .
(a) P/V Ratio (b) Net Margin
(c) MOS (d) Gross Margin
8. is the difference between actual sales or output and the break even sales.
9. is an angle where sales line intersects total cost line which indicates profit
earning capacity over the BEP.
(a) Angle of Incidence (b) Contribution
(c) Margin of Safety (d) Gross Margin
10. If contribution is ₨. 3,00,000 and Sales is ₨. 10,00,000, then what is P/V
Ratio?(a) 20% (b) 30%
(c) 33.33% (d) 1/3
11. If P/V Ratio is 25%, then what is the % of Variable Cost?
(a) 70% (b) 80%
(c) ¾ (d) ½
12. If Fixed Cost is ₨. 2,50,000 and P/V Ratio is 60%, then what is BEP in
₨.?(a) ₨. 4,16,667 (b) ₨. 3,83,333
(c) ₨. 3,75,000 (d) ₨. 4,10,000
13. If Fixed Cost is ₨. 2,50,000 and Profit is ₨. 3,50,000, then what is the amount of
Contribution? (a) ₨. 1,00,000 (b) ₨. 6,00,000
(c) ₨. 3,75,000 (d) ₨. 4,10,000
14. If Sales are ₨. 50,000 and P/V Ratio is 20%, then what is the amount of Variable
Cost? (a) ₨. 40,000 (b) ₨. 10,000
(c) ₨. 25,000 (d) ₨. 30,000
15. If contribution is ₨. 3,00,000 and Profit is ₨. 1,00,000, then what is the amount of Fixed
Cost?(a) ₨. 4,00,000 (b) ₨.2,00,000
(c) ₨. 2,50,000 (d) ₨.3,00,000
16. If Sales are ₨. 3,00,000 and P/V ratio is 20%, then what is the amount of Variable
Cost?(a) ₨. 2,40,000 (b) ₨. 80,000
(c) ₨. 2,70,000 (d) ₨. 2,00,000
17. The correct formula of Contribution is .
(a) Contribution = Sales – Variable Cost
(b) Contribution = Fixed Cost + Profit or – Loss
(c) Contribution = Sales × P/ V Ratio
18. The correct formula of P/V Ratio is .
(a) P/ V Ratio = [Contribution/Sales ] × 100
(b) P/ V Ratio = [Change in Profit/Change in Sales ] × 100
(c) P/ V Ratio = [Sales−Variable Cost/Sales] × 100
19. Marginal Costing is a Costing .
(a) Technique (b) Method
(c) System (d) Convention
20. Under absorption and over absorption of overheads problems are not arisen under
.
(c) Job Costing (d) Budgetary Control
21. Standard cost is the cost.
(a) Pre-determined (b) Pre-decided
(c) Pre-planned (d) None of the above
22. Small organizations cannot adopt technique.
(a) Standard Costing (b) Marginal Costing
(c) Budgetary Control (d) None of the above
23. means difference between standard cost and actual cost.
(a) Balance Cost (b) Variance
(c) Marginal Cost (d) Variable Cost
24. helps management to understand the present costs and then to control the
future costs.
(a) ABC Analysis (b) Variance Analysis
(c) Marginal Analysis (d) Budget Analysis
25. Variances are classified in categories.
(a) One (b) Two
(c) Three (d) Four
26. If Standard Cost ₨. 80 and Actual Cost ₨. 70, then what is the amount of Material Cost
Variance?
(a) 10 (b) –10
(c) 150 (d) 20
27. If Standard Price ₨. 8 & Standard Qty.10, Actual Price ₨. 7 & Actual Qty.10, then what is
theamount of Material Price Variance?
(a) 10 (b) –10
(c) 150 (d) 20
28. If Standard Price ₨. 8 & Standard Qty.10, Actual Price ₨. 7 & Actual Qty.10, then what is
theamount of Material Usage Variance?
(a) 10 (b) –10
(c) 50 (d) 0
29. If Standard Rate ₨. 1.50 & Standard Hours 1600, Actual Rate ₨. 2 & Actual Hours 1500,
thenwhat is the amount of Labour Cost Variance?
(a) 600 (b) –600
(c) 500 (d) 400
30. If Standard Rate ₨. 1.50 & Standard Hours 1600, Actual Rate ₨. 2 & Actual Hours 1500,
thenwhat is the amount of Labour Rate Variance?
(a) 750 (b) –750
(c) 600 (d) 400
31. If Standard Rate ₨ 1.50 & Standard Hours 1600, Actual Rate ₨.2 & Actual Hours 1500,
then what is the amount of Labour Efficiency Variance?
(a) 150 (b) –150
(c) 300 (d) 200
32. The correct formula for verification of Material Cost Variance is .
(a) MCV = MPV + MUV (b) MCV = MPV – MUV
(c) MCV = MPV × MUV (d) None of the above
33. The correct formula for verification of Labour Cost Variance is .
(a) LCV = LRV + LEV (b) LCV = LRV – LEV
(c) LCV = LRV × LEV (d) None of the above
34. In Standard Costing comparison between is carried out.
(a) Standard Cost and Actual Cost (b) Fixed Cost and Variable Cost
(c) Normal Cost and Abnormal Cost (d) None of the above
35. The Disadvantages of Standard Costing is/are .
(a) Establishments of standards are difficult in practice.
(b) Standards are requires to revise continuously.
(c) Inaccurate, unreliable and outdated standards do more harm than benefit
36. is a concrete precise picture of the total operation of an enterprise in
monetary terms.
(a) Budget (b) Plan
(c) Strategy (d) Goal
37. Accuracy cannot be maintained is a limitation of .
(a) Budgetary Control (b) Scientific Planning
(c) Standard Costing (d) Marginal Costing
38. Pre- requisitions for effective implementation of Budgetary Control system is/are
.
(a) Deciding budget centres & budget period
(b) Preparation of a budget manual
(c) Determination of budget key factor
39. is the budget in which adjustment is possible according to change in
business conditions.
(a) Flexible Budget (b) Fixed Budget
(c) Sales Budget (d) Cash Budget
40. When forecasts about budget shows greater revenue to be received or generated than the
expenses to be incurred during budgeted period that is known as .
(a) Surplus Budget (b) Best Budget
(c) Favourable Budget (d) Non-favourable Budget
41. budget highlights that the expenditures to be incurred in budget period will
be greater than the revenues to be received during the same period.
(a) Surplus Budget (b) Deficit Budget
42. The establishment of budgets relating the responsibilities of executives to the requirements of
a policy and the continuous comparison of actual with budgeted results, either to secure by
individual action the objective of that policy or to provide basis for its revision is called as
.
(a) Budget (b) Budgeting
43. A is a powerful tool available to the management for the purpose of
maximizing profits.
(a) Budget (b) Decrease in selling price
(c) Standard Norm (d) Increase in selling price
44. Fixed Budget is also known as .
(a) Static Budget (b) Standard Budget
(c) Master Budget (d) Flexible Budget
45. Normal Profit means .
(a) No Profit No Loss (b) Less Profit
(c) Expected Profit (d) None of the above
46. Personnel Budget is also called as .
(a) Cost Budget (b) Labour Budget
(c) Employee Budget (d) None of the above
47. In cash budget, transactions are considered.
(a) Cash (b) Credit
(c) all financial (d) None of the above
48. Budget is prepared for a period of time.
(a) Fixed
(b) One Month
(c) One Year
49. Purchase Budget is also called as .
(a) Production Budget (b) Material Budget
(c) Cost Budget (d) None of the above
50. is the plan of proposed investment in the fixed assets.
(a) Fixed Budget (b) Capital Expenditure Budget
(c) Cash Budget (d) Purchase Budget
1. (a) 11. (c) 21. (a) 31. (a) 41. (b)

2. (a) 12. (a) 22. (a) 32. (a) 42. (c)
3. (a) 13. (b) 23. (b) 33. (a) 43. (a)
4. (a) 14. (a) 24. (b) 34. (a) 44. (a)
5. (b) 15. (b) 25. (d) 35. (d) 45. (a)
6. (d) 16. (a) 26. (a) 36. (a) 46. (b)
7. (d) 17. (d) 27. (a) 37. (a) 47. (c)
8. (c) 18. (d) 28. (d) 38. (d) 48. (a)
9. (a) 19. (a) 29. (b) 39. (a) 49. (b)
10. (b) 20. (a) 30. (b) 40. (a) 50. (b)
  

Chapter 4 Marginal Costing
1. Contribution margin is equal to .
A. fixed cost - loss .
B. profit + variable cost.
C. sales — fixed cost- profit .
D. sales – profit.
ANSWER: A
2. P/V Ratio is an indicator of .

A. the rate at which goods are sold .
B. the volume of sales
C. the volume of profit.
D. the rate of profit.
ANSWER: D
3. Contribution margin is also known as .

A. marginal income .
B. gross profit.
C. net profit.
D. net loss.
ANSWER: A
4. Margin of Safety is the difference between .

A. planned sales and planned profit .
B. actual sales and break-even sales.
C. planned sales and actual sales
D. planned sales and planned expenses.
ANSWER: B
5. An increase in variable costs .

A. increases p/v ratio .
B. increases the profit.
C. reduces contribution .
D. increase margin of safety.
ANSWER: C
6. An increase in selling price .

D. optimize the break even point.
ANSWER: B
7. A large Margin of Safety indicates .

A. over production.
B. over capitalization .
D. under capitalization.
ANSWER: C
8. Angie of incidence is .
C. the angle between the sales line and the x-axis.
D. the angle between the sales line and the total profit line.
ANSWER: A
9. CVP analysis is most important for the determination of .

A. sales revenue necessary to equal fixed costs .
B. relationship between revenues and costs at various levels of operations .
C. variable revenues necessary to equal fixed costs .
D. volume of operations necessary to Break—even. ANSWER: A
10. The conventional Break-even analysis does not assume that .

A. selling price per unit will remain fixed .
B. total fixed costs remain the same.
C. variable cost per unit will vary .
D. productivity per worker will remain unchanged. ANSWER: B
11. 1f₨. fixed costs decrease while variable cost per unit remains constant, the new B.E.P in
relation to the old B.E.P will be .
A. lower .
B. higher.
C. unchanged .
D. indeterminate.
E. ANSWER: B
12. If fixed costs decrease while the variable cost per unit remains constant, the new contribution
margin in relation to the old contribution margin will be .
A. lower .
B. unchanged .
C. higher.
D. indeterminate.
E. ANSWER: B
production in units____ .
A. 10,000.
B. 16,300.
C. 2,000.
D. 2,500. ANSWER: D
14. Sales Rs. 25,000; Variable cost Rs. 8,000; Fixed cost Rs. 5,000; Break-even sales in value__.
A. Rs. 7,936.
B. Rs. 7,353.
C. Rs. 8,333.
D. Rs. 9,090. ANSWER: B
15. Fixed cost Rs. 80,000; Variable cost Rs. 2 per unit; Selling price_Rs. 10 per unit; turnover
required for a profit target of Rs. 60,000.
A. Rs. 1,75,000.
B. Rs. 1,17,400.
C. Rs. 1.57,000.
D. Rs. 1,86,667. ANSWER: A
16. Sales Rs. 25,000; Variable cost Rs. 15,000; Fixed cost Rs .4,000; P/V Ratio is .
A. 40% .
B. 80%
C. 15%
D. 30%. ANSWER: A
17. Sales Rs. 50,000; Variable cost Rs. 30,000; Net profit Rs. 6,000; fixed cost is .
A. Rs. 10,000.
B. b. Rs. l4,000 .
C. Rs. 12,000.
D. Rs. 8,000. ANSWER: B
18. Actual sales Rs .4,00,000; Break-even sales Rs. 2,50,000; Margin of Safety in percentage is_.
A. 33.33%.
B. 66.67%
C. 37.5% .
D. 76.33%.
E. ANSWER: C
19. P/V Ratio 50%; Variable cost of the produce Rs. 25; Selling price is .
A. Rs. 50 .
B. Rs. 40.
C. Rs. 30 .
D. Rs. 55. ANSWER: A
20. Fixed cost Rs. 2,00,000; Sales Rs. 8,00,000; P/V Ratio 30%; the amount of' profit is .
A. Rs. 50,000.
B. Rs. 40,000 .
C. Rs. 35,000 .
D. Rs. 45,000 . ANSWER: B
21. P/V Ratio is 25% and Margin of Safety is Rs; 3,00,000, the amount of profit is .
A. Rs. 1,00,000.
B. Rs. 80,000.
C. Rs. 75,000.
D. . Rs. 60,000. ANSWER: C
22. Total sales Rs. 20,00,000; Fixed expenses Rs. 4,00,000; P/V Ratio 40%; Break-even capacity
in percentage is .
A. 40% .
B. 60% .
C. 50% .
D. 45%. ANSWER: C
23. Break - even point occurs at 40% of₨. total capacity, margin of safety will be .
A. 40% .
B. 60% .
C. 80% .
D. 85% . ANSWER: B
24. If the P/V Ratio of a product is 30% and selling price is Rs. 25 per unit, the marginal cost of
the product would be .
A. Rs.18.75 .
B. Rs.16 .
C. Rs. 15 .
D. Rs.20 . ANSWER: A
25. Under marginal costing stock are valued at .

A. fixed cost.
C. variable cost.
D. market price. ANSWER: C
26. Expected sales + desired closing stock – estimated opening stock = .

A. Expected production.
B. Expected sales.
C. Expected purchase.
D. Expected loss.
ANSWER: A
27. Material consumed is Rs. 5,00,000 Opening stock of raw material is Rs. 50,000 and Closing
stock of raw material is Rs. 25,000. What is the cost of raw material purchased?
A. Rs. 4,50,000.
B. Rs. 4,75,000.
C. Rs. 5,25,000.
D. Rs. 5, 50,000.
ANSWER: B
28. If selling price is Rs. 25,000 and profit is Rs. 5,000 then what is the percentage of profit on
cast?
A. 20%.
B. 25%.
C. 33.33%.
D. 35%.
ANSWER: B
Chapter 5 Exercising Control
1. Material control involves .
A. consumption of material
B. issue of material.
C. purchase of material.
D. purchase, storage and issue of material.
ANSWER: C
2. In production budget opening stock is deducted with .

A. expense.
B. sales.
C. purchase.
D. material.
ANSWER: B
3. In production budget closing stock is added with .
A. expense.
B. sales.
C. purchase.
D. material.
ANSWER: B
4. The budget starts without any base is .
A. Master budget.
B. Flexible budget.
C. Zero base budgeting.
D. Fixed budget.
ANSWER: C
5. The budget prepared to estimate the expenditure on fixed assets is known as.
A. Capital expenditure budget
B. Production overhead budget.
C. Administration overhead budget.
D. Selling and distribution overhead budget.
ANSWER: A
6. The budget prepared for replacement of assets, expansion of production facilities, adoption of
new technologies etc. is .
A. Capital expenditure budget.
ANSWER: A
7. A fixed budget is prepared for only .

A. One level of activity.
B. Range of activity.
C. Two level of activity.
D. Three level of activity.
ANSWER: A
8. A flexible budget is prepared for a _.

ANSWER: B
9. The budget prepared to estimate the expenditure to be incurred for planning, organizing,
direction and control function of the management is .
A. . Production overhead budget.
B. Administration overhead budget.
C. Selling and distribution overhead budget.
D. Master budget.
ANSWER: B
10. The budget prepared to estimate expenditure to be incurred to sell the product and its
distribution is
A. Production overhead budget.
D. Master budget
ANSWER: C
11. The budget prepared to estimate the research and development expenditure to be incurred
during a specific period is .
D. Research and development budget.
ANSWER: D
12. The budget is a .
A. a post-mortem analysis .
B. a substitute of management
C. an aid to management
D. calculation .
ANSWER: C
13. One of the most important tools of cost planning is .

A. budget.
B. direct cost.
C. unit cost.
D. cost sheet.
ANSWER: A
14. Sales budget is a .

A. Functional budget.
B. Expenditure budget.
C. Master budget .
D. Flexible budget.
ANSWER: A
15. The budget which usually takes the form of budgeted profit and loss account and balance
sheet is known as
A. Flexible budget .
B. Master budget.
C. Cash budget .
D. Purchase budget.
ANSWER: B
16. Which of the following is usually a long-term budget?.

A. .Fixed budget.
B. Cash budget.
C. Sales budget
ANSWER: D
17. The fixed-variable cost classification has `a special significance in the preparation of .
A. Capital budget.
B. Cash budget.
C. Master budget .
D. Flexible budget .
ANSWER: D
18. The budget, which is prepared first of all is.

A. Master budget.
B. Cash budget.
C. Budget for key factor.
D. Flexible budget.
ANSWER: C
19. Preparing budget figures for different levels of activity within a range under flexible
budgeting is
A. .
B. Formula method.
C. Multi-activity method.
D. Budget cost allowance method.
E. Proportionate method.
ANSWER: B
A. Master budget.
B. Rolling budget.
C. Flexible budget .
D. Functional budget.
ANSWER: B
21. Operation budgets normally cover a period of .

ANSWER: D
22. The entire process of preparing the budgets is known as .

A. Planning.
B. Organizing.
C. Budgeting.
D. Controlling.
ANSWER: C
23. Budgetary control starts with .

A. Planning.
B. Organizing.
C. Budgeting.
D. Controlling.
ANSWER: C
24. Budgetary control ends with .

A. Planning.
B. Organizing
C. Budgeting.
D. Control.
ANSWER: D
25. Budget designed to remain constant irrespective of the level of activity attained is called .
A. Fixed budget.
B. Flexible budget.
C. Sales budget.
D. Production budget
ANSWER: A
26. Long-term budgets are prepared for .

A. 1 year.
B. 1-3 years.
C. 1-5 years.
D. 5-10 years.
ANSWER: D
27. The budget which shows the budgeted quantity of output to be produced during a specific
period is.
A. Fixed budget.
B. Flexible budget.
C. Sales budget.
ANSWER: D
28. Material consumption budget is prepared on the basis of .

A. Production budget.
B. Sales budget.
C. Fixed budget.
D. Flexible budget.
ANSWER: A
29. Material budget consists of two parts, one is the consumption budget and another Is .
A. Material purchase budget.
B. Material sales budget.
C. Material production budget.
D. Material budget.
ANSWER: A
30. Materials purchase budget is prepared on the basis of .

A. Material sales budget.
B. Material consumption budget.
D. Material budget.
ANSWER: B
31. Labour budget is a part of .

A. Fixed budget.
B. Sales budget.
C. Production budget.
D. Flexible budget.
ANSWER: C
32. Labour budget is prepared by .

A. Personnel department.
B. Sales department.
C. Purchase department.
D. Accounts department.
ANSWER: A
33. Budget of indirect costs in the form of indirect wages, indirect material and indirect expenses
in the factory is .
D. Master budget.
ANSWER: A

MCQs

a. Shareholders
b. Creditors
c. Managers

a. Creditor
c. Controller
d. Treasurer

a. Service entities
d. All of

c. Indirect labour
d. Direct labour

a. Cost
b. Financial
c. Management
d. All

d. None of these
a. Fixed asset
b. Current asset
c. Fictitious asset
d. Wasting asset
c. Cost accounting
d. Real Accounting

c. Both (a) & (b)
d. None of these

a. Debtors account
c. Sales account

a. opening stock
b. net purchases
d. sales

c. Goods account
d. Purchase account

a. Cash account
b. Mahesh Account
c. Sales account
d. Purchase account

b. Rent account
c. Cash account
d. Expense account

a. Discount account
c. Sales account
d. Cash account

Stock = …………………
a. Sales, Purchases


a. Historical
b. Forward looking
c. Analytical
d. Social


c. Labour unrest

a. Only to workers


a. Fixed cost
b. Variable cost

a. Cost unit
b. Cost centre
c. Cost object
d. Cost estimation

a. Prime cost
b. Factory overhead
c. Selling overhead
d. Office overhead
a. Opportunity cost
b. Sunk Cost
c. Incremental cost
d. Decremental cost

a. Loan
b. Unsecured Loan
c. Secured Loan
b. Advertising
c. Depreciation
d. Carriage
a. Practicability
b. Subjectivity

d. All the above
is in pursuance to:



b. Sales account
c. Purchase account

c. (a) &(b) above
b. Trading account
Balance sheet
a. Investment
c. Provision
d. Lease Holds

c. P & L a/c
in……………….

a. Remains fixed

c. Journal
d. Both a and b

48. Cash Purchases:

a. Increases assets
c. Decreases assets


a. Machinery
b. Building
c. Cash
d. Creditor


b. Matching Concept
c. Consistency

a. Building
b. Bank Balance
c. Plant Patents
d. Goodwill

b. Matching Concept
c. Cost Concept

d. Cost Concept

a. Current assets
c. Fixed asset
d. Fixed liability

b. A liability
d. Both a and b
e. Both a and c

a. Dual concept
b. Divider concept
c. Entity concept
d. Landlord concept

a. Nominal Capital
c. Issues capital
d. None of these
d. None of these
d. All of these

a. Projected data
c. Historic data


a. Art and Science
b. Art
c. Science
d. Art or Science

a. Original
b. Duplicate
c. Personal
d. Nominal

b. Rules of Real
c. Rules of Nominal
d. All of these
b. Cash a/c
c. Short term loan
d. creditors
a. Discount
b. Depreciation
c. Reduction


d. None of these

a. Long term loan
b. Short term loan
c. Owner’s fund
d. All of these

a. Current asset
d. None of these

a. Cost
b. Net profit
c. Gross profit
d. Selling price

a. Management only
b. Government only
c. Investor only
d. All of these

a. Provision
a. Provision
a. Separate entity
b. Going concern
c. Consistency
d. Time period
c. Entity Concept
OWNER'S EQUITY
a. Income Statement
c. Balance Sheet

a. Loan from Mr.Y
b. loan to Mr.y
c. Both (a) (b)
d. None of these
a. (ii) (iii)(i)
b. (iii)(iv)(ii)
d. (i)(iv)

a. Accrual concept
b. Cost concept
a. Separate entity
b. Going concern
c. Consistency
d. Time period


a. Trading a/c
b. Balance sheet
d. Trial balance.
b. Corporation
c. Partnership
d. All of them
a. Fiscal year
b. Calendar year
d. Accrual period

a. Personal a/c
b. Impersonal a/c
c. Real a/c
d. Nominal a/c


d. Matching concept
b. Corporation
c. Partnership
d. All of them
100. The revenue recognition principal dictates that all types of incomes should be recorded or
recognized when
a. Cash is received
following?
a. Accrual concept
b. Matching concept

a. Fiscal year
b. Calendar year
d. Accrual period
accounting concept?
b. Materiality
c. Prudence
d. Matching concept
a. Concrete
b. Complete
c. Immaterial
d. Material
following?
d. Duality Concept
b. The transactions which cannot be expressed in money, will not be recorded in
accounting books
d. None of These
d. All of the above
a. Rs 70,000
b. Rs 80,000
c. Rs 90,000
d. Rs 1,00,000

a. Revenue Profit
c. Loss
d. None of these

a. Profit
b. Assets
c. Company
d. Books of A/c

a. Depreciation
b. Wages
c. Salary
d. Stationary

a. Assets
b. Liabilities
c. Capital
d. All of these

a. Benefits & Costs
b. Revenues & Costs

a. Patents
b. Trade Marks
c. Copyright
d. Land



d. None of these


a. Practicability
b. Subjectivity
d. None of these
d. None of these
pursuant of
d. None of these

d. None of these
a. Cash a/c
b. Capital a/c
c. Drawing a/c
d. Bank a/c

b. Salaries a/c
c. Cash a/c
d. Bank a/c

a. Customer a/c
b. Sales return a/c
c. Goods a/c

a. Cash a/c
b. Mahesh a/c
c. Sales a/c
d. Sales return a/c

a. Land lord a/c
b. Rent a/c
c. Cash a/c
d. Tenant a/c

a. Discount a/c
b. Customer a/c
c. Sales a/c
d. None of these

a. Debtors Accounts
b. Bad debts a/c
c. Sales a/c
d. None of these

accounting concept
d. None of these
d. None of these
d. None of these
c. Not disclosed
d. None of these

a. Single aspect
b. Dual aspect
c. Triple aspect
d. None of these
Statements
d. None of these
d. None of these
d. None of these.
a. Cash concept
b. Accrual concept
c. Matching concept
d. On-going concept

a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these
a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these
a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these
a. Journal
b. Ledger
c. Trial balance
d. None of these
a. Compound Journal
b. Ledger
c. Trial balance
d. None of these

a. Compound Journal
b. Ledger
c. Trial balance
d. None of these
ledger is called as
a. Ledger
b. Posting
c. Forward journal
d. None of these
a. Land
b. Machine
c. Cash
d. Owner Equity
a. Cash
b. Debtor
c. Owner’s equity
d. None of these
a. Rs.1020000
b. Rs.1010000
c. Rs.1030000
a. 600,000
b. 1,400,000
c. 2,000,000
d. None of these
a. Rs.200, 000
b. Rs.700, 000
c. Rs.800, 000
d. Rs1, 100,000
a. 000,000
b. 1,550,000
c. 800,000
d. None of these
a. Only (a)
b. Both (a) (b)
c. All (a)(b)(c)(d)
d. None of these
a. Net Loss
b. Net income
c. Dividend


a. Accounts payable
c. Sales
d. Cash
liabilities?
a. Rs.200
b. Rs.1900
c. Rs.1200
d. Rs.1700
informed reader

a. Goodwill
b. Sales

d. None of theses
b. Currency
c. Money orders

correct?
ledger.
is true?

account credited.

a. Current assets
b. Investments

d. None of these


a. Planning
b. Decision making
c. Control
d. All of these
departments.

d. All of these
a. Variable cost
c. Direct cost



c. Owners

a. Market values


a. Asset
b. Liability
c. Accounts

c. recorded facts


a. Management
b. Creditors
c. Bankers
d. All of the above
a. Sundry creditors
b. Acceptances


a. Actual figures
b. Budgeted figures
c. Standard figures

a. 1910
b. 1939
c. 1950
d. 1960


a. Compulsory
b. Optional
c. Obligation

a. Trading account
c. Balance sheet
d. All of the above
a. Fixed asset
b. Investment
c. Current asset
d. Owners equity.

a. Financial
b. Economic
c. Non financial
d. None of these.
a. sales
b. Share capital
d. Unsecured loan


a. Balance Sheet

a. M. S. Gosav
b. Wheldon
c. LucoPacioli
d. R. N. Carter

a. Analytical
b. Clerical
c. Executive
d. Non- executive

a. Cash basis
b. Accrual basis
c. Mercantile basis
c. Both

a. Capital
b. Revenue
c. Direct
d. Non- cash

a) Nominal account
b) Real Account

a) Balance sheet
b) Trial Balance
c) Ledger
d) Journal
a. cash account
b. capital account
c. drawings account

b. Salaries account
c. Cash account
as:
b. Overhead
a. Variable cost
c. Direct cost

d. All of these
c. Indirect labour
d. Direct labour
a. Indirect labour
b. Direct materials

classified as
a. A prime cost

b. Direct materials
d. Immaterial items

a. Direct labour
b. Direct materials
d. Advertising

b. Direct Wages
c. Direct Expenses
d. Prime Cost

a. Work on cost
b. Work Cost
d. Direct Cost
a. Prime Cost
b. Factory Overhead
c. Selling overhead
d. Office overhead
a. Total Cost
b. Office Cost
c. Cost of sales
d. Selling overhead


d. future costs
a. Rs. 1,80,000
b. Rs. 2,00,000
c. Rs. 1,70,000
d. Rs. 2,10,000
Answers
1. (c) 2. (a) 3. (d) 4. (a) 5. (d) 6. (b) 7. (c) 8. (d) 9. (b) 10. (b)
11. (a) 12. (b) 13. (d) 14. (b) 15. (a) 16. (c) 17. (b) 18. (c) 19. (c) 20. (a)
21. (c) 22. (d) 23. (d) 24. (d) 25. (b) 26. (b) 27. (b) 28. (b) 29. (a) 30. (c)
31. (c) 32, (c) 33. (a) 34. (b) 35. (a) 36. (c) 37. (c) 38. (c) 39. (c) 40. (c)
41. (c) 42. (b) 43. (a) 44. (b) 45. (d) 46. (e) 47. (a) 48. (c) 49. (c) 50. (d)
51. (c) 52. (a) 53. (b) 54. (b) 55. (d) 56. (c) 57. (a) 58. (e) 59. (e) 60. (a)
61. (c) 62. (a) 63. (a) 64. (d) 65. (b) 66. (c) 67. (a) 68. (c) 69. (c) 70. (b)
71. (b) 72. (b) 73. (e) 74. (d) 75. (d) 76. (e) 77. (a) 78. (a) 79. (d) 80. (d)
81. (a) 82. (b) 83. (c) 84. (c) 85. (a) 86. (d) 87. (d) 88. (b) 89. (d) 90. (a)
91. (c) 92. (d) 93. (c) 94. (d) 95. (b) 96. (c) 97. (d) 98. (c) 99. (d) 100. (c)
101.(c) 102.(a) 103.(c) 104.(d) 105.(b) 106.(c) 107.(d) 108.(b) 109.(d) 110.(b)
111.(b) 112.(a) 113.(a) 114.(d) 115.(b) 116.(d) 117.(c) 118.(b) 119.(a) 120.(a)
121.(a) 122.(b) 123.(c) 124.(c) 125.(a) 126.(b) 127.(b) 128.(b) 129.(b) 130.(a)
131.(c) 132.(c) 133.(a) 134.(a) 135.(a) 136.(c) 137.(a) 138.(a) 139.(b) 140.(c)
141.(c) 142.(b) 143.(b) 144.(b) 145.(a) 146.(c) 147.(a) 148.(b) 149.(c) 150.(b)
151.(d) 152.(c) 153.(d) 154.(c) 155.(c) 156.(a) 157.(c) 158.(d) 159.(b) 160.(d)
161.(c) 162.(b) 163.(d) 164.(d) 165.(b) 166.(a) 167.(c) 168.(b) 169.(d) 170.(d)
171.(c) 172.(d) 173.(a) 174.() 175.(b) 176.(c) 177.(d) 178.(a) 179.(d) 180.(c)
181.(d) 182.(b) 183.(b) 184.(a) 185.(b) 186.(c) 187.(c) 188.(a) 189.(d) 190.(d)
191.(b) 192.(a) 193.(c) 194.(c) 195.(b) 196.(d) 197.(d) 198.(a) 199.(a) 200.(c)
201.(a) 202.(c) 203.(b) 204.(b) 205.(a) 206.(a) 207.(b) 208.(d) 209.(c) 210.(b)
211.(b) 212.(b) 213.(d) 214.(d) 215.(d) 216.(b) 217.(d) 218.(b) 219.(c) 220.(a)
221.(d) 222.(b) 223.(b) 224.(a) 225.(b) 226.(b) 227.(c)
Managerial Accounting (101)
Multiple Choice Questions:
1.Basic objectives of cost accounting is .

A. tax compliance.
B. financial audit.
D. profit analysis.
ANSWER: C

A. each department.
C. each month.
D. each executive.
ANSWER: B

ANSWER: A
A. notional cost.
B. real cost.
C. normal cost.
D. variable cost.
ANSWER: A
5. Operating costing is suitable for .

A. job order business.
B. contractors.
C. sugar industries.
D. service industries.
ANSWER: D
6. Process costing is suitable for .
A. hospitals.
B. oil reefing firms.
C. transport firms.
D. brick laying firms.
ANSWER: B

A. two ways.
B. three ways.
C. four ways.
D. several ways.
ANSWER: D

ANSWER: A

ANSWER: A
10. Multiple costing is a technique of using two or more costing methods for ascertainment of cost by.
A. the same firm.
B. the several firms.
C. the same industry.
D. the several industries.
ANSWER: A
A. direct cost.
B. indirect cost.
C. sunk cost.
D. imputed cost.
ANSWER: A
A. imputed cost.
B. historical cost.
C. sunk cost.
D. shutdown cost
ANSWER: D

ANSWER: C

A. three types.
B. four types.
C. five types.
D. seven types.
ANSWER: A

A. major expenses.
D. sundry expenses.
ANSWER: B

A. office overhead.
ANSWER: D

A. prime cost.
B. factory cost.
D. production cost.
ANSWER: C

A. prime cost.
B. factory cost.
C. labour cost.
ANSWER: B
A. Factory cost.
C. Selling cost.
D. Labour cost.
ANSWER: B

A. prime cost.
B. works cost.
D. cost of sales.
ANSWER: C
21. Tender is an.

ANSWER: C

A. selling price.
D. value of stocks.
ANSWER: A

ANSWER: C

A. prime cost.
B. works cost.
C. cost of sales.
ANSWER: A
25. Depreciation of plant and machinery is a part of

ANSWER: A

A. works on cost.
B. selling overhead.distribution overhead.
C. administration overhead.
ANSWER: D
27. Counting house salary is part of .

ANSWER: D

A. material cost.
B. labour cost.
C. prime cost.
D. direct expenses
ANSWER: A

A. material cost.
B. labour cost.
C. prime cost.
D. factory cost.
ANSWER: C

A. material cost.
B. labour cost.
C. prime cost.
D. factory cost.
ANSWER: C
31. The ratios which reflect managerial efficiency in handling the assets is.
A. turnover ratios
B. profitability ratios.
C. short term solvency ratio.
D. long term solvency ratio.
ANSWER: A
32. he ratios which reveal the final result of the managerial policies and performance is .
A. turnover ratios.
ANSWER: B
33. Return on investment is a .

A. turnover ratioshort term solvency ratio.
C. long term solvency ratio.
ANSWER: C
34. Net profit ratio is a .

A. turnover ratio.
B. long term solvency ratio.
C. short term solvency ratio
D. profitability ratio.
ANSWER: D
35. Stock turnover ratio is a .

A. turnover ratio.
B. profitability ratio.
ANSWER: A
36. Current ratio is a
A. short-term solvency ratio.
B. long-term solvency ratio.
C. profitability ratio.
D. turnover ratio.
ANSWER: A
37. Proprietary ratio is a .

D. turnover ratio.
ANSWER: B
38. Fixed assets ratio is a

D. turnover ratio.
ANSWER: B
39. Fixed assets turnover ratio is a

D. turnover ratio.
ANSWER: D
40. The ratio which measures the profit in relation to capital employed is known as
A. return on investment.
B. gross profit ratio.
C. operating ratio.
D. operating profit ratio.
ANSWER: A
41. The ratio which determines the profitability from the shareholder’s point of view is .
C. return on shareholders funds.
ANSWER: C
42. Return on equity is also called
A. . return on investment.
D. return on net worth.
ANSWER: D
43. Preliminary expenses is an example of

A. fixed assets.
B. current assets.
C. fictitious assets.
D. current liabilities.
ANSWER: C
44. Prepaid expenses is an example of .

A. fixed assets.
B. current assets.
ANSWER: B
45. The ratio which is calculated to measure the productivity of total assets is
A. return on equity.
B. return on share holders funds.
C. return on total assets.
D. return on equity share holders’ funds.
ANSWER: C
46. The ratio which shows the proportion of profits retained in the business out of the current year’s profits
is
A. . retained earnings ratio.
B. pay out ratio
C. earnings per share.
D. price earnings ratio.
ANSWER: A
47. The ratio which indicates earnings per share reflected by the market price is .
A. retained earnings ratio.
B. pay out ratio.
ANSWER: D
48. The ratio establishes the relationship between profit before interest and tax and fixed interest charges
is .
A. interest cover ratio.
B. fixed dividend cover ratio.
C. debt service coverage ratio.
D. dividend yield ratio.
ANSWER: A
49. The ratio shows the preference dividend as a proportion of profit available for shareholders is
.
ANSWER: B
50. The dividend is related to the market value of shares in .

ANSWER: D
51. . Turnover ratio is also known as .

A. activity ratios.
B. solvency ratios.
C. liquidity ratios.
D. profitability ratios.
ANSWER: A
52. Inventory or stock turnover ratio is also called .
A. stock velocity ratio.

B. . debtors velocity ratio.
C. . creditors velocity ratio.
D. working capital turnover ratio.
ANSWER: A
53. Which ratio is calculated to ascertain the efficiency of inventory management in terms of capital
investment?
8
B. debtors velocity ratio.
C. creditors velocity ratio.
ANSWER: A
54. The ratio which measures the relationship between the cost of goods sold and the amount of average
inventory is
A. stock turnover ratio.
ANSWER: A

A. net profit.
ANSWER: D

A. net profit.
ANSWER: D
57. Which ratio measures the number of times the receivables are rotated in a year in terms of sales?
B. debtors turnover ratio.
ANSWER: B
58. Debtors turnover ratio is also called .

D. working capital turnover ratio
ANSWER: B
59. Creditors turnover ratio is also called .

C. . accounts payables ratio.
ANSWER: C
9
60. The indicates the number of times the payables rotate in a year is _.
B. stock turnover ratio.
ANSWER: C
61. Funds flow statement is based on the .

A. working capital concept of funds.
B. cash concept of funds.
C. fixed assets concept of funds.
D. long term funds.
ANSWER: A
62. All those assets which are converted into cash in the normal course of business within one year are
known as .
A. fixed assets.
B. current assets.
D. wasting assets.
ANSWER: B
63. All those liabilities which are payable in cash in the normal course of business within a period of one
year are called _.
A. long term liabilities.
B. overdraft.
C. short term loans.
ANSWER: D
64. Any transaction between a current account and another current account does not
Affect .
A. profit.
B. funds.
C. working capital.
D. capital.
ANSWER: B
65. Any transaction between a non current account and another non current account does not
affect .
A. profit.
B. funds.
C. working capital.
D. capital.
ANSWER: B
66. Principle’ for preparation of working capital statement -Increase in current asset .
A. increases working capital.
B. decreases working capital.
C. decrease fixed capital.
D. increase fixed capital.
ANSWER: A
67. Principle’ for preparation of working capital statement - Decrease in current asset .
ANSWER: B
68. Principle’ for preparation of working capital statement -Increase in current liability .
ANSWER: B
69. Principle’ for preparation of working capital statement -Decrease in current Liability .
C. decrease fixed capital
ANSWER: A
70. Depreciation on fixed assets is .

A. non operating income.
B. operating expense.
C. operating income.
D. non operating expense.
ANSWER: D

C. . prime cost and variable overhead.
ANSWER: C
72. One of the primary differences between marginal costing and absorption costing regarding
the treatment of .
A. prime cost .
B. fixed overheads.
C. variable overheads .
D. direct materials.
ANSWER: B

A. fact that standard costs can be used with absorption costing but not with marginal costing .
B. amount of costs assigned to individual units of products .
C. kind of activities for which each can be used .
D. amount of fixed costs that will be incurred.
ANSWER: B

B. gross profit.
C. net profit.
D. net loss.
ANSWER: A

A. overhead costs .
B. prime cost.
C. variable cost.
D. fixed costs.
ANSWER: D

ANSWER: A

ANSWER: D


ANSWER: B

ANSWER: C

ANSWER: B

A. over production.
ANSWER: C

ANSWER: A

D. volume of operations necessary to Break—even.
ANSWER: A

D. productivity per worker will remain unchanged.
ANSWER: B
85. 1f` fixed costs decrease while variable cost per unit remains constant, the new B.E.P in relation to the
old B.E.P will be .
A. lower .
B. higher.
C. . unchanged .
D. indeterminate.
ANSWER: B
relation to the old contribution margin will be .
A. lower .
B. unchanged .
C. higher.
D. indeterminate.
ANSWER: B
production in units .
A. 10,000.
B. 16,300.
C. 2,000.
D. 2,500.
ANSWER: D
88. Sales Rs. 25,000; Variable cost Rs. 8,000; Fixed cost Rs. 5,000; Break-even sales
in value .
A. Rs. 7,936.
B. Rs. 7,353.
C. Rs. 8,333.
D. Rs. 9,090.
ANSWER: B
89. Fixed cost Rs. 80,000; Variable cost Rs. 2 per unit; Selling price_Rs. 10 per unit; turnover required
for a profit target of Rs. 60,000.
A. Rs. 1,75,000.
B. Rs. 1,17,400.
C. Rs. 1.57,000.
D. Rs. 1,86,667.
ANSWER: A
A. 40% .
B. 80%
C. 15%
D. 30%.
ANSWER: A
A. Rs. 10,000.
B. b. Rs. l4,000 .
C. Rs. 12,000.
D. Rs. 8,000.
ANSWER: B
92. Actual sales Rs .4,00,000; Break-even sales Rs. 2,50,000; Margin of Safety in
percentage is _.
A. 33.33%.
B. 66.67%
C. 37.5% .
D. 76.33%.
ANSWER: C
A. Rs. 50 .
B. Rs. 40.
C. Rs. 30 .
D. Rs. 55.
ANSWER: A
A. Rs. 50,000.
B. Rs. 40,000 .
C. Rs. 35,000 .
D. Rs. 45,000 .
ANSWER: B
A. Rs. 1,00,000.
B. Rs. 80,000.
C. Rs. 75,000.
D. . Rs. 60,000.
ANSWER: C
in percentage is .
A. 40% .
B. 60% .
C. 50% .
D. 45%.
ANSWER: C
97. Break - even point occurs at 40% of` total capacity, margin of safety will be .
A. 40% .
B. 60% .
C. 80% .
D. 85% .
ANSWER: B
98. If the P/V Ratio of a product is 30% and selling price is Rs. 25 per unit, the marginal cost of the
product would be .
A. Rs.18.75 .
B. Rs.16 .
C. Rs. 15 .
D. Rs.20 .
ANSWER: A
99. Absorption costing is also known as .

B. real costing.
D. real costing .
ANSWER: A

A. fixed cost.
C. variable cost.
D. market price.
ANSWER: C

D. calculation .
ANSWER: C

A. budget.
B. direct cost.
C. unit cost.
D. cost sheet.
ANSWER: A
C. Master budget .
D. Flexible budget.
ANSWER: A
known as
B. Master budget.
C. Cash budget .
D. Purchase budget.
ANSWER: B

A. .Fixed budget.
B. Cash budget.
C. Sales budget
ANSWER: D
A. Capital budget.
B. Cash budget.
C. Master budget .
ANSWER: D

A. Master budget.
B. Cash budget.
D. Flexible budget.
ANSWER: C
108. Preparing budget figures for different levels of activity within a range under flexible budgeting is
.
A. Formula method.
B. Multi-activity method.
C. Budget cost allowance method.
D. Proportionate method.
ANSWER: B
A. Master budget.
B. Rolling budget.
ANSWER: B

ANSWER: D

A. Planning.
B. Organizing.
C. Budgeting.
D. Controlling.
ANSWER: C

A. Planning.
B. Organizing.
C. Budgeting.
D. Controlling.
ANSWER: C

A. Planning.
B. Organizing
C. Budgeting.
D. Control.
ANSWER: D
114. Budget designed to remain constant irrespective of the level of activity attained is
called .
A. Fixed budget.
B. Flexible budget.
C. Sales budget.
ANSWER: A

A. 1 year.
B. 1-3 years.
C. 1-5 years.
D. 5-10 years.
ANSWER: D
116. The budget which shows the budgeted quantity of output to be produced during a specific period is.
A. Fixed budget.
B. Flexible budget.
C. Sales budget.
ANSWER: D

B. Sales budget.
C. Fixed budget.
D. Flexible budget.
ANSWER: A

D. Material budget.
ANSWER: A

18
D. Material budget.
ANSWER: B

A. Fixed budget.
B. Sales budget.
D. Flexible budget.
ANSWER: C

ANSWER: A
factory is .
D. Master budget.
ANSWER: A
123. The budget prepared to estimate the expenditure to be incurred for planning, organizing, direction and
control function of the management is .
D. Master budget.
ANSWER: B
124. The budget prepared to estimate expenditure to be incurred to sell the product and its distribution is
.
D. Master budget
ANSWER: C
125. The budget prepared to estimate the research and development expenditure to be incurred during a
specific period is .
19
ANSWER: D
ANSWER: A
127. The budget prepared for replacement of assets, expansion of production facilities, adoption of new
technologies etc. is .
ANSWER: A

ANSWER: A

ANSWER: B

A. Master budget.
B. Flexible budget.
D. Fixed budget.
ANSWER: C
131. ABC analysis is .

A. At Best Control.
B. Always Better Control.
C. Average better Control.
D. All best control.
ANSWER: B
132. JIT inventory system is .

A. . Just In Time.
B. Just Inventory Time.
20
C. Job In Time.
D. Job Inventory Time.
ANSWER: A
133. Perpetual inventory system involves .

A. bincard and stores ledger.
B. bill of material and material requisition.
C. purchase requisition and purchase order.
D. inward and outward invoices.
ANSWER: A
134. FIFO is .
A. Fast Investment in Future Order.
B. First In First Out.
C. Fast In Fast Out
D. Fast Issue Of Fast Order.
ANSWER: D
135. LIFO method of pricing of materials is more suitable when.

A. material prices are rising.
B. material prices are falling.
C. material prices are constant.
D. material prices are fluctuating.
ANSWER: A
136. Average method of pricing the material issues is useful when .

ANSWER: D
137. Scrap is .
A. residue of material.
B. wastage of material.
C. surplus material.
D. abnormal loss of material.
ANSWER: A
138. Material is issued by store keeper against.
A. material requisition.
B. material order.
C. goods received note.
D. purchase requisition.
ANSWER: A
139. EOQ stands for .

A. Economic Order Quantity.
B. Essential Order Quantity.
C. Economic Output Quantity.
D. Essential Output Quantity.
ANSWER: A
140. The document which is prepared after receiving and inspecting material .
A. material record note.
B. goods received note.
C. bill of material.
D. inventory record.
ANSWER: B
141. The budget which reviews a programme or project from ‘scratch’ is

A. Master budget.
B. Flexible budget.
D. Fixed budget.
ANSWER: C
142. The budget said as ‘resource planning’ and ‘redeployment process’ is .

A. Zero base budgeting.
B. Master budget.
C. Flexible budget.
D. Fixed budget.
ANSWER: A

B. Expected sales.
D. Expected loss.
ANSWER: A
A. expense.
B. sales.
C. purchase.
D. material.
ANSWER: B

A. expense.
B. sales.
C. purchase.
D. material.
ANSWER: B
146. Material consumed is Rs. 5,00,000 Opening stock of raw material is Rs. 50,000 and Closing stock of
raw material is Rs. 25,000. What is the cost of raw material purchased?
A. Rs. 4,50,000.
B. Rs. 4,75,000.
C. Rs. 5,25,000.
D. Rs. 5, 50,000.
ANSWER: B
cast?
A. 20%.
B. 25%.
C. 33.33%.
D. 35%.
ANSWER: B

ANSWER: C
149. Material requisition is meant for .

A. purchase of material.
B. supply of material from stores.
C. sale of material.
D. storage of material.
ANSWER: B
150. Stock control through stock levels and EOQ is called .

A. demand and supply method.
B. perpetual inventory system.
C. control by important and exception.
D. automatic order method.
ANSWER: B
Journal entries of ____________for the period ended _________ LEDGER ACCOUNTS
Date Particulars L.F. Debit (Rs.) Credit (Rs.) Dr.
1 Cash A/c. 1 Dr. 50,000 Date
To S. Capital A/c. 2 50,000 1
2 Cash A/c Dr. 20,000 13
To Manish's Loan A/c 3 20,000
5 Computer A/c 4 Dr. 58,000

To Cash A/c 58,000
1st Feb 2019
8 Computer Supplies A/c 5 Dr. 6,000
To Creditors A/c 6 6,000
13 Cash A/c Dr. 12,000 Dr

To Software income A/c 7 12,000 Date
31
15 Creditor A/c Dr 2,000
To Cash A/c 2,000
30 Salary A/c 8 Dr 4,000

To Cash A/c 4,000
30 Office Rent A/c 9 Dr 1,200 Dr

To Cash A/c 1,200 Date
31
31 Debtors A/c 10 Dr. 8,000
To Software income A/c 8,000
TOTAL 161,200 161,200
Dr
Date
5
1st Feb
Dr.
Date
8
1stFeb
Dr
Date
31
Date
31
Dr.
Date
30
1st Feb
Dr
Date
30
1st Feb
Dr
Date
31
1st Feb
LEDGER ACCOUNTS
Cash A/c
Particulars J.F. Amount(RS.) Date Particulars J.F.
To S. Capital A/c 50,000 5 By Computer A/c
To Manish's Loan A/c 20,000 By Creditors A/c
To Software income A/c 12,000 30 By Salary A/c
30 By Office Rent A/c
31 By balance carried down

82,000
To Balance brought down 16,800

opening balance
Capital A/c
To balance carried down 50,000 1 By Cash A/c
Credit balance
50,000
1-Feb By balance brought down
Manish's Loan A/c

Credit balance
20,000
1srt Feb By Balance brought down
Computer A/c
To Cash A/c 58,000 31 By balance carried down
58,000
To balance carried down 58,000
Computer Supplies A/c
To Creditors A/c 6,000 31 By balance carried down
6,000
To balance brought down 6,000
Creditors A/c
To Cash A/c 2,000 8 By Computer Supplies A/c
To balance carried down Credit 4,000
6,000
1st Feb By balance brought down
Software Income A/c

credit 31 By Debtors A/c
20,000
1st Feb By balance brought down
Salary A/c
To Cash A/c 4,000 31 By balance carried down
4,000
Office Rent A/c
To Cash 1,200 31 By balance carried down
1,200
Debotrs A/c
To Software income A/c 8,000 31 By balance carried down
8,000
Suresh began business wit
Cr. The firm took a loan from
Amount(RS.) Bought for cash a compute
58,000 Bought computer supplies
2,000 Received payment for soft
4,000 Paid creditor for supplies R
1,200 Paid salaries Rs. 4000 and
16,800 Debit balance Sold software on credit Rs.
82,000
TRIAL BALANCE OF FOR THE PERIOD ENDED

Sr.No. Name of the Account Debit (Rs.) Credit (Rs.)
1 Cash A/c 16,800
Cr 2* S. Capital A/c 50,000
Amount(RS.) 3 Manish's Loan A/c 20,000
50,000 4* Computer A/c 58,000
5 Computer Supplies A/c 6,000
6 Creditors A/c 4,000
7 Software income A/c 20,000
50,000 8* Salary A/c 4,000
50,000 9 Office Rent A/c 1,200
10 Debtors A/c 8,000
Cr
Amount(RS.) Total 94,000 94,000
20,000
Additional information (Adjustments)
1. Depreciate Computer @15% p.a. (per annum) (yearly)
20,000 2. Salary of Rs. 2000 was outstanding for the month
3. Suresh withdrew Rs. 6500 for personal use
4. An order is received from a customer worth Rs. 16700, not recorded in th
Cr
Amount(RS.)
58,000 debit balance
58,000
Cr
Amount(RS.)
6,000 debit balance
6,000
Cr
Amount(RS.)
6,000
6,000
4,000
Amount(RS.)
12,000
8,000
20,000
20,000
Amount(RS.)
4,000 debit balance
4,000
Amount(RS.)
1,200 debit balance
1,200
Amount(RS.)
8,000 debit balance
8,000
gan business with cash Rs. 50000
ook a loan from Manish Rs. 20000
cash a computer Rs. 58000
mputer supplies on credit Rs. 6000
ayment for software sales Rs. 12000
or for supplies Rs. 2000
es Rs. 4000 and office rent Rs. 1200
are on credit Rs. 8000
Trading and Profit and Loss A/c for the year ended
Dr
Particulars Amount(Rs.)
To Depreciation on Computers 8,700
To Salary 4,000
Add: Outstanding salary 2,000 6,000
To office rent 1,200
To Net Proft carried to balance sheet 4,100
20,000
Balance Sheet as at
Liabilities Amount (Rs.)
S. Capital 50,000
Less: Drawings 6,500
43,500
Add: Net profit earned 4,100 47,600
Creditors 4,000
Outstanding salary 2,000
Manish's Loan 20,000
Rs. 16700, not recorded in the books 73,600

A/c for the year ended
Cr
Particulars Amount(Rs.)
By Software income 20,000
20,000
nce Sheet as at
Assets Amount(Rs)
Computer 58,000
Less: Depreciation@15% 8,700 49,300
Cash 16,800
Less: Drawings 6,500 10,300
Computer Supplies 6,000
Debtors 8,000
73,600
Journal entries in the books of _____________ for the period _____________
Date Particulars L.F. Debit(Rs.) Credit (Rs.)
1.10.2017 Cash A/c Dr. 50,000
To Owner's Capital A/c 50,000
(Being business started with cash)
5.10.2017 Petrol A/c Dr. 1,000
To Cash A/c 1,000
(Being cash paid for petrol)
10.10.2017Cash A/c Dr. 5,000
To Rent received A/c 5,000
(Being cash received towards rent)
TOTAL 56,000 56,000

Problems # 1:
From the following particulars taken out from the books of Maya and Co. You are required to prepare Trading and Profit & Lo
final accounts questions
Adjustments:
(a) Closing stock Rs, 25,000.
(b) Provision for doubtful debts at 2.5% of sundry debtors.
(c) Depreciation furniture and machinery by 10%.
(d) Commission of Rs. 4,200 has been earned but not received till the closing of accounts.
(e) Wages of Rs. 400 are outstanding/unpaid.
(f) Insurance premium is paid for the entire year starting 1.10.2019.
(g) Goods worth Rs. 2,500 were distributed as free sample
d) First effect = balance sheet asset side, second effect = profit and loss A/c credit side add to commission
e) First effect = balance sheet liability side, second effect = trading A/c debit side add to wages
f) first effect = balance sheet asset side, second effect = profit and loss A/c debit side less from insurance premium
g) first effect = trading A/c credit side, second effect = profit and loss A/c debit side
o prepare Trading and Profit & Loss Account and Balance Sheet as at June 30, 2020.
o commission
om insurance premium
Trading A/c of Maya & Co for the year ended 30.06.2020
Dr
Particulars Amount
To opening stock 11,400
To purchases 145,000
Less: purchase return
To wages 23,600
Add: outstanding wages 400 24,000
To Carriage inward 2,040
Profit and Loss A/c of Maya & Co for the year ended 30.06.2020
Dr
Particulars Amount
To Bad debts (Trial balance) 0
Add: Bad debts (Adjustment) 0
add: Provision for doubtful debts (Adj) 1,300
Less: Provision for doubtful debts (T/B) 0 1,300
To Depreciation on furniture 350
To Depreciation on machinery 2,400
To Insurance Premium 2,400
Less: Prepaid insurance premium 600 1,800
To loss due to distribution of goods as free samples 2,500
To Salary 8,420
To motor car expenses 3,600
To general expenses 2,680
To carriage outward 1,630
To transportation charges 6,430
To rent and taxes 3,600
o for the year ended 30.06.2020
Cr
Particulars Amount
By Sales 292,000
Less: Sales Return 2,600 289,400
By goods distributed as free samples 2,500
By Closing stock 25,000
Cr
Particulars Amount
By Commission 0
Add: Oustanding commission 4,200
Balance sheet of Maya & Co as at 30.06.2020
Liabilities Amount Assets

Owner's equity 20,000 Closing stock
Less: drawings 8,000 Sundry debtors 52,000
12,000 Less: Provision for doubtful debts 1300
Furniture 3,500
Less: Depreciation @ 10% 350
Machinery 24,000
Less: Depreciation @ 10% 2400
Outstanding commission
Prepaid insurance premium
Cash
Motor car
outstanding wages 400 Equipment
Accounts payable 22,000 Cash at bank
Amount
25,000
50,700
3,150
21,600
4,200
600
2.392
22,000
2,508
6,200
Trading A/c of for the year ended
Dr. Cr
Particulars Amount Particulars Amount
To opening stock (goods, raw material) xxx By Sales (goods,
xxx finished product)
To Purchases ( of goods, raw material) xxx Less: Sales Return
xxx xxx
Less:Purchase Return xxx xxx By Goods gone as free xxx
samples/ fire/
To Wages xxx theft
Add: Outstanding wages xxx
OR By Closing stock (goods, raw material)
Less: Prepaid wages xxx xxx
To Carriage inward xxx
To Gross Profit carried to Profit and Loss A/c xxx By Gross Loss carried toxxx
Profit and Loss A/c
Profit and Loss A/c of for the year ended

Dr. Cr
To Gross Loss carried to Profit and Loss A/c xxx By Gross Profit carried xxx
to Profit and Loss A/c
To Salary xxx
Add/Less: Outstanding/Prepaid salary xxx xxx By rent received
xxx
To Insurance Premium Add/Less: Outstanding/Prereceived
xxx xxx rent
Add/Less: Outstanding/Prepaid Insurance Premium xxx xxx By dividend received xxx
To Rent By interest received xxx
Add/Less: Outstanding/Prepaid Rent xxx xxx
To Depreciation xxx
To Goodwill/copyright written off (Amortization) xxx
To Petrol xxx
To Stationary expense xxx
To Bad Debts xxx
To Provision for doubtful debts (Adjustment) xxx
Less: Provision for doubtful debts (T/B Credit balance) xxx xxx
To Carriage outward xxx
To Salesmen's commission xxx
To Advertisement xxx
To Loss due to fire/theft xxx
To Net Profit carried to Balance sheet xxx By Net Loss carried to Balance
xxx sheet
Balance Sheet of as as
Liabilities Amount Assets Amount

Owner's Capital
xxx Fixed Assetsxxx
Add: Profit xxx
from Profit and Loss A/cLess: Depreciation/Amortization
xxx xxx
xxx Debtors xxx
Less: Drawings
xxx Less: Provision
xxx for doubtful debts
Less: Loss from
xxx Profit and
xxx Loss A/cLess: Bad Debts
xxx xxx
ds, raw material) Cash xxx
Bank Loan xxx Bank xxx
Creditors xxx Pre-paid expenses xxx
Outstanding expenses xxx Out-standing income xxx
Pre-received income xxx Closing stock of goods xxx
Advance from customers xxx
Following is the Trial Balance of Akbar Ali & Sons on March 31st, 2017. Prepare Profit and Loss Account and Balance Sheet.
12th final accounts problems with solutions
Adjustments:
· Stock at the end of year Rs. 4,300 and Three months Excise duties is due, but not paid Rs. 50.
· 10 percent depreciation to be written-off on furniture and write-off further bad debts Rs. 50.
· The provision for bad debts to be Rs. 400 and provision for discount on debtor @ 2.5 % to be made.
· During the year machinery was purchased for Rs. 5,000, but was debited to Purchase account.
 Provide 10% depreciation of machinery
nt and Balance Sheet.
Accrued concept
Accounting period concept Sales 100,000.00 12 months
Matching concept Salary 12000 12 months
1,000 p.m.
Actual Salary paid 11,000 11 months

1000 p.m.
Add: outstanding salary 1,000 1 month
12,000.00 12 months
Less: prepaid salary
600
Insurance premium 2,400 12 months
12 months 1.10.2019
200 p.m. 2,400
12 months
1.7.2019 30.06.2020
13,000 13 months
1,000 1 month
12,000 12 months
30.09.2020
30.06.2020
MCQ for Managerial Accounting Practice Set-1

a) Shareholders
b) Creditors
c) Managers
d) Regulatory agencies

a) Creditor
b) Department manager
c) Controller
d) Treasurer
3. Management accounting is applicable to-

a) Service entities
b) Manufacturing entities
c) Non-profit entities
d) All of these
4. Creating Provision against fluctuation in the price of investment is an example of

which accounting convention
a) Convention of conservatism
b) Convention of full disclosure
c) Convention of materiality
d) Convention of consistency
material into finished goods is classified as-
a) Manufacturing overhead
b) Indirect materials
c) Indirect labour
d) Direct labour
Managerial Accounting MCQ Page 1

a) Cost
b) Financial
c) Management
d) All

a) Opening books of account
b)Preparation of financial statements
c) Control of business activities

d) None of these
become valueless when the yield is over?
a) Fixed asset
b) Current asset
c) Fictitious asset
d) Wasting asset
9. An accounting that deals with the accounting and reporting of information to

management regarding the detail information is
a) Financial accounting
b) Management accounting
c) Cost accounting
d) Real Accounting

a) Prepare final a/c
b) Provide management complete and true information
c) Both (a) & (b)

d) None of these

11.Bad debt amount should be credited to
a) Debtors account
b) Bad debts account
c) Sales account
d) Creditors account

a) Nominal account- debit all expenses & losses
b) Real account- credit what comes in
c) Nominal account- credit all incomes & gains

d) Personal account- debit the receiver
a) opening stock
b) net purchases
c) expenses on Purchases
d) sales

a) Customers account
b) Sales return account

c) Goods account
d) Purchase account

a) Cash account
b) Mahesh Account
c) Sales account
d) Purchase account

a) Landlords account
b) Rent account
c) Cash account
d) Expense account

a) Discount account
b) Customer’s account
c) Sales account
d) Cash account
18. Opening stock + …………………+ Direct Expenses (Carriage on Raw material)-

Closing Stock = …………………
a) Sales, Purchases
b) Sales, Sales return

c) Purchases, Cost of goods produced
d) Purchases, Cost of goods sold

a) Recording of business expenses and revenue
b) Recording of costs of products and services

c) Recording of day to day business transactions
d) None of the above

a) Historical
b) Forward looking
c) Analytical
d) Social

a) To record day to day transactions of the business
b) To reveal managerial efficiency
c) To ascertain true cost of products and services

d) To determine tender price

a) Statutory requirements
b) Competition in the market
c) Labour unrest
d) Limitations of financial accounting

a) Only to workers
b) Only to government
c) Only to consumers
d) To management, workers, consumers and government

a) Public undertakings only
b) Large business enterprise only

c) Small business concerns only
d) Manufacturing and service concern

a) Fixed cost
b) Variable cost
c) Semi variable cost

a) Cost unit
b) Cost centre
c) Cost object
d) Cost estimation

a) Prime cost
b) Factory overhead
c) Selling overhead
d) Office overhead
28. ………………cost refers to those cost which have already been incurred and cannot
be altered by any decision in the future.
a) Opportunity cost
b) Sunk Cost
c) Incremental cost
d) Detrimental cost
29. Amortization of intangible Asset Such as Goodwill which has indefinite life is an
example of accounting concept
a) Conservatism Concept
b) Continuity Concept
c) Realisation Concept
d) Measurement Concept

a) Loan
b) Unsecured Loan
c) Secured Loan
d) Advance by Manager & director

a) Cost of raw material
b) Advertising
c) Depreciation
d) Carriage

a) Practicability
b) Subjectivity
c) Convenience in recording

a) Double account system
b) Double entry system
c) Single entry system

d) All the above
34. The practice of appending notes regarding contingent liabilities in accounting

a) Convention of consistency
b) Money measurement concept

c) Convention of conservatism
d) Convention of disclosure

a) Cost of goods sold + gross profit
b) Cost of goods sold - gross profit

c) Gross profit- Cost of goods sold

a) Expenditure for the business
b) Cost for the business
c) Gain for the business


a) Advertisement account
b) Sales account
c) Purchase account

a) Added to Salaries while preparing P & La/c
b) Shown in liability side of Balance sheet under current Liability
c) (a) &(b) above

a) Debited to trading account
b) Debited to profit and loss account

c) Deducted from capital account in the balance sheet
40.All direct & indirect expenses related to business are charged:

a) Profit and loss account
b) Trading account
c) Trading account Profit and Loss account
d) Directly to Balance sheet

Balance sheet
a) Investment
b) Current Loan & Advances

c) Provision
d) Lease Holds

a) Asset side of B/S
b) Liability side of B/S

c) P & L a/c
43. Investment of X company profit in shares of other company PQR Pvt. ltd are
a) Asset side of Balance Sheet
b) Liability side of Balance Sheet
c) Profit & Loss a/c
d) Not recorded in Balance Sheet

a) Equity and liabilities-Liability side of B/S
b) Current liabilities- Liability side of B/S
c) Fixed assets- Asset side of B/S
d) Asset side of B/S

a) Remains fixed
b) Fluctuates with volume of production
c) Varies in consideration with the volume of sales


a) Cash book and ledger
b) Sales and purchase book
c) Journal
d) Both a and b
e) All of a, b, c above

a) Debit side Profit & Loss a/c
b) Debit side Trading a/c

c) Credit side of Profit & Loss a/c
d) Credit side of trading a/c
48. Cash Purchases:

a) Increases assets
b) Results in no change in the total assets

c) Decreases assets
d) Increases liability

a) Debit purchases a/c; credit cash a/c
b) Debit A a/c ;credit purchases a/c
c) Debit purchases a/c ; credit A a/c
d) Debit A a/c ; credit stock a/c

a) Machinery
b) Building
c) Cash
d) Creditor

a) Decreases the total assets
b) Increases the total assets
c) Results in no change in total assets

d) Increase the total liabilities

a) Debiting salary a/c; crediting cash a/c
b) Debiting cash a/c; crediting salary a/c
c) Debiting employee a/c ; crediting cash a/c

d) Debiting employee a/c ; crediting salary a/c
a) Double Entry Bookkeeping
b) Matching Concept
c) Consistency
d) Money measurement Concept

a) Building
b) Bank Balance
c) Plant Patents
d) Goodwill

a) Realization Concept
b) Matching Concept
c) Cost Concept
d) Both a and b above

a) Consistency concept
b) Conservatism concept
c) Accounting period concept

d) Cost Concept

a) Current assets
b) Current liabilities
c) Fixed asset
d) Fixed liability

a) An asset in the balance sheet
b) A liability
c) By adjusting it in the P & L a/c

d) Both a and c above
e) Both b and c above
a) credited to P & L a/c
b) Shown as liability side in balance sheet
c) Reduced from related asset in the balance sheet
d) Both a and b
e) Both a and c

a) Debtors
b) Investors
c) Creditors
d) Shareholders

a) Dual concept
b) Divider concept
c) Entity concept
d) Landlord concept

a) Nominal capital
b) Paid up capital
c) Issues capital
d) None of these
a) Preparing trial balance
b) Preparing respective ledger of account
c) Preparing trading a/c

d) Preparing trading & profit & loss a/c

a) Asset side of balance sheet
b) Liability side of balance sheet

c) Not shown in balance sheet
d) Half on asset side and half on liability side
65. Under which concept it is assumed that the enterprises has neither the intention nor
the necessity of liquidation or of curtailing materiality the scale of operation
a) Revenue realization concept
b) Matching cost concept

c) Going concern concept
d) None of these

66. Making the provision for doubtful debts and discount on debtors in anticipation of
actual bad debts and discount is an example for which concept
a) Conservatism concept
b) Continuity concept
c) Realization concept
d) All of these

a) Projected data
b) External data only

c) Historic data
d) Manager data only

a) Decreases the Total Assets
b) Increases the Total Assets

c) Results in no change in the Total Assets
d) Increases the Total Liabilities
69. Bookkeeping is an……………………of correctly recording of business transition. a)

Art and Science
b) Art
c) Science
d) Art or Science

a) Original
b) Duplicate
c) Personal
d) Nominal

a) Rules of Personal
b) Rules of Real
c) Rules of Nominal
d) All of these
72. Which of the following account balance will be shown on debit side of Trial
Balance?
a) Outstanding expenses
b) Cash a/c
c) Short term loan
d) Creditors
a) Discount
b) Depreciation
c) Reduction

a) Credited to the trading account
b) Credited to the profit and loss account

c) Deducted from the purchases in the trading account
d) Shown on the liability side of the Balance sheet

c) Not charged to balance sheet
d) None of these
76. Liabilities in balance sheet include the following items
a) Long term loan
b) Short term loan
c) Owner’s fund

d) All of these
77. Prepaid expense is treated as

a) Current asset
b) Current liability
c) Short term liability
d) None of these

a) Cost
b) Net profit
c) Gross profit
d) Selling price

a) Management only
b) Government only
c) Investor only
d) All of these

a) Accrual concept
b) Cost concept
c) Continuity concept
d) Money measurement concept
a) Provisions
b) Reserves and Surplus
c) Current Liabilities
d) Other Liabilities

a) Separate entity
b) Going concern
c) Consistency
d) Time period

a) Periodicity concept
b) Materiality Principle
c) Entity Concept
d) Consistency concept
84. Which financial statement represents the accounting equation

ASSETS = LIABILITIES + OWNER'S EQUITY
a) Income Statement
b) Cash Flow Statement

c) Balance Sheet
d) Fund Flow Statement

a) Loan from Mr.Y
b) loan to Mr.y
c) Both (a) (b)
d) None of these
86. Which of the following are correct?

Account to be debitedAccount to be credited

a) (ii) (iii)(i)
b) (iii)(iv)(ii)

c) (i)(iii)(iv)
d) (i)(iv)

a) Accrual concept
b) Cost concept
a) Separate entity
b) Going concern
c) Consistency
d) Time period

a) Profit does not alter capital
b) Capital can only come from profit
c) Profit reduces capital

d) Profit increases capital

a) It is a list of balances on the books
b) It is a special account
c) Shows the financial position of a business

d) Shows all the entries in the books

a) Trading a/c
b) Balancesheet
c) Profit & loss a/c

d) Trial balance.

92. The concept of separate entity is applicable to which of following types of
businesses? a. Sole proprietorship
b. Corporation
c. Partnership
d. All of them
93. Which of the following is time span into which the total life of a business is divided
for the purpose of preparing financial statements?
a) Fiscal year
b) Calendar year
c) Accounting period
d) Accrual period
94. Interest, rent, electricity bill are types of account

a) Personal a/c
b) Impersonal a/c
c) Real a/c
d) Nominal a/c

a) Good sold on credit
b) Office fixtures sold

c) Sale of item previously included in purchase
d) Good sold for cash

a) Disclosure of loss
b) Disclosure of profit
c) Disclosure of all information which are important for investor
d) Disclosure of all information which are important for management


98. Using "lower of cost and net realisable value(Market Value)" for the purpose of
inventory valuation is the implementation of which of the following concepts?
a) The going concern concept
b) The separate entity concept
c) The prudence concept
d) Matching concept
99. The concept of separate entity is applicable to which of following types of

businesses?
a) Sole proprietorship
b) Corporation
c) Partnership
d) All of them
100. The revenue recognition principal dictates that all types of incomes should be
a) Cash is received
b) At the end of accounting period

c) When they are earned
d) When interest is paid
following?
a) Accrual concept
b) Matching concept
c) Separate business entity concept

a) The entity continue running for foreseeable future
b) The entity continue running until the end of accounting period
c) The entity will close its operating in 10 years
d) The entity can't be liquidated

103.Which of the following is time span into which the total life of a business is divided
for the purpose of preparing financial statements?
a) Fiscal year
b) Calendar year
d) Accrual period
104. Showing purchased office equipments in financial statements is the application of

which accounting concept?
a) Historical cost convention
b) Materiality
c) Prudence
d) Matching concept
105. Information about an item is ________ if its omission or misstatement might

influence the financial decision of the users taken on the basis of that information
a) Concrete
b) Complete
c) Immaterial
d) Material
106."Financial information should be neutral and bias free" is the dictation of which
one of the following?
a) Completeness concept
b) Faithful representation Concept

c) Objectivity Concept
d) Duality Concept
a) Accounting Concepts
b) Accounting Conventions
c) Accounting Standards
d) Accounting Concepts &Accounting Conventions

108. Which of the following is not related with Money Measurement Concept ?
a) All business transaction should be expressed only in money
b) The transactions which cannot be expressed in money, will not be recorded in accounting
books
c) Business is treated as separate from the proprietor
d) None of These
109. Which of the following equation is related with Dual Aspect Concept ?
a) Total Assets = Total Liabilities
b) Total Assets = Capital + Outsider’s Liabilities

c) Capital = Total Assets - Outsider’s Liabilities
d) All of the above
110.If the total assets of the company amount to Rs 1,50,000 and owner’s equity is Rs
a) Rs 70,000
b) Rs 80,000
c) Rs 90,000
d) Rs 1,00,000

a) Revenue Profit
b) Capital Profit
c) Loss
d) None of these

a) Profit
b) Assets
c) Company
d) Books of A/c

113.Which expenses is a Capital Nature?
a) Depreciation
b) Wages
c) Salary
d) Stationary

a) Assets
b) Liabilities
c) Capital
d) All of these
115.Accounting is the process of matching……..

a) Benefits & Costs
b) Revenues & Costs
c) Cash Inflow & Cash Outflow

d) Potential & Real Performance
116.Which one of the following is not an example of Intangible Assets?

a) Patents
b) Trade Marks
c) Copyright
d) Land
117.The prime function of accounting is to

a) To record economic data
b) Provide the information basis of action

c) Classifying and recording business transaction
d) Attainment of economic goal

118.The basic function of financial accounting is to
a) Record all business transaction
b) Interpret financial data
c) Assist the management in performing function effectively
119.Management Accounting provides invaluable services to management in

performing
a) All management function
c) Controlling function
d) None of these

a) Recording of financial data relating to business operation
b) Designing the systems in recording classifying, summarizing the recorded data
c) Interpreting the data for internal and external users
121.Accounting principles are generally based on

a) Practicability
b) Subjectivity
d) None of these
122.The system of recording transaction based on dual aspect concept is called

d) None of these
123.The practice of appending notes regarding contingent liabilities in accounting

statement is pursuant of

124. According to the money measurement concept the following will be recorded in the
books of accounts of the business
a) Health of the managing director of the company
b) Quality of company goods

c) Value of plant and machinery
d) Health of labour in factory
125.The convention of conservatism when applied to the balance sheet result in.
a) Understand the asset
b) Understand the liabilities

c) Overstatement of capital
d) None of these
126.The convention of conservatism is applicable

a) In providing for discount on creditors
b) In making provision for bad doubtful debts

c) Providing depreciation
d) None of these
127.The amount brought in by the proprietor in the business should be credited to

a) Cash a/c
b) Capital a/c
c) Drawing a/c
d) Bank a/c
128.The amount of salary paid to Suresh should be debited to
a) The account of Suresh
b) Salaries a/c
c) Cash a/c
d) Bank a/c
129.The return of goods by the customer should be debited to
a) Customer a/c
b) Sales return a/c
c) Goods a/c

d) Purchase return a/c
130.sales made by Mahesh for cash should be debited to

a) Cash a/c
b) Mahesh a/c
c) Sales a/c
d) Sales return a/c
131.The rent paid to land lord to be credited to

a) Land lord a/c
b) Rent a/c
c) Cash a/c
d) Tenant a/c
132.The cash discount allowed to a debtor should be credited to

a) Discount a/c
b) Customer a/c
c) Sales a/c
d) None of these
133.In case of a debt becoming bad, the amount should be credited to

a) Debtors Accounts
b) Bad debts a/c
c) Sales a/c
d) Purchase a/c
134.The primary objective of cost accounting is

a) Ascertain the cost of goods and services
b) Ascertain the profit
c) Presentation of all data
d) None of these

accounting concept

c) Convention of consistency
d) None of these
136. Accountant should follow the same principles of accounting continuously is as per
which accounting convention
d) None of these
137 Accounting principles are …………………………. which are adopted by the

accountant universally while recording accounting transaction.
a) Rules of action or conduct
b) Which u can change as per accountant

c) Which keep changing every year
d) None of these
138.The convention of disclosure implies that all material information should be
a) Disclosed in the account
b) Disclosed in the accounts which is required to owner

c) Not disclosed
d) None of these
139.In accounting all business transaction are recorded as having
a) Single aspect
b) Dual aspect
c) Triple aspect
d) None of these
statements
a) Accounting convention
b) Accounting concepts
c) Accounting principles
d) None of these

d) None of these
142.Basic assumptions or conditions upon which the science of accounting is based.

d) None of these.
143.A system in which accounting entries are made on the basis of amounts having
a) Cash concept
b) Accrual concept
c) Matching concept
d) On-going concept
144.Debit the receiver credit the giver rule for

a) Real a/c
b) Personal a/c
c) Nominal a/c
d) None of these
145.Debit what come in Credit what goes out rule for

a) Real a/c
b) Personal a/c
c) Nominal a/c
d) None of these
146.Debit all expenses and losses Credit all gains and income.
a) Real a/c
b) Personal a/c

c) Nominal a/c
d) None of these
a) Journal
b) Ledger
c) Trial balance
d) None of these
148. Transferring the debit and credit item from the journal to the respective accounts
is called
a) Compound Journal
b) Ledger
c) Trial balance
d) None of these
149.A statement containing the various ledgers balances on particular date

a) Compound Journal
b) Ledger
c) Trial balance
d) None of these
150.The transferring of debit and credit items from journal to the respective accounts in
the ledger is called as
a) Ledger
b) Posting
c) Forward journal
d) None of these
a) Land
b) Machine
c) Cash
d) Owner Equity

152.Which one of the following items would fall under the definition of a liability
a) Cash
b) Debtor
c) Owner’s equity
d) None of these
153.Which of the following statements are false?

a) All liability is a debt for your business
b) Debtor are a asset for business
c) The accounting equation shows how much of your assets belong to the owner, and how
154.A business has the following items in it:

Land Rs.1,000,000
Machinery Rs.20,000
Cash Rs.10,000
Debt Rs.0 Owner’s equity ?

a) Rs.1020000
b) Rs.1010000
c) Rs.1030000
Owners’ equity Rs.6,00, 000

a) 600,000
b) 1,400,000
c) 2,000,000
d) None of these

Land Rs.1, 500,000

Cash Rs.20, 000

Owners equity Rs.900, 000 Loan Rs.500, 000 Creditors?
a) Rs.200, 000
b) Rs.700, 000
c) Rs.800, 000
d) Rs1, 100,000
157.A business has following items in it
Land ?
Vehicles Rs.600,000
Debtors Rs. 1,20,000
Cash Rs.30,000
Owners’Equity Rs.1,000,000
Loan 5,00,000
Creditors Rs.50,000

a) 1,000,000
b) 1,550,000
c) 800,000
d) None of these
158. Which of the following equations properly represents a derivation of the

c) Cash = Assets

a) Only (a)
b) Both (a) (b)

c) All (a)(b)(c)(d)
d) None of these
a) Net Loss
b) Net income
c) Dividend
d) Investment by share holder.

a) Repayment of bank Loan
b) Dividend to stock holders
c) The purchase of land

d) Payment of current period rent
161.Which of the following would not be included on a balance sheet?

a) Accounts payable
b) Accounts receivable
c) Sales
d) Cash
162.XYZltd.has provided the following information about its balance sheet:

Cash Rs.100
Accounts Receivable Rs.500

Stock holder equity Rs.700
Accounts Payable Rs.200 Bank Loan Rs.1,000

a) Rs.200
b) Rs.1900
c) Rs.1200
d) Rs.1700

163. The full disclosure principle, as adopted by the accounting profession, is best
described by which of the following?
a) All information related to an entity's business and operating objectives is required to be
b) Information about each account balance appearing in the financial statements is to be

c) Enough information should be disclosed in the financial statements so a person wishing to

invest in the stock of the company can make a profitable decision.
d) Disclosure of any financial facts significant enough to influence the judgment of an
informed reader
164. .Which of the following is a real (permanent) account?

a. Goodwill
b. Sales


d.None of theses
166. The Cash account on the balance sheet should not include which of the following
items?
b. Currency
c. Money orders



168. The following comments all relate to the recording process. Which of these
c. The trial balance provides the primary source document for recording transactions into the
general journal.
d. Transposition is the transfer of information from the general journal to the general ledger.
169. The following comments each relate to the recording of journal entries. Which
statement is true?
d. Journalization is the process of converting transactions and events into debit/credit format.


171.Which of the following errors will be disclosed in the preparation of a trial balance?

d. Recording the wrong amount for a transaction to both the account debited and the account
credited.


a. Current assets
b. Investments



d. None of these

a) It is probable that the future event will occur.
b) The amount of the liability can be reasonably estimated.
c) Both (a) and (b).

d) Either (a) or (b).

a) Planning
b) Decision making
c) Control
d) All of these
178. Which of the following statements about differences between financial and
managerial accounting is incorrect?
a) Managerial accounting information is prepared primarily for external parties such as
stockholders and creditors; financial accounting is directed at internal users.
b) Financial accounting is aggregated; managerial accounting is focused on products and
departments.
c) Managerial accounting pertains to both past and future items; financial accounting focuses
d) Financial accounting is based on generally accepted accounting practices; managerial



d. All of these

a. Variable cost
c. Direct cost
182.Accounting principles are

a) As definite as principles of physics and chemistry
b) Unlike principles of physical sciences.
c) Verifiable through observations and records
d) Thoughts of accountant
183.Accounting concepts are based on

a) Certain assumptions
b) Certain facts and figures
c) Certain accounting records

d) Practice experience

a) Individual and business
b) Business and business
c) Owners
d) Debtors and creditors
184.The cost concept records the figures at

a) Market values
b) Actual amount paid
c) Actual amount or market values whichever is less.

d) MRP maximum retail price
185.Going concern concept assumes

a) Business as a dissolving concern
b) Business on relishing values
c) Business as a going concern

d) Asset = liability

a) Asset
b) Liability
c) Accounts

a) Estimates of facets
b) Anticipated facts
c) recorded facts

a) Appropriation of profits
b) Estimates of profits
c) Estimates of costs

a) Management
b) Creditors
c) Bankers
d) All of the above

a) Sundry creditors
b) Acceptances
c) Unclaimed dividend
d) Short term investment

a) Determination of cost
b) Determination of profit
c) Determination of price
d) Determination of selling price

a) Actual figures
b) Budgeted figures
c) Standard figures
d) Management Figure

a) 1910
b) 1939
c) 1950
d) 1960

a) Recording of accounting data
b) Recording of cost data

c) Presentation of account data

195 The use of management accounting is

a) Compulsory
b) Optional
c) Obligation
d) Statutory requirement

a) Trading account
b) Profit and loss account

c) Balance sheet
d) All of the above

a) Fixed asset
b) Investment
c) Current asset
d) Owners equity

a) Financial
b) Economic
c) Non financial
d) None of these
a) sales
b) Share capital
c) Reserves and surplus
d) Unsecured loan

200.The word accounting can be classified in to:
a) Financial accounting and management accounting
b) Financial accounting and cost accounting
c) Financial accounting, management accounting and cost accounting

d) Cannot be classified
201.If a company has contingent liabilities, they appear in the …………..

a) Balance Sheet
b) Director’s Report
c) Foot note down the balance sheet

d) Chairman’s report

a) M. S. Gosav
b) Wheldon
c) LucoPacioli
d) R. N. Carter

a) Analytical
b) Clerical
c) Executive
d) Non- executive

a) Cash operating expenditure
b) Non cash operating expenditure

c) Cash non-operating expenditure
d) Non cash non-operating expenditure

a) Cash basis
b) Accrual basis
c) Mercantile basis
d) Single entry basis
a) only financial transaction
b) only non- financial transaction
c) Both
d) Personal transaction of Proprietor

a) Capital
b) Revenue
c) Direct
d) Non- cash

a) Nominal account
b) Real Account
209. _______________ is a summary of all transactions relating to particular account.

a) Balance sheet
b) Trial Balance
c) Ledger
d) Journal

a) cash account
b) capital account
c) drawings account

d) creditors account

a) Account of Suresh
b) Salaries account
c) Cash account
d) Outstanding expenses
212.All costs other than direct materials cost, direct labour cost and direct expenses are
known as:
a) Indirect material cost
b) Overhead
c) Indirect labour cost
d) Indirect expenses
a. Variable cost
c. Direct cost
g. Semi variable cost


d. All of these
215. The work of factory employees that can be physically associated with converting
raw material into finished goods is classified as-
e. Manufacturing overhead
f. Indirect materials
g. Indirect labour
h. Direct labour

a) Indirect labour
b) Direct materials
c) Insurance on factory building

d) Indirect materials

a) Raw materials and manufacturing overhead
b) Indirect materials and manufacturing overhead
c) Indirect labour and manufacturing overhead

d) Direct materials and direct labour
218. A manufacturing process requires small amounts of glue. The glue used in the
process is classified as
a) A prime cost
b) An indirect material
c) A direct material
d) Miscellaneous expense

a) Miscellaneous expense
b) Direct materials
c) Indirect materials
d) Immaterial items

a) Direct labour
b) Direct materials
c) Manufacturing overhead
d) Advertising

a) Direct material costs
b) Direct Wages
c) Direct Expenses
d) Prime Cost

a) Work on cost
b) Work Cost
c) Cost of Production
d) Direct Cost

a) Prime Cost
b) Factory Overhead
c) Selling overhead
d) Office overhead
224. Aggregate of cost of goods sold and selling and distribution overheads is known as :
a) Total Cost
b) Office Cost
c) Cost of sales
d) Selling overhead

(a) Raw material, WIP
(b) Raw material, Finished goods
(c) WIP, Finished goods

(d) Finished goods, Saleable goods

(a) relevant for decision making

(c) cost to be incurred in future
(d) future costs

227. Calculate the prime cost from the following information:
Direct material purchased: Rs. 1,00,000

Direct material consumed: Rs. 90,000
Direct labour: Rs. 60,000

Direct expenses: Rs. 20,000
Manufacturing overheads: Rs. 30,000

(a) Rs. 1,80,000
(b) Rs. 2,00,000
(c) Rs. 1,70,000

(d) Rs. 2,10,000

MCQ for Managerial Accounting Practice Set-2
1.Who coined the concept of management accounting?
a. Robert Anthony
b. James H Bliss
c. J. Batty
d. Michael Porter
2.The main role of management accounting is:
a. Decision making
b. Planning
c. Direction
d. Provision of information to management.
3.The term management accounting was first coined in:
a. 1960
b. 1930
c. 1950
d. 1910
4.The use of management accounting is:
a. Compulsory
b. Optional
c. Mandatory
d. Any of the above
5.Which of the following is not a predictive tool of management accounting?
a. Simulation
b. Balanced score card
c. Cash flow analysis
d. KPIs

6.Which of the following is not an analytical tool of management accounting?
a. Ratio analysis
b. Standard costing
c. Budgetary control
d. Cash flow analysis
7.“Management Accounting is concerned with accounting information which is useful to

management”-whose definition?
a. Robert Anthony
b. James H Bliss
c. J. Batty
d. Michael Porter
8.Which of the following is not included in the scope of management accounting?
b. Cost accounting
c. Tax accounting
d. None of these.
9.Which of the following is not a feature of management accounting?
a. Accounting information
b. Future oriented
c. Management oriented
d. Compulsory accounting.
10.The process of quantifying the efficiency and effectiveness of past actions is called:
a. Simulation
b. Decision accounting
c. Revaluation accounting
d. Performance measurement.

11.Which of the following is/are the tools of financial performance measures?
a. ROI
b. EVA
c. Residual income
d. All of these.
12.Which of the following is not a tool for financial performance measure?
a. EVA
c. Residual income
d. ROI
13. “NOPAT-(Capital Employed x WACC)”=?
a. ROI
b. EVA
c. Residual income
d. EBIT
14. Net profit before Tax-(average capital employed x Desired minimum rate of return)
=?
a. ROI
b. EVA
c. Residual income
d. EBIT
15.Operating profit ratio X Capital turnover ratio=?
a. ROI
b. EVA
c. Residual income
d. EBIT

16.Return on Investment (ROI) was developed by:
a. Michael Porter
b. Du Pont Company
c. Taichi Okno
d. None of these
17.Which of the following is a tool of financial as well as non-financial performance

measure?
a. Economic Value Added
b. Residual income
c. NOPAT
d. Balanced Score card
18.The term Balanced Score Card coined by:
a. Jimmy Carter
b. Art Schneiderman
c. Taichi Okno
d. Robert Anthony
19.---------- Integrates financial and non- financial performance measures.
a. Economic value added
b. WACC
c. Balanced Score card
d. SCBA
20.SCBA stands for----------
a. Strategic Control for Business Administration
b. Strategic Cost and Benefit Administration
c. Social Cost Benefit Analysis
d. Socially Controlled Benefit Analysis.

21.Which of the following is not a perspective of balanced score card?
a. Internal process
b. Customer
c. Financial perspective
d. Value chain
22.Customer retention and warranty claims are tools of performance measure in

balance score card under------------- perspective.
a. Financial perspective
b. Internal process
c. Customer
d. Learning and growth.
23.Employees training and number of patents are tools of performance measure in

balance score card under------------- perspective.
b. Internal process
c. Customer
24.Defect rates and lead times are tools of performance measure in balance score card
under------------- perspective.
b. Internal process
c. Customer
25.Operating income and sales growth are tools of performance measure in balance
score card under------------- perspective.
b. Internal process
c. Customer

26.Zero based budgeting is also known as:
a. Scratch based budgeting
b. De nova budgeting
c. Priority based budgeting
d. All of these
27.Zero based budgeting was first applied by:
a. Abraham Lincon
b. Jimmy Carter
c. Peter A phyrr
d. Alex Ouchy
28.ZBB coined out by :
a. Art Schneiderman
b. Jimmy Carter
c. Peter A phyrr
d. Taichi Okno
29. ---------- budgeting pay more attention on overhead costs.
a. ZBB
b. ABB
c. Performance budgeting
d. Traditional budgeting
30. --------- budgets are prepared after justifying the cost drivers.
a. ZBB
b. ABB
c. Flexible budget
d. Cost budget

31.The difference between actual sales and break even sales is:
a. Contribution
b. Profit volume rate
c. Margin of safety
d. Gross margin
32.Net Avoidable fixed cost divided by Contribution per unit is equal to:
a. PV ratio
b. Break Even point
c. Contribution
d. Shutdown point
33. Marginal cost does not include----------
a. Variable cost
b. Fixed cost
c. Variable Overhead
d. Direct expenses
34. In marginal costing, stock of finished goods valued at-----------
a. Fixed cost
b. Cost or market price whichever is less
c. Market price
d. Variable cost
35. At break Even Point--------- is equal to fixed cost.
a. Profit
b. Loss
c. Contribution
d. Sales

36. The BEP -------- when selling price is increased.
a. Increases
b. Decreases
c. Remain unchanged
d. Any of the above.
37.Under marginal costing product cost is equal to-----------
a. Prime cost
b. Prime cost + variable overhead
c. Cost of production
d. Cost of sales
38. An increase in the variable cost-----------
a. Increases PV ratio
b. Decreases PV ratio
c. Increases Profit
d. Increases contribution
39. Sales x PV ratio is equal to-----------
a. Profit
b. Contribution
c. BEP
d. Margin of Safety
40. Contribution / PV ratio is equal to------------
a. BEP
b. Sales
c. Fixed cost
d. Variable cost

41. Profit / PV ratio is equal to-------------
a. Net profit
b. Contribution
c. BEP
d. Margin of Safety
42. Sales price per unit Rs.10, Variable cost Rs.8 per unit and fixed cost is Rs.20,000,
then BEP in units is----------
a. 10,000
b. 16,000
c. 2,000
d. 2,500
43.The difference between gross profit and gross margin is----------
a. Fixed cost
b. Variable cost
c. Net profit
d. Net loss
44.Actual sales is Rs.5,00,000 and BEP sales is 3,00,000, then margin of safety
percentage is:
a. 20%
b. 40%
c. 33.33%
d. 25%
45.If sales is Rs.2,50,000 and PV ratio is 40%, contribution will be:
a. 80,000
b. 50,000
c. 1,00,000
d. 25,000

46.Margin of safety x Profit volume ratio is:
a. BEP
b. Angle of incidence
c. Margin of safety in units
d. Profit.
47.Contribution is also known as:
a. Share Capital
b. Gross profit
c. Gross margin
d. Margin of safety
48. -----------is formed as curve by the intersection of total cost and total revenue.
a. BEP
c. Margin of safety
d. Key factor
49.Variable cost of a product is Rs.10 and firm has an overall PV ratio @ 60%, what
will be its selling price?
a. Rs.60
b. Rs.6
c. Rs.25
d. Rs.16
50.While making make or buy decision under marginal costing, external purchase price
of the articles must be compared with:
a. Its Fixed cost
b. Its total cost
c. Its variable cost
d. Its prime cost.

51.Shut down cost is:
a. Avoidable fixed cost
b. Unavoidable fixed cost
c. Avoidable Variable cost
d. Unavoidable variable cost.
52.Profit volume ratio can be improved by:
a. Reducing variable cost
b. Reducing the selling price
c. Increasing the fixed cost
d. Increasing the key factor
53.Profit volume ratio cannot be calculated by using:
a. Profit / volume of sales
b. Profit / volume of costs
c. Changes in profit / changes in sales
d. Changes in profit / changes in contribution
54.Fixed cost Rs.50,000, Profit Rs.30,000, cost of goods sold Rs.170,000, what is PV
ratio?
a. 25%
b. 50%
c. 20%
d. 40%
55.Cost of capital is the ---------- rate of return expected by the investors.
a. Maximum
b. Average
c. Minimum
d. Zero

56.In relation to cost of capital, k = r0 +----------+-----------
a. p,d
b. b,f
c. e, p
57.According to traditional approach cost of capital is effected by--------
a. Debt-equity mix
b. Dividend
c. EBIT
d. EAT
58. ------------ is the opportunity cost of dividend foregone by the shareholders.
a. Cost of equity
b. Cost of retained earnings
c. Cost of debt
d. Cost of preference shares.
59.Which of the following is/ are the method of calculating cost of equity?
a. Dividend yield method
b. Earning yield method
c. Realized yield method
d. All of these.
60. ------------- is the rate of return the firm requires from investment in order to
increase the value of the firm in the market place
a. Net Present Value
b. Internal Rate of Return
c. Average Rate of Return
d. Cost of capital.

61. ---------- is the weighted average cost of capital.
a. Specific cost
b. Marginal cost
c. Composite cost
d. Any of these.
62.The span of time within which the investment made for the project will be recovered
by the net returns of the project is known as:
a. Period of return
b. Payback period
c. Span of return
63.Projects with -------- are preferred
a. Lower payback period
b. Normal payback period
c. Higher payback period
d. Any of the above
64. ----------- on capital is called ‘Cost of capital’.
a. Lower expected return
b. Normally expected return
c. Higher expected return
65.The values of the future net incomes discounted by the cost of capital are called:
a. Average capital cost
b. Discounted capital cost
c. Net capital cost
d. Net present values

66.Under Net present value criterion, a project is approved if
a. Its net present value is positive
b. The funds are unlimited
c. Both (A) and (B)
67.The internal Rate of Return (IRR) criterion for project acceptance, under
theoretically infinite funds is: accept all projects which have:
a. IRR equal to the cost of capital
b. IRR greater than the cost of capital
c. IRR less than the cost of capital
d. Both a&b above
68.Which of the following is non-discounting method in capital budgeting?
a. Net present value
b. Profitability index
c. Internal Rate of Return
d. Accounting Rate of return
69.The project is accepted:
a. If the profitability index is equal to one
b. If the profitability index is less than one
c. If the profitability index is greater than one
d. Both (b) and (c)
70.Where capital availability is unlimited and the projects are not mutually exclusive,
for the same cost of capital, following criterion is used.
c. Profitability Index
d. Any of the above

71.A project is accepted when:
a. Net present value is greater than zero
b. Internal Rate of Return will be greater than cost of capital
c. Profitability index will be greater than unity
d. Any of the above
72.With limited finance and a number of project proposals at hand, select that package
of projects which has:
a. The maximum net present value
b. Internal rate of return is greater than cost of capital
c. Profitability index is greater than unity
d. Any of the above
73.A project may be regarded as high risk project when:
a. It has smaller variance of outcome but a high initial investment
b. It has larger variance of outcome and high initial investment
c. It has smaller variance of outcome and a low initial investment
d. It has larger variance of outcome and low initial investment
74.Following is (are) the method(s) for adjustment of risks.
a. Risk-adjusted Discounting Rate
b. Risk Equivalence Coefficient Method
c. Both (a) and (b)
75. Profitability Index is also known as:
a. Sensitivity index
b. Benefit cost ratio
c. Profit volume Ratio
d. All of these

76. ---------- is the point at which Net Present Value becomes zero;
a. Break Even point
b. Average Rate of return
c. Internal Rate of return
d. Profitability index
77.Which of the following is not a method of capital budgeting, under risk and
uncertainty?
a. Probability assignment
b. Risk adjusted discount rate
c. Certainty equivalent
d. Discounted pay back
78.Under which method, three types of cash flows such as optimistic, pessimistic and
most likely cash flows are estimated?
d. Sensitivity analysis
79. --------- is graphical representation of alternative courses of action and the possible
outcomes and the risk associated with each action.
a. Pivot table
b. Sensitivity analysis
c. Decision tree
d. All of these.
80.Risk free cash flow /risky cash flow =------------.
a. Expected cash flow
b. Probable cash flow
c. Net terminal Value
d. CE Co-efficient

81.An investment appraisal approach which gives a precise measure of risk associated
with a project is:
c. Profitability index
d. Standard deviation.
82. ----------- provides absolute measure of risk in a project.
a. Standard deviation
d. Probability assignment.
83.The higher the co-efficient of variation, higher is the-------- in the project
a. Profitability
b. Return
c. Risk
d. Capital
84. ------------ is a comprehensive view of all the possibilities associated with a proposed
project.
a. Co-efficient of variation
b. Probability assignment
c. Sensitivity analysis
d. Decision tree.
85.Activity Based Costing is developed by:
a. Kaplan & Cooper
b. Ouchy
c. Taichi Okno
d. Moulin

86. --------- is a technique of costing which is based on the benefit received from indirect
costs.
a. Life Cycle costing
b. Target costing
c. Activity based costing
d. Standard costing.
87.In Activity based costing, the cost of an activity in called:
a. Cost driver
b. Target cost
c. Cost pool
d. Cost object.
88.In activity based costing, ---------are the factors which influences the cost.
a. Cost pool
b. Cost centre
c. Cost driver
d. Cost object.
89. ------------- is the technique of estimating permissible market driven cost.
b. Target costing
90. ---------- Technique of costing considers all the cost to be incurred during the entire
life of the project.
b. Target costing

91. ------------ is the difference between target selling price and desired profit margin.
a. Activity cost
b. Upstream cost
c. Downstream cost
d. Target cost
92.Under ------------ total cost are classified into upstream cost, manufacturing cost and
downstream cost.
b. Target costing
93.Traditional costing is also known as:
a. Full costing
b. Volume based costing
c. Proportion based costing
d. All of these.
94. ------------ refers to the system of cost reduction based on a series of gradual and
small improvements rather than drastic changes in the manufacturing process.
a. Throughput costing
b. Quality costing
c. Kaizen costing
d. Transaction costing
95.Which of the following is also known as transaction costing/accounting?.
b. Quality costing
c. Kaizen costing
d. Activity based costing

96. Under ‘throughput costing’, only ---------- is treated as direct cost.
a. Direct material
b. Direct labour
c. Direct expense
d. Indirect cost
97.Which of the following Japanese concept means ‘Change for better’?
a. Kan Ban
b. Kaizen
c. JIT
d. TQM
98.‘Theory of Constraints’ was developed by:
a. Robert S Kaplan
b. Robin Cooper
c. Goldratt and J.Cox
d. Waldron
99.Under life cycle costing, research and development cost, design cost etc., are
considered as:
a. Activity cost
b. Upstream cost
c. Downstream cost
d. Target cost
100. -------------- is a practice of identifying, studying and building upon the best
practices of organizational role models.
a. Core competency
b. Bench marking
c. Spying
d. Conglomerating

101.Which of the following is not a component of Quality costing?
a. Cost of failure
b. Cost of quality maintenance
c. Appraisal cost
d. None of these
102.Which of the following is/ are the primary activities under Porter’s Value chain?
a. Inbound logistics
b. Procurement
c. Marketing and selling
d. All of these.
103.Which of the following is/are considered as supportive activities under Porter’s

Value Chain?
a. Infrastructure
b. HRM
c. Procurement
d. All of these.
104.Cost of new debentures incorporates:
a. Floatation cost
b. No floatation cost
c. Only a part of floatation cost
d. None of these.
105. ----------- Method of capital budgeting also known as ‘trial and error’ method.
a. ARR
b. NPV
c. BCR
d. IRR

106.The process of selecting a combination of investment proposals for the purpose of
effectively utilizing firm’s limited fund is known as:
a. Capital budgeting
b. Project screening
c. Capital rationing
d. Capital expending
107.Which of the following is not statistical technique of capital budgeting?
a. Sensitivity analysis method
b. Co-efficient of variation method
c. Probability assignment method
d. Certainty equivalent method
108.The philosophy of “Just in Time” developed by:
a. Robert S Kaplan
b. Michael Porter
c. R.Cooper
d. Taichi Okno
109. ---------- System advocates ‘Zero Inventory System’.
a. TQM
b. JIT
c. VED system
d. Flexible manufacturing system.
110.Which of the following is/are not discounting techniques of capital budgeting?
a. IRR
b. Benefit Cost Ratio
c. Discounted Payback
d. Average rate of return

111.Which of the following is not a benefit of implementing Just In Time?
a. Cost reduction
b. Variability increase
c. Work in process reduction
d. Quality improvement.
112.Kan ban is associated with all of the following except:
a. Signaling when it is time for next batch
b. Reducing set up time
c. Reducing batch size
d. Increasing material handling
113. The word “ Kanban” means
a. Low inventory
b. Employee empowerment
c. Card
d. Continuous improvement.
114. which one of the following is not a requirement of JIT system
a. quality deliveries on time
b. low set up time
c. employee empowerment
d. Strong job specialization.
115. “Fish bone diagram is also known as:
a. Cause and effect diagram
b. Poke-yoke diagram
c. Kaizen diagram
d. Taguchi diagram

116.………………is the practice of charging all costs, both variable and fixed, to
operations, processes, or products.
a. Marginal costing
b. Absorption costing
c. Differential costing
d. None of these
117.In absorption costing, managerial decision making is based upon …………..
a. Profit
b. Contribution
c. Costs
d. None of these
118.Given sales = Rs.1,50,000, Fixed costs = Rs.30,000, Profit =Rs. 40,000.The variable
cost is Rs………….
a. 110000
b. 80000
c. 120000
d. 10000
119.The Profit/Volume ratio or marginal ratio expresses the relation of ………… to

sales.
a. Profit
b. Marginal cost
c. Contribution
d. None of these
120.Which of the following measures helps to increase the P/V Ratio?
a. increasing the selling price per unit
b. reducing the variable or marginal cost
c. changing the sales mixture
d. all of these

121.Given sales = 1,00,000, Profit = 10,000 , variable cost = 70%.The sales required to
earn a profit of Rs.40000 is------------
a. 1,40,000
b. 14,00,000
c. 20,00,000
d. 2,00,000
122.Marginal cost is the ……….cost of producing an additional unit of output
a. variable
b. fixed
c. semi variable
d. all of these
123.Gross margin is the another name of-----
a. Contribution
b. Net Profit
c. Gross Sales
d. none of these
124. Which of the following shows the shows the degree of profitability?
a. Angle of contribution
c. Margin of safety
d. Both b and c above
125.At Breakeven point contribution will be equal to----------
a. Variable cost
b. Fixed price
c. Profit
d. None of these

126.The ratio of profit(gross) to Volume of sales called------------
a. GP Ratio
b. NP Ratio
c. PV Ratio
d. OP ratio
127.Marginal cost is the aggregate of prime cost and -----------------
a. Fixed overheads
b. Variable overheads
c. Contribution
d. Work cost
128.When fixed cost is deducted from contribution, the balance will be--------
a. Variable cost
b. Gross profit
c. Total cost
d. sales
129.When sales are Rs.30000 and P/V ratio is 20% then contribution will be--------
a. 2000
b. 4000
c. 6000
d. 8000
130.When fixed costs are Rs.4000 and Gross margin ratio is 25%, then breakeven point
will be- - - - - - - -
a. 40000
b. 20000
c. 16000
d. 10000

131.When Profit is Rs.5000 and P/v ratio is 20%, Margin of safety is ---------
a. 10000
b. 25000
c. 30000
d. 50000
132. Fixed costs Rs.6000, Profit required Rs.4000 and P/v ratio is 50% , then sales
required will be---------
a. 6000
b. 4000
c. 10000
d. 20000
133. Variable cost ratio is 60% Sales Rs.20000 and fixed cost Rs.5000, then profit will be
……..
a. 15000
b. 12000
c. 3000
d. 10000
134. Responsibility Accounting is also called---------- Accounting
a. Profitability
b. Management
c. Authority
d. None of these
135.In responsibility accounting the organization is divided into different ---------centres
a. Responsibility
b. Cost
c. Profit
d. None of these

136..A cost centre is a segment of the organization where the manager is responsible for
-----------
a. Costs
b. Inputs
c. a or b
d. None of these
137. Both costs and revenues are measured in------- centres
a. Cost
b. Profit
c. Revenue
d. All of these
138. In Activity based Costing, a factor which causes cost is usually called as.
a. Cost driver
b. Governing factor
c. Key factor
d. Limiting factor
139. Cost drivers can be classified in two such as :
a. Activity cost driver and Resource Cost driver
b. Expense driver and Activity cost driver
c. Resource cost driver and Transaction cost driver
d. None of these
140. A centre where the manager is responsible for sales is ----------
a. Cost centre
b. Revenue centre
c. Investment centre
d. Sales Centre

141. The performance of investment centre is based on----------
a. Cost of the centre
b. Profit of the centre
c. Profit and investment of the centre
d. Revenue of the centre
142.Responsibility accounting is used for----------
a. cost control
b. planning
c. decision making
d. pricing
143. Profit – Capital charges=------------
a. ROI
b. Residual Income
c. NPV
d. Operating profit
144. Capital rationing due to internal factors is known as:
a. Hard capital rationing
b. Soft capital rationing
c. Mild capital rationing
d. Insider rationing.
145.Capital rationing due to external factors is known as:

146. In ------------- Costing, actual cost of production is directly charged to units
produced and there is no concept of predetermined standard cost.
a. Activity based costing
b. Target costing
c. Back flush costing
d. All of these.
147. Which of the following is/are not method of transfer pricing?
a. Total cost method
b. Marginal cost method
c. Market price method
d. Skimming price method
148. Which of the following is/are method of transfer pricing?
a. Negotiated price method
b. Cost plus pricing method
d. All of these.
149. The Concept of ‘Transfer Pricing’ is applied for transactions in:
a. Export of goods
b. Import of goods
c. Mergers and Acquisition
d. Inter-unit transfer of goods
150. Variable cost per unit is Rs.20 and over all PV ratio is 20%, then price of the
product will be-----------
a. 40
b. 24
c. 25
d. 30

151. The term “Six Sigma” related to the management of:
a. Labour cost
b. Storage cost
c. Defectives
152.Pareto charts are used to:
a. Identify inspection point
b. Organize errors and problems
c. Guide the quality training
d. Outline the production schedule.
153. Key factor is also called as:
a. Restricting factors
b. Governing factors
c. Limiting factor
d. All of these.
154. Where key factor is present, from alternative best project must be selected on the
basis of:
a. PV Ratio
b. Contribution per Unit
c. BEP
d. Contribution per key factor
155. There will be two BEP in the case of :
a. Analytical BE chart
b. Profit graph
c. Curvilinear BE chart
d. Contribution BE chart

156. Payback period of a project can be called as----------- of that project.
a. Contribution
b. ROI
c. BEP
d. Residual income.
157. Average rate of return is also known as Accounting rate of return since it
considers:
a. Cash inflows
b. Cash outflow
c. Profit after tax
d. All of these
158. ------------- is preventive action but ----------- is corrective action.
a. Standard cost, Actual Cost
b. Budgeting, standard costing
c. Cost control, cost reduction
d. All the above.
159. The purpose of ------------- is to attain a real and permanent declain in cost.
a. Cost control
b. Budgeting
c. Decremented costing
d. Cost reduction.
160. --------------- is superior to cost control.
a. Differential costing
b. Budgeting
c. Standard costing
d. Cost reduction.

Account
ANSWER: B
A. overproduction.
ANSWER: C
ANSWER: A
ANSWER: B
A. fixed
B. equity
C. preference
D. variable
ANSWER: A
106. 1f` fixed costs decrease while variable cost per unit remains constant, the new B.E.P in relation
to the old B.E.P will be ___.
A. lower.
B. higher.
C. unchanged.
D. indeterminate.
ANSWER: B
margin in relation to the old contribution margin will be __.
A. lower.
B. unchanged.
C. higher.
D. indeterminate.
ANSWER: B
production
in units ___.
A. 10,000.
B. 16,300.
C. 2,000.
D. 2,500.
ANSWER: A
A. Rs. 7,936.
B. Rs. 7,353.
C. Rs. 8,333.
D. Rs. 9,090.
ANSWER: B
110. Fixed cost Rs. 80,000; Variable cost Rs. 2 per unit; Selling price_Rs. 10 per unit; Turnover
required for a
A. Rs. 1,75,000.
B. Rs. 1,17,400.
C. Rs. .57,000.
D. Rs. 1,86,667.
ANSWER: A
A. 40 percent
B. 80 percent
C. 15 percent
D. 30 percent
ANSWER: A
112. Sales Rs. 50,000; Variable cost Rs. 30,000; Net profit Rs. 6,000; fixed cost is__________.
A. Rs. I0,000.
B. Rs.l4,000.
C. Rs. 12,000.
D. Rs. 8,000.
ANSWER: B
113. Actual sales Rs .4,00,000; Break-even sales Rs. 2,50,000; Margin of Safety in percentage
is_______.
A. 33.3 percent
B. 66.67 percent
C. 37.5 percent
D. 76.33 percent
ANSWER: C
A. Rs. 50.
B. Rs. 40.
C. Rs. 30.
D. Rs. 55.
ANSWER: A
115. Fixed cost Rs. 2,00,000; Sales Rs. 8,00,000; P/V Ratio 30%; the amount of’ profit is________.
A. Rs. 50,000.
B. Rs. 40,000.
C. Rs. 35,000.
D. Rs. 45,000.
ANSWER: B
116. P/V Ratio is 25% and Margin of Safety is Rs; 3,00,000, the amount of profit is_____.
A. Rs. 1,00,000.
B. Rs. 80,000.
C. Rs. 75,000.
D. Rs. 60,000.
ANSWER: C
117. Total sales Rs. 20,00,000; Fixed expenses Rs. 4,00,000; P/V Ratio 40 percent Break-even
capacity in
percentage is_______.
A. 40
B. 60
C. 50
D. 45
ANSWER: C
118. Break-even point occurs at 40 percent of total capacity, margin of safety will be _ percent.
A. 40
B. 60
C. 80
D. 85
ANSWER: B
119. If the P/V Ratio of a product is 30 percent and selling price is Rs. 25 per unit, the marginal cost
of the product would be _______.
A. Rs.18.75.
B. Rs.16.
C. Rs. 15.
D. Rs.20.
ANSWER: A
B. real costing.
D. real costing.
ANSWER: A
121. Under marginal costing, stock are valued at _____.
A. cost less
B. cost more.
C. variable cost.
D. market price.
ANSWER: C
122. Absorption costing lays emphasis on _.
A. production.
B. sales.
C. marketing.
D. advertising.
ANSWER: A
123. Marginal costing lays emphasis on _______.
A. production.
B. sales.
C. marketing.
D. advertising.
ANSWER: B
124. Selling price – marginal cost =____________.
A. fixe
d cost.
C. contribution.
ANSWER: C
A. fixed cost.
C. contribution.
ANSWER: C
126. Fixed cost + net profit =__________.
A. BEP
D. contribution.
ANSWER: D
127. A high P/V ratio indicates_____.
C. high loss.
D. break even.
ANSWER: A
128. Fixed cost / P/V ratio =___________.
A. Contribution
D. Variable cost.
ANSWER: C
129. Profit / P/V ratio =_____________.
C. Contribution.
D. Variable cost.
ANSWER: B
130. Marginal costing is a technique of _.
A. cost reduction.
B. cost control.
C. budgeting.
ANSWER: B
131. The budget is a________.
D. calculation.
ANSWER: C
132. One of the most important tools of cost planning is_________.
A. budget.
B. direct cost.
C. unit cost.
D. cost sheet.
ANSWER: A
133. Sales budget is a______.
C. master budget.
D. flexible budget.
ANSWER: A
134. The budget which usually takes the form of budgeted profit and loss account and balance sheet
is known as _____.
A. flexible budget.
B. master budget.
C. cash budget.
D. purchase budget.
ANSWER: B
A. Fixed budget.
B. Cash budget.
C. Sales budget.
ANSWER: D
A. capital budget.
B. cash budget.
C. master budget.
D. flexible budget.
ANSWER: D
137. The budget, which is prepared first of all is_________.
A. master budget.
B. cash budget.
D. none of these.
ANSWER: C
is_____________.
A. formula method.
D. none of these.
ANSWER: B
A. master budget.
B. rolling budget.
C. flexible budget.
ANSWER: B
ANSWER: D
A. planning.
B. organizing.
C. budgeting.
D. controlling.
ANSWER: C
A. planning.
B. organizing.
C. budgeting.
D. controlling.
ANSWER: C
A. planning.
B. organizing.
C. budgeting.
D. control.
ANSWER: D
A. fixed budget.
B. flexible budget
C. sales budget.
ANSWER: A
A. 1 year.
B. 1-3 years
C. 1-5 years.
D. 5-10 years.
ANSWER: D
variable and semi-fixed categories is ______.
A. fixed budget.
B. flexible budget.
C. sales budget.
ANSWER: B
147. Budget which shows the quantity of finished products to be sold and the price at which they are
to be sold is____________.
A. fixed budget.
B. flexible budget.
C. sales budget.
ANSWER: C
148. The budget which shows the budgeted quantity of output to be produced during a specific
period is_____________.
A. fixed budget
B. flexible budget.
C. sales budget.
ANSWER: D
A. sales budget.
C. fixed budget.
D. flexible budget.
ANSWER: B
150. Budget of indirect costs in the form of indirect wages, indirect material and indirect expenses in
the factory is __.
A. pro
duction overhead budget.

D. master budget.
ANSWER: A
1. C 2. A 3. D 4.A 5. D 6.B 7.C 8. D 9. B 10. B
11.A 12.B 13.D 14. B 15.A 16.C 17.B 18. C 19. C 20. A
21.C 22.D 23.D 24. D 25.B 26.B 27.B 28. B 29. A 30. C
31.C 32.A 33.B 34. D 35.A 36.C 37.C 38. C 39. C 40. C
41.C 42.B 43.A 44. D 45.B 46.E 47.A 48. C 49. C 50. D
51. C 52.A 53.B 54.B 55.D 56.C 57.A 58. E 59. E 60. C
61.C 62.A 63.D 64. B 65.C 66.A 67.C 68. C 69. B 70. A
71.A 72.B 73.B 74. A 75.B 76.D 77.A 78. A 79. D 80. D
81.A 82.B 83.C 84. C 85.A 86.D 87.D 88. B 89. D 90. A
91.C 92.D 93.C 94. D 95.B 96.C 97.D 98. C 99. D 100. C
101. C 102. A 103. C 104. B 105. D 106. C 107. D 108. B 109. D 110.B
111.B 112. A 113. A 114. D 115. B 116. D 117. C 118. B 119. A 120. A
121.A 122.B 123. C 124. C 125. A 126. B 127.B 128. B 129. B 130. A
131. C 132.B 133. A 134. A 135. A 136.C 137. A 138. B 139. B 140. C
141. C 142. B 143. B 144. B 145. A 146.C 147. A 148. B 149. C 150.B
151. D 152. C 153. D 154. C 155. C 156.A 157. C 158. D 159. B 160. D
161. C 122. B 163. D 164. D 165. B 166.A 167. C 168. B 169. D 170. D
171. C 172. D 173. A 174. 175. B 176.C 177. D 178. A 179. D 180. C
181. D 182. B 183. B 184.A 185. C 186C. 187. C 188. A 189. D 190. D
191. B 192. A 193. C 194. C 195. B 196. D 197. D 198. A 199. A 200. C
201.A 202. C 203. B 204. B 205. A 206. A 207. B 208. D 209. B 210. B
211.B 212. B 213. D 214. D 215. D 216. B 217. D 218.B 219.C 220.A
221.D 222. B 223. B 224. A 225. B 226. B 227. C

*Managerial Accounting (IMP)*
1. In marginal costing technique, fixed costs are sometimes called as_______?
A) Period cost
B) Prime cost
C) Overhead cost
D) Variable cost
2. Of the following________: provides strategic, decision based financial and operative information to
the board of directors.
B) Cost Accountant
D) Accounts Clerk
3. The difference between fixed and Variable cost has a special significance in the preparation
of__________?
A) Flexible Budget
B) Master Budget
C) Cash Budget
D) Sales Budget
margin in relation to the old contribution margin will be________?
A) Lower
B) Unchanged
C) Higher
D) Indeterminate
5. marginal costing is a_______?
6. The prime objective of marginal costing is to_______?

D) Predict profits
7. A Budget which is designed to remain unchanged in respect of the level of activity actually attained
is called_________?
A) Flexible Budget
B) Cash Budget
C) Fixed Budget
D) Master Budget

function of_______?
A) Decision Making
B) Planning
C) Controlling
9. Percentage of level of activity attained over a period of time is called_______?
A) Budgeted Ratio
B) Capacity Ratio
C) Activity Ratio
D) Efficiency Ratio
10. An increase in variable costs________?
11. Management Accounting deals with_____?
A) Nothing
12. Budgetary controls helps management to plan &_______?
A) Control
B) Generate losses
C) Increase losses
D) Dissolve
13. A Large Margin of Safety indicates_______?
B) Over production
C) Under production
A) 40 percentage
B) 30 percentage
C) 50 percentage
D) 60 percentage
15. An estimate made about future production, sales and financial requirements in the specific period
is called as_______?
A) Forecasting
B) Planning
C) Budgeting
D) Decision making
16. Accounting designed to serve management in decision making process is called as_______?
A) Cost accounting
17. Cash budget starts with opening balance of_______?

B) Fixed assets
C) Creditors
D) Expenses
18. Cost accounting is one of the subdivision of_______?
B) Cost accounting
19. A Budget is a________?

20. In case of material the key factor may be_______?
21. Marginal costing is known as________?
A) Variable costing
B) Fixed costing
C) Standard costing
22. Margin of safety means______?

C) Safety operation
D) Marginal costs
23. The basic function of accounting is to_________?

24. A plan and blueprint for future period is called as______?
A) Estimate
B) Future plan
C) Long term plan
D) Budget
25. The factors whose influence should be measured before preparing Budget is called as_______?
A) Important factor
C) Key factor
D) Economic factor
26. Break even
point is that level of sales where_________?

27. Cash Budget is prepared by________?
A) Cashier
B) Sales manager
D) Chief Accountant
28. Production cost under marginal costing includes_______?

B) Prime cost only
29. Break Even Point is a point_______?

D) None of these
30. An increase in selling price without increase in cost_______?

31. Master budget incorporates all_______Budgets.
A) Distribution
B) Functional
C) Production
D) Selling
32. Contribution margin of safety is equal to the________?
A) Sales
B) Variable costs
C) Fixed cost
D) Profit
33. management accounting usually provides information to________?

34. Angle of incidence is the angle between_______?

35. Under marginal costing method, cost per unit ascertained only on the basis of________?
A) Fixed cost
B) Variable cost
C) Semi fixed cost
D) None of these
B COM SEMESTER 6- MCQ
Management Accounting
1. Statement of cash flows includes
A) Financing Activities
B) Operating Activities
C) Investing Activities
D) All of the Above
2. In cash flows, when a firm invests in fixed assets and short-term financial investments
results in
A) Increased Equity
B) Increased Liabilities
C) Decreased Cash
D) Increased Cash
3. A firm that issues stocks and bonds to raise funds results in
A) Decreases Cash
B) Increases Cash
C) Increases Equity
D) Increases Liabilities
4. The purchase value of assets over its serviceable life is categorised as
A) Appreciated Liabilities
B) Appreciated Assets
C) Depreciation
D) Appreciation
5. The basic financial statements include
A) Statement of Cash Flows
B) Statement of Retained Earnings
C) Balance Sheet and Income Statement
D) None of the Above
6. The statement of cash flow clarifies cash flows according to
A) Operating and Non-operating Flows
B) Inflow and Outflow
C) Investing and Non-operating Flows
D) Operating, Investing, and Financing Activities
7. Cash flow example from a financial activity is
A) Payment of Dividend
B) Receipt of Dividend on Investment
C) Cash Received from Customers
D) Purchase of Fixed Asset
8. Cash flow example from an investing activity is
A) Issue of Debenture
B) Repayment of Long-term Loan
C) Purchase of Raw Materials for Cash
D) Sale of Investment by Non-Financial Enterprise
9. Cash flow example from an operating activity is
A) Purchase of Own Debenture
B) Sale of Fixed Assets
C) Interest Paid on Term-deposits by a Bank
D) Issue of Equity Share Capital
10. Which item comes under financial activities in cash flow?
A) Redemption of Preference Share
B) Issue of Preference Share
C) Interest Paid
D) All of the above
11. As per AS-3, Cash Flow Statement is mandatory for
A) All enterprises
B) Companies listed on a stock exchange
C) Companies with a turnover of more than Rs 50 crores
a) Both A and B
b) Both A and C
c) Both C and B
12. Listed Enterprises need to prepare Cash Flow Statement only under indirect method.
a) True
b) False
13. In the case of financial enterprises, the cash flow resulting from interest and dividend
received and interest paid should be classified as cash flow from
a) Operating activities
b) Financing activities
c) Investing activities
14. In case of other enterprises cash flow arising from interest paid should be classified as cash
flow from ________ while dividends and interest received should be stated as cash flow
from ____.
a) Operating activities, financing activities
b) Financing activities, investing activities
c) Investing activities, operating activities
15. Issue of bonus shares and conversion of debentures into equity are shown as a footnote to
the Cash Flow Statement.
a) True
b) False
16. When a fixed asset is bought as hire purchase, interest element is classified under ______
and loan element is classified under________.
A) Old Furniture written off doesn’t affect cash flow.
B) Cash flow statement is a substitute for cash account.
C) Appropriation of retained earnings is not shown in Cash flow statement.
D) Net cash flow during a period can never be negative.
a) A, B, C
b) B, C, D
c) C, D, A
18. Which of the following is not a cash inflow?
a) Decrease in debtors
b) Issue of shares
c) Decrease in creditors
d) Sale of fixed assets
19. Which of the following is not a cash outflow?
a) Increase in Prepaid expenses
b) Increase in debtors
c) Increase in stock
d) Increase in creditors
20. Which of the following is a conventional method of ascertaining cost?
a) Absorption costing
b) Full Costing
c) Both a & b
21. Under absorption costing, profit is ascertained
a) On the basis of difference between sales and total cost.
b) By computation as per desired rate of profit on sales or cost
c) Both a and b
d) None of the above.
22. While ascertaining gross profit under absorption costing, only that portion of
manufacturing overheads is deducted from sales revenue which is associated with the
goods sold.
a) True
b) False
23. Under absorption costing among fixed expenses
a) Fixed manufacturing expenses are included in unit cost
b) Fixed non-manufacturing expenses are included in unit cost
c) Both a and b
24. Absorption costing is used for
a) Price determination on basis of full cost
b) Solution of separation of costs
c) Calculation of gross and net profit
d) All of the above
25. Absorption costs helps in
a) Difference between product cost and period cost
b) Charged of fixed factory overheads on inventory
c) Both a and b
26. Which of the following statements are true?
A) Absorption costing helps in preparation of fixed budget.
B) Absorption costing is dependent on level of level of output.
C) Absorption costing is very helpful in taking managerial decisions.
D) Absorption costing helps to conform with accrual and matching concept.
a) A and B
b) B and C
c) A and D
d) B and D
27. Fixed expenses decrease per unit with the increases in production and increases per unit
with the decrease in production.
a) True
b) False
28. Marginal costs is taken as equal to
a) Prime Cost plus all variable overheads
b) Prime Cost minus all variable overheads
c) Variable overheads
29. If total cost of 100 units is Rs 5000 and those of 101 units is Rs 5030 then increase of Rs
30 in total cost is
a) Marginal cost
b) Prime cost
c) All variable overheads
30. Marginal cost is computed as
a) Prime cost + All Variable overheads
b) Direct material + Direct labor + Direct Expenses + All variable overheads
c) Total costs – All fixed overheads
d) All of the above
31. Marginal costing is also known as
a) Direct costing
b) Variable costing
c) Both a and b
A. Marginal costing is not an independent system of costing.
B. In marginal costing all elements of cost are divided into fixed and variable components.
C. In marginal costing fixed costs are treated as product cost.
D. Marginal costing is not a technique of cost analysis.
a) A and B
b) B and C
c) A and D
d) B and D
33. While computation of profit in marginal costing
a) Total marginal cost is deducted from total sales revenues
b) Total marginal cost is added to total sales revenues
c) Fixed cost is added to contribution
34. Which of the following are the assumptions of marginal costing?
A) All the elements of cost can be divided into fixed and variable components.
B) Total fixed cost remains constant at all levels of output.
C) Total variable costs varies in proportion to the volume of output.
D) Per unit selling price remain unchanged at all levels of operating activity.
a) A and B
b) B and C
c) A and D
d) A, B C and D
35. In two periods total costs amounts to Rs 50000 and Rs 40000 against production of 20000
and 15000 units respectively. Determine marginal cost per unit and fixed cost.
a) Rs 2 and Rs 10,000
b) Rs 4 and Rs 5000
c) Rs 10 and Rs 8000
36. Under High and Low Point method, the output at two different levels is compared with the
amount of __________ incurred at these two points.
a) Total fixed costs
b) Total costs
c) Total fixed costs
37. Given Maximum value of production and minimum value of production is 10,000 and
5000 units respectively. Maximum total cost is RS 25,000 and minimum total cost is Rs
15,000. Determine total fixed cost and per unit marginal cost.
a) Rs 2 per unit, Rs 5,000
b) Rs 5 per unit, Rs 2000
c) Rs 10 per unit, Rs 10,000
38. Under method of least squares, a linear equation is developed in the form of ______
wherein Y is total cost, a=fixed cost, b= marginal cost and X is output.
a) Y=a+bX
b) Y=a-bX
c) Y=a*bX
39. In Analytical method of calculating marginal costing, it is determined on the basis of past
records.
a) True
b) False
40. Theory of contribution is the excess of sales over variable costs.
a) a)True
b) b)False
41. Which of the following statements related to Contribution Analysis are ture?
a) If contribution is zero, there is loss equal to fixed costs
b) If contribution is negative, loss is less than fixed costs
c) If contribution is positive and more than fixed cost there will be profit.
d) All of the above
42. When contribution is negative but less than fixed cost,
a) There is loss equal to fixed costs
b) There is loss more than fixed costs
c) There will be loss less than fixed costs
d) All of above are false
43. When contribution is positive but equal to fixed cost,
d) There will be neither profit not loss
44. Opportunities to achieve further growth within current businesses are:
a) Intensive Opportunities
b) Integrative Opportunities
c) Diversification Opportunities
45. Absorption costing is also known as
a) Historical costing
b) Total costing
c) Both a and b
46. Given production is 1,00,000 units, fixed costs is Rs 2,00,000 Selling price is Rs 10 per
unit and variable cost is Rs 6 per unit. Determine profit using technique of marginal
costing.
a) Rs 2,00,000
b) Rs 8,00,000
c) Rs 6,00,000
a) In absorption costing, cost is divided into three major parts while in marginal costing cost
is divided into two main parts.
b) IN absorption costing period is important and in marginal costing product is important.
c) Both a and b
48. In context of net operating profit, which of the following statements are true?
a) If all costs are variable, the amount of profit obtained in marginal costing and absorption
costing will be same.
b) If the volume of sales and output is equal in a period, profit will be same in absorption
costing and marginal costing.
c) Both a and b
49. Under absorption costing, managerial decisions are based on
a) Profit
b) Contribution
c) Profit volume ratio
50. If sales is less than production and there is no opening stock, it suggests there is closing
stock. In such a scenario, profit under marginal costing will be less than the one shown by
absorption costing.
a) True
b) False
51. In the calculation of return on shareholders investments the referred investment deals with
A. All reserves
B. Preference and equity capital only
C. All appropriations
D. All of the above
52. Which of the following is an advantage of standard costing?
A. Measuring efficiency
B. Facilitates cost control
C. Determination of variance
D. All of the above
53. The assets of a business can be classified as
A. Only fixed assets
B. Only current assets
C. Fixed and current assets
D. None of the above
54. Which of the following is the test of the long term liquidity of a business?
A. Interest coverage ratio
B. Stock turnover ratio
C. Operating ratio
D. Current ratio
55. The term management accounting was first coined in
a) 1960
b) 1950
c) 1945
d) 1955
56. Management accounting is
A) Subjective
B) Objective
a) Only A
b) Only B
c) Both A and B
a) Optional
b) Compulsory
c) Legally obligatory
d) Compulsory to some and optional to others
58. The management accounting can be stated an extension of
A) Cost Accounting
B) Financial Accounting
C) Responsibility Accounting
a) Both A and B
b) Both A and C
c) Both B and C
d) A, B, C
59. Which of the following is true about management accounting?
A) Management accounting is associated with presentation of accounting data.
B) Management accounting is extremely sensitive to investors needs.
a) Only A
b) Only B
c) Both A and B
60. Management accounting assists the management
a) Only in control
b) Only in direction
c) Only in planning
d) In planning, direction and control
61. Which of the following are tools of management accounting?
A) Decision accounting
B) Standard costing
C) Budgetary control
D) Human Resources Accounting
a) A, B and D
b) A, C and D
c) A, B and C
d) A, B , C, D
62. Management accounting is related with
a) The problem of choice making
b) Recording of transactions
c) Cause and effect relationships
A. A and B
B. B and C
C. A and C
D. All are false
63. Management accountancy is a structure for
A. Costing
B. Accounting
C. Decision making
D. Management
64. Who coined the concept of management accounting?
A. R.N Anthony
B. James H. Bliss
C. J. Batty
D. American Accounting
65. Management accounting deals with
A. Quantitative information
B. Qualitative information
C. Both a and b
66. Management accounting highlights staff relationship with top management as well as other
personnel.
A. True
B. False
67. The definition â˜Management Accounting is the presentation of accounting information
in such a way as to assist management in the creation of policy and the day-to-day
operation of an undertaking.â™
A. Ango-American Council on Productivity
B. AICPA
C. Robert N. Anthony
D. All of the above
68. The second term for Horizontal Analysis is
A. Dynamic Analysis
B. Inter-firm Analysis
C. Time-series Analysis
D. All of the above
69. Vertical analysis is also known as
A. Static analysis
B. Structural analysis
C. Cross-sectional analysis
D. All of the above
70. The assessment of financial statements by a shareholder is an example of
A. Vertical Analysis
B. Horizontal Analysis
C. Internal Analysis
D. External Analysis
71. Trend percentages and trend ratios are used in
A. Static Analysis
B. Dynamic Analysis
C. Horizontal Analysis
D. Vertical Analysis
A) Vertical Analysis is also termed as dynamic analysis.
B) Horizontal analysis is also termed as dynamic analysis.
C) Static Analysis is not extremely useful for the long-term financial planning.
A. Both A and B
B. Both A and C
C. Both B and C
D. A, B , C
A) Funds Flow statement is one of the ways to analysis & interpret financial statements.
B) Cash Flow Statement is one of the ways to analysis & interprets financial statements.
C) Common-size statement one of the ways to analysis & interprets financial statements.
A. Both A and B
B. Both A and C
C. Both B and C
D. A, B, C
74. Which of the following statements are true about Horizontal Analysis?
A) It do not examines the periodical trend
B) It is useful for long-term analysis.
C) It is useful for long â“term planning.
A. Both A and B
B. Both A and C
C. Both B and C
D. A, B, C
A) Comparative financial statement is an example of horizontal analysis.
B) Trend Analysis is an example of vertical analysis.
C) Cash flow analysis is an example of horizontal analysis.
A. Both A and B
B. Both A and C
C. Both B and C
D. A, B, C
76. John N. Myer stated that vertical and horizontal analysis forms the back-bone of financial
statement analysis technique.
A. True
B. False
77. Ratio analysis is an important approach of horizontal analysis.
A. True
B. False
78. The 3 Ps, i.e. the three objectives of analysis and interpretation of financial statements are :
Progress, Position and Prospects.
A. True
B. False
79. Comparison of financial statements highlights the trend of the _________ of the business.
A. Financial position
B. Performance
C. Profitability
D. All of the above
80. Analysis of any financial Statement comprises
A. Balance sheet
B. P&L Account
C. Trading account
D. All of the above
81. Which of the following are techniques, tools or methods of analysis and interpretation of
financial statements?
A. Ratio Analysis
B. Average Analysis
C. Trend Analysis
D. All of the above
82. Interpretation of accounts is the
A. Art and science of translating the figures
B. To know financial strengths and weaknesses of a business
C. To know the causes for the prevailing performance of business
D. All of the above
83. The only feasible purpose of financial management is
A. Wealth Maximization
B. Sales Maximization
C. Profit Maximization
D. Assets maximization
84. Financial management process deals with
A. Investments
B. Financing decisions
C. Both a and b
85. Agency cost consists of
A. Binding
B. Monitoring
C. Opportunity and structure cost
D. All of the above
86. Finance Function comprises
A. Safe custody of funds only
B. Expenditure of funds only
C. Procurement of finance only
D. Procurement & effective use of funds
87. The objective of wealth maximization takes into account
A. Amount of returns expected
B. Timing of anticipated returns
C. Risk associated with uncertainty of returns
D. All of the above
88. Financial management mainly focuses on
A. Efficient management of every business
B. Brand dimension
C. Arrangement of funds
D. All elements of acquiring and using means of financial resources for financial
activities
89. Time value of money indicates that
A. A unit of money obtained today is worth more than a unit of money obtained in
future
B. A unit of money obtained today is worth less than a unit of money obtained in
future
C. There is no difference in the value of money obtained today and tomorrow
90. Time value of money supports the comparison of cash flows recorded at different time
period by
A. Discounting all cash flows to a common point of time
B. Compounding all cash flows to a common point of time
C. Using either a or b
D. None of the above.
91. If the nominal rate of interest is 10% per annum and there is quarterly compounding, the
effective rate of interest will be:
A. 10% per annum
B. 10.10 per annum
C. 10.25%per annum
D. 10.38% per annum
92. Relationship between annual nominal rate of interest and annual effective rate of interest,
if frequency of compounding is greater than one:
A. Effective rate > Nominal rate
B. Effective rate < Nominal rate
C. Effective rate = Nominal rate
93. Mr. X takes a loan of Rs 50,000 from HDFC Bank. The rate of interest is 10% per annum.
The first installment will be paid at the end of year 5. Determine the amount of equal
annual installments if Mr. X wishes to repay the amount in five installments.
A. Rs 19500
B. Rs 19400
C. Rs 19310
94. If nominal rate of return is 10% per annum and annual effective rate of interest is 10.25%
per annum, determine the frequency of compounding:
A. 1
B. 2
C. 3
95. Present value tables for annuity cannot be straight away applied to varied stream of cash
flows.
A. True
B. False
96. Heterogeneous cash flows can be made comparable by
A. Discounting technique
B. Compounding technique
C. Either a or b
97. Risk of two securities with different expected return can be compared with:
A. Coefficient of variation
B. Standard deviation of securities
C. Variance of Securities
98. Efficient portfolios can be defined as those portfolios which for a given level of risk
provides
A. Maximum return
B. Average return
C. Minimum return
99. CAPM accounts for:
A. Unsystematic risk
B. Systematic risk
C. Both a and b
100. Which among the following presents a bird's-eyeview of the operations for the entire
period of a business?
A. Balance sheet
B. Profit and loss a/c
C. Cash flow statements
D. Position statement
101. ________ is the relationship between quick assets and current liabilities .
A. Current ratio
B. Absolute liquidity ratio
C. Acid test ratio
D. Proprietary ratio
102. When the concept of ratio is defined in respected to the items shown in the financial
statements, it is termed as
A. Accounting ratio
B. Financial ratio
C. Costing ratio
103. The definition, “The term accounting ratio is used to describe significant relationship
which exist between figures shown in a balance sheet, in a profit and loss account, in a
budgetary control system or in a any part of the accounting organization” is given by
A. Biramn and Dribin
B. Lord Keynes
C. J. Betty
104. The relationship between two financial variables can be expressed in:
A. Pure ratio
B. Percentage
C. Rate or time
D. Either of the above
105. Liquidity ratios are expressed in
A. Pure ratio form
B. Percentage
C. Rate or time
106. Which of the following statements are true about Ratio Analysis?
A) Ratio analysis is useful in financial analysis.
B) Ratio analysis is helpful in communication and coordination
C) Ratio Analysis is not helpful in identifying weak spots of the business.
D) Ratio Analysis is helpful in financial planning and forecasting.
a) A, B and D
b) A, C and D
c) A, B and C
d) A, B , C, D
107. Profit for the objective of calculating a ratio may be taken as
A. Profit before tax but after interest
B. Profit before interest and tax
C. Profit after interest and tax
D. All of the above
108. Which of the following falls under Profitability ratios?
A) General Profitability ratios
B) Overall Profitability ratios
C) Comprehensive Profitability ratios
A. A and B
B. A and C
C. B and C
109. General Profitability ratios are based on
A. Investments
B. Sales
C. a & B
110. Gross Profit ratio is also termed as
A. Gross Profit Margin
B. Gross Margin to net sales
C. Both a and b
D. All of the above
111. While calculating Gross Profit ratio,
A. Closing stock is deducted from cost of goods sold
B. Closing stock is added to cost of goods sold
C. Closing stock is ignored
112. While calculating Gross Profit, if net profit is given,
A. It can be converted into gross profit by adding interest to it
B. It can be converted into Gross profit by adding indirect expenses to it
C. Both a and b
113. Gross profit ratio is calculated by
A. (Gross Profit/Gross sales)*100
B. (Gross Profit/Net sales)*100
C. (Net Profit/Gross sales)*100
114. Given Sales is 1, 20,000 and Gross Profit is 30,000, the gross profit ratio is
A. 24%
B. 25%
C. 40%
D. 44%%
115. What will be the Gross Profit if, total sales is Rs 2,60,000 Cost of net goods sold is Rs
2,00,000 and Sales return is Rs 10,000?
A. 13%
B. 28%
C. 26%
D. 20%
116. If selling price is fixed 25% above the cost, the Gross Profit ratio is
A. 13%
B. 28%
C. 26%
D. 20%
117. Gross Profit ratio should be adequate to cover
A. Selling expenses
B. Administrative expenses
C. Dividends
D. All of the above
118. Which statement is prepared in the process of funds flow analysis?
A. Schedule of changes in working capital
B. Funds Flow Statement
C. Both a and b
119. Funds Flow Statement is prepared on the basis of data of P&L statement and two
consecutive balance sheets.
A. True
B. False
C. Value delivery
120. Which of the following rules stands true while preparation of Schedule of changes in
working capital?
A) An increase in current assets increases working capital.
B) An increase in current assets decreases working capital.
C) An increase in current liabilities decreases working capital.
D) An increase in current liabilities increases working capital
A. A and C
B. A and D
C. B and D
D. A, B, C and D
121. If reserve for bad and doubtful debts is mentioned in the question of Funds Flow Statement
Preparation, it can be shown as
A. In the schedule by deducting from total debtors under current assets
B. In the schedule separately under the heading of capital liabilities
C. Both a & b
122. Funds Flow Statement is also known as
A. Statement of Funds Flow
B. Statement of Sources and Application of Funds
C. Statement of Sources and Uses of Funds
D. All of the above
123. Given Net profit for the year Rs 2, 50,000 Transferred to general reserves Rs 40,000 and
old machinery bought for Rs 50,000 was sold for Rs 20,000. Calculate funds from
operations.
A. Rs 2, 80,000
B. Rs 2, 20,000
C. Rs 2, 90,000
D. Rs 3, 00,000
124. Which of the following are sources of funds?
A) Issue of bonus shares
B) Issue of shares against the purchase of fixed assets
C) Conversion of debentures into shares
D) Conversion of loans into shares
a) A and C
b) A and D
c) A, B, C and D
125. The share capital of A Ltd. stood at Rs 20,00,000 in 2013 and at Rs 26 lac in 2014. As per
records, the company bought asset of another company for Rs 6 lac payable in fully paid
shares. These assets included Goodwill Rs 2,00,000 Machinery Rs 1, 83, 600 and Stock Rs
2,16,400. What is the fund from issue of shares?
A. Rs 2,15,600
B. Rs 2,16,400
C. Rs 2,00,000
126. Debentures are Rs 2,50,000 and Rs 3,50,000 in the balance sheet of 2013 and 2014. 1000
of the debentures of Rs 100 each were issued at par in 2014 of which 400 debentures were
issued to a supplier for the purchase of a machine. Determine amount of issue for
debentures for the purpose of funds flow statement.
A. Rs 60,000
B. Rs 40,000
C. RS 10,000
127. In the balance sheet of Praveen for 2013 and 2014, 4% debentures are Rs 5,00,000 and Rs
4,00,000, respectively. Profit on redemption of debentures in 2013 is nil while in 2014 is
Rs 4,000. What is the amount of redemption for the purpose of funds flow statement?
A. Rs 96,000
B. Rs 1,04,000
C. Rs 9,00,000
D. Rs 9,04,000
128. The balance of property at cost has been RS 20,000 and Rs 17,000 in 2013 and 2014
respectively. The profit on sale of property of Rs 2000 is credited to Capital Reserves
Account. New property costing Rs 5000 bought in 2014. Determine sale of proceeds from
land.
A. Rs 3000
B. Rs 10,000
C. Rs 7000
D. Rs 15,000
129. of Ram at end of 2013 and 2014 disclose investments in shares of Rs 2000 and Rs 3000,
respectively. Rs 100 as pre-acquisition dividend has been credited to investments account.
Determine purchase of investments.
A. RS 5000
B. Rs 1000
C. Rs 1,100
130. The balance of fixed assets of Y Ltd. at cost at the end of 2013 and 2014 were Rs 5,70,800
and Rs 6,15,300. During the year 2014 a machinery costing Rs 60,000 was sold.
Determine the purchase of fixed assets.
A. Rs 1,04,500
B. Rs 1,40,500
C. Rs 1,64,500
131. Which of the following are applications of funds?
A. Payment of dividend on share capital
B. Payment of tax
C. Increase in working capital
D. All of above
132. Which of the following are treated as long term investments?
A. Non-current investments
B. Trade Investments
C. Sinking fund investments
D. All of the above
133. Provision of taxation is treated as
A. As a current liability
B. As an appropriation of profits
C. Either a or b
134. As per accounting standard AS3, provision for taxation should be treated as
C. Either a or b
135. Which of the following statement is true?
A. If the amount of good will increases during current year, the difference is treated as
purchase of goodwill.
B. If the amount of good will decreases during current year, It will treated as written
off.
C. Both a and b
136. The opening and closing balance of general reserves are Rs 10,000 and Rs 9,000,
respectively. It is stated in addition information that a loss of Rs 1000 has been written off
in general reserves. In such a case, decline in reserve and loss on investment will be
adjusted in P&L account.
A. True
B. False
137. As per Accounting Standard-3, Cash Flow is classified into
A. Operating activities and investing activities
B. Investing activities and financing activities
C. Operating activities and financing activities
D. Operating activities, financing activities and investing activities
138. Cash Flow Statement is also known as
A. Statement of Changes in Financial Position on Cash basis
B. Statement accounting for variation in cash
C. Both a and b
139. The objectives of Cash Flow Statement are
A) Analysis of cash position
B) Short-term cash planning
C) Evaluation of liquidity
D) Comparison of operating Performance
a) Both A and B
b) Both A and C
c) Both B and D
d) A, B, C, D
140. In cash flow statement, the item of interest is shown in
A) Operating Activities
B) Financing Activities
A. Both A and B
B. Both A and C
C. Both B and C
D. A, B, C
141. Cash Flow Statement is based upon
A. Cash basis of accounting
B. Accrual basis of accounting
C. Credit basis of accounting
A) Cash Flow Statement is helpful in the formation of policies.
B) Cash Flow Statement is useful for external analysis
C) Cash Flow Statement is helpful in estimating future cash flow
A. Both A and B
B. Both A and C
C. Both B and C
A) Cash flow reveals only the inflow of cash
B) Cash flow reveals only the outflow of cash
C) Cash flow is a substitute for income statement
D) Cash flow statement is not a replacement of funds flow statement.
A. Only A
B. Only B
C. Both B and C
D. Only D
144. Cash flow statement is based upon _________ while Funds Flow Statement recognizes
_______.
A. Cash basis of accounting, accrual basis of accounting
B. Accrual basis of accounting, cash basis of accounting
C. Both are based on cash basis of accounting
145. Statement of changes in working capital is prepared separately in
A. Cash Flow Statement
C. Both a and b
146. Cash Flow Statement studies causes of change in working capital.
A. True
B. False
147. _________ reconciles the opening cash balance with the closing cash balance of a given
period on the basis of net decrease or increase in cash during that period.
C. Both a and b
A) Cash flow statement is more useful for short term cash planning.
B) Funds Flow statement is more useful in planning medium term and long term
financing.
C) Cash Flow statement discloses the position of liquidity in a better way
A. Only A
B. Only B
C. Only C
D. A, B and C
149. _____ has/have accepted cash flow statement is more useful than funds flow statement,
particularly from view of analysis of liquidity of a firm.
A. Institute Of Chartered Accountants of India
B. FASB, America
C. SEBI
D. All of the above
150. Cash Flow Statement is prepared from
A. Profit and loss account
B. Balance Sheet
C. Additional Information
D. All of the above
151. Which of the following are cash flow from operating activities?
A) Cash Receipts from customers
B) Cash Paid to Supplier and Employees
C) Purchase of fixed assets
D) Sale of fixed assets
A. Both A and B
B. Both A and C
C. Both B and C
D. Both C and D
152. Match the column
A) Taxes Paid ------------------ i) Cash flow from investing activities
B) Repayment of loans -------------- ii) Cash flow from operating activities
C) Sale of fixed assets ----------------------- iii) Cash Flow from financing activities
A. A-ii), B-iii), C-i)
B. A-i), B-ii), C-iii)
C. A-iii), B-i), C-ii)
153. Cash payment to suppliers for services and goods is example of cash outflow.
A. True
B. False
154. For the calculation of cash flow from operating activities, payments and receipts shown in
Profit & Loss account are converted into payments and receipts actually in cash.
A. True
B. False
Profit & Loss account are converted into payments and receipts actually in cash by
eliminating
A. Non-cash revenue from the revenue earned
B. Non-cash expenses from expenses incurred
C. Both a & b
156. While preparing Cash Flow Statement, non-cash items and non-operating items are not
required to be adjusted under________
A. Indirect method
B. Direct method
C. Both a & b
157. Cash flow from sales is calculated by
A. Cash sales + Cash Collections
B. Sales + Opening debtors+ Opening B/R â“Closing Debtors â“ Closing B/R
C. Both a and b
158. Cash outflow on purchases is calculated by
A. Purchases + Opening Creditors + Opening B/P â“Closing Creditors-Closing B/P
B. Purchases + Opening Creditors - Closing Creditors +Closing B/P
C. Purchases - Opening Creditors - Opening B/P + Closing Creditors +Closing B/P
159. The amount of operating expenses which are actually been paid in cash are shown under:
A. Cash flow from sales
B. Cash outflow on purchases
C. Cash outflow on expenses
D. All of above are false
160. Given salary expenses Rs 40,000, Outstanding in the beginning of the year: Rs 5,000 and
outstanding at the end of the year Rs 10,000. Cash outflow on salary will be:
A. Rs 45,000
B. Rs 35000
C. Rs 55,000
D. Rs 15,000
161. In indirect method, net cash flow from operating activities is calculated on the basis of
A. Net Profit after tax
B. Net profit before tax
C. Both and b
162. Which of the following are added to net profit after tax and extraordinary items to reach to
net profit before tax and extraordinary items?
A) Provision for tax made during the year
B) Proposed dividend made during the year
C) Interim dividend
D) Transfer to General reserves and other reserves
A. Both A and B
B. Both A and C
C. Both B and C
D. A, B, C and D
163. Which of the following are cash flow from investing activities?
A) Interest received
C) Dividend received
E) Purchase of fixed assets
a) Both A and B
b) Both A and C
c) Both B and C
d) A, B, C and D
164. Which of the following are cash flow from financing activities?
B) Dividend received
C) Interest paid
D) Dividend paid
A. Both A and B
B. Both A and C
C. Both C and D
D. A, B, C and D
165. Acquisition and disposal of long term assets is included in
A. Cash flow from investing activities
B. Cash flow from financing activities
C. Cash flow from operating activities
166. Which of the following statements represent example of cash flow from investing
activities?
A. Cash advances and loans made by financial enterprises
B. Cash advances and loans made to third parties
C. Both a and b
167. ABC Ltd had investment of Rs 68,000 as on 31.3.2013 and investment of Rs 56,000 as on
31.3.2014. During the year ABC Ltd sold 40% of its investments being held in the
beginning of period at a profit of Rs 16,800. Determine cash flow from investing activities.
A. Rs 59,200
B. Rs 28,800
C. Rs 72,800
168. Financing activities brings changes in
A. Size and composition of ownerâ™s equities
B. Borrowing of the enterprise
C. Both a and b
169. For year 2013 Equity Share Capital is Rs 3,00,000 Preference Share Capital is 1,00,000
10% debentures is 2,00,000 and Share premium is 30,000. For year 2014 Equity Share
Capital is Rs 4,00,000 Preference Share Capital is 60,000 10% debentures is 1,00,000 and
Share premium is 40,000. Also given, Dividend paid on shares Rs 15,000 and Interest paid
on debentures RS 20,000. Determine net cash flow from financing activities.
A. Cash inflow of Rs 65,000
B. Cash outflow of Rs 65,000
C. Cash inflow of Rs 56,000
D. Cash outflow of Rs 56,000
A) All enterprises
A. Both A and B
B. Both A and C
C. Both C and B
A. True
B. False
A. Operating activities
B. Financing activities
C. Investing activities
from ____.
A. Operating activities, financing activities
B. Financing activities, investing activities
C. Investing activities, operating activities
A. True
B. False
A. A, B, C
B. B, C, D
C. C, D, A
A. Decrease in debtors
B. Issue of shares
C. Decrease in creditors
D. Sale of fixed assets
A. Increase in Prepaid expenses
B. Increase in debtors
C. Increase in stock
D. Increase in creditors
A. Absorption costing
B. Full Costing
C. Both a & b
A. On the basis of difference between sales and total cost.
B. By computation as per desired rate of profit on sales or cost
C. Both a and b
181. All costs are classified under ______ segments under absorption costing.
A. Five
B. Six
C. Four
D. Three
goods sold.
A. True
B. False
A. Fixed manufacturing expenses are included in unit cost
B. Fixed non-manufacturing expenses are included in unit cost
C. Both a and b
A. Price determination on basis of full cost
B. Solution of separation of costs
C. Calculation of gross and net profit
D. All of the above
A. Difference between product cost and period cost
B. Charged of fixed factory overheads on inventory
C. Both a and b
A. True
B. False
A. Prime Cost plus all variable overheads
B. Prime Cost minus all variable overheads
C. Variable overheads
30 in total cost is
A. Marginal cost
B. Prime cost
C. All variable overheads
A. Prime cost + All Variable overheads
B. Direct material + Direct labor + Direct Expenses + All variable overheads
C. Total costs – All fixed overheads
D. All of the above
A. Direct costing
B. Variable costing
C. Both a and b
A. Total fixed costs
B. Total costs
C. Total fixed costs
records.
A. True
B. False
A. There is loss equal to fixed costs
B. There is loss more than fixed costs
C. There will be loss less than fixed costs
D. There will be neither profit not loss
A. Intensive Opportunities
B. Integrative Opportunities
C. Diversification Opportunities
A. Historical costing
B. Total costing
C. Both a and b
A. Profit
B. Contribution
C. Profit volume ratio
197. Managers utilizes marginal costing for
A. Make or buy decision
B. Utilization of additional capacity
C. Determination of dumping price
D. All of the above
198. The problems associated with marginal costing are
A. Difficulties in divisions of costs
B. Problem of valuation of stocks
C. Ignores time elements
D. All of the above
199. ___________ is not suitable where selling price is determined on the basis of cost-plus
method.
B. Marginal costing
C. Both a and b
A. Provision for tax made during the year
B. Proposed dividend made during the year
C. Interim dividend
D. Transfer to General reserves and other reserves
a. Both A and B
b. Both A and C
c. Both B and C
d. A, B, C and D
D. All of the above
Answers
1. D) All of the Above 35. a) Rs 2 and Rs 10,000
36. b) Total costs
2. C) Decreased Cash 37. a) Rs 2 per unit, Rs 5,000
3. B) Increases Cash 38. a) Y=a+bX
4. C) Depreciation 39. a) True
5. D) None of the Above 40. a)True
6. D) Operating, Investing and 41. a) If contribution is zero, there is loss
Financing Activities equal to fixed costs
7. D) Purchase of Fixed Asset 42. c) There will be loss less than fixed
8. D) Sale of Investment by Non- costs
Financial Enterprise 43. d) There will be neither profit not
9. C) Interest Paid on Term-deposits by loss
a Bank 44. a) Intensive Opportunities
10. D) All of the above 45. c) Both a and b
11. c) Both C and B 46. a) Rs 2,00,000
12. a) True 47. c) Both a and b
13. a) Operating activities 48. c) Both a and b
14. b) Financing activities, investing 49. a) Profit
activities 50. a) True
15. a) True 51. D) All of the Above
16. b) Financing activities, investing 52. D) All of the Above
activities 53. Fixed and current assets
17. b) B, C, D 54. A) Interest coverage ratio
18. c) Decrease in creditors
19. d) Increase in creditors 55. b) 1950
20. c) Both a & b 56. a) Only A
21. c) Both a and b 57. a) Optional
22. a) True 58. d) A, B, C
23. a) Fixed manufacturing expenses are 59. a) Only A
included in unit cost 60. d) In planning, direction and control
24. a) Price determination on basis of full 61. c) A, B and C
cost 62. c) a and c
25. c) Both a and b 63. c) Decision making
26. d) B and D 64. b) James H. Bliss
28. a) Prime Cost plus all variable 66. b) False
overheads 67. a) Ango-American Council on
29. a) Marginal cost Productivity
30. a) Prime cost + All Variable 68. d) All of the above
overheads 69. d) All of the above
31. c) Both a and b 70. d) External Analysis
71. a) Static Analysis
32. a) A and B 72. c) Both B and C
33. a) Total marginal cost is deducted 73. d) A, B, C
from total sales revenues 74. c) Both B and C
34. d) A, B C and D 75. b) Both A and C
76. a) True 115. D) 20 %
77. b) False 116. B) 20%
78. a) True 117. D) All of the above
79. d) All of the above 118. A) Schedule of changes in working
80. d) All of the above capital
81. d) All of the above 119. A) True
82. d) All of the above 120. A) A and C
83. a) Wealth Maximization 121. C) Both a and b
84. b) Financing decisions 122. D) All of the above
85. d) All of the above 123. A) 2,80,000
86. d) Procurement & effective use of 124. d) None of the above
funds 125. B) Rs. 2,16,400
87. d) All of the above 126. A) Rs 60,000
88. d) All elements of acquiring and 127. A) 96,000
using means of financial resources for 128. B) 10,000
financial activities 129. C) 1,100
89. a) A unit of money obtained today is 130. A) 1,04,500
worth more than a unit of money 131. d) All of above
obtained in future 132. d) All of the above
90. c) Using either a or b 133. c) Either a or b
91. d) 10.38% per annum 134. b) As an appropriation of profits
92. a) Effective rate > Nominal rate 135. c) Both a and b
93. c) Rs 19310 136. b) False
94. b) 2 137. d) Operating activities, financing
95. a) True activities and investing activities
96. c) Either a or b 138. c) Both a and b
97. a) Coefficient of variation 139. d) A, B, C, D
98. a) Maximum return 140. c) Both B and C
99. b) Systematic risk 141. a) Cash basis of accounting
100. b) Profit and loss a/c 142. d) None of the above
101. c) Acid test ratio 143. D) only D
102. a) Accounting ratio 144. a) Cash basis of accounting, accrual
103. c) J. Betty basis of accounting
104. Either of the above 145. b) Funds Flow Statement
105. A) Pure ratio form 146. b) False
106. a) A, B and D 147. a) Cash Flow Statement
107. D) All of the above 148. d) A, B and C
108. A) A and B 149. d) All of the above
109. B) Sales 150. D) All of the above
110. C) Both A and B 151. a) Both a and b
111. A) Closing stock is deducted from 152. a) A-ii), B-iii), C-i)
cost of goods sold 153. b) False
112. a) It can be converted into gross 154. : a) True
profit by adding interest to it 155. c) Both a & b
113. ) (Gross profit / net sales) * 100 156. b) Direct method
157. c) Both a and b
114. B) 25 %
158. a) Purchases + Opening Creditors + 181. d) Three
Opening B/P â“Closing Creditors- 182. a) True
Closing B/P 183. a) Fixed manufacturing expenses are
159. c) Cash outflow on expenses included in unit cost
160. b) Rs 35000 184. a) Price determination on basis of full
161. b) Net profit before tax cost
162. d) A, B, C and D 186. a) True
163. d) A, B, C and D 187. a) Prime Cost plus all variable
164. c) Both C and D overheads
165. a) Cash flow from investing activities 188. a) Marginal cost
166. b) Cash advances and loans made to 189. a) Prime cost + All Variable
third parties overheads
167. b) Rs 28,800 190. c) Both a and b
168. c) Both a and b 191. b) Total costs
169. b) Cash outflow of Rs 65,000 192. a) True
170. c) Both C and B 193. d) There will be neither profit not
171. a) True loss
172. a) Operating activities 194. a) Intensive Opportunities
173. b) Financing activities, investing 195. c) Both a and b
activities 196. a) Profit
174. a) True 197. d) All of the above
175. b) Financing activities, investing 198. d) All of the above
activities 199. b) Marginal costing
176. b) B, C, D 200. d) A, B, C and D
177. c) Decrease in creditors 201. a) Price determination on basis of full
178. d) Increase in creditors cost
179. c) Both a & b
Marginal Costing and Break Even Point Analysis
Absorption Costing
Under Absorption Costing, all fixed as well as variable costs are allocated to cost units and total
overheads are absorbed according to activity level. Thus all costs, whether fixed or variable are
charged to operations, products or processes.
Absorption Costing is also called ‘Cost plus Costing’ where a fixed percentage is added to total
cost, to cover for profit.
TC=FC+VC (PER UNIT)
TC=FC+VC (TOTAL)
SP-TC (P.U.) =PROFIT (PER UNIT)
SALES(TOTAL)-TOTAL COST(TOTAL)=TOTAL PROFIT
SP 100
Less: VC 30
Less: FC 25 55 (TC)
Profit 45
(Dictate full forms of each)
Marginal Cost and Marginal Costing
Marginal Cost is defined as the amount at any given volume of output, by which the aggregate
costs are changed if the volume of output is increased or decreased by one unit. It is the variable
cost of one unit of a product or service.
SP 100
Less: variable cost 30
Contribution 70
Less: fixed cost 25
Profit 45
1
Example:
SP=Rs. 100
VC pu= Rs.30
Total Fixed Cost=350
Prod TVC TFC TC=TVC+TFC SALES PROFIT/(LOSS)

&
sales (Rs.) (Rs.) (Rs.) (Rs.) =sales-TC
(Units) (Rs.)
0 0 350 350 0 (350)
1 30 350 380 100 (280)
2 60 350 410 200 (210)
3 90 350 440 300 (140)
4 120 350 470 400 (70)
5 150 350 500 500 0 Break even

point
6 180 350 530 600 70
7 210 350 560 700 140
8 240 350 590 800 210
9 270 350 620 900 280
10 300 350 650 1000 350
2
Prod & sales FC VC TC Profit
Per Per Per Per
unit unit unit Unit
SP-TC
0 - 0
1 350 30
2 175 30
3 116.66 30
4 87.5 30
5 70 30
6 58.33 30 88.33 11.67
7 50 30 80 20
8 43.75 30 73.75 26.25
9 38.88 30 68.88 31.12
10 35 30 65 35
Rule: Variable cost per unit remains constant. The total variable cost increases in direct
proportion to increase in production.
Total fixed cost remains constant. The fixed cost per unit decreases in direct proportion to
increase in output.
Marginal Costing is a principle whereby variable costs are charged to cost units and the fixed
costs of the relevant period is written off in full against the contribution for that period. Thus
Marginal costing is the ascertainment of marginal cost and the effect on profit of changes in
volume or type of output by differentiating between fixed costs and variable cost.
Difference between Absorption Costing and Marginal Costing
3
Absorption Costing Marginal Costing
Total Cost, both fixed and variable is charged Only variable cost is charged to products and
to the cost of products and inventory valuation. inventory valuation.
Fixed cost is transferred to Costing Profit and
Loss Account.
Opening and closing stock is valued at total Stock is valued only at variable cost. Hence the
cost, which included both fixed and variable stock value is lower in Marginal costing than
cost. Hence stock values in Absorption costing in Absorption costing
are higher than in Marginal costing.
Profitability is measured by the profit earned Profitability is measured by the ‘contribution’
by various products or departments. made by various products or departments.
Cost data are arrived on conventional pattern Cost data helps to know the total contribution
and hence only the net profit for each product and contribution of each product.
is arrived at.
Practical Applications of Marginal Costing
Marginal Costing is a technique frequently used for short-term decision making. The following
are the practical applications of Marginal Costing.
1. Key or Limiting Factor Analysis
Marginal costing is useful when there is a scarcity of resources. For example, there may be a
limit to the availability of a particular grade of labor, shortage of raw materials, limit to
machine capacity or shortage of working capital. Then the decision is taken based on the
maximum contribution per unit of the scarce resource.
2. Profit Planning
Marginal costing is used for profit planning. A profit target is fixed and the management tries
to achieve it by bringing changes in the factors affecting the profit like selling price, quantity
sold, variable cost per unit, total fixed costs and sales mix. With the help of marginal costing,
the impact of the changes in the above variables can be easily evaluated and desired profit
can be achieved by the management. It helps in doing sensitivity analysis by observing
different cost and revenue situations and its resultant impact on profit and guides in the
determination of activity level to achieve target profit.
3. Selection of Profitable Product Mix
In a multi-product concern, a problem is faced by the management as to which product mix

or sales mix will give the maximum profit. The product mix which gives the maximum profit
4
must be selected. Product mix is the ratio in which various products are produced and sold.
The marginal costing technique helps the management in taking decisions regarding
changing the ratio of product mix which gives maximum contribution or in dropping
unprofitable product line. The product which gives less contribution may be reduced or
discontinued. A multi-product company seeks to choose as its product mix that combination
of products which will yield the largest total contribution.
4. Make or Buy decisions
A manufacturing industry may make some products, parts or tools related to operation or
sometimes it may buy the same thing from outside. The management must decide which is
more profitable to the firm. Make or Buy decisions are best taken with full knowledge of the
marginal or variable cost of making rather than buying a product. But it is also helpful to
know through Marginal Costing what contribution to fixed costs will result from a ‘Make’
decision.
5. Introduction of a New Product

If the present fixed costs of the firm are recovered by the existing products, then the firm
can introduce a new product, by using the existing additional capacity. The firm must
ensure that the contribution must cover at least the variable cost of such production. The
contribution in excess of such variable cost will improve the overall profitability of the
firm.
6. Discontinuance of a Product or Closure of a Department

If any product’s performance is not impressive, then such product should be discontinued
only if there is no contribution margin from that product. That product or product line
should be dropped, which will maximize the profit. If any factor is key factor, then that
product/product line should be dropped which provides least contribution per unit of key
factor.
7. Accept or Reject Special Offer and Sub-contracting

In this case, contribution analysis is made as to whether it is profitable to accept or reject
new order or in sub-contracting.
8. Planning of Activity Level

A manufacturing company may have plans to expand or contract the level of activities
depending upon the conditions prevailing in the market. Such planning is to be
considered before the events overtake the business. Marginal costing is very useful for
5
taking such decisions by enabling management to compare the contribution at different
levels of activities.
9. Market Expansion
Marginal costing provides relevant information in taking market expansion or contraction
decisions. This may include increasing the sales volume within the usual territories or by
tapping new territories. The customers may be earlier attached to the products of a
competitor, and removal of competition may involve higher selling and distribution costs.
10. Temporary cessation of operations

A factory may have to cease its operations temporarily due to various reasons like labor
troubles, material shortage, financial difficulties, major breakdown, lack of orders etc.
Shutdown costs are to be incurred in relation to the temporary closing of a
department/division/enterprise. Such costs include those of closing as well as reopening.
Marginal costing technique helps the management in taking decision to continue
operations or shutdown plant temporarily for some time. If the existing operations are
able to earn at least some contribution to meet fixed costs even otherwise to be incurred
during the period of shutdown, then the suggested course of action is to continue
operations. In situation, where even variable costs are not covered, then the operations
may be suspended temporarily until improvement in the business situation.
Formulas for Marginal Costing

1. Total fixed cost remains constant. Hence the fixed cost per unit declines as production
increases.
2. The variable cost per unit remains constant. Hence the total variable cost increases in
direct proportion to increases in production.
3. Here it is assumed that all the units produced are sold. Hence, production=sales and there
is no stock.
4. Sales=Variable cost+Fixed cost+profit
5. Sales-Variable cost=Contribution
6. Sales -variable cost=fixed cost+profit
7. Contribution=fixed cost + profit
8. Contribution-fixed cost=profit
9. Profit-volume ratio (%)=Contribution *100
Sales
10. Profit-volume ratio(%)(P/V ratio)=Change in profit *100

Change in sales
11. Break even point(BEP) is the point of sales where there is no profit and no loss. Thus,
here, profit=Re.0
6
12. Margin of Safety(units)=Actual sales(units) -Break even sales(units)
13. Margin of Safety(units) +Break even sales(units) =Actual Sales (units)
14. Margin of Safety (Rs.)=Actual sales (Rs.)-Break even sales (Rs.)

15. Margin of Safety (Rs.) + Break even sales(Rs.) =Actual sales (Rs.)
Sales(units)=Total fixed BEP(Units)= Total fixed MOS(Units)= Total profit(Rs.)

cost(Rs.)+profit cost(Rs.) Contribution per unit
Contribution Contribution per unit
per unit
Sales(Rs.)=sales BEP(Rs.)=BEP(units)*Selling MOS(Rs.)=MOS(units)*Selling
(units)*Selling price price price
Sales (Rs.)=Total fixed BEP(Rs.)=Total fixed MOS(Rs.)=Total profit(Rs.)

cost(Rs.)+profit cost(Rs.) P/V ratio
P/V ratio P/V ratio
Sales (units)=Sales(Rs.) BEP (units)=BEP(Rs.) MOS (units)=MOS(Rs.)
Selling price Selling price Selling price
Break even Analysis

Break even analysis refers to ascertainment of level of operations where total revenue equals to
total costs. It is no profit no loss situation. It is an analysis used to determine the probable profit
or loss at any level of operations. Thus break even analysis is a method of studying the
relationship among sales revenue, variable cost and fixed cost to determine the level of operation
at which all the costs are equal to its sales revenue. This analysis helps in assessing the viability
of the organization and to take decisions in profit planning and cost control.
Assumptions and Limitations in BEP Analysis

1. BEP analysis requires that all costs should be segregated into fixed and variable
components.
In practice, it is difficult to accurately segregate the variable and fixed components of
semi-variable costs.
2. It is assumed that all fixed costs remain constant at various levels of activity.
But in practice, it may not be fixed in the long run.
3. The variable costs change in direct proportion to the volume of output. Thus the variable
cost per unit remains constant.
7
In practice, this may not be exactly true.
4. It is assumed that production units are equal to sales units and there is no opening or
closing inventory.
In practice, there is always existence of inventory.
5. Selling price remains constant at all levels of output and there is no change in sales mix.
In the real world, sometimes, it becomes necessary to change the selling price and sales
mix of the products, in order to increase the sales.
6. The productivity, operating efficiency, product specifications and methods of

manufacture and sale will not undergo any change.
In practice, it is impractical to assume that these factors will remain constant.
7. It ignores the capital employed in the business, which is one of the important factors in
determination of profitability of the company and its products.
8. A break even chart can depict the position of only one product and fails to present various
products in the sales mix in one chart. Different charts are required to be drawn for
different products.
9. The break even charts assume that total cost and total revenue can be represented in
straight lines.
In practice, the functions of costs and revenue are curvilinear in nature.
Benefits of Cost-Volume-Profit Analysis

1. CVP Analysis is useful for short run decision making.
2. Planning and forecasting of profit at various levels of activity.
3. Useful in developing flexible budgets for cost control purposes.
4. Evaluation of performance for control.
5. Ascertain the effects on costs of changes in volume for market expansion and contraction.
6. Ascertain the amount of overhead costs that could be charged to production costs at
various levels of operation.
7. Identification of minimum volume of activity that the enterprise must achieve to avoid
incurring loss and also to attain the profit objective.
8. Provision of an estimate of the probable profit or loss at different levels of activity within
the range reasonably expected.
8
9. Provision of data on relevant costs for special decisions relating to pricing, keeping or
dropping product lines, accepting or rejecting particular orders, make or buy decision,
sales mix planning, altering plant layout, channels of distribution specification,
promotional activities etc.
10. Guide in fixation of selling price where the volume has a close relationship with the price
level.
11. Evaluates the impact of cost factors on profit.
Sums
FAM book, pg. 163, sum4
P/V ratio=C/S *100
P/V ratio= S-V *100
S
=6000-3600 *100
6000
=40%
Sales (Rs.)=Total fixed cost(Rs.)+profit

P/V ratio
=1200+1800
40%
=Rs. 7,500
Sum 3 pg. 162

Calculation of contribution per unit= S-V
= 20-(11+3)
=Rs. 6 per unit
1. Break even point (units)= F

CONTRIBUTION PER UNIT
= 5,40,000+2,52,000
6
=1,32,000 units
Break even point (Rs.)=BEP(units)*SP
9
=1,32,000*20
=Rs. 26,40,000
2. Sales (units)= F+P

Contribution per unit
=7,92,000+60,000
6
=1,42,000 units
Sales (Rs.)= Sales(units)*SP
= 1,42,000*20
=Rs. 28,40,000
3. If selling price per unit is reduced by 10%

New SP=Rs.20-10% =Rs. 18
New contribution= New SP-VC
=18-14
=Rs. 4
New BEP= F
C per unit
=7,92,000
4
= 1,98,000 units
New BEP (Rs.)=BEP(units)*SP

=198000*18
=Rs. 35,64,000
Pg.163 sum 5
Calculation of contribution per unit
Particulars Rs. Rs.
Selling price 400
Less: variable cost per unit

Materials 60
wages 120
Variable charges 120

(100% of wages)
Total variable cost 300 300
10
Contribution 100
a. BEP(units) = F_____
C per unit
= 6,00,000
100
=6000 units
BEP (Rs.) =BEP (units)* S.P

= 6000*400
=Rs. 24,00,000
b. Sales to make a profit of Rs. 1,00,000

Sales(units) = F+P_____
C per unit
= 6,00,000+1,00,000
100
=7000 units
Sales (Rs.)=Sales(units)*S.P
= 7000 *400
=Rs. 28,00,000
(Ans) Sales to make a profit of Rs. 1,00,000 will be 7000 units amounting to Rs.
28,00,000
Pg. 165 sum 6

Sales (units)= F+P
C per unit
Sales (units)=Sales(Rs.)
S.P
= 11,50,000
11.50
=1,00,000 units
11
Sales (units)= F+P
C per unit
1,00,000= 2,00,000+P
11.50-7.50
Profit =Rs.2,00,000
The management wants to maintain profit at Rs.2,00,000 and reduce selling price
to Rs. 10 per unit.
New contribution=new S.P -VC
=10-7.50
=Rs. 2.50
New sales (units)= Fixed cost+profit

New Contribution per unit
=2,00,000+2,00,000
2.50
= 1,60,000 units
Ans. The company will have to sell 60,000 more units(1,60,000-1,00,000) to

give effect to this decision.
Sum 7 pg 166
(i) BEP (units)= F
C per unit
= 80,000
40-30
= 8000 units
BEP (Rs.)=BEP(units)*S.P
= 8000*40
=Rs. 3,20,000
(ii) New BEP=5000 units

BEP (units)= F
C per unit
5000 = 80,000
SP-30
SP-30=80,000
5000
12
SP=16+30
=Rs. 46
Sum 8 pg 168
P/V ratio=50%
Margin of safety=40%
Sales volume=Rs. 50,00,000
Find out BEP
Sales=F+P
P/V ratio
50,00,000=F+P
50%
F+P=Rs. 25,00,000
If Margin of safety is 40%, then the BEP will be at 60% of sales
BEP=Rs. 50,00,000*60%
BEP=Rs. 30,00,000
BEP(Rs.)=F
P/V ratio
30,00,000=F
50%
30,00,000*50%=F
15,00,000=F
Fixed cost=Rs. 15,00,000
F+P=Rs. 25,00,000
15,00,000+P=25,00,000
P=Rs. 10,00,000
Thus profit is Rs. 10,00,000
13
Pg 168 sum 9
1.P/V ratio= C *100
= 10-6 *100
10
= 40%
2. contribution per unit= SP-VC
= 10-6
=Rs. 4 per unit
BEP (units)= F
C per unit
= 4000
4
=1000 units
BEP (Rs.)= BEP(units)*SP
= 1000*10
=Rs. 10,000
3. Margin of safety=Actual sales(Rs) -Break even point(Rs.)

=15,000-10,000
Margin of safety (Rs.)=Rs. 5,000
Margin of safety (units) = MOS(Rs.)
S.P
=5000
10
14
Therefore, MOS(units)=500 units
4. Sales required to earn a profit of Rs. 5000

sales (units)= Fixed cost+profit
= 4000+5,000
4
=2250 units
Sales (Rs.)=Sales (units)*SP
2250*10
=Rs. 22,500
5. Amount of profit when sale is Rs. 15,000

Sales= F+P
P/V ratio
15,000= 4000+P
40%
6000= 4000+P
Profit =Rs 2,000
Pg. 169 sum 10
1 P/V ratio=C *100
= 30 *100
50
= 60%
2. BEP (units)= F
C per unit
= 75000
30
=2500 units
BEP (Rs.)= BEP(units)*SP
= 2500*50
=Rs. 1,25,000
15
3. sales (units)= Fixed cost+profit
= 75000+1,50,000
30
=7500 units
=7500*50
=Rs. 3,75,000
4.If selling price is reduced by 20%
New S.P=50-20%
=Rs. 40
New C=New SP-VC
=40-20
=Rs.20 per unit
New BEP (units)= F
New C per unit

= 75000
20
=3750 units
BEP (Rs.)= NewBEP(units)*New SP
= 3750*40
=Rs. 1,50,000
Pg.187 sum14
1. BEP (units)= F
C per unit
= 1,20,000
80
=1500 units
BEP (Rs.)= BEP(units)* SP
= 1500*180
=Rs. 2,70,000
16
2 P/V ratio=C *100
= 80 *100
180
= 44.44%
3.sales (units)= Fixed cost+profit

= 1,20,000+1,80,000
80
=3750 units
=3750*180
=Rs. 6,75,000
4 sales (units)= Fixed cost+profit

= 1,20,000+2,40,000
80
=4500 units
=4500*180
=Rs. 8,10,000
5 New SP=180+20%
=Rs. 216
New BEP (units)= F
New C per unit

= 1,20,000
216-100
=1034.48 units
1035 units
New BEP (Rs.)= BEP(units)* New SP
= 1035*216
17
=Rs. 2,23,560
Pg 170 sum 11(i)
a. Contribution margin/profit volume ratio/contribution ratio=30% of sales

Contribution =3,00,000*30%
= Rs. 90,000
Contribution =fixed cost+profit
90,000 = 60,000+profit
Profit=Rs. 30,000
b. Break even point(Rs.)= Fixed cost
Profit volume ratio
=60,000
30%
= Rs. 2,00,000
c. sales (Rs)= Fixed cost+profit

profit volume ratio
= 60,000+90,000
30%
=Rs. 5,00,000
Pg 170 sum 11(ii)

If the selling price is reduced by 10%, the total amount of sale will also reduce by 10%
New Sales=Sales-10%
= 2,00,000-10%
=Rs. 1,80,000
New contribution=New sales- variable cost

=180000-100000
=Rs. 80,000
New P/V ratio=C/S *100
=80,000 *100
1,80,000
= 44.44%
BEP=Fixed cost
P/V ratio
= 50,000
44.44%
18
= Rs. 112511.25
Pg. 174 sum 13

Year Sales(Rs.) Profit(Rs.)
2004 1,00,000 10,000
2005 1,20,000 14,000
Solution
Profit volume ratio= change in profit *100
Change in sales
= 4000 *100
20000
= 20%
To find out the fixed expenses,
Contribution=Sales *profit volume ratio
Year 2004
Contribution=1,00,000*20%
=Rs. 20,000
Fixed cost+profit=Rs. 20000
Fixed cost+10,000=Rs. 20000
Fixed cost=Rs. 10,000
Profit where sales are Rs. 90,000
Sales= fixed cost+profit
P/V ratio
90,000 = 10000+profit
20%
19
18000-`10000=profit
Profit=Rs. 8000
Profit where sales are Rs. 40,000
P/V ratio
40,000 = 10000+profit
20%
8000-`10000=profit
Loss=Rs. 2000
Sales to earn a profit of Rs. 20,000
P/V ratio
= 10000+20,000
20%
Sales =Rs. 1,50,000
Breakeven point= fixed cost
P/V ratio
= 10000
20%
BEP =Rs. 50,000
20
SUM 14 PG 175
First six months of year Second half(six months) of

year
1st Jan to 30th June
1st July to 31st Dec.
Sales Rs. 8,10,000 Rs. 10,26,000
Profit Rs. 21,600 Rs. 64,800
Solution:-
Change in sales
= 64800-21600 *100
10,26,000-8,10,000
= 43200 *100
2,16,000
= 20%
First half of the year
Contribution=8,10,000*20%
=Rs. 1,62,000
Fixed cost+profit=Rs. 1,62,000
Fixed cost+21,600=Rs. 1,62,000
Fixed cost=Rs. 1,40,400
Amount of profit when sales are Rs. 6,48,000
P/V ratio
21
6,48,000=1,40,400+P
20%
Profit=Rs. 129600-140400
Loss=Rs. 10,800
Amount of sales required to earn a profit of Rs. 1,08,000
P/V ratio
=1,40,400+1,08,000
20%
Sales=Rs. 12,42,000
Pg. 189 sum 18
1/1/97 to 30/6/1997 1/7/1997 to 31/12/1997
Sales Rs. 60,000 70,000
Total cost Rs. 54,000 62,000
Ans: Profit=Sales – total cost
Profit for the period 1/1/97 to 30/6/1997= Rs. 6,000
Profit for the period 1/7/97 to 31/12/1997= Rs. 8,000
Change in sales
= 2,000 *100
10,000
= 20%
22
First half of the year
Contribution=60,000*20%
=Rs. 12,000
Fixed cost+profit=Rs. 12,000
Fixed cost+6,000=Rs. 12,000
Fixed cost=Rs. 6,000
It is given that fixed expenses are paid equally for the whole year. This is fixed cost for 6 months.
So fixed cost for 12 months=Rs. 6000*2=Rs. 12,000
BEP= fixed cost
P/V ratio
=12,000
20%
BEP=Rs. 60,000
Margin of Safety=Actual sales-Breakeven sales (for the whole year)
Actual sales for whole year=Rs.(60,000+70,000)
= Rs. 1,30,000
Now Margin of Safety=Actual sales-Breakeven sales (for the whole year)
=1,30,000-60,000
=Rs. 70,000
23
24
Chapter 1 Question Review 1
Chapter 1 Questions
Multiple Choice
1. A business organized as a separate legal entity is a
a. corporation.
b. proprietor.
c. government unit.
d. partnership.
2. Which of the following is not one of the three forms of business organization?
a. Corporations
b. Partnerships
c. Proprietorships
d. Investors
3. Which of the following would not be considered an internal user of accounting data for the Xanadu
Company?
a. President of the company
b. Production manager
c. Merchandise inventory clerk
d. President of the employees' labor union
4. The liability created by a business when it purchases coffee beans and coffee cups on credit from
suppliers is termed a(n)
a. account payable.
b. account receivable.
c. revenue.
d. expense.
5. The right to receive money in the future is called a(n)

a. account payable.
b. account receivable.
c. liability.
d. revenue.
6. The cost of assets consumed or services used is also known as

a. a revenue.
b. an expense.
c. a liability.
d. an asset.
7. The best definition of assets is the

a. cash owned by the company.
b. collections of resources belonging to the company and the claims on these resources.
c. owners’ investment in the business.
d. resources belonging to a company that have future benefit to the company.
8. Dividends are reported on the

a. income statement.
b. retained earnings statement.
c. balance sheet.
d. income statement and balance sheet.
9. Which of the following is an asset?

a. Accounts Receivable
b. Accounts Payable
c. Common Stock
d. Dividends
10. To show how successfully your business performed during a period of time, you would report its
revenues and expenses in the
a. balance sheet.
b. income statement.
c. statement of cash flows.
d. retained earnings statement.
11. Ashley’s Accessory Shop started the year with total assets of $210,000 and total liabilities of
$120,000. During the year the business recorded $330,000 in revenues, $165,000 in expenses, and
dividends of $60,000. The net income reported by Ashley’s Accessory Shop for the year was
a. $120,000.
b. $150,000.
c. $195,000.
d. $165,000.
12. Rodgers Company compiled the following financial information as of December 31, 20XX:
Sales revenue $1,120,000
Common stock 240,000
Buildings 320,000
Operating expenses 1,000,000
Cash 280,000
Dividends 80,000
Inventory 40,000
Accounts payable 160,000
Accounts receivable 120,000
Retained earnings, 1/1/20XX 600,000
Rodger’s assets on December 31, 20XX are

a. $1,880,000.
b. $1,360,000.
c. $640,000.
d. $760,000.
13. As of January 1, 20XX, Elena’s Store had a balance in its retained earnings account of $100,000. During
the year Elena’s Store had revenues of $80,000 and expenses of $45,000. In addition, the business paid
cash dividends of $20,000. What is the balance in Retained Earnings at December 31, 20XX for Elena’s
Store?
a. $100,000
b. $115,000
c. $135,000
d. $155,000
14. Which of the following financial statements is concerned with the company at a point in time?
a. Balance sheet
b. Income statement
c. Retained earnings statement
d. Statement of cash flows
15. An income statement

a. summarizes the changes in retained earnings for a specific period of time.
b. reports the changes in assets, liabilities, and stockholders’ equity over a period of time.
c. reports the assets, liabilities, and stockholders’ equity at a specific date.
d. presents the revenues and expenses for a specific period of time.
Exercises
1. Indicate in the space provided by each item whether it would appear on the income statement (IS),
balance sheet (BS), or retained earnings statement (RE):
a. _____ Service Revenue g. __ Accounts Receivable
b. _____ Utilities Expense h. ___ Common Stock
c. _____ Cash i. ___ Equipment
d. _____ Accounts Payable j. ___ Advertising Expense
e. _____ Supplies k. ___ Dividends
f. _____ Salaries and Wages Expense l. ___ Notes Payable
2. Use the following information to calculate for the year ended December 31, 20XX
(a) net income (net loss)
(b) ending retained earnings
(c) total assets.
Supplies $ 1,500 Service revenue $19,000

Other operating expenses 10,000 Cash 15,000
Accounts payable 11,000 Dividends 6,000
Accounts receivable 4,000 Notes payable 1,000
Common stock 10,000 Equipment 9,500
Retained earnings (beginning) 5,000
Chapter 1 Solutions
Multiple Choice Solutions
1. A
2. D
3. D
4. A
5. B
6. B
7. D
8. B
9. A
10. B
11. D
12. D
13. B
14. A
15. D
Exercise Solutions
1.
a. IS g. BS
b. IS h. BS
c. BS i. BS
d. BS j. IS
e. BS k. RE
f. IS l. BS
2.
(a) $9,000 (Ser. rev. – Other oper. exp.)

(b) $8,000 (Beg. ret. earn. + Net inc. – dividends)
(c) $30,000 (Sup. + Acc. rec. + Cash + Equip.)
MCQ for Managerial Accounting
a) Shareholders
b) Creditors
c) Managers
a) Creditor
c) Controller
d) Treasurer
a) Service entities
c) Non profit entities
d) All of these

c) Indirect labour
d) Direct labour

a) Cost
b)Financial
37
c) Management
d) All
7. Management accounting concentrates on

c)Control of business activities
d) None of these
8. Which type of asset class includes those assets which have only definite use and become
valueless when the yield is over?
a) Fixed asset
b) Current asset
c) Fictitious asset
d) Wasting asset
c) Cost accounting
d) Real Accounting

c) Both (a) & (b)
d) None of these
a) Debtors account
c) Sales account
37
c)Nominal account- credit all incomes & gains
Which part of formula is wrong? a) opening stock
b) net purchases
d)sales
14. Return of goods by a customer should be debited to


c) Goods account
d) Purchase account
15. Sales made to Mahesh for cash should be debited to
a) Cash account
b) Mahesh Account
c) Sales account
d) Purchase account

b) Rent account
c)Cash account
d) Expense account

a) Discount account
37
c) Sales account
d) Cash account
18. Opening stock + + Direct Expenses (Carriage on Raw material)-Closing

Stock = …………………
a) Sales, Purchases


a) Historical
b) Forward looking
c) Analytical
d) Social


c) Labour unrest

a) Only to workers

37

a) Fixed cost
b) Variable cost
26. is a person or item for which cost may be ascertained. a) Cost unit
b) Cost centre
c) Cost object
d) Cost estimation

a) Prime cost
b) Factory overhead
c) Selling overhead
d) Office overhead
28. cost refers to those cost which have already been incurred and cannot be
a) Opportunity cost
b) Sunk Cost
c) Incremental cost
d) Decremental cost
29. Amortization of intangible Asset Such as Goodwill which has indefinite life is an example of
accounting concept

a) Loan
b) Unsecured Loan
c) Secured Loan
31. cost will still be incurred although a plant is shut down temporarily.
b) Advertising
c) Depreciation
d) Carriage
37
a) Practicability
b) Subjectivity

d) All the above
34. The practice of appending notes regarding contingent liabilities in accounting statements is in
pursuance to:



b) Sales account
c) Purchase account

c) (a) &(b) above
37
b) Trading account
41. According to schedule VI Companies Act which item is not shown on Asset side of Balance
sheet
a) Investment
c) Provision
d) Lease Holds

c) P & L a/c
in……………….

a) Remains fixed
37

c) Journal
d) Both a and b

48. Cash Purchases:
a) Increases assets
c) Decreases assets


a) Machinery
b) Building
c) Cash
d) Creditor


37

b) Matching Concept
c) Consistency

a) Building
b) Bank Balance
c) Plant Patents
d) Goodwill
b) Matching Concept
c) Cost Concept
d) Cost Concept
a) Current assets
c) Fixed asset
d) Fixed liability

b) A liability
37
d) Both a and b
e) Both a and c
a) Debtors
b) Investors
c) Creditors
d) Shareholders
a) Dual concept
b) Divider concept
c) Entity concept
d) Landlord concept
a) Nominal capital
b) Paid up capital
c) Issues capital
d) None of these

37
d) None of these
d) All of these

a) Projected data
c) Historic data

69. Bookkeeping is an……………………of correctly recording of business transition. a) Art

and Science
b) Art
c) Science
d) Art or Science
70. Journal Entries are known as book of Entry.

a) Original
b) Duplicate
c) Personal
d) Nominal

b) Rules of Real
c) Rules of Nominal
d) All of these
72. . Which of the following account balance will be shown on debit side of Trial Balance?
b) Cash a/c
37
c) Short term loan
d) creditors
a)Discount
b) Depreciation
c)Reduction

d) None of these
a) Long term loan
b) Short term loan
c) Owner’s fund
d) All of these

a) Current asset
d) None of these
78. Cost accounting aims at ascertain of product
a) Cost
b) Net profit
c) Gross profit
d) Selling price
a) Management only
b) Government only
c) Investor only
d) All of these
a) Accrual concept
37
b) Cost concept
a) Provisions
a) Separate entity
b) Going concern
c) Consistency
d) Time period

c) Entity Concept

a) Income Statement
c) Balance Sheet
a) Loan from Mr.Y

b) loan to Mr.y
c) Both (a) (b)
d) None of these

37
a) (ii) (iii)(i)
b) (iii)(iv)(ii)
c) (i)(iii)(iv)
d) (i)(iv)

a) Accrual concept
b) Cost concept
a) Separate entity
b) Going concern
c) Consistency
d) Time period



a) Trading a/c
b) Balancesheet
d) Trial balance.
37
92. The concept of separate entity is applicable to which of following types of businesses? a.
Sole proprietorship
b. Corporation
c. Partnership
d. All of them
93. Which of the following is time span into which the total life of a business is divided for the
purpose of preparing financial statements?
a) Fiscal year
b) Calendar year
d) Accrual period

a) Personal a/c
b) Impersonal a/c
c) Real a/c
d) Nominal a/c


d) Matching concept
37
b) Corporation
c) Partnership
d) All of them
recognized when
a) Cash is received
following?
a) Accrual concept
b) Matching concept

a) Fiscal year
b) Calendar year
d) Accrual period
104. Showing purchased office equipments in financial statements is the application of which
accounting concept?
b) Materiality
c) Prudence
d) Matching concept
105. Information about an item is if its omission or misstatement might influence
the financial decision of the users taken on the basis of that information
a) Concrete
b) Complete
37
c) Immaterial
d) Material
following?
d) Duality Concept
b) The transactions which cannot be expressed in money, will not be recorded in
accounting books
d) None of These
d) All of the above
110. If the total assets of the company amount to Rs 1,50,000 and owner’s equity is Rs 70,000,the
amount of liabilities will be –
a) Rs 70,000
b) Rs 80,000
c) Rs 90,000
d) Rs 1,00,000

a) Revenue Profit
b) Capital Profit
c) Loss
d) None of these
a) Profit
37
b) Assets
c) Company
d) Books of A/c
a) Depreciation
b) Wages
c) Salary
d) Stationary

a) Assets
b) Liabilities
c) Capital
d) All of these
a) Benefits & Costs

b) Revenues & Costs
a) Patents
b) Trade Marks
c) Copyright
d) Land

d) Attainmentofeconomic goal

119.Management Accounting provides invaluable services to management in performing

37
d) None of these
120.Book keeping is mainly concerned with

b) Designing the systems in recording classifying,summarizing the recorded data
a) Practicability
b) Subjectivity
d) None of these

d) None of these
pursuant of
124. According to the money measurement concept the following will be recorded in the books of
accounts of the business

d) None of these
126. The convention of conservatism is applicable a)
In providing for discount on creditors

37
d) None of these
a) Cash a/c
b) Capital a/c
c) Drawing a/c
d) Bank a/c

b) Salaries a/c
c) Cash a/c
d) Bank a/c
a) Customer a/c
b) Sales return a/c
c) Goods a/c
a) Cash a/c
b) Mahesh a/c
c) Sales a/c
d) Sales return a/c
a) Land lord a/c

b) Rent a/c
c) Cash a/c
d) Tenant a/c
a) Discount a/c
b) Customer a/c
c) Sales a/c
d) None of these
a) Debtors Accounts
b) Bad debts a/c
c) Sales a/c
37
d) None of these

accounting concept
d) None of these
d) None of these
137 Accounting principles are which are adopted by the accountant


d) None of these

c) Not disclosed
d) None of these
a) Single aspect
b) Dual aspect
c) Triple aspect
d) None of these
statements
37
d) None of these
d) None of these
d) None of these.
A. system in which accounting entries are made on the basis of amounts having become due
for payment or receipt is called
a) Cash concept
b) Accrual concept
c) Matching concept
d) On-going concept
a) Real a/c
b) Personal a/c
c) Nominal a/c
d) None of these
a) Real a/c
b) Personal a/c
c) Nominal a/c
d) None of these
a) Real a/c
b) Personal a/c
c) Nominal a/c
d) None of these
a) Journal
37
b) Ledger
c) Trial balance
d) None of these
148. Transferring the debit and credit item from the journal to the respective accounts is
called a) Compound Journal

b) Ledger
c) Trial balance
d) None of these

a) Compound Journal
b) Ledger
c) Trial balance
d) None of these
ledger is called as
a) Ledger
b) Posting
c) Forward journal
d) None of these
151. Which of the following items would not fall under the definition of an asset? a)
Land
b) Machine
c) Cash
d) Owner Equity
152. Which one of the following items would fall under the definition of a liability a)
Cash
b) Debtor
c) Owner’s equity
d) None of these

37
Land Rs.1,000,000
Machinery Rs.20,000
Cash Rs.10,000
Debt Rs.0
Owner’s equity ?

a) Rs.1020000
b) Rs.1010000
c) Rs.1030000

a) 600,000
b) 1,400,000
c) 2,000,000
d) None of these

Land Rs.1, 500,000
Cash Rs.20, 000
Owners equity Rs.900, 000
Loan Rs.500, 000
Creditors?
a) Rs.200, 000
b) Rs.700, 000
c) Rs.800, 000
d) Rs1, 100,000
Land ?
Vehicles Rs.600,000
Cash Rs.30,000
Loan 5,00,000
37
Creditors Rs.50,000
e) 1,000,000
f) 1,550,000
g) 800,000
h) None of these
accounting equation?

c) Cash = Assets
a) Only (a)
b) Both (a) (b)
c) All (a)(b)(c)(d)
d) None of these
159. Retained earnings will change over time because of several factors. Which of the following
factors would explain an increase in retained earnings?
a) Net Loss
b) Net income
c) Dividend


a) Accounts payable
c) Sales
d) Cash
Cash Rs.100
37
Accounts Payable Rs.200
Bank Loan Rs.1,000
a) Rs.200
b) Rs.1900
c) Rs.1200
d) Rs.1700
c) Enough information should be disclosed in the financial statements so a person wishing
informed reader
164. .Which of the following is a real (permanent) account? a. Goodwill

b. Sales

d.None of theses
b. Currency
c. Money orders
37
correct?
ledger.
169. The following comments each relate to the recording of journal entries. Which statement is
true?


171. . Which of the following errors will be disclosed in the preparation of a trial balance?
37
account credited.
173. Inventory accounts should be classified in which section of a balance sheet? a. Current
assets
b. Investments

d. None of these

177. Which of the following functions is managerial accounting intended to facilitate? a)
Planning
b) Decision making
c) Control
d) All of these
37
a) Managerial accounting information is prepared primarily for external parties
such as stockholders and creditors; financial accounting is directed at internal
users.
departments.
c) Managerial accounting pertains to both past and future items; financial accounting

d. All of these
180. Manufacturing costs are also known as product costs. Which of the following best describes
those costs which are considered to be manufacturing costs?

a. Variable cost
c. Direct cost


37

c) Owners

a) Market values

a) Asset
b) Liability
c) Accounts
c) recorded facts
a) Management
b) Creditors
c) Bankers
d) All of the above
37
a) Sundry creditors
b) Acceptances
a) Actual figures
b) Budgeted figures
c) Standard figures
a) 1910
b) 1939
c) 1950
d) 1960

a) Compulsory
b) Optional
c) Obligation
a) Trading account
c) Balance sheet
d) All of the above
a) Fixed asset
b) Investment
37
c) Current asset
d) Owners equity
198. Financial account state the position of a concern.
a) Financial
b) Economic
c) Non financial
d) None of these
a) sales
b) Share capital
d) Unsecured loan


.
a) Balance Sheet

a) M. S. Gosav
b) Wheldon
c) LucoPacioli
d) R. N. Carter
203. The work of a book keeper is in nature. a)

Analytical
b) Clerical
37
c) Executive
d) Non- executive
204. Depreciation is a . a)
Cash operating expenditure

205. system records only actual cash receipts and payments a)
Cash basis
b) Accrual basis
c) Mercantile basis
206. Which of the following is true for: -“In accounts recording is done of ” a)
only financial transaction

c) Both
207. Salary is one of the expenses a)

Capital
b) Revenue
c) Direct
d) Non- cash
208. Outstanding salary account is a account
37
a) Nominal account
b) Real Account

209. is a summary of all transactions relating to particular account. a)

Balance sheet
b) Trial Balance
c) Ledger
d) Journal
a) cash account
b) capital account
c) drawings account
211. Amount of salary paid to Suresh should be debited to a)

Account of Suresh
b) Salaries account
c) Cash account
212. All costs other than direct materials cost, direct labour cost and direct expenses are known as:
b) Overhead
e. Variable cost
f. Committed fixed cost
37
g. Direct cost
h. Semi variable cost

d. All of these
g. Indirect labour
h. Direct labour
216. Which one of the following would not be classified as manufacturing overhead? a) Indirect
labour
b) Direct materials

classified as
a) A prime cost
219. Lubricants, used regularly in a production process, are classified as a) Miscellaneous

expense
b) Direct materials
d) Immaterial items
37
220. Because of automation, which component of product cost is declining? a)
Direct labour
b) Direct materials
d) Advertising

b) Direct Wages
c) Direct Expenses
d) Prime Cost

a) Work on cost
b) Work Cost
d) Direct Cost

a) Prime Cost
b) Factory Overhead
c) Selling overhead
d) Office overhead
224. Aggregate of cost of goods sold and selling and distribution overheads is known as : a)
Total Cost
b) Office Cost
c) Cost of sales
d) Selling overhead


(d) future costs
37
(a) Rs. 1,80,000
(b) Rs. 2,00,000
(c) Rs. 1,70,000
(d) Rs. 2,10,000
37
Cost Sheet/Unit Costing
Meaning & Definition of Cost Sheet
Cost Sheet is defined as a document which provides for the assembly of the estimated detailed cost in
respect of a cost center or cost unit.
Thus, a Cost Sheet is a statement usually prepared to present the analytical cost of total production
during a particular period.
Format of Cost Sheet
1. Simple Cost Sheet
In the books of Company A

Cost sheet for the period ended ____
Name of the Product- _________ Units Produced-_________________ Units Sold-___________
Particulars Total cost (Rs.) Unit cost (Rs.)
Direct Materials
Add: Direct Labour
Add: Direct expenses
Prime Cost (1)
Add: Factory Overheads

Factory Cost/Works Cost (2)
Add: Office Overheads

Cost of Production/Office Cost (3)
Add: Selling & Distribution Overheads

Total Cost/Cost of Sales (4)
Add: Profit or Less: Loss
Sales
1
2. Cost Sheet with Stock Adjustments
In the books of Company A
Cost sheet for the period ended ____
Name of the Product- _________ Units Produced-_______________ Units Sold-___________
Opening stock of Raw Materials
Add: Purchases of Raw Materials
Add: Expenses on purchases of Raw Materials
Less: Closing stock of Raw Materials
Less: Purchase returns
Less: Sale of scrap or defectives of raw materials
Cost of Materials Consumed (1)
Add: Direct Labour
Prime Cost (2)

Add: Opening stock of Work-in-Progress
Less: Closing stock of Work-in-Progress
Less: Sale of scrap or defectives of Work-in-Progress
Factory Cost/Works Cost (3)
Add: Office Overheads

Cost of Production/Office Cost (4)
Add: Opening Stock of Finished Goods

Less: Closing Stock of Finished Goods
Cost of Goods Sold (5)

Total Cost/Cost of Sales (6)
Add: Profit or Less: Loss
Sales (7)
2
Sums:
1. Accounting for Business Decisions, Nirali Prakashan, Pg. 3.30
Sum of Mumbai Traders
In the books of Mumbai Traders, Mumbai
Cost Sheet for the year ending 31st March, 2013
Particulars Amount (Rs.) Amount (Rs.)
Cost of Direct Materials 2,00,000
Add: Direct Wages 1,00,000
1. Cost of special patterns 40,000
2. Other direct expenses 2,000
3. Royalty 8,000
Prime Cost (1) 3,50,000 3,50,000
Add: Factory expenses

1. Factory Rent & Insurance 5,000
2. Factory Indirect Wages 3,000
3. Factory Indirect Material 1,000
4. General Works overheads 2,000
Factory Cost (2) 3,61,000 3,61,000
Add: Office Expenses

1. Office Indirect Materials 5,000
2. Post & Telegram 2,000
3. Printing & Stationery 500
Cost of Production (3) 3,68,500 3,68,500
Add: Selling & Distribution Expenses

1. Carriage Outward 2,500
2. Selling cost 4,000
3. Travelling salesman’s salary 4,000
4. Bad debts written off 1,000
Total Cost (4) 3,80,000 3,80,000
Add: Profit for the year (5) 20,000 20,000
Sales 4,00,000 4,00,000
Percentage of profit earned to sales= Profit * 100

Sales
3
= 20,000* 100
4,00,000
= 5% on sales
2. FAM by B.S. Shah Prakashan, Pg. 123

Solution:
Cost Sheet for the month of March, 2016
Particulars Amount (Rs.) Amount (Rs.)
Raw Materials consumed
Opening stock of raw materials 50,800
Add: Purchases of raw materials 43,400
Add: Carriage inward 700
Less: Closing stock of raw materials (61,000)
Materials consumed 33,900
Add: Productive Wages 34,900
68,800
Opening stock of work-in-progress 15,600
Less: closing stock of work-in-progress (17,200)
Prime Cost 67,200
Add: Factory overheads

Indirect wages 1,200
Depreciation & maintenance of plant 3,300
Drawing office expenses 2,000
Works salaries 3,900
Stores expenses 700
Indirect materials 14,200 25,300
Factory or Works Cost 92,500
Add: Administration Overheads

1,200 1,200
Cost of Production 93,700
Add: Opening stock of finished goods 35,800

Less: Closing stock of finished goods (21,200)
Cost of Production of goods sold 1,08,300

Carriage Outward 2,000
Expenses of participating in
industrial exhibition 5,000 7,000
4
Total Cost 1,15,300
Note: Interest on debentures is a financial expense and goodwill written off is an
intangible asset written off, and therefore they will not be shown in the cost sheet.
3. FAM B.S.Shah Pg. 129 Sum. 6

In the books of Company
Cost sheet for the month of August, 2005
Units Produced and Sold- 5000 units
Direct Materials 6000kg. * Rs. 5 per kg. 30,000
Less: Sale of scrap of material (2,000)
28,000 5.60
Add: Direct Labour cost 5000 lab. Hrs* Rs. 4 per lab. hour 20,000 4.00
Add: Direct expenses 7,000 1.4
Prime Cost (1) 55,000 11.00

Fixed 10,000 2.0
Variable (20000*50%) 10,000 2.0
20,000 4.0
Factory Cost/Works Cost (2) 75,000 15.0
Add: Office Overheads (33.33% of Factory Cost) 25,000 5.00

Cost of Production/Office Cost (3) 1,00,000 20.0
Add: Selling & Distribution Overheads (10% on cost of 10,000 2.0

production)
Total Cost/Cost of Sales (4) 1,10,000 22
Add: Profit 27,500 5.50
Sales 1,37,500 27.50
1. Labour hours= no. Of laborers* no. Of hours

50 labor hours
10 laborers*5 hours per laborer
2. Profit is 20% on S.P

If SP is Rs. 100, Profit will be Rs. 20, then CP will be Rs. 80.
Here, the cost price is Rs. 1,10,000, then profit will be ?
5
Profit CP
20 80
? 1,10,000
Therefore, 1,10,000*20 =Rs. 27,500
80
3. Universal Furniture Manufacturing Ltd. Sum. 7 Pg. 131, FAM, B.S. Shah
In the books of Universal Furniture Manufacturing Ltd.

Cost Sheet for the year ending 31st March, 2006
Production & Sales- 10,000 tables
Particulars Total cost Unit cost
(Rs.) (Rs.)
Raw materials consumed:
Opening stock of materials 12,000
Add:Purchases of raw material 1,70,000
Less: closing stock of materials (16,000)
Materials consumed 1,66,000
Add: wages 2,90,000
4,56,000
Add: Opening stock of Work-in-Progress 10,000
Prime Cost 4,60,000 46.00

Establishment ch. Of factory 36,000
Factory power 40,000
Light & fan of factory 6,000
Engg. Office exp. 20,000
Misc. Factory exp. 5,000
Rep. & depreciation of factory 35,000
Less: sale of factory scrap (2000) 1,40,000 14

Works Cost 6,00,000 60
Add: Office overheads

Establishment ch. Of office 1,04,000
Light& fan ch. Of office 6,000
Misc. Exp. Of office 6,000
Repairs & depreciation of office 4,000
1,20,000 12
Cost of production 7,20,000 72
Add: Selling & distribution overheads

Advertisement 40,000
6
Carriage outward 10,000
50,000 05
Cost of Sales/ Total Cost 7,70,000 77
Add: Profit 1,80,000 18

Sales 9,50,000 95
Note: 1. Interest on investment, profit on sale of machinery, provision for taxation are items
which do not appear in the cost sheet.
2.Since there is no opening and closing stock of finished goods, production=sales=10,000 units.
Sum no. 9 Pg. 135

Note1- Calculation of units of sales
Opening stock of finished goods (units)+production during the year (units) - sales during the year(
units)= closing stock (units)
Therefore, Opening stock of finished goods (units)+production during the year (units)-closing stock
(units)= sales during the year(units)
2000+4000-1000=5000 units is the units sold during the year.
Cost Sheet for the year ending ------

Units Produced- 4000 units and Units Sold- 5000 units
Particulars Cost (Rs.) Total cost Unit cost
(Rs.) (Rs.)
Raw materials consumed
Opening stock of raw material 20,000
Add: Purchases of raw material 1,00,000
Add: expenses relating to pur. of raw material 15,000
Less: closing stock of raw material (10,000)
Cost of Raw materials consumed 1,25,000 1,25,000 31.25
Add: Direct Labour cost 60,000 15
Add: Opening stock of work-in-progress 25,000

Prime Cost (1) 2,00,000 50

Fixed 10,000
Variable (8*4000 units) 32,000
42,000 10.5
Factory Cost/Works Cost (2) 2,42,000 60.5
Add: Office overheads 18,000

Cost of Production/Office Cost (3) 2,60,000 65
7
Add: Opening stock of finished goods 1,20,000
Less: closing stock of finished goods (65,000)
Cost of production of goods sold 3,15,000 63
(divide by
sales units)
Add: selling & distribution expenses (Rs.5 25,000 5
*5000 units)
Add: Profit 60,000 12
Sales 4,00,000 80
Note: value of closing stock of finished goods

Units Cost(Rs.)
Prod. 4,000 2,60,000
Closing stock1,000 ?
2,60,000*1000 =Rs. 65,000
4,000
Sum. No. 4 Pg.126
1. Quantity of sales
Opening stock of finished goods(tons) +production(tons)-closing stock of finished goods (tons)= sales
(tons)
1000+16000-2000=15000 tons is the quantity of sales
Cost Sheet for the period from 1st July, 2005 to 31st December, 2005
Production- 16,000 tons Sales- 15,000 tons
8
Particulars Cost (Rs.) Total cost Unit cost
(Rs.) (Rs.)
Raw materials consumed
Opening stock of raw material 20,000
Add: Purchases of raw material 1,20,000
Add: carriage inwards 1,440
Less: closing stock of raw material (22,240)
Cost of Raw materials consumed
1,19,200 7.45
Add: Direct Labour wages 1,00,000 6.25
Prime Cost (1) 2,19,200 13.70
Add: Works overheads 40,000 2.5
Add: Opening stock of work-in-progress 4,800

Less: Closing stock of work-in-progress (16,000)
Factory Cost/Works Cost (2) 2,48,000 15.5
Add: Office overheads 8,000 0.5

Cost of Production/Office Cost (3) 2,56,000 16
Add: Opening stock of finished goods 16,000
Less: closing stock of finished goods (32,000)
Cost of production of goods sold 2,40,000 16
(divide by
quantity sold)
Add: advertisement, discount allowed and 15,000 1

selling expenses (Re.1 *15000 tons)
Add: Profit 45,000 3
Sales 3,00,000 20
9
Chapter 1
1. ______________ is nothing but the right process of selecting an appropriate, logical, practical
2. ______________ is a person who carried on business exclusively by and for himself.
private gain.
4. A ______________ is a form of business organization in which the funds of large number of
5. ______________ is the language of business.
6. The object/s of accounting ______________.
8. Accounting ______________ are the Rules of Action or the Methods and Procedures of
2 All in One Multiple Choice Questions
9. According to ______________ concept, assets purchased are generally recorded in

10. According to ______________ concept, revenue is recognized only when the sale is
performed.
11. Accounting ______________ are the traditions, usage and customs which are in used since long.
15. Accounts in the names of persons are known as ______________.
16. Accounts in the names of assets are known as ______________.
17. Accounts in the respect of expenses and incomes are known as ______________.
18. Every transaction must have ______________ aspects and involve ______________ accounts.
19. A ______________ is an accounting entry that either increases an asset or expense account,
20. A ______________ is an accounting entry that either increases a liability or equity account,
All in One Multiple Choice Questions 3
21. Debit the receiver, credit the giver is the rule of ______________.
22. Debit what comes in, credit what goes out is the rule of ______________.
23. Debit all expenses and losses, credit all incomes and gains is the rule of ______________.
24. ______________ is a record of transaction in the books of Accounts.
25. ______________ is an exchange of money or money’s worth.
26. ______________ is a book of original entry.
27. ______________ is a bound book of different accounts.
28. ______________ is a summarized record of transactions related to one person, one asset, one
29. ______________ means totaling of sums in the books of accounts.
30. ______________ are obligations or debts that the enterprise must pay in money or services at
31. ______________ are economic resources of an enterprise that can be usefully expressed in
monetary terms.
32. ______________ are commodities, purchased or manufactured for resale with a view to earn
profit.
33. ______________ are the amounts the business earns by selling its products or providing
34. ______________ are the costs incurred by a business in the process of earning revenue.
35. ______________ are persons and/or other entities who owe to an enterprise an amount for
36. ______________ are persons and/or other entities that have to be paid by an enterprise an
37. ______________ is a list of the entire general ledger account names and balances; it is
38. The difference of two sides of an account is called as ______________.
39. ______________ deals with expenses related to or identified with products, which may only
40. In ______________ stocks are valued at lower of cost or market value.
41. The primary objective of ______________ is to provide necessary information to the
decision-making.
42. The Success of ______________ does not depend upon Management Accounting system.
43. In______________ no statutory requirement of audit for reports.

(a) Tally (b) Marg
(c) Saral (d) SAP
45. The Advantage/s of Accounting Software ______________.
46. Internal and external parties are the users of ______________.
47. Capital A/c generally shows ______________ balance.
(a) Cash (b) Debit
48. Asset A/c shows ______________ balance.
(a) Cash (b) Debit
49. There are ______________ columns in Journal.
(a) Two (b) Three
(c) Four (d) Five
50. Explanatory note written below an entry recorded in the Journal is called as ______________.
1. (a) 11. (a) 21. (a) 31. (a) 41. (b)

2. (b) 12. (d) 22. (b) 32. (b) 42. (d)
3. (a) 13. (a) 23. (c) 33. (d) 43. (b)
4. (c) 14. (d) 24. (a) 34. (b) 44. (a)
5. (c) 15. (a) 25. (c) 35. (a) 45. (d)
6. (d) 16. (b) 26. (a) 36. (b) 46. (a)
7. (c) 17. (c) 27. (b) 37. (d) 47. (c)
8. (a) 18. (a) 28. (d) 38. (c) 48. (b)
9. (d) 19. (a) 29. (a) 39. (d) 49. (d)
10. (d) 20. (b) 30. (b) 40. (a) 50. (a)
Chapter 2
1. ______________ shows the firm’s assets, liabilities, and stockholders’ equity as of the report
date.
2. ______________ shows the results of the firm’s operations and financial activities for the
reporting period.
3. ______________ includes explanations of various activities, additional details of some
accounts, and other items as mandated by the regulatory authorities, bodies from time to time.
4. ______________ is a formal official record of the financial activities and position of a
business, person, or other entity.
5. ______________ provides the vital information related to the profitability, liquidity and
solvency of the business.
6. ______________ is the simplest business form under which one can operate a business.
7. ______________ is not a separate legal entity.
8. For every item given in Trial Balance, ______________ effect should be given.
(a) Dual (b) Single
9. For every item given in Adjustment, ______________ effect should be given.
(a) Dual (b) Single
10. ______________ are nothing but the entries which are not included in the original Trial
Balance.
11. Every adjustment has two effects, i.e., ______________.

12. Depreciation is debited to ______________.
13. Income Accrued but Not Received is recorded to ______________.
14. Prepaid Expenses shown at ______________.
15. Closing Stock is recorded to ______________.
16. Outstanding Expenses shown at ______________.
17. Goods Withdrawn from business is considered as ______________.
18. Interest on Capital is debited to ______________.
19. Interest on Drawings is credited to ______________.
20. Goods Distributed as Free Samples is debited to______________.
21. Reserve for Discount on Creditors is credited to ______________.
22. ______________ information is ignored in the financial statements.
(a) Cash (b) Credit
23. The financial statements are based on the accounting ______________.
(a) Accounting Concepts and Conventions
(b) Accounting Concepts
(c) Accounting Conventions

24. Accounting year starts from ______________.
(a) 1st January (b) 1st April
(c) 1st March (d) 1st June
25. Accounting year ends on ______________.
(a) 31st January (b) 31st August
(c) 31st March (d) 31st December
26. Returns outwards are deducted from ______________.
27. Returns inwards are deducted from ______________.
28. Carriage inward is debited to ______________.
29. Carriage outward is debited to ______________.
30. Goodwill is recorded to ______________.
31. Depreciation is ______________ in/from asset.
32. In ______________ business, all incomes and losses are taxed on the individual’s personal
income tax return.
33. Freight is recorded to ______________.
34. Outstanding Expenses are always ______________.
35. Prepaid Expenses are always ______________.
36. Gross Profit is transferred to ______________.

37. Goods Withdrawn for Personal Use by Proprietor is treated as ______________.
38. Royalty is recorded to ______________.
39. Purchase Return is also called as ______________.
40. Sales Return is also called as ______________.
41. RDD is deducted from______________.
42. ______________ is a non cash expense.
43. Income Received in Advance is considered as ______________.
44. An insurance charge of goods is recorded to ______________.
45. Wages and Salaries item is recorded to ______________.
46. Patents item is recorded at ______________.
47. ______________ is not a current asset.
48. ______________ is not a fixed asset.
49. ______________ is not a current liability.

50. Net Profit is added in ______________.
1. (d) 11. (a) 21. (d) 31. (a) 41. (d)

2. (a) 12. (d) 22. (c) 32. (a) 42. (a)
3. (d) 13. (b) 23. (a) 33. (c) 43. (d)
4. (a) 14. (a) 24. (b) 34. (c) 44. (a)
5. (a) 15. (d) 25. (c) 35. (c) 45. (c)
6. (b) 16. (a) 26. (b) 36. (d) 46. (d)
7. (b) 17. (d) 27. (a) 37. (b) 47. (d)
8. (b) 18. (d) 28. (c) 38. (c) 48. (d)
9. (a) 19. (d) 29. (d) 39. (d) 49. (a)
10. (c) 20. (d) 30. (b) 40. (c) 50. (c)
Chapter 3
Cost Accounting
1. ______________ provides a specialized technique, which provides prompt and accurate
______________.
(a) Cost (b) Price
3. The techniques and process of ascertaining cost is called as ______________.
4. With the help of ______________, we can control the cost.
5. With the help of ______________, we can find out the cost.
6. The total of Direct Material + Direct Labour + Direct Expenses is called as ______________.
7. Direct Expenses are also called as ______________.
8. Depreciation is an example of ______________.
9. The aggregate of all indirect expenses is ______________.
10. Factory Cost is also called as ______________.
11. Cost of Sales is also called as ______________.
12. Telephone bill, Electricity bill is an example of ______________.

13. Fixed Cost is also called as ______________.
14. Material and Labour is an example of ______________.
15. Repairs and Maintenance is an example of ______________.
16. Cost incurred because of lock outs is an example of ______________.
17. One-time set-up cost of a plant or project is called as ______________.
18. Standard Cost is also called as ______________.
19. Variable Cost is also called as ______________.
20. Rent is an example of ______________.
21. ______________ is the difference between the costs of two alternatives.
22. Cost incurred as per policy of top management is called as ______________.
23. Notional cost is nothing but ______________.
24. Depreciation on Plant and Rent is an example ______________.
ascertained and used for the purpose of control is called as ______________.
26. ______________ a statement, which shows various components of total cost of a product.
27. ______________ is prepared on the basis of actual cost incurred.
28. Haulage Charges is an example of ______________.
29. Counting House Salaries is an example of ______________.
30. Carriage Outward is an example of ______________.
31. Opening Stock of Finished Goods is added in ______________.
32. Direct Labour Charges is also called as ______________.
33. Cost unit is divided into ______________.
34. Cost of converting raw material into finished goods is also called as ______________.
35. According to Elements, Cost is divided into ______________ categories.
(a) One (b) Two
(c) Three (d) Four
36. ______________ means the amount spent to sell a company’s products.
37. Insurance is an example of ______________.

38. ______________ cost directly varies with volume of output.
periods also is ______________.
______________.
______________.
42. The value of benefit sacrificed in favour of an alternative course of action is ______________
cost.
______________ in Prime Cost.
44. Carriage Inward is added while calculating ______________.
45. Profit Margin is added in ______________.
46. Abnormal Wastage of Material is added in ______________.
47. Discount allowed is an example of ______________.
48. Sale of Scrap is ______________ after addition of factory overheads in Prime Cost.
49. Cleaning Charges is an example of ______________.
50. ______________ is the process of ascertaining costs whereas ______________ is the process
ascertain cost.
1. (a) 11. (a) 21. (a) 31. (c) 41. (a)

2. (a) 12. (d) 22. (b) 32. (d) 42. (c)
3. (a) 13. (d) 23. (d) 33. (c) 43. (b)
4. (d) 14. (b) 24. (a) 34. (c) 44. (d)
5. (a) 15. (d) 25. (b) 35. (c) 45. (a)
6. (c) 16. (c) 26. (a) 36. (a) 46. (d)
7. (a) 17. (c) 27. (a) 37. (c) 47. (d)
8. (d) 18. (a) 28. (c) 38. (d) 48. (b)
9. (c) 19. (c) 29. (d) 39. (c) 49. (b)
10. (c) 20. (c) 30. (b) 40. (a) 50. (a)
Chapter 4
Cost Control
1. Cost of storing the goods as well as the interest on the capital is called as ______________.
(a) Inventory Carrying Cost (b) Order Placing Cost
(c) Buying Cost (d) Fixed Cost
2. Cost of placing the orders and receiving the goods are called as ______________.
(a) Inventory Carrying Cost (b) Variable Cost
3. The main objective of EOQ is to ______________ the total costs.
(a) Minimize (b) Control
(c) Maintain (d) Avoid
4. ______________ analysis is based on Selective Inventory Management.
(a) EOQ (b) JIT
(c) ABC (d) HML
5. Calculate EOQ if Cost of material per unit ` 40, Annual requirement 1600 units, Cost of
placing and receiving one purchase order ` 50, Annual carrying cost of inventory is 10% of
inventory value.
(a) 200 Units (b) 175 Units
(c) 225 Units (d) 250 Units
6. A level of inventory that should never be exceeded is ______________.
(a) Maximum Stock Level (b) Minimum Level
(c) Re-order Stock Level (d) Danger Stock Level
7. A level below which stock should not be allowed to fall is ______________.
8. A level at which store keeper should intimate purchase department for fresh/new supply is
______________.
9. A level below which the stock should never be allowed to fall under emergency
circumstances is ______________.
10. A strategy for inventory management in which raw materials and components are delivered
from the vendor or supplier immediately before they are needed in the manufacturing process
is ______________.
(a) Scientific Purchasing (b) Immediate Buying
(c) JIT (d) None of the above
11. Out of the following, which is the method of issuing material.

(a) LIFO (b) FIFO
(c) Simple Average (d) All of the above
12. Full Form of LIFO is ______________.
(a) Latest in First Out (b) Last in First Out
(c) Largest in First Out (d) Lowest in First Out
13. The formula of Re-order Stock Level is ______________.
(a) Maximum Consumption × Maximum Reorder Period
(b) Reorder Level − (Normal Consumption × Normal Reorder Period)
(c) Reorder Level + Reorder Quantity − (Minimum Consumption × Minimum Reorder
Period)
(d) Average Usage × Maximum Reorder Period for Emergency Purchases
14. The formula of Minimum Stock Level is ______________.
(a) Maximum Consumption× Maximum Reorder Period
Period)
15. The formula of Maximum Stock Level is ______________.
Period)
16. The formula of Danger Stock Level is ______________.
Period)
17. Material Losses are generally classified into two categories, i.e., ______________.
(a) Normal and Abnormal
(b) Avoidable and Unavoidable
(c) Controllable and Non-controllable
(d) Fixed and Variable
18. ______________ is the example of Material Losses.
(a) Wastage (b) Scarp
(c) Spoilage or Defectives (d) All of the above
19. Material Control includes ______________.

(a) Fixed Cost Control (b) Debtors Control
(c) Inventory Control (d) Creditors Control
20. The main objective/s of store-keeping is/are ______________ .
(a) To protect materials from losses and damages
(b) To avoid over and under-stocking of materials
(c) To minimize the storage costs of materials
21. Wages which can be indentified with and allocated to cost centers and cost units is
______________.
(a) Direct Labour Cost (b) Indirect Labour Cost
(c) Fixed Labour Cost (d) Variable Labour Cost
22. ______________ is defined as the rate of change of labour force in an organization during a
specified period.
(a) Labour Turnover (b) Labour Rate
(c) Labour Cost (d) Employee Change Rate
23. Labour Turnover Causes are classified into ______________.
(a) Personal Causes (b) Avoidable Causes
(c) Unavoidable Causes (d) All of the above
24. ______________ includes all those costs which are incurred to keep the workers satisfied, so
that they are prevented from leaving the organization.
(a) Direct Labour Cost (b) Preventive Cost
(c) Maintenance Cost (d) Variable Labour Cost
25. Labour Turnover Rate is calculated as per ______________.
(a) Separation Method (b) Replacement Method
(c) Flux Method (d) All of the above
26. ______________ is recording of incoming and outgoing time of all employees in factory.
(a) Time Keeping (b) Time Booking
(c) Time Noting (d) All of the above
27. ______________ is recording of the time of employees spent on various job.
28. ______________ study is concerned with determining the proper method for performing the
job so that there is no wastage in movement.
(a) Time (b) Motion
(c) General (d) Special
29. ______________ study is concerned with the determination of standard time required by a
person of average ability to perform a jo(b)
(a) Time (b) Motion
30. Out of the following, which factor/s affecting the Labour Cost.
(a) Assessment of Manpower Requirement
(b) Time and Motion Study
(c) Control over Idle Time and Overtime
31. Which department/s is/are closely associated with the Control of Labour Cost?
(a) Personnel and Payroll Department
(b) Time Keeping Department
(c) Engineering and Work Study Department
32. ______________ arises from replacement of workers who leave the organization.
(c) Maintenance Cost (d) Replacement Cost
33. Method/s of Time Keeping is/are ______________.
(a) Attendance Register Method
(b) Token or Disc Method
(c) Time Recording Clocks & Dial Time Records
34. Method/s of Time Booking is/are ______________.
(a) Daily Time Sheet (b) Weekly Time Sheet
(c) Job Cards or Job Tickets (d) All of the above
35. ______________ refers to the estimation of standard time, i.e., the time allowed for
completing one piece of job using the given metho(d)
(a) Work Measurement (b) Time Measurement
(c) Period Measurement (d) None of the above
36. ______________ costs are the operating costs of a business enterprise which cannot be traced
to a particular unit of output.
(a) Material (b) Labour
(c) Overhead (d) Foxed & Variable
37. The ______________ is the process of recording each item of cost in the books of accounts
maintained for the purpose of ascertainment of cost of each Cost Centre or Cost Unit.
(a) Collection of Overhead (b) Allocation of Overhead
(c) Apportionment of Overhead (d) Classification of Overhead
38. ______________ means, the allotment of whole items of cost to cost centres or cost units.
39. ______________ means, the allotment to two or more departments or cost centers of
proportions of common items of cost on estimated basis of benefit received.
40. The process of apportionment is also known as ______________ of overhead.

(a) Departmentalization (b) Centralization
(c) Decentralization (d) Classification
41. Methods for Allocation & Apportionment of Overhead/s is/are ______________.
(a) Primary Distribution of Overhead
(b) Secondary Distribution of Overhead
(c) Simultaneous Equation Method of Overhead
42. The overhead, which can be easily identified with a particular department that is charged only
to the specific department, is called ______________.
(a) Collection (b) Allocation
(c) Apportionment (d) Classification
43. Insurance of Plant is distributed on the basis ______________.
(a) Value of Plant (b) Ratio of Plant
(c) Quantity of Production (d) None of the above
44. Recreation Expenses is distributed on the basis ______________.
(a) No. of Workers (b) Days Spend by Workers
(c) Time Spent by Workers (d) None of the above
45. Electric Power is distributed on the basis ______________.
(a) Horse Power (b) KWH
(c) No. of Machine Hours (d) All of the above
46. Materials Handling Charges is distributed on the basis ______________.
(a) Value of Materials (b) No. of Stores Requisitions
(c) Weight or Value of Materials (d) All of the above
47. Allocation of Overheads is ______________ process of allotment of overheads.
(a) direct (b) indirect
(c) fixed (d) variable
48. Apportionment of Overheads is ______________ process of allotment of overheads.
49. ______________ deals with the whole items of cost.
50. ______________ deals with only proportion of items of cost.
1. (a) 11. (d) 21. (a) 31. (d) 41. (d)

2. (b) 12. (b) 22. (a) 32. (d) 42. (b)
3. (a) 13. (a) 23. (d) 33. (d) 43. (a)
4. (c) 14. (b) 24. (b) 34. (d) 44. (a)
5. (a) 15. (c) 25. (d) 35. (a) 45. (d)
6. (a) 16. (d) 26. (a) 36. (a) 46. (d)
7. (b) 17. (a) 27. (b) 37. (a) 47. (a)
8. (c) 18. (d) 28. (b) 38. (b) 48. (b)
9. (d) 19. (c) 29. (a) 39. (c) 49. (b)
10. (c) 20. (d) 30. (d) 40. (a) 50. (c)
Chapter 5
1. Marginal Costing is also called as ______________.
2. In ______________ total costs cannot be easily segregated into fixed costs and variable costs.
3. P/V Ratio is mainly known as ______________.
4. ______________ analysis classifies all costs as either fixed or variable.
(a) CVP (b) ABC
(c) JIT (d) HML
5. ______________ that point where no profit or no loss position is observed.
6. ______________ is the difference between sales revenue and variable cost.
7. Contribution is also called as ______________.
8. ______________ is the difference between actual sales or output and the break even sales.
9. ______________ is an angle where sales line intersects total cost line which indicates profit
10. If contribution is ` 3,00,000 and Sales is ` 10,00,000, then what is P/V Ratio?
(a) 20% (b) 30%
(c) 33.33% (d) 1/3
(a) 70% (b) 80%
(c) ¾ (d) ½
12. If Fixed Cost is ` 2,50,000 and P/V Ratio is 60%, then what is BEP in `?
(a) ` 4,16,667 (b) ` 3,83,333
(c) ` 3,75,000 (d) ` 4,10,000
13. If Fixed Cost is ` 2,50,000 and Profit is ` 3,50,000, then what is the amount of Contribution?
(a) ` 1,00,000 (b) ` 6,00,000
(c) ` 3,75,000 (d) ` 4,10,000
14. If Sales are ` 50,000 and P/V Ratio is 20%, then what is the amount of Variable Cost?
(a) ` 40,000 (b) ` 10,000
(c) ` 25,000 (d) ` 30,000
15. If contribution is ` 3,00,000 and Profit is ` 1,00,000, then what is the amount of Fixed Cost?
(a) ` 4,00,000 (b) `2,00,000
(c) ` 2,50,000 (d) `3,00,000
16. If Sales are ` 3,00,000 and P/V ratio is 20%, then what is the amount of Variable Cost?
(a) ` 2,40,000 (b) ` 80,000
(c) ` 2,70,000 (d) ` 2,00,000
17. The correct formula of Contribution is ______________.
18. The correct formula of P/V Ratio is ____________.
19. Marginal Costing is a Costing ______________.
______________.
21. Standard cost is the ______________ cost.
22. Small organizations cannot adopt ______________ technique.
23. ______________ means difference between standard cost and actual cost.
24. ______________ helps management to understand the present costs and then to control the
future costs.
25. Variances are classified in ______________ categories.
(a) One (b) Two
(c) Three (d) Four
26. If Standard Cost ` 80 and Actual Cost ` 70, then what is the amount of Material Cost
Variance?
(a) 10 (b) –10
(c) 150 (d) 20
27. If Standard Price ` 8 & Standard Qty.10, Actual Price ` 7 & Actual Qty.10, then what is the
amount of Material Price Variance?
(a) 10 (b) –10
(c) 150 (d) 20
amount of Material Usage Variance?
(a) 10 (b) –10
(c) 50 (d) 0
29. If Standard Rate ` 1.50 & Standard Hours 1600, Actual Rate ` 2 & Actual Hours 1500, then
what is the amount of Labour Cost Variance?
(a) 600 (b) –600
(c) 500 (d) 400
what is the amount of Labour Rate Variance?
(a) 750 (b) –750
(c) 600 (d) 400
31. If Standard Rate ` 1.50 & Standard Hours 1600, Actual Rate `2 & Actual Hours 1500, then
what is the amount of Labour Efficiency Variance?
(a) 150 (b) –150
(c) 300 (d) 200
32. The correct formula for verification of Material Cost Variance is ______________.
33. The correct formula for verification of Labour Cost Variance is ______________.
34. In Standard Costing comparison between ______________ is carried out.
35. The Disadvantages of Standard Costing is/are ______________.
36. ______________ is a concrete precise picture of the total operation of an enterprise in
monetary terms.
(a) Budget (b) Plan
37. Accuracy cannot be maintained is a limitation of ______________.
______________.
39. ______________ is the budget in which adjustment is possible according to change in
expenses to be incurred during budgeted period that is known as ______________.
41. ______________ budget highlights that the expenditures to be incurred in budget period will
______________.
43. A ______________ is a powerful tool available to the management for the purpose of
maximizing profits.
44. Fixed Budget is also known as ______________.
45. Normal Profit means ______________.
46. Personnel Budget is also called as ______________.
47. In cash budget, ______________ transactions are considered.
(a) Cash (b) Credit
48. Budget is prepared for a ______________ period of time.
(a) Fixed (b) One Month
(c) One Year (d) None of the above
49. Purchase Budget is also called as ______________.
50. ______________ is the plan of proposed investment in the fixed assets.
1. (a) 11. (c) 21. (a) 31. (a) 41. (b)

2. (a) 12. (a) 22. (a) 32. (a) 42. (c)
3. (a) 13. (b) 23. (b) 33. (a) 43. (a)
4. (a) 14. (a) 24. (b) 34. (a) 44. (a)
5. (b) 15. (b) 25. (d) 35. (d) 45. (a)
6. (d) 16. (a) 26. (a) 36. (a) 46. (b)
7. (d) 17. (d) 27. (a) 37. (a) 47. (c)
8. (c) 18. (d) 28. (d) 38. (d) 48. (a)
9. (a) 19. (a) 29. (b) 39. (a) 49. (b)
10. (b) 20. (a) 30. (b) 40. (a) 50. (b)

Dr. D. Y. Patil Unitech Society’s
Dr. D.Y. PATIL INSTITUTE OF MANAGEMENT & RESEARCH,
Sant Tukaram Nagar, Pimpri, Pune-411018, Maharashtra, India.

Chapter 1
private gain.

performed.
19. A is an accounting entry that either increases an asset or expense account, or
decreases a liability or equity account.
monetary terms.
profit.
decision-making.
(a) Tally (b) Marg
(c) Saral (d) SAP
(a) Cash (b) Debit
(a) Cash (b) Debit
(a) Two (b) Three
(c) Four (d) Five
1. (a) 11. (a) 21. (a) 31. (a) 41. (b)

2. (b) 12. (d) 22. (b) 32. (b) 42. (d)
3. (a) 13. (a) 23. (c) 33. (d) 43. (b)
4. (c) 14. (d) 24. (a) 34. (b) 44. (a)
5. (c) 15. (a) 25. (c) 35. (a) 45. (d)
6. (d) 16. (b) 26. (a) 36. (b) 46. (a)
7. (c) 17. (c) 27. (b) 37. (d) 47. (c)
8. (a) 18. (a) 28. (d) 38. (c) 48. (b)
9. (d) 19. (a) 29. (a) 39. (d) 49. (d)
10. (d) 20. (b) 30. (b) 40. (a) 50. (a)
Chapter 2
1. shows the firm’s assets, liabilities, and stockholders’ equity as of the report
date.
2. shows the results of the firm’s operations and financial activities for the
reporting period.
3. includes explanations of various activities, additional details of some
4. is a formal official record of the financial activities and position of a
5. provides the vital information related to the profitability, liquidity and
(a) Dual (b) Single
(a) Dual (b) Single
10. are nothing but the entries which are not included in the original Trial
Balance.
(a) Cash (b) Credit

25.25.Accounting year ends on .
income tax return.

1. (d) 11. (a) 21. (d) 31. (a) 41. (d)

2. (a) 12. (d) 22. (c) 32. (a) 42. (a)
3. (d) 13. (b) 23. (a) 33. (c) 43. (d)
4. (a) 14. (a) 24. (b) 34. (c) 44. (a)
5. (a) 15. (d) 25. (c) 35. (c) 45. (c)
6. (b) 16. (a) 26. (b) 36. (d) 46. (d)
7. (b) 17. (d) 27. (a) 37. (b) 47. (d)
8. (b) 18. (d) 28. (c) 38. (c) 48. (d)
9. (a) 19. (d) 29. (d) 39. (d) 49. (a)
10. (c) 20. (d) 30. (b) 40. (c) 50. (c)
Chapter 3
Cost Accounting
.
(a) Cost (b) Price

(a) One (b) Two
(c) Three (d) Four

periods also is .
.
.
cost.
in Prime Cost.
ascertain cost.
1. (a) 11. (a) 21. (a) 31. (c) 41. (a)

2. (a) 12. (d) 22. (b) 32. (d) 42. (c)
3. (a) 13. (d) 23. (d) 33. (c) 43. (b)
4. (d) 14. (b) 24. (a) 34. (c) 44. (d)
5. (a) 15. (d) 25. (b) 35. (c) 45. (a)
6. (c) 16. (c) 26. (a) 36. (a) 46. (d)
7. (a) 17. (c) 27. (a) 37. (c) 47. (d)
8. (d) 18. (a) 28. (c) 38. (d) 48. (b)
9. (c) 19. (c) 29. (d) 39. (c) 49. (c)
10. (c) 20. (c) 30. (b) 40. (a) 50. (a)
Chapter 4
(a) CVP (b) ABC
(c) JIT (d) HML
10. If contribution is Rs 3,00,000 and Sales is Rs 10,00,000, then what is P/V
Ratio? (a) 20% (b) 30%
(c) 33.33% (d) 1/3
(a) 70% (b) 80%
(c) ¾ (d) ½
12. If Fixed Cost is Rs. 2,50,000 and P/V Ratio is 60%, then what is BEP in
`? (a) ` 4,16,667 (b) ` 3,83,333
(c) ` 3,75,000 (d) ` 4,10,000
13. If Fixed Cost is Rs. 2,50,000 and Profit is Rs. 3,50,000, then what is the amount of
Contribution? (a) ` 1,00,000 (b) ` 6,00,000
(c) ` 3,75,000 (d) ` 4,10,000
14. If Sales are Rs. 50,000 and P/V Ratio is 20%, then what is the amount of Variable
Cost? (a) ` 40,000 (b) ` 10,000
(c) ` 25,000 (d) ` 30,000
15. If contribution is Rs. 3,00,000 and Profit is ` 1,00,000, then what is the amount of Fixed
Cost? (a) ` 4,00,000 (b) `2,00,000
(c) ` 2,50,000 (d) `3,00,000
16. If Sales are Rs. 3,00,000 and P/V ratio is 20%, then what is the amount of Variable
Cost? (a) ` 2,40,000 (b) ` 80,000
(c) ` 2,70,000 (d) ` 2,00,000
.
future costs.
(a) One (b) Two
(c) Three (d) Four
26. If Standard Cost Rs. 80 and Actual Cost Rs. 70, then what is the amount of Material Cost
Variance?
(a) 10 (b) –10
(c) 150 (d) 20
27. If Standard Price Rs. 8 & Standard Qty.10, Actual Price Rs. 7 & Actual Qty.10, then what is
the amount of Material Price Variance?
(a) 10 (b) –10
(c) 150 (d) 20
the amount of Material Usage Variance?
(a) 10 (b) –10
(c) 50 (d) 0
29. If Standard Rate Rs. 1.50 & Standard Hours 1600, Actual Rate ` 2 & Actual Hours 1500, then
(a) 600 (b) –600
(c) 500 (d) 400
(a) 750 (b) –750
(c) 600 (d) 400
31. If Standard Rate Rs. 1.50 & Standard Hours 1600, Actual Rate Rs. 2 & Actual Hours 1500,
(a) 150 (b) –150
(c) 300 (d) 200

monetary terms.
(a) Budget (b) Plan
.
.
maximizing profits.
(a) Cash (b) Credit
1. (a) 11. (c) 21. (a) 31. (a) 41. (b)

2. (a) 12. (a) 22. (a) 32. (a) 42. (c)
3. (a) 13. (b) 23. (b) 33. (a) 43. (a)
4. (a) 14. (a) 24. (b) 34. (a) 44. (a)
5. (b) 15. (b) 25. (d) 35. (d) 45. (a)
6. (d) 16. (a) 26. (a) 36. (a) 46. (b)
7. (d) 17. (d) 27. (a) 37. (a) 47. (c)
8. (c) 18. (d) 28. (d) 38. (d) 48. (a)
9. (a) 19. (a) 29. (b) 39. (a) 49. (b)
10. (b) 20. (a) 30. (b) 40. (a) 50. (b)

Chapter 3 - Demand and Supply - Sample Questions
Answers are at the end fo this file
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1) A relative price is 1)
A) the ratio of one price to another.
B) the difference between one price and another.
C) the slope of the supply curve.
D) the slope of the demand curve.
2) If the price of a candy bar is $1 and the price of a fast food meal is $5, 2)
A) the money price of a fast food meal is 1/5 of a candy bar.
B) the money price of a candy bar is 1/5 of a fast food meal.
C) the relative price of a fast food meal is 5 candy bars.
D) the relative price of a candy bar is 5 fast food meals.
3) If the price of a hot dog is $2 and the price of a hamburger is $4, 3)

A) the money price of a hamburger is 2 hot dogs.
B) the money price of a hot dog is 2 hamburgers.
C) the relative price of a hot dog is 1/2 of a hamburger.
D) the relative price of a hamburger is 1/2 of a hot dog.
4) The opportunity cost of good A in terms of good B is equal to the 4)

A) ratio of the price of good B to the price of good A.
B) ratio of the price of good A to the price of good B.
C) price of good A minus the price of good B.
D) price of good B minus the price of good A.
5) The opportunity cost of a hot dog in terms of hamburgers is 5)

A) the price of a hot dog minus the price of a hamburger.
B) the ratio of the slope of the supply curve for hot dogs to the slope of the supply curve for
hamburgers.
C) the ratio of the slope of the demand curve for hot dogs to the slope of the demand curve for
hamburgers.
D) the ratio of the price of a hot dog to the price of a hamburger.
6) Wants, as opposed to demands, 6)

A) depend on the price.
B) are the goods the consumer plans to acquire.
C) are the unlimited desires of the consumer
D) are the goods the consumer has acquired.
1
7) Demands differ from wants in that 7)
A) wants require a plan to acquire a good but demands require no such plan.
B) demands are unlimited, whereas wants are limited by income.
C) wants imply a decision about which demands to satisfy, while demands involve no specific
plan to acquire the good.
D) demands reflect a decision about which wants to satisfy and a plan to buy the good, while
wants are unlimited and involve no specific plan to acquire the good.
8) Scarcity guarantees that 8)

A) wants will exceed demands. B) demands will be equal to wants.
C) demands will exceed wants. D) most demands will be satisfied.
9) The quantity demanded is 9)

A) the amount of a good that consumers plan to purchase at a particular price.
B) independent of the price of the good.
C) independent of consumers' buying plans.
D) always equal to the equilibrium quantity.
10) The law of demand states that, other things remaining the same, the higher the price of a good, the 10)
A) smaller is the demand for the good.
B) smaller is the quantity of the good demanded.
C) larger is the quantity of the good demanded.
D) larger is the demand for the good.
11) The law of demand implies that, other things remaining the same, 11)
A) as the demand for cheeseburgers increases, the price of a cheeseburger will fall.
B) as the price of a cheeseburger rises, the quantity of cheeseburgers demanded will decrease.
C) as income increases, the quantity of cheeseburgers demanded will increase.
D) as the price of a cheeseburger rises, the quantity of cheeseburgers demanded will increase.
12) The law of demand states that the quantity of a good demanded varies 12)
A) inversely with its price.
B) directly with population.
C) directly with income.
D) inversely with the price of substitute goods.
13) Which of the following is consistent with the law of demand? 13)
A) A decrease in the price of a gallon of milk causes a decrease in the quantity of milk demanded.
B) An increase in the price of a soda causes a decrease in the quantity of soda demanded.
C) An increase in the price of a tape causes an increase in the quantity of tapes demanded.
D) A decrease in the price of juice causes no change in the quantity of juice demanded.
2
14) The law of demand implies that if nothing else changes, there is 14)
A) a linear relationship between price of a good and the quantity demanded.
B) a positive relationship between the price of a good and the quantity demanded.
C) a negative relationship between the price of a good and the quantity demanded.
D) an exponential relationship between price of a good and the quantity demanded.
15) Which of the following influences people's buying plans and varies moving along a demand curve? 15)
A) preferences B) the price of the good
C) income D) the prices of related goods
16) The law of demand states that 16)

A) a decrease in the price of a good shifts the demand curve leftward.
B) other things remaining the same, the higher the price of a good, the smaller is the quantity
demanded.
C) other thing remaining the same, the higher the price of a good, the larger is the quantity
demanded.
D) an increase in the price of a good shifts the demand curve leftward.
17) The law of demand implies that demand curves 17)

A) shift leftward whenever the price rises. B) shift rightward whenever the price rises.
C) slope down. D) slope up.
18) Each point on the demand curve reflects 18)

A) the highest price consumers are willing and able to pay for that particular unit of a good.
B) the highest price sellers will accept for all units they are producing.
C) the lowest-cost technology available to produce a good.
D) all the wants of a given household.
19) A drop in the price of a compact disc shifts the demand curve for prerecorded tapes leftward. From 19)
that you know compact discs and prerecorded tapes are
A) normal goods. B) substitutes. C) inferior goods. D) complements.
20) A substitute is a good 20)

A) of higher quality than another good. B) that is not used in place of another good.
C) that can be used in place of another good. D) of lower quality than another good.
21) People buy more of good 1 when the price of good 2 rises. These goods are 21)
A) normal goods. B) complements. C) substitutes. D) inferior goods.
22) Which of the following pairs of goods are most likely substitutes? 22)
A) compact discs and compact disc players B) lettuce and salad dressing
C) cola and lemon lime soda D) peanut butter and gasoline
3
23) The demand for a good increases when the price of a substitute ________ and also increases when 23)
the price of a complement ________.
A) falls; falls B) rises; falls C) rises; rises D) falls; rises
24) A complement is a good 24)

A) used in conjunction with another good. B) used instead of another good.
C) of lower quality than another good. D) of higher quality than another good.
25) Suppose people buy more of good 1 when the price of good 2 falls. These goods are 25)
A) substitutes. B) inferior. C) normal. D) complements.
26) As the opportunity cost of a good decreases, people buy 26)

A) more of that good but less of its complements.
B) less of that good and also less of its complements.
C) less of that good but more of its complements.
D) more of that good and also more of its complements.
27) People come to expect that the price of a gallon of gasoline will rise next week. As a result, 27)
A) next week's supply of gasoline decreases.
B) the price of a gallon of gasoline falls today.
C) today's supply of gasoline increases.
D) today's demand for gasoline increases.
28) The demand curve for a normal good shifts leftward if income ________ or the expected future 28)
price ________.
A) decreases; falls B) increases; rises C) increases; falls D) decreases; rises
29) If income increases or the price of a complement falls, 29)

A) the supply curve of a normal good shifts leftward.
B) the supply curve of a normal good shifts rightward.
C) the demand curve for a normal good shifts rightward.
D) the demand curve for a normal good shifts leftward.
30) If income decreases or the price of a complement rises, 30)

A) there is an upward movement along the demand curve for the good.
B) there is a downward movement along the demand curve for the good.
C) the demand curve for a normal good shifts leftward.
D) the demand curve for a normal good shifts rightward.
31) Normal goods are those for which demand decreases as 31)
A) the price of a substitute falls. B) the price of a complement falls.
C) the good's own price rises. D) income decreases.
4
32) A normal good is a good for which 32)
A) there are very few complements.
B) demand decreases when income increases.
C) demand increases when income increases.
D) there are few substitutes.
33) Most goods 33)

A) have vertical demand curves. B) have vertical supply curves.
C) are normal goods. D) are complements to each other.
34) A normal good is a good for which demand 34)

A) increases when income increases. B) decreases when population increases.
C) increases when population increases. D) decreases when income increases.
35) Inferior goods are those for which demand increases as 35)
A) income decreases. B) income increases.
C) the price of a substitute rises. D) the price of a substitute falls.
36) By definition, an inferior good is a 36)

A) normal substitute good.
B) good for which demand decreases when its price rises.
C) want that is not expressed by demand.
D) good for which demand decreases when income increases.
37) If a good is an inferior good, then purchases of that good will decrease when 37)
A) the demand for it increases. B) population increases.
C) income increases. D) the price of a substitute rises.
38) An inferior good is a good for which demand 38)

A) increases when population increases. B) decreases when income increases.
C) decreases when population increases. D) increases when income increases.
39) When economists speak of preferences as influencing demand, they are referring to 39)
A) the availability of a good to all income classes.
B) directly observable changes in prices and income.
C) the excess of wants over the available supplies.
D) an individual's attitudes toward goods and services.
40) In 2000 there were 200,000 gas grills demanded at a price of $500. In 2001 there were more than 40)
200,000 gas grills demanded at the same price. This increase could be the result any of the
following EXCEPT
A) an increase in the supply of gas grills.
B) an increase in population.
C) an increase in income if gas grills are a normal good.
D) a fall in the price of natural gas, a complement for a gas grill.
5
41) A change in the price of a good 41)
A) shifts the good's demand curve but does not cause a movement along it.
B) does not shift the good's demand curve but does cause a movement along it.
C) shifts the good's demand curve and also causes a movement along it.
D) neither shifts the good's demand curve nor causes a movement along it.
42) A reduction in the price of a good 42)

A) does not shift the good's demand curve leftward but does decrease the quantity demanded.
B) shifts the good's demand curve leftward but does not decrease the quantity demanded.
C) shifts the good's demand curve leftward and also decreases the quantity demanded.
D) neither shifts the good's demand curve leftward nor decreases the quantity demanded.
43) A decrease in quantity demanded caused by an increase in price is represented by a 43)

A) movement up and to the left along the demand curve.
B) movement down and to the right along the demand curve.
C) leftward shift of the demand curve.
D) rightward shift of the demand curve.
44) A change in which of the following alters buying plans for cars but does NOT shift the demand 44)
curve for cars?
A) a 10 percent decrease in the price of car insurance
B) a 20 percent increase in the price of a car
C) a 5 percent increase in people's income
D) an increased preference for walking rather than driving
45) Which of the following would NOT shift the demand curve for turkey? 45)
A) a change in tastes for turkey B) a decrease in the price of ham
C) an increase in income D) a change in the price of a turkey
46) When we say demand increases, we mean that there is a 46)

A) movement to the right along a demand curve.
B) movement to the left along a demand curve.
C) leftward shift of the demand curve.
D) rightward shift of the demand curve.
6
47) In the figure above, which movement reflects an increase in demand? 47)
A) from point a to point e B) from point a to point c
C) from point a to point b D) from point a to point d
48) In the figure above, which movement reflects a decrease in demand? 48)
A) from point a to point d B) from point a to point e
C) from point a to point c D) from point a to point b
49) In the figure above, which movement reflects a decrease in quantity demanded but NOT a 49)
decrease in demand?
A) from point a to point c B) from point a to point e
C) from point a to point d D) from point a to point b
50) In the figure above, which movement reflects how consumers would react to an increase in the 50)
price of a non-fruit snack?
A) from point a to point b B) from point a to point d
C) from point a to point c D) from point a to point e
51) In the figure above, which movement reflects an increase in the price of a substitute for fruit 51)
snacks?
C) from point a to point b D) from point a to point c
52) In the figure above, which movement reflects an increase in the price of a complement for fruit 52)
snacks?
A) from point a to point b B) from point a to point d
C) from point a to point e D) from point a to point c
7
53) In the figure above, which movement reflects how consumers would react to an increase in the 53)
price of a fruit snack that is expected to occur in the future?
A) from point a to point b B) from point a to point e
C) from point a to point c D) from point a to point d
54) In the figure above, which movement reflects an increase in income if fruit snacks are an inferior 54)
good?
A) from point a to point d B) from point a to point c
C) from point a to point b D) from point a to point e
55) In the figure above, which movement reflects an increase in income if fruit snacks are a normal 55)
good?
C) from point a to point b D) from point a to point c
56) In the figure above, which movement reflects a decrease in population? 56)
A) from point a to point d B) from point a to point c
C) from point a to point e D) from point a to point b
57) The quantity supplied of a good is 57)

A) equal to the difference between the quantity available and the quantity desired by all
consumers and producers.
B) the same thing as the quantity demanded at each price.
C) the amount that the producers are planning to sell at a particular price during a given time
period.
D) the amount the firm would sell if it faced no resource constraints.
58) The quantity supplied of a good or service is the quantity that a producer 58)
A) actually sells at a particular price during a given time period.
B) should sell at a particular price during a given time period.
C) is willing to sell at a particular price during a given time period.
D) needs to sell at a particular price during a given time period.
59) A fall in the price of a good causes producers to reduce the quantity of the good they are willing to 59)
produce. This fact illustrates
A) a change in supply. B) the law of demand.
C) the nature of an inferior good. D) the law of supply.
60) Each point on a supply curve represents 60)

A) the highest price sellers can get for each unit over time.
B) the lowest price buyers will accept per unit of the good.
C) the lowest price for which a supplier can profitably sell another unit.
D) the highest price buyers will pay for the good.
8
61) Because of increasing marginal cost, most supply curves 61)
A) are horizontal. B) have a negative slope.
C) are vertical. D) have a positive slope.
62) A supply curve shows the relation between the quantity of a good supplied and 62)
A) the price of the good. Usually a supply curve has negative slope.
B) income. Usually a supply curve has positive slope.
C) income. Usually a supply curve has negative slope.
D) the price of the good. Usually a supply curve has positive slope.
63) A supply curve differs from a supply schedule because a supply curve 63)
A) is a graph and the supply schedule is a table.
B) holds the number of suppliers constant, whereas the supply schedule allows the number to
vary.
C) holds resource prices constant, whereas the supply schedule allows them to vary.
D) represents one firm, whereas the supply schedule represents all firms in the market.
64) Which of the following is NOT held constant while moving along a supply curve? 64)
A) prices of resources used in production B) expected future prices
C) the number of sellers D) the price of the good itself
65) If a producer can use resources to produce either good A or good B, then A and B are 65)
A) substitutes in consumption. B) complements in consumption.
C) complements in production. D) substitutes in production.
66) Good A and good B are substitutes in production. The demand for good A increases so that the 66)
price of good A rises. The increase in the price of good A shifts the
A) demand curve for good B rightward. B) demand curve for good B leftward.
C) supply curve of good B rightward. D) supply curve of good B leftward.
67) Blank tapes and prerecorded tapes are substitutes in production. An increase in the price of a blank 67)
tape will cause
A) a decrease in the supply of prerecorded tapes.
B) an increase in the quantity supplied of prerecorded tapes but not in the supply.
C) a decrease in the quantity supplied of prerecorded tapes but not in the supply.
D) an increase in the supply of prerecorded tapes.
68) Good A and good B are substitutes in production. The demand for good A decreases, which lowers 68)
the price of good A. The decrease in the price of good A
A) increases the demand for good B. B) decreases the demand for good B.
C) increases the supply of good B. D) decreases the supply of good B.
9
69) An increase in the number of fast-food restaurants 69)
A) increases the demand for substitutes for fast-food meals.
B) raises the price of fast-food meals.
C) increases the supply of fast-food meals.
D) increases the demand for fast-food meals.
70) Over the past decade technological improvements that have lowered the cost of producing an 70)
automobile have increased
A) the demand but not the supply of automobiles.
B) both the supply and the demand for automobiles.
C) the supply but not the demand for automobiles.
D) neither the supply nor the demand for automobiles.
71) Which of the following will shift the supply curve for good X leftward? 71)
A) a situation in which quantity demanded exceeds quantity supplied
B) an increase in the cost of the machinery used to produce X
C) a decrease in the wages of workers employed to produce X
D) a technological improvement in the production of X
72) Which of the following does NOT shift the supply curve? 72)
A) an increase in the price of the good
B) a fall in the price of a substitute in production
C) a decrease in the wages of labor used in production of the good
D) a technological advance
73) If the price of a good changes but everything else influencing suppliers' planned sales remains 73)
constant, there is a
A) rotation of the initial supply curve around the initial price.
B) new supply curve that is to the right of the initial supply curve.
C) new supply curve that is to the left of the initial supply curve.
D) movement along the supply curve.
74) A decrease in the quantity supplied is represented by a 74)

A) rightward shift in the supply curve. B) movement down the supply curve.
C) leftward shift in the supply curve. D) movement up the supply curve.
75) Which of the following causes an increase in the quantity supplied of good X but NOT in the 75)
supply of good X?
A) an increase in the price of X
B) an increase in the price of good Y, a complement in the production of X
C) an improvement in the technology for producing X
D) a reduction in the price of resources used to produce X
10
76) In the figure above, an increase in the supply of oil would result in a movement from 76)
A) point a to point d. B) point a to point e.
C) point a to point b. D) point a to point c.
77) In the figure above, an increase in the quantity of oil supplied but NOT in the supply of oil is 77)
shown by a movement from
A) point a to point c. B) point a to point b.
C) point a to point e. D) point a to point d.
78) In the figure above, a decrease in the quantity of oil supplied but NOT in the supply of oil is shown 78)
by a movement from
A) point a to point e. B) point a to point d.
C) point a to point b. D) point a to point c.
79) In the figure above, which movement could be caused by an increase in the wages of oil workers? 79)
A) point a to point d B) point a to point b
C) point a to point c D) point a to point e
80) In the figure above, which movement could be caused by the development of a new, more efficient 80)
refining technology?
A) point a to point e B) point a to point c
C) point a to point b D) point a to point d
11
81) The figure above represents the market for candy. People become more concerned that eating 81)
candy causes them to gain weight, which they do not like. As a result, the
A) demand curve will not shift, and the supply curve shifts from S1 to S2.
B) demand curve shifts from D1 to D2and the supply curve shifts from S1 to S2.
C) demand curve shifts from D2 to D1 and the supply curve shifts from S2 to S1.
D) demand curve shifts from D2 to D1 and the supply curve will not shift.
82) The above figure represents the market for oil. Because of the development of a new deep sea 82)
drilling technology the
A) demand curve shifts from D1 to D2 and the supply curve shifts from S1 to S2.
B) demand curve shifts from D1 to D2 and the supply curve will not shift.
C) demand curve will not shift, and the supply curve shifts from S1 to S2.
D) demand curve will not shift, and the supply curve shifts from S2 to S1.
83) The above figure represents the market for oil. When terrorists blow up a major refinery the 83)
A) demand curve for oil will not shift, and the supply curve for oil shifts from S2 to S1.
B) demand curve for oil shifts from D1 to D2 and the supply curve for oil will not shift.
C) demand curve for oil shifts from D1 to D2 and the supply curve for oil shifts from S2 to S1.
D) demand curve for oil will not shift, and the supply curve for oil shifts from S1 to S2.
84) The above figure represents the market for bicycles. When there is a physical fitness craze the 84)
A) demand curve for bicycles shifts from D1 to D2.
B) demand curve for bicycles shifts from D2 to D1.
C) supply curve of bicycles shifts from S1 to S2.
D) demand curve and the supply curve of bicycles do not shift.
12
85) The above figure represents the market for french fries at fast food joints. If the price of potatoes 85)
rises and simultaneously people become concerned that french fries can cause heart attacks
A) the demand curve for french fries will shift from D2 to D1 and the supply curve of french fries
will shift from S2 to S1.
B) the demand curve for french fries will shift from D2 to D1 and the supply curve of french fries
will not shift.
C) the demand curve for french fries will not shift, and the supply curve of french fries will shift
from S1 to S2.
D) the demand curve for french fries will shift from D2 to D1 and the supply curve of french fries
will shift from S1 to S2.
86) The interaction of supply and demand explains 86)

A) both the prices and the quantities of goods and services.
B) the quantities of goods and services but not their prices.
C) the prices of goods and services but not their quantities.
D) neither the prices nor the quantities of goods and services.
87) When the quantity demanded equals quantity supplied 87)

A) the government must be intervening in the market.
B) there is a shortage.
C) there is a surplus.
D) none of the above
13
88) In the above figure, if the demand curve is D2, then 88)
A) an increase in price will cause the demand curve to shift to D3.
B) the equilibrium price will be P1 and the equilibrium quantity will be Q2.
C) the equilibrium price will be P1 and the equilibrium quantity will be Q1.
D) there will be a shortage equal to Q2 - Q1.
89) When the price is below the equilibrium price, the quantity demanded 89)
A) is less than the equilibrium quantity. The quantity supplied exceeds the equilibrium quantity.
B) exceeds the equilibrium quantity. The quantity supplied is less than the equilibrium quantity.
C) exceeds the equilibrium quantity. So does the quantity supplied.
D) is less than the equilibrium quantity. So is the quantity supplied.
90) A price below the equilibrium price results in 90)

A) a further price fall. B) a shortage.
C) excess supply. D) a surplus.
91) Which of the following correctly describes how price adjustments eliminate a shortage? 91)
A) As the price falls, the quantity demanded increases while the quantity supplied decreases.
B) As the price rises, the quantity demanded decreases while the quantity supplied increases.
C) As the price falls, the quantity demanded decreases while the quantity supplied increases.
D) As the price rises, the quantity demanded increases while the quantity supplied decreases.
92) A shortage causes the 92)

A) supply curve to shift rightward. B) price to rise.
C) price to fall. D) demand curve to shift leftward.
14
93) If the quantity demanded exceeds the quantity supplied, then there is 93)
A) a shortage and the price is above the equilibrium price.
B) a surplus and the price is below the equilibrium price.
C) a shortage and the price is below the equilibrium price.
D) a surplus and the price is above the equilibrium price.
94) A surplus occurs when the price is 94)

A) equal to the equilibrium price.
B) greater than the equilibrium price.
C) less than the equilibrium price.
D) None of the above because the existence of a surplus is independent of the price of the good.
95) If the quantity supplied exceeds the quantity demanded, then there is 95)
A) a shortage and the price is below the equilibrium price.
B) a surplus and the price is below the equilibrium price.
C) a surplus and the price is above the equilibrium price.
D) a shortage and the price is above the equilibrium price.
96) The price of a good will fall if 96)

A) the price of a complement falls.
B) there is a surplus at the current price.
C) the quantity demanded exceeds the quantity supplied.
D) the current price is less than the equilibrium price.
97) The equilibrium price in the above figure is 97)

A) $2. B) $8. C) $4. D) $6.
15
98) The equilibrium quantity in the above figure is 98)
A) 400 units. B) 300 units. C) 600 units. D) 200 units.
99) At a price of $10 in the above figure, there is 99)

A) a surplus of 400 units. B) a shortage of 200 units.
C) a surplus of 200 units. D) a shortage of 400 units.
100) At a price of $4 in the above figure, 100)

A) there is a surplus of 200 units. B) the equilibrium quantity is 400 units.
C) the quantity supplied is 400 units. D) there is a shortage of 200 units.
101) If the good in the above figure is a normal good and income rises, then the new equilibrium 101)
quantity
A) is more than 300 units.
B) is less than 300 units.
C) could be less than, equal to, or more than 300 units.
D) is 300 units.
102) The initial supply and demand curves for a good are illustrated in the above figure. If there are 102)
technological advances in the production of the good, then the new price for the good
A) is $6.
B) is more than $6.
C) could be less than, equal to, or more than $6.
D) is less than $6.
103) The initial supply and demand curves for a good are illustrated in the above figure. If there is a rise 103)
in the price of the resources used to produce the good, then the new price
A) is less than $6.
B) is more than $6.
C) could be less than, equal to, or more than $6.
D) is $6.
16
The Market for Wapanzo Beans
Quantity Demanded Price Quantity Supplied
(millions of pounds (dollars per (millions of pounds
per year) pound) per year)
Case Case Case Case Case Case
1 2 3 A B C
15 10 5 1 2 3
12 8 4 2 2 4 6
9 6 3 3 3 6 9
6 3 2 4 4 8 12
3 2 1 5 5 10 15
104) Refer to the table above. Suppose that in normal years demand is represented by Case 2 and 104)
supply is represented by Case B. In a normal year the price of wapanzo beans will be
A) $3 per pound. B) $4 per pound. C) $2 per pound. D) $1 per pound.
supply is represented by Case B. In a normal year the equilibrium quantity of wapanzo beans will
be
A) 8 million pounds. B) 4 million pounds.
C) 6 million pounds. D) 2 million pounds.
supply is represented by Case B. If there is a drought in the wapanzo bean growing region then
supply will ________ and demand will ________.
A) stay at case B; become case 3 B) stay at case B; become case 1
C) become case A; become case 1 D) become case A; stay at case 2
supply is represented by Case B. If there is exceptionally good growing weather in the wapanzo
bean growing region then supply will ________ and demand will ________.
A) stay at case B; become case 1 B) become case C; stay at case 2
C) become case C; become case 3 D) become case C; become case 1
supply is represented by Case B. If it is discovered that wapanzo beans help prevent cancer then
supply will ________ and demand will ________.
A) stay at case B; become case 1 B) become case C; stay at case 2
C) become case A; become case 1 D) become case C; become case 1
109) When the demand for a good decreases, its equilibrium price ________ and equilibrium quantity 109)
________.
A) rises; decreases B) falls; decreases C) falls; increases D) rises; increases
17
110) If good A is a normal good and income increases, the equilibrium price of A 110)
A) and the equilibrium quantity will increase.
B) and the equilibrium quantity will decrease.
C) will rise and the equilibrium quantity will decrease.
D) will fall and the equilibrium quantity will increase.
111) The price of a gallon of milk falls. Which of the following is a possible cause? 111)
A) a discovery that milk cause diabetes
B) a drought that reduces supplies of feed grains fed to cows that produce milk
C) an increase in the income of the average household, with milk being a normal good
D) a decrease in the price of oatmeal, a complement to milk
112) Assume that beef and pork are substitutes for consumers. There is a drought in the cattle grazing 112)
areas. The drought will cause the
A) supply curve for pork to shift rightward. B) supply curve for pork to shift leftward.
C) demand curve for pork to shift leftward. D) demand curve for pork to shift rightward.
113) An increase in demand combined with no change in supply causes 113)

A) a decrease in demand because the supply curve does not shift.
B) the equilibrium price to fall.
C) a movement rightward along the demand curve.
D) the equilibrium price to rise.
114) Goods A and B are complementary goods (in consumption). The cost of a resource used in the 114)
production of A decreases. As a result,
A) the equilibrium price of B will fall and the equilibrium price of A will rise.
B) the equilibrium prices of both A and B will rise.
C) the equilibrium price of B will rise and the equilibrium price of A will fall.
D) the equilibrium prices of both A and B will fall.
115) When demand decreases and supply does not change, the equilibrium price 115)
A) rises and the equilibrium quantity decreases.
B) rises and the equilibrium quantity increases.
C) falls and the equilibrium quantity increases.
D) falls and the equilibrium quantity decreases.
116) When supply decreases and demand does not change, the equilibrium quantity 116)
A) decreases and the price rises. B) increases and the price falls.
C) decreases and the price falls. D) increases and the price rises.
18
117) Beef and leather belts are complements in production. If people's concern about health shifts the 117)
demand curve for beef leftward, the result in the market for leather belts will be a
A) lower equilibrium price for a leather belt because there is an increase in the supply of leather
belts.
B) higher equilibrium price for a leather belt because there is a decrease in the supply of leather
belts.
C) lower equilibrium price for a leather belt because there is a decrease in the supply of leather
belts.
D) higher equilibrium price for a leather belt because there is an increase in the supply of leather
belts.
118) You observe that the price of a good rises and the quantity decreases. These observations can be 118)
the result of
A) the supply curve shifting rightward. B) the demand curve shifting rightward.
C) the demand curve shifting leftward. D) the supply curve shifting leftward.
119) Leather belts and leather shoes are substitutes in production. If style changes increase the demand 119)
for leather belts, the supply curve of leather shoes will shift
A) rightward and the equilibrium price of leather shoes will fall.
B) leftward and the equilibrium price of leather shoes will rise.
C) leftward and the equilibrium price of leather shoes will fall.
D) rightward and the equilibrium price of leather shoes will rise.
120) If both demand and supply increase, what will be the effect on the equilibrium price and quantity? 120)
A) The price will rise but the quantity could either increase, decrease, or remain the same.
B) The quantity will increase but the price could either rise, fall, or remain the same.
C) Both the price and the quantity will increase.
D) The price will fall but the quantity will increase.
121) If both the demand and supply increase, the equilibrium quantity 121)
A) decreases and the price rises.
B) increases and the effect on price is indeterminate.
C) decreases and the effect on price is indeterminate.
D) increases and the price falls.
122) The price will rise and the equilibrium quantity might increase, decrease, or stay the same when 122)
the
A) demand and the supply of a good both increase.
B) demand and the supply of a good both decrease.
C) demand for a good decreases and the supply of it increases.
D) demand for a good increases and the supply of it decreases.
19
123) The price will fall and the equilibrium quantity might increase, decrease, or stay the same when the 123)
A) demand for a good increases and the supply of it decreases.
B) demand and the supply of a good both decrease.
D) demand and the supply of a good both increase.
124) The equilibrium quantity will decrease and the price might rise, fall, or stay the same when the 124)
A) demand and the supply of a good both decrease.
B) demand for a good increases and the supply of it decreases.
D) demand and the supply of a good both increase.
125) The equilibrium quantity of a good will increase and its equilibrium price might rise, fall, or stay 125)
the same when
A) its demand decreases and supply increases.
B) its demand increases and supply decreases.
C) its demand and supply both increase.
D) its demand and supply both decrease.
126) The price of compact disc players fell over the past decade because a combination of improving 126)
technology, rising incomes, and falling prices of compact discs caused the
A) demand curve for compact disc players to shift rightward faster than the supply curve of
compact disc players shifted rightward.
B) supply curve of compact disc players to shift rightward faster than the demand curve for
compact disc players shifted rightward.
C) demand curve for compact disc players to shift leftward and the supply curve of compact disc
players to shift leftward.
D) supply curve of compact disc players to shift rightward and the demand curve for compact
disc players to shift leftward.
127) Which of the following will always raise the equilibrium price? 127)
A) an increase in demand combined with a decrease in supply
B) a decrease in both demand and supply
C) an increase in both demand and supply
D) a decrease in demand combined with an increase in supply
20
128) In the above figure, a change in quantity demanded with unchanged demand is represented by a 128)
movement from
A) point a to point c.
B) point a to point e.
C) point a to point b.
D) None of the above represent a change in the quantity demanded with an unchanged demand.
129) In the above figure, a change in quantity supplied with unchanged supply is represented by a 129)
movement from
A) point b to point e. B) point b to point a.
C) point e to point c. D) point a to point e.
130) In the above figure, if D2 is the demand curve, then a price of P3 would result in 130)
A) a surplus of Q3 - Q1. B) a shortage of Q4 - Q3.
C) a surplus of Q4 - Q0. D) a shortage of Q3 - Q1.
131) In the above figure, if D2 is the original demand curve for a normal good and income decreases, 131)
which price and quantity may result?
A) point c, with price P3 and quantity Q3 B) point a, with price P2 and quantity Q2
C) point b, with price P1 and quantity Q1 D) point d, with price P1 and quantity Q3
132) In the above figure, if D2 is the original demand curve and the price of a substitute in consumption 132)
rises, which price and quantity may result?
A) point c, with price P3 and quantity Q3 B) point d, with price P1 and quantity Q3
C) point a, with price P2 and quantity Q2 D) point b, with price P1 and quantity Q1
21
133) In the above figure, if D2 is the original demand curve and consumers come to expect that the price 133)
of the good will rise in the future, which price and quantity may result?
A) point a, with price P2 and quantity Q2 B) point c, with price P3 and quantity Q3
C) point d, with price P1 and quantityQ3 D) point b, with price P1 and quantity Q1.
134) In the above figure, if D2 is the original demand curve and the population falls, which price and 134)
quantity may result?
A) point d, with price P1 and quantity Q3 B) point c, with price P3 and quantity Q3
C) point b, with price P1 and quantity Q1 D) point a, with price P2 and quantity Q2
135) In the figure, the equilibrium price is initially $3 per bushel of wheat. If suppliers come to expect 135)
that the price of a bushel of wheat will rise in the future, but buyers do not, the current equilibrium
price will
A) not change.
B) fall.
C) rise.
D) perhaps rise, fall, or stay the same, depending on whether there are more demanders or
suppliers in the market.
136) In the figure, the equilibrium price is initially $3 per bushel of wheat. If buyers come to expect that 136)
the price of a bushel of wheat will rise in the future, but sellers do not, the current equilibrium price
will
A) rise.
B) fall.
C) not change.
D) perhaps rise, fall, or stay the same, depending on whether there are more demanders or
suppliers in the market.
22
137) Let Qd stand for the quantity demanded, Qs stand for the quantity supplied, and P stand for price. 137)
If Qd = 20 - 2P and Qs = 5 + 3P, then the equilibrium price is
A) $2. B) $3. C) $4. D) $1.
138) LetQd stand for the quantity demanded, Qs stand for the quantity supplied, and P stand for price. 138)
If Qd = 20 - 2P andQs = 5 + 3P, then the equilibrium quantity is
A) 14. B) 5. C) 20. D) 3.
139) A consumer might consider in-line skates and elbow-pads to be 139)

A) unrelated goods.
B) substitutes.
C) products with upward sloping demand curves.
D) complements.
140) A decrease in the price of a game of bowling shifts the 140)

A) demand curve for bowling balls rightward.
B) supply curve of bowling balls leftward.
C) supply curve of bowling balls rightward.
D) demand curve for bowling balls leftward.
141) If a decrease in the price of gasoline increases the demand for large cars, then 141)
A) gasoline and large cars are complements in consumption.
B) large cars are an inferior good.
C) gasoline is an inferior good.
D) gasoline and large cars are substitutes in consumption.
142) Gruel is an inferior good. Hence, a decrease in people's incomes 142)

A) shifts the supply curve of gruel leftward.
B) shifts the demand curve for gruel rightward.
C) shifts the demand curve for gruel leftward.
D) decreases the quantity of gruel supplied.
143) An unusually warm winter 143)

A) shifts the supply curve of gloves leftward.
B) shifts the demand curve for gloves rightward.
C) shifts the demand curve for gloves leftward.
D) shifts the supply curve of gloves rightward.
144) A rise in the price of a good causes producers to supply more of the good. This statement 144)
illustrates
A) the nature of an inferior good. B) the law of demand.
C) the law of supply. D) a change in supply.
23
145) The price of jet fuel falls. This fall shifts the 145)
A) supply curve of airplane trips rightward.
B) demand curve for airplane trips leftward.
C) demand curve for airplane trips rightward.
D) supply curve of airplane trips leftward.
146) If there is surplus of a good, then the quantity demanded ________ the quantity supplied and the 146)
price will ________.
A) is less than; rise B) is less than; fall
C) is greater than; fall D) is greater than; rise
147) Pizza and hamburgers are substitutes for consumers. A fall in the price of a pizza ________ the 147)
price of a hamburger and ________ the quantity of hamburgers.
A) raises; decreases B) lowers; decreases
C) raises; increases D) lowers; increases
148) How does an unusually warm winter affect the equilibrium price and quantity of gloves? 148)
A) It lowers both the price and the quantity.
B) It raises both the price and the quantity.
C) It raises the price and decreases the quantity.
D) It lowers the price and increases the quantity.
149) You notice that the price and quantity of wheat both decrease. This observation can be the result of 149)
the
A) demand curve for wheat shifting leftward.
B) supply curve of wheat shifting rightward.
C) demand curve for wheat shifting rightward.
D) supply curve of wheat shifting leftward.
150) A technological improvement lowers the cost of producing coffee. At the same time, consumers' 150)
preferences for coffee increase. The equilibrium price of coffee will
A) rise, fall, or stay the same, depending on the relative size of the shifts in the demand and
supply curves.
B) remain the same.
C) fall.
D) rise.
151) Which of the following definitely causes a fall in the equilibrium price? 151)
A) a decrease in both demand and supply
B) an increase in demand combined with a decrease in supply
C) a decrease in demand combined with an increase in supply
D) an increase in both demand and supply
24
152) CD players rise in price while pre-recorded audio tapes fall in price. The combined effect of these 152)
two changes is to create
A) a leftward shift of the demand curve for portable audio tape players, such as a Walkman.
B) a rightward shift of the demand curve for portable audio tape players, such as a Walkman.
C) a rightward shift of the supply curve for portable audio tape players, such as a Walkman.
D) a leftward shift of the supply curve of portable audio tape players, such as a Walkman.
153) Walkman Watch expects a recession to occur. Knowing that a Walkman is a normal good, you 153)
predict that the demand for a Walkman
A) will increase. B) might increase or decrease.
C) will decrease. D) will remain unchanged.
154) Wages for workers producing Walkmans and similar products will rise next year. Walkman Watch 154)
asks you to predict the effect of this change in next year's market for Walkmans. You predict that
the major effect will be that the
A) demand curve for a Walkman will shift leftward.
B) supply curve for a Walkman will shift rightward.
C) supply curve for a Walkman will shift leftward.
D) demand curve for a Walkman will shift rightward.
155) Producers of Walkmans are able to lower the wage rate that they pay to their workers. Walkman 155)
Watch asks you to predict the effect on the Walkmans. You predict that the
A) quantity supplied will decrease. B) price will rise.
C) supply curve will shift leftward. D) supply curve will shift rightward.
156) The wage rate paid by Walkman producers falls and at the same time the price of raw materials 156)
used in the production of Walkmans rises. You predict that the supply curve of Walkmans will
A) surely shift leftward. B) surely become steeper.
C) shift either leftward or rightward. D) surely shift rightward.
157) Walkmans play cassette tapes. Producers of Walkmans expect that a new technology for producing 157)
CD players will be available next year. Walkman Watch asks you to predict the effect of the new
technology on the market for Walkmans. You predict that
A) the demand curve for Walkmans will shift leftward and the price will fall.
B) the price will rise, and so will the quantity demanded.
C) the price will fall, and the quantity demanded will increase.
D) the demand curve for Walkmans will shift rightward and the price will rise.
158) Producers of Walkmans will be able to lower the wage rate that they pay to their workers. 158)
Walkman Watch asks you to predict the effects on the supply of Walkmans, and the price of a
Walkman. You predict that the supply curve shifts
A) leftward, and the price is constant. B) rightward, and the price falls.
C) leftward, and the price rises. D) rightward, and the price is constant.
25
Answer Key
Testname: UNTITLED3.TST
1) A
2) A
3) C
4) B
5) D
6) C
7) D
8) A
9) A
10) B
11) B
12) A
13) B
14) C
15) B
16) B
17) C
18) A
19) B
20) C
21) C
22) C
23) B
24) A
25) D
26) D
27) D
28) A
29) C
30) C
31) D
32) C
33) C
34) A
35) A
36) D
37) C
38) B
39) D
40) A
41) B
42) A
43) A
44) B
45) D
46) D
47) D
48) C
49) B
50) B
1
Answer Key
51) A
52) D
53) D
54) B
55) A
56) B
57) C
58) C
59) D
60) C
61) D
62) D
63) A
64) D
65) D
66) D
67) A
68) C
69) C
70) C
71) B
72) A
73) D
74) B
75) A
76) C
77) C
78) D
79) A
80) C
81) D
82) C
83) A
84) A
85) A
86) A
87) D
88) B
89) B
90) B
91) B
92) B
93) C
94) B
95) C
96) B
97) D
98) B
99) A
100) D
2
Answer Key
101) A
102) D
103) B
104) A
105) C
106) D
107) B
108) A
109) B
110) A
111) A
112) D
113) D
114) C
115) D
116) A
117) B
118) D
119) B
120) B
121) B
122) D
123) C
124) A
125) C
126) B
127) A
128) B
129) B
130) A
131) C
132) A
133) B
134) C
135) C
136) A
137) B
138) A
139) D
140) A
141) A
142) B
143) C
144) C
145) A
146) B
147) B
148) A
149) A
150) A
3
Answer Key
151) C
152) B
153) C
154) C
155) D
156) C
157) A
158) B
4
M.Com First Semester- MCQs on AMD
First semester M.Com (SDE), University of Calicut
Accounting for Managerial Decisions–MCQs with Answers
Prepared by:
Praveen MV
Asst.Professor of commerce
Govt. College Madappally
Accounting for Managerial Decisions.

1.Who coined the concept of management accounting?

a. Robert Anthony
b. James H Bliss
c. J. Batty
d. Michael Porter
2.The main role of management accounting is:
a. Decision making
b. Planning
c. Direction
d. Provision of information to management.
3.The term management accounting was first coined in:
a. 1960
b. 1930
c. 1950
d. 1910
4.The use of management accounting is:
a. Compulsory
b. Optional
c. Mandatory
d. Any of the above
5.Which of the following is not a predictive tool of management accounting?
a. Simulation
c. Cash flow analysis
d. KPIs
6.Which of the following is not an analytical tool of management accounting?
a. Ratio analysis
b. Standard costing
c. Budgetary control
d. Cash flow analysis

7.“Management Accounting is concerned with accounting information which is useful to

management”-whose definition?
a. Robert Anthony
b. James H Bliss
c. J. Batty
d. Michael Porter
8.Which of the following is not included in the scope of management accounting?
b. Cost accounting
c. Tax accounting
d. None of these.
9.Which of the following is not a feature of management accounting?
a. Accounting information
b. Future oriented
c. Management oriented
d. Compulsory accounting.
10.The process of quantifying the efficiency and effectiveness of past actions is called:
a. Simulation
b. Decision accounting
c. Revaluation accounting
d. Performance measurement.
11.Which of the following is/are the tools of financial performance measures?
a. ROI
b. EVA
c. Residual income
d. All of these.
12.Which of the following is not a tool for financial performance measure?
a. EVA
c. Residual income
d. ROI

13. “ NOPAT-(Capital Employed x WACC)”=?

a. ROI
b. EVA
c. Residual income
d. EBIT
14.Net profit before Tax-(average capital employed x Desired minimum rate of return) =?
a. ROI
b. EVA
c. Residual income
d. EBIT
15.Operating profit ratio X Capital turnover ratio=?
a. ROI
b. EVA
c. Residual income
d. EBIT
16.Return on Investment (ROI) was developed by:
a. Michael Porter
b. Du Pont Company
c. Taichi Okno
d. None of these
17.Which of the following is a tool of financial as well as non-financial performance
measure?
a. Economic Value Added
b. Residual income
c. NOPAT
d. Balanced Score card
18.The term Balanced Score Card coined by:
a. Jimmy Carter
b. Art Schneiderman
c. Taichi Okno
d. Robert Anthony

19.---------- Integrates financial and non- financial performance measures.

a. Economic value added
b. WACC
c. Balanced Score card
d. SCBA
20.SCBA stands for----------
a. Strategic Control for Business Administration
b. Strategic Cost and Benefit Administration
c. Social Cost Benefit Analysis
d. Socially Controlled Benefit Analysis.
21.Which of the following is not a perspective of balanced score card?
a. Internal process
b. Customer
c. Financial perspective
d. Value chain
22.Customer retention and warranty claims are tools of performance measure in balance
b. Internal process
c. Customer
23.Employees training and number of patents are tools of performance measure in balance
b. Internal process
c. Customer
24.Defect rates and lead times are tools of performance measure in balance score card under-
------------ perspective.
b. Internal process

c. Customer
25.Operating income and sales growth are tools of performance measure in balance score
card under------------- perspective.
b. Internal process
c. Customer
26.Zero based budgeting is also known as:
a. Scratch based budgeting
b. De nova budgeting
c. Priority based budgeting
d. All of these
27.Zero based budgeting was first applied by:
a. Abraham Lincon
b. Jimmy Carter
c. Peter A phyrr
d. Alex Ouchy
28.ZBB coined out by :
a. Art Schneiderman
b. Jimmy Carter
c. Peter A phyrr
d. Taichi Okno
29.---------- budgeting pay more attention on overhead costs.
a. ZBB
b. ABB
c. Performance budgeting
d. Traditional budgeting
30.--------- budgets are prepared after justifying the cost drivers.
a. ZBB
b. ABB

c. Flexible budget
d. Cost budget
31.The difference between actual sales and break even sales is:
a. Contribution
b. Profit volume rate
c. Margin of safety
d. Gross margin
32.Net Avoidable fixed cost divided by Contribution per unit is equal to:
a. PV ratio
b. Break Even point
c. Contribution
d. Shutdown point
33.Marginal cost does not include----------
a. Variable cost
b. Fixed cost
c. Variable Overhead
d. Direct expenses
34.In marginal costing, stock of finished goods valued at-----------
a. Fixed cost
b. Cost or market price whichever is less
c. Market price
d. Variable cost
35.At break Even Point--------- is equal to fixed cost.
a. Profit
b. Loss
c. Contribution
d. Sales
36.The BEP -------- when selling price is increased.
a. Increases
b. Decreases
c. Remain unchanged


37.Under marginal costing product cost is equal to-----------
a. Prime cost
b. Prime cost + variable overhead
c. Cost of production
d. Cost of sales
38.An increase in the variable cost-----------
a. Increases PV ratio
b. Decreases PV ratio
c. Increases Profit
d. Increases contribution
39.Sales x PV ratio is equal to-----------
a. Profit
b. Contribution
c. BEP
d. Margin of Safety
40.Contribution / PV ratio is equal to------------
a. BEP
b. Sales
c. Fixed cost
d. Variable cost
41.Profit / PV ratio is equal to-------------
a. Net profit
b. Contribution
c. BEP
d. Margin of Safety
42.Sales price per unit Rs.10, Variable cost Rs.8 per unit and fixed cost is Rs.20,000, then
BEP in units is----------
a. 10,000
b. 16,000
c. 2,000

d. 2,500
43.The difference between gross profit and gross margin is----------
a. Fixed cost
b. Variable cost
c. Net profit
d. Net loss
44.Actual sales is Rs.5,00,000 and BEP sales is 3,00,000, then margin of safety percentage
is:
a. 20%
b. 40%
c. 33.33%
d. 25%
45.If sales is Rs.2,50,000 and PV ratio is 40%, contribution will be:
a. 80,000
b. 50,000
c. 1,00,000
d. 25,000
46.Margin of safety x Profit volume ratio is:
a. BEP
c. Margin of safety in units
d. Profit.
47.Contribution is also known as:
a. Share Capital
b. Gross profit
c. Gross margin
d. Margin of safety
48.-----------is formed as curve by the intersection of total cost and total revenue.
a. BEP
c. Margin of safety

d. Key factor
49.Variable cost of a product is Rs.10 and firm has an overall PV ratio @ 60%, what will be
its selling price?
a. Rs.60
b. Rs.6
c. Rs.25
d. Rs.16
50.While making make or buy decision under marginal costing, external purchase price of
the articles must be compared with:
a. Its Fixed cost
b. Its total cost
c. Its variable cost
d. Its prime cost.
51.Shut down cost is:
a. Avoidable fixed cost
b. Unavoidable fixed cost
c. Avoidable Variable cost
d. Unavoidable variable cost.
52.Profit volume ratio can be improved by:
a. Reducing variable cost
b. Reducing the selling price
c. Increasing the fixed cost
d. Increasing the key factor
53.Profit volume ratio cannot be calculated by using:
a. Profit / volume of sales
b. Profit / volume of costs
c. Changes in profit / changes in sales
d. Changes in profit / changes in contribution
54.Fixed cost Rs.50,000, Profit Rs.30,000, cost of goods sold Rs.170,000, what is PV ratio?
a. 25%
b. 50%

c. 20%
d. 40%
55.Cost of capital is the ---------- rate of return expected by the investors.
a. Maximum
b. Average
c. Minimum
d. Zero
56.In relation to cost of capital, k = r0 +----------+-----------
a. p,d
b. b,f
c. e, p
57.According to traditional approach cost of capital is effected by--------
a. Debt-equity mix
b. Dividend
c. EBIT
d. EAT
58.------------ is the opportunity cost of dividend foregone by the shareholders.
a. Cost of equity
b. Cost of retained earnings
c. Cost of debt
d. Cost of preference shares.
59.Which of the following is/ are the method of calculating cost of equity?
a. Dividend yield method
b. Earning yield method
c. Realized yield method
d. All of these.
60.------------- is the rate of return the firm requires from investment in order to increase the
value of the firm in the market place
a. Net Present Value

c. Average Rate of Return

d. Cost of capital.
61.---------- is the weighted average cost of capital.
a. Specific cost
b. Marginal cost
c. Composite cost
d. Any of these.
62.The span of time within which the investment made for the project will be recovered by
the net returns of the project is known as:
a. Period of return
b. Payback period
c. Span of return
63.Projects with -------- are preferred
a. Lower payback period
b. Normal payback period
c. Higher payback period
d. Any of the above
64.----------- on capital is called ‘Cost of capital’.
a. Lower expected return
b. Normally expected return
c. Higher expected return
65.The values of the future net incomes discounted by the cost of capital are called:
a. Average capital cost
b. Discounted capital cost
c. Net capital cost
d. Net present values
66.Under Net present value criterion, a project is approved if
a. Its net present value is positive
b. The funds are unlimited

c. Both (A) and (B)

67.The internal Rate of Return (IRR) criterion for project acceptance, under theoretically
infinite funds is: accept all projects which have:
a. IRR equal to the cost of capital
b. IRR greater than the cost of capital
c. IRR less than the cost of capital
d. Both a&b above
68.Which of the following is non-discounting method in capital budgeting?
b. Profitability index
c. Internal Rate of Return
d. Accounting Rate of return
69.The project is accepted:
a. If the profitability index is equal to one
b. If the profitability index is less than one
c. If the profitability index is greater than one
d. Both (b) and (c)
70.Where capital availability is unlimited and the projects are not mutually exclusive, for the
same cost of capital, following criterion is used.
c. Profitability Index
d. Any of the above
71.A project is accepted when:
a. Net present value is greater than zero
b. Internal Rate of Return will be greater than cost of capital
c. Profitability index will be greater than unity
d. Any of the above
72.With limited finance and a number of project proposals at hand, select that package of
projects which has:

a. The maximum net present value

b. Internal rate of return is greater than cost of capital
c. Profitability index is greater than unity
d. Any of the above
73.A project may be regarded as high risk project when:
a. It has smaller variance of outcome but a high initial investment
b. It has larger variance of outcome and high initial investment
c. It has smaller variance of outcome and a low initial investment
d. It has larger variance of outcome and low initial investment
74.Following is (are) the method(s) for adjustment of risks.
a. Risk-adjusted Discounting Rate
b. Risk Equivalence Coefficient Method
c. Both (a) and (b)
75.Profitability Index is also known as:
a. Sensitivity index
b. Benefit cost ratio
c. Profit volume Ratio
d. All of these
76.---------- is the point at which Net Present Value becomes zero;
a. Break Even point
b. Average Rate of return
c. Internal Rate of return
d. Profitability index
77.Which of the following is not a method of capital budgeting, under risk and uncertainty?
d. Discounted pay back
78.Under which method, three types of cash flows such as optimistic, pessimistic and most
likely cash flows are estimated?

d. Sensitivity analysis
79.--------- is graphical representation of alternative courses of action and the possible
outcomes and the risk associated with each action.
a. Pivot table
c. Decision tree
d. All of these.
80.Risk free cash flow /risky cash flow =------------.
a. Expected cash flow
b. Probable cash flow
c. Net terminal Value
d. CE Co-efficient
81.An investment appraisal approach which gives a precise measure of risk associated with a
project is:
d. Standard deviation.
82.----------- provides absolute measure of risk in a project.
a. Standard deviation
d. Probability assignment.
83.The higher the co-efficient of variation, higher is the-------- in the project
a. Profitability
b. Return
c. Risk
d. Capital

84.------------ is a comprehensive view of all the possibilities associated with a proposed

project.
a. Co-efficient of variation
b. Probability assignment
c. Sensitivity analysis
d. Decision tree.
85.Activity Based Costing is developed by:
a. Kaplan & Cooper
b. Ouchy
c. Taichi Okno
d. Moulin
86.--------- is a technique of costing which is based on the benefit received from indirect
costs.
b. Target costing
87.In Activity based costing, the cost of an activity in called:
a. Cost driver
b. Target cost
c. Cost pool
d. Cost object.
88.In activity based costing, ---------are the factors which influences the cost.
a. Cost pool
b. Cost centre
c. Cost driver
d. Cost object.
89.------------- is the technique of estimating permissible market driven cost.
b. Target costing

90.---------- Technique of costing considers all the cost to be incurred during the entire life of
the project.
b. Target costing
91.------------ is the difference between target selling price and desired profit margin.
a. Activity cost
b. Upstream cost
c. Downstream cost
d. Target cost
92.Under ------------ total cost are classified into upstream cost, manufacturing cost and
downstream cost.
b. Target costing
93.Traditional costing is also known as:
a. Full costing
b. Volume based costing
c. Proportion based costing
d. All of these.
94.------------ refers to the system of cost reduction based on a series of gradual and small
improvements rather than drastic changes in the manufacturing process.
b. Quality costing
c. Kaizen costing
d. Transaction costing
95.Which of the following is also known as transaction costing/accounting?.

b. Quality costing
c. Kaizen costing
d. Activity based costing
96.Under ‘throughput costing’, only ---------- is treated as direct cost.
a. Direct material
b. Direct labour
c. Direct expense
d. Indirect cost
97.Which of the following Japanese concept means ‘Change for better’?
a. Kan Ban
b. Kaizen
c. JIT
d. TQM
98.‘Theory of Constraints’ was developed by:
a. Robert S Kaplan
b. Robin Cooper
c. Goldratt and J.Cox
d. Waldron
99.Under life cycle costing, research and development cost, design cost etc., are considered
as:
a. Activity cost
b. Upstream cost
c. Downstream cost
d. Target cost
100.-------------- is a practice of identifying, studying and building upon the best practices of
organizational role models.
a. Core competency
b. Bench marking
c. Spying
d. Conglomerating
101.Which of the following is not a component of Quality costing?

a. Cost of failure
b. Cost of quality maintenance
c. Appraisal cost
d. None of these
102.Which of the following is/ are the primary activities under Porter’s Value chain?
a. Inbound logistics
b. Procurement
c. Marketing and selling
d. All of these.
103.Which of the following is/are considered as supportive activities under Porter’s Value
Chain?
a. Infrastructure
b. HRM
c. Procurement
d. All of these.
104.Cost of new debentures incorporates:
a. Floatation cost
b. No floatation cost
c. Only a part of floatation cost
d. None of these.
105.----------- Method of capital budgeting also known as ‘trial and error’ method.
a. ARR
b. NPV
c. BCR
d. IRR
106.The process of selecting a combination of investment proposals for the purpose of
effectively utilizing firm’s limited fund is known as:
a. Capital budgeting
b. Project screening
c. Capital rationing
d. Capital expending

107.Which of the following is not statistical technique of capital budgeting?

a. Sensitivity analysis method
b. Co-efficient of variation method
c. Probability assignment method
d. Certainty equivalent method
108.The philosophy of “Just in Time” developed by:
a. Robert S Kaplan
b. Michael Porter
c. R.Cooper
d. Taichi Okno
109.---------- System advocates ‘Zero Inventory System’.
a. TQM
b. JIT
c. VED system
d. Flexible manufacturing system.
110.Which of the following is/are not discounting techniques of capital budgeting?
a. IRR
b. Benefit Cost Ratio
c. Discounted Payback
d. Average rate of return
111.Which of the following is not a benefit of implementing JIT?
a. Cost reduction
b. Variability increase
c. Work in process reduction
d. Quality improvement.
112.Kan ban is associated with all of the following except:
a. Signaling when it is time for next batch
b. Reducing set up time
c. Reducing batch size
d. Increasing material handling
113. The word “ Kanban” means

a. Low inventory
b. Employee empowerment
c. Card
d. Continuous improvement.
114.which one of the following is not a requirement of JIT system
a. quality deliveries on time
b. low set up time
c. employee empowerment
d. Strong job specialization.
115. “Fish bone diagram is also known as:
a. Cause and effect diagram
b. Poke-yoke diagram
c. Kaizen diagram
d. Taguchi diagram
116.………………is the practice of charging all costs, both variable and fixed,
to operations, processes, or products.
a. Marginal costing
b. Absorption costing
c. Differential costing
d. None of thes
117.In absorption costing, managerial decision making is based upon …………..

a. Profit
b. Contribution
c. Costs
d. None of these
118.Given sales = Rs.1,50,000, Fixed costs = Rs.30,000, Profit =Rs.

40,000.The variable cost is Rs………….
a. 110000
b. 80000

c. 120000
d. 10000
119.The Profit/Volume ratio or marginal ratio expresses the relation of

………… to sales.
a. Profit
b. Marginal cost
c. Contribution
d. None of these
120.Which of the following measures helps to increase the P/V Ratio?

a. increasing the selling price per unit
b. reducing the variable or marginal cost
c. changing the sales mixture
d. all of these
121.Given sales = 1,00,000, Profit = 10,000 , variable cost = 70%.The sales

required to earn a profit of Rs.40000 is------------
a. 1,40,000
b. 14,00,000
c. 20,00,000
d. 2,00,000
122.Marginal cost is the ……….cost of producing an additional unit of output

a. variable
b. fixed
c. semi variable
d. all of these
123.Gross margin is the another name of-----

a. Contribution

b. Net Profit
c. Gross Sales
d. none of these
124. Which of the following shows the shows the degree of profitability?
a. Angle of contribution
c. Margin of safety
d. Both b and c above
125.At Breakeven point contribution will be equal to----------

a. Variable cost
b. Fixed price
c. Profit
d. None of these
126.The ratio of profit(gross) to Volume of sales called------------

a. GP Ratio
b. NP Ratio
c. PV Ratio
d. OP ratio
127.Marginal cost is the aggregate of prime cost and -----------------

a. Fixed overheads
b. Variable overheads
c. Contribution
d. Work cost
128.When fixed cost is deducted from contribution, the balance will be--------
a. Variable cost
b. Gross profit

c. Total cost
d. sales
129.When sales are Rs.30000 and P/V ratio is 20% then contribution will be--------
a. 2000
b. 4000
c. 6000
d. 8000
130.When fixed costs are Rs.4000 and Gross margin ratio is 25%, then
breakeven point will be- - - - - - - -
a. 40000
b. 20000
c. 16000
d. 10000
131.When Profit is Rs.5000 and P/v ratio is 20%, Margin of safety is---------
a. 10000
b. 25000
c. 30000
d. 50000
132.Fixed costs Rs.6000, Profit required Rs.4000 and P/v ratio is 50% , then
sales required will be---------
a. 6000
b. 4000
c. 10000
d. 20000
133.Variable cost ratio is 60% Sales Rs.20000 and fixed cost Rs.5000, then
profit will be ……..

a. 15000
b. 12000
c. 3000
d. 10000
134.Responsibility Accounting is also called---------- Accounting

a. Profitability
b. Management
c. Authority
d. None ofthese
135.In responsibility accounting the organization is divided into different

---------centers
a. Responsibility
b. Cost
c. Profit
d. None of these
136..A cost centre is a segment of the organization where the manager is

responsible for -----------
a. Costs
b. Inputs
c. a or b
d. None of these
137. Both costs and revenues are measured in------- centers
a. Cost
b. Profit
c. Revenue
d. All of these

138. In Activity based Costing, a factor which causes cost is usually called as.
a. Cost driver
b. Governing factor
c. Key factor
d. Limiting factor
139. Cost drivers can be classified in two such as :

a. Activity cost driver and Resource Cost driver
b. Expense driver and Activity cost driver
c. Resource cost driver and Transaction cost driver
d. None of these
140. A centre where the manager is responsible for sales is -------

---
a. Cost centre
b. Revenue centre
c. Investment centre
d. Sales Centre
141. The performance of investment centre is based on----------

a. Cost of the centre
b. Profit of the centre
c. Profit and investment of the centre
d. Revenue of the centre
142.Responsibility accounting is used for----------

a. cost control
b. planning
c. decision making
d. pricing

143. Profit – Capital charges=------------

a. ROI
b. Residual Income
c. NPV
d. Operating profit
144. Capital rationing due to internal factors is known as:

145.Capital rationing due to external factors is known as:
146. In ------------- Costing, actual cost of production is directly charged to units produced
and there is no concept of predetermined standard cost.
a. Activity based costing
b. Target costing
c. Back flush costing
d. All of these.
147. Which of the following is/are not method of transfer pricing?
a. Total cost method
b. Marginal cost method
d. Skimming price method
148. Which of the following is/are method of transfer pricing?
a. Negotiated price method
b. Cost plus pricing method

d. All of these.
149. The Concept of ‘Transfer Pricing’ is applied for transactions in:
a. Export of goods
b. Import of goods
c. Mergers and Acquisition
d. Inter-unit transfer of goods
150. Variable cost per unit is Rs.20 and over all PV ratio is 20%, then price of the product
will be-----------
a. 40
b. 24
c. 25
d. 30
151. The term “Six Sigma” related to the management of:
a. Labour cost
b. Storage cost
c. Defectives
152.Pareto charts are used to:

a. Identify inspection point
b. Organize errors and problems
c. Guide the quality training
d. Outline the production schedule.
153. Key factor is also called as:

a. Restricting factors
b. Governing factors
c. Limiting factor
d. All of these.

154. Where key factor is present, from alternative best project must be selected on the basis
of:
a. PV Ratio
b. Contribution per Unit
c. BEP
d. Contribution per key factor
155. There will be two BEP in the case of :

a. Analytical BE chart
b. Profit graph
c. Curvilinear BE chart
d. Contribution BE chart
156. Payback period of a project can be called as----------- of that project.

a. Contribution
b. ROI
c. BEP
d. Residual income.
157. Average rate of return is also known as Accounting rate of return since it considers:
a. Cash inflows
b. Cash outflow
c. Profit after tax
d. All of these
158. ------------- is preventive action but ----------- is corrective action.

a. Standard cost, Actual Cost
b. Budgeting, standard costing
c. Cost control, cost reduction
d. All the above.

159. The purpose of ------------- is to attain a real and permanent declain in cost.
a. Cost control
b. Budgeting
c. Decremented costing
d. Cost reduction.
160. --------------- is superior to cost control.
a. Differential costing
b. Budgeting
c. Standard costing
d. Cost reduction.
Answers
Q.No Answer Q.No Answer Q.No Answer Q.No Answer

1 b 41 d 81 d 121 d
2 d 42 a 82 d 122 a
3 c 43 a 83 c 123 a
4 b 44 b 84 d 124 b
5 c 45 c 85 a 125 b
6 d 46 d 86 c 126 a
7 a 47 c 87 c 127 b
8 d 48 b 88 c 128 b
9 d 49 c 89 b 129 c
10 d 50 c 90 a 130 c
11 d 51 b 91 d 131 b
12 b 52 a 92 a 132 d
13 b 53 b 93 d 133 c
14 c 54 d 94 c 134 a
15 a 55 c 95 d 135 a
16 b 56 b 96 a 136 c
17 d 57 a 97 b 137 b
18 b 58 b 98 c 138 a

19 c 59 d 99 b 139 a
20 c 60 d 100 b 140 b
21 d 61 c 101 d 141 c
22 c 62 b 102 a 142 a
23 d 63 a 103 d 143 b
24 b 64 d 104 a 144 b
25 a 65 d 105 d 145 a
26 d 66 a 106 c 146 c
27 b 67 b 107 d 147 d
28 c 68 d 108 d 148 d
29 b 69 c 109 b 149 d
30 b 70 d 110 d 150 c
31 c 71 d 111 b 151 c
32 d 72 a 112 d 152 d
33 b 73 a 113 c 153 d
34 d 74 c 114 d 154 d
35 c 75 b 115 a 155 c
36 b 76 c 116 b 156 c
37 b 77 d 117 a 157 c
38 b 78 d 118 b 158 c
39 b 79 c 119 c 159 d
40 b 80 d 120 d 160 d

CHAPTER 1
QUESTION
______is nothing but the right process of selecting appropriate,logical,pracital,achievable option from the availabe alternative
______is person who carry on business exclusively by and for himself
the relationship between person who agree to carry on business in a common with a view to private gain
a_____is a firm of a business organization in which the funds of the large no of invester are managed by a few person for a pur
______is the language of business
the object/s of accounting
out of the following which is not the branch of accounting
accounting______are the rules of action or the methods and procedures of accounting commanly adopted while recording busi
according to _______concept assests purchase are generally recorded in the accounting book at the cost at which they are purc
accourding to ______concept revenue is recognized only when the sale is performed
accounting _______are the traditional usage and custom which are in use since long
out of the following which is not the convention of accounting
out of the following which is not the system of accounting
out of the following which transactions are not to be recorded in the books of accounts
account in the names of a persons are known as
account in the name of assets are known as
account in the respect of expenses and incomes are known as
every transaction must have ______aspects and involve ______accounts
a _______is an accounting entry that either increases an assets or expenses or account, or decreases a liability or equity a/c
a _______is an accounting entry that either increases a liability or a equity a/c, or decreases an assets or expenses a/c
debit the receiver, credit the giver is the rule of
debit what comes in, credit was goes out is the rule of
debit all expenses and losses, credit all incomes and gains is the rule of
________is a record of transaction in the book of accounts
_________is an exchange of money or money's worth
_______is a book of orginal entry
_______is a bound book of different accounts
_______is a summarized record of transactions related to one person one assets one head of expense/loss and one head of inco
_______means a totaling of sums in the books of accounts
_______ are obligation or debts that the enterprise must pay in money or services at sum time in the future
______are economic resources of an enterprises that can usefully expressed in monetary terms
_______are commoditie, purchased or manufactured for resale with a view to earn profit
________are the amounts the business earn by selling its product or providing the services to customer
_______are the costs incurred by a business in the process of earning revenue
______are persons and /or other enteries who owe to an enterprises an amount for receving goods and services on credit
_______are person and/or other enteries that have to be paid by an enterprises an amount for providing the enterprieses gooods
_______is a list of the entire journal ledger accounts name and balances ; it is prepared to prove the ledger
the differences of two sides of an account is called as
_______deals with expenses related to or identified with products which may only be a part of the organization
in_______stocks are valued at lower of cost or market value
the primary objective of _______is to provide necessary information to the management in the process of its planning, controll
the success of ______does not depend upon management accounting system
in________no statuary requirement of audit for reports
which is most popular and acceptable software?
the advantages of accounting software
internal and external parties are the users of _______
capital account generally shows ______balance
assest a/c shows ______ balance
there are______ columns in journal
explanatory note written below an entry recorded in the journal is called as_______
CHAPTER 2
QUESTION
______shows the firm's assets ,liabilities, and stockholder' equity as of the report date
______shows the result of the firms operation and financial activity for the reporting period
_____include explanation of various activities additional details of some accounts and other items mandated by the regulatory
_______is a formal official record of the financial activity position of business,person,or other entry
_______provide the vital information related to the profitability liquidity and solvency of the business
______is the simplest business form under which one can operate a business
______is not a separate legal entity
for every items given in trial balance ______effect should be given
for every items given in adjustement _____ effects should be given
_______are nothing but the enteries which are not included in the original trial balance
every adjustment has two effects, i.e
depreciation is debited to
income accured but not received is recorded to ______
a prepaid expenses shown at
closing stock recorded to
outstanding expenses shown at
goods withdrawn from business is considered as
interest on capital is debited to
interest on drawing is credited to
good disturbited as free sample is debited to
reserve for discount on creditor is credited to
_______information is ignored in financial statement
the financial statement are based on accounting
accounting years start from
accounting years ends on
return outward are deducted from
return inward are deducted from
carriage inward is debited to
carriage outward is debited to
goodwill is recorded to
depreciation is ______in /from assets
in_______business ,all income and losses are taxes on the individual personal income tax return
freight is recorded to
outstanding expenses are always ___________
prepaid expenses are always ________
gross profit is transferred to ________
good withdrawn for personal use by proprietor is treated as ______
royalty is recorded to
purchase return is also called as
sales return is also called as
R.D.D is deducted from
________is non cash expenses
income received in advance is considered as
an insurance charge of goods is recorded to
wages and salaries items is recorded to
patents items is recorded at
_______is not a current assets
________is not a fixed assets
_______is not a current liability
net profit is added in
CHAPTER NO3
QUESTION
______provide a speacilised tecnique which provide prompt and accurate information regarding the cost
of producing and selling and article
the amount of expenditure incurred on, attributable to a given thing is called as ____
the technique and process of ascertaining cost is called as
with the help of ______we can control the cost
with the help of ____we can find out the cost
the total of direct material + direct labour+ direct expenses is called as
direct expenses are also called as
depreciation is an example of
the aggregate of all indirect expenses is
factory cost is also called
cost of sales is also called as
telephone bill, electricity bill is an example of
fixed cost is also called as
material and labour is an example of _____
repair and maintenance is an example of ________
cost incurred because of lock outs is an example of _____
one-time set up cost of a plant or project is called as
standard cost is also called as
variable cost is also called as
rent is an example of
______is the difference between cost of two alternative
cost incurred as per the policy of top management is called as
notional cost is nothing but _________
depreciation on plant and rent is an example __________
a location, person or item of equipment (or a group these )for which cost may be a ascertained and used
for the purpose of control is called as
_______a statement which show various componentsof total cost of a product
_______is prepared on the basis of actual cost incurred
haulage charges is an example of _____
counting house salaries is an example of
carriage outward is an example of
opening stock of finished gooods is added in
direct labour charge is also called as
cost unit is divided into
cost of converting raw material into finshed goods is also called as
accourding to elements, cost is divided into _____catogeries
______means the amount spend to sell a company’s products
insurance is an example of _____
________cost directly varies with volume of output
the expenditure which has been incurred in a accounting period but it is applicable further periods also is
_______
the estimate of expenditure for different business operation for a specific period is ________
an up-gradation of machine , change in service / distribution channel are the example of ______
the value of benefit sacrificed in favour of an alternative cource of action is ___________ cost
opening stock of W.I.P and closing stock of W.I.P is added and deducted after addition of ________in
prime cost
carriage inward is added while calculating _____
profit margine is added in __________
abnormal wastage of material is added in ___________
discount allowed is an example of _________
sale of scrap is __________after addition of factory overhead in prime cost
cleaning charges is an example of _____________-
_____is the process of ascertaining cost whereas_______is the process of recording various costs in a
systematic manner, in order to prepare statistical date to ascertain cost
CHAPTER NO 4
QUESTION
Marginal costing is also called as
In --- total cost can not be easily segregated binto fixed costs and variable costs.
P/V ratio is mainly known as ---------
_____ analysis classifies all costs as either fixed or variable
___ that point where no profit no loss position is observed
____ is the difference between sales revenue and variable cost
Contribution is also called as
____ is the difference between actual sales and break even sales
_____ is an angle where sales line intersects total cost line which indicates profit earning capacity over
the BEP
If contribution is Rs.3,00,000 and sales Rs.10,00,000 then what is P/V ratio?
If P/V ratio is 25% then what is the % of variable cost?
If Fixed cost is Rs.2,50,000 and profit is rs. 3,50,000 then what is the amount of contribution?
If Fixed cost is Rs.2,50,000 and P/V ratio is 60% then what is BEP in Rs?
If sales are Rs.50,000 and P/V ratio is 20% then what is the amount of variable cost?
If cotribution is Rs.3,00,000 and profit is Rs.1,00,000 then what is the amount of Fixed cost?
If sales are Rs.3,00,000 and P/V ratio is 20% then what is the amount of Fixed cost?
The correct formula of Contribution is _______
The correct formula for P/V ratio is __________
Marginal costing is a costing ________
Under absorption and over absorption of overheads problems are not arisen under
CHAPTER NO 5
QUESTION
Standard cost is the ______ cost
Small organizations can not adopt ____ technique
____ means difference between Standard cost and Actual cost
_____ helps the management to understand the present costs and then to control future costs
Variances are classified in _____ categories
If Standard cost is Rs.100 and actual cost is rs. 70 then what is the amount of Material Cost variance
If Standard price is Rs.8 and standard qty 10 Actual price is Rs7 and Actual qty 10 then what is the
amount of material price variance?
If Standard price is Rs.8 and standard qty 10 Actual price is Rs7 and Actual qty 10 then what is the
amount of material usage variance?
If Standard rate is Rs.1.50 and Standard hours are 1600 Actual rate Rs.2 and Actual hours 1500 then
what is the amount of Labour cost Variance?
what is the amount of Labour rate Variance?
what is the amount of Labour efficiency Variance?
The correct formula for verification of Material Cost Variance is _____
The correct formula for verification of Labour Cost Variance is _____
In Standard costing comparison between ______ is carried out
The Disadvantages of Standard Costing is / are

____ is a concrete precise picture of the total operation of an enterprise in monetary terms.
Accuracy can not bbe maintained is a limitation of
Pre requisitions for effective implementation of Budgetory Control system is / are

____ is the budget in which adjustment is possible according to change in business condition
When forecasts about budget shows greater revenue to be received or generated than the expenses to be
incurred during butget period that is known as ______
___ Budget highlights that the expenditures to be incurred in the budget period will be greater than the
revenue to be received during the same period
The establishment of budgets relating to the responsibilities of executives to the requirements of a policy
and the contineous comparison of actual with budgeted results either to secure by individual action the
objective of that policy or to provide basis for its revision is called as _______
A ___ is a poweful tool available to the management for the purpose of maximising profits.
Fixed budget is also known as
Normal profit means ________
Personal budget is also called as ______
In Cash Budget _______ transactions are considered
Budget is prepared for a ______ period of time
Purchase budget is also called as _____
_____ is the plan of proposed investment in the fixed assets

A B C
business decision planning organizing
partner sole trader executive
partnership firm sole trading firm joint stock company
partnership firm sole trading firm joint stock company
marketing profit earning capacity accounting
to calculate net profit or net loss of
to know
the business
the financial condition
to of
provide
the firm
information to the management for important manage
financial accounting management accounting human resources accounting
principles concepts conventions
business entity concept going concern concept money measurement concept
business entity concept going concern concept money measurement concept
principles concepts conventions
convention of consistency convention of disclosure convention of conservatism
non-cash entry system cash system single entry system
cash transaction credit transaction financial transaction
personal a/c real a/c nominal a/c
two, two one, one one, two
debit credit sales
debit credit sales
entry recording monetary transaction
entry recording transaction
journal ledger cash book
casting summarizing journalizing
assets liabilities responsibilities
assets liabilities cash and bank balance
assets goods investments
asstes goods investments
assets expenses investments
debtors creditors shareholders
debtors creditors shareholders
debit credit balance
tally Marg saral
accounting software save time and
nomoney
scope for mistakes and errors
provide accurate an updated information as an when required
cash debit credit
cash debit credit
two three four
narration explanation brief information
A B C
cash flow funds flow income statement
trading and profit and loss a/c expenses statement income statement
trading and profit and loss a/c expenses statement income statement
financial statement trading a/c profit and loss a/c
financial statement trading a/c profit and loss a/c
partnership firm sole trading firm private ltd co.
partnership firm sole proprietorship firm private ltd co.
dual single triple
dual single triple
journal proper ledger adjustment
one debit and one credit debit credit
BRS balancesheet trading a/c
profit and loss a/c DR.SIDE profit and loss a/c CR. Side trading a/c dr. side
balance sheet assets side profit and loss a/c CR. Side trading a/c dr. side
balance sheets liability side profit and loss a/c CR. Side balance sheets assests side
sales purchase capital
capital a/c balancesheet trading
journal a/c balancesheet trading a/c
capital a/c personal a/c trading a/c
cash credit qualitative
accounting concept and convention
accounting concept accounting convention
1st jan 1st april 1 st march
31st jan 31st aug 31 st march
sales purchase stock
sales purchase stock
capital a/c balancesheet assets side trading a/c
added deducted not added
sole proprietorship partnership co-operative
added in respective assets added in respective liability added in respective expenses
deducted from respective assets added in respective liability deducted form respective expenses
capital a/c balance sheet trading a/c
income expenses liability
inward outward return inward
inward outward return inward
sales purchase creditor
depreciation discount purchase
income expenses assets
profit and loss a/c DR.SIDE profit and loss a/c CR. Side balance sheets liability side
stock investment cash
land building machinery
capital loan bill payble
trading a/c income a/c capital a/c
A B C
cost accounting financial accounting management accounting

cost price expenses
costing accounting financing
costing method cost accounting management accounting
costing method cost accounting management accounting
total cost factory cost prime cost
chargeable expenses factory expenses work expenses
direct expenses factory expenses general expenses
total cost total expenses overhead
total cost cost of production work cost
total cost cost of production work cost
total cost fixed overhead variable overhead
total cost direct cost work cost
fixed cost controllable cost non controllable cost
fixed cost avoidable cost non controllable cost
fixed cost unavoiadable cost abnormal cost
fixed cost direct cost capital cost
pre determine cost direct cost capital cost
pre determine cost direct cost marginal cost
pre determine cost direct cost unavoiadable cost
differential cost semivariable cost variable cost
differential cost programmed cost normal cost
standard cost programmed cost normal cost
commited cost programmed cost general cost
cost unit cost center cost department

cost sheet cost account cost report
historical cost sheet cost account cost report
fixed overhead direct cost factory overhead
fixed overhead selling overhead factory overhead
fixed overhead selling overhead factory overhead
factory cost prime cost cost of production
factory cost prime cost fixed wages
unit of production unit of service both a and b
factory cost prime cost conversion cost
one two three
revenue cost differential cost fixed cost
revenue cost differential cost differed revenuve cost

budgeted cost differential cost differed revenuve cost
incremental cost differential cost opportunity cost
incremental fixed opportunity
direct expenses factory overhead office overhead

cost of direct expenses cost of direct overhead cost of direct labour
cost of sales fixed cost cost of production
cost of sales cost of production cost of goods sold
added deducted not considered
costing , cost accounting cost accounting ,costing costing and allocation cost
A B C
Variable costing Standard costing Material costing

Marginal costing Standard costing Material costing
Contribution to sales ratio Contribution margin ratio Variable profit ratio
CVP ABC JIT
Centr point BEP Starting point
P/V ratio BEP MOS
P/V ratio Net Margin MOS
P/V ratio Net Margin MOS
Angle of incidence Contriution Margin of safety

20% 30% 33.33%
70% 80% 75%
100,000 600,000 375,000
416,667 383,333 375,000
40,000 10,000 25,000
400,000 2,0,000 250,000
240,000 80,000 270,000
Sales - Variable cost Fixed cost + profit Sales* P/V ratio
Change in profit / change
Contribution / sales*100 in sales *100 Sales- Variable cost / Sales*100
Technique Method System
Marginal costing Standard costing Job costing
A B C
pre determine cost Pre decided Pre Planned
Standard costing Marginal Costing Budgetory control
Balance cost Variance marginal cost
ABC Analysis Variance Analysis Marginal Analysis
one Two Three
10 -10 150
10 -10 150
10 -10 50
600 -600 500
750 -75 600
150 -150 300
MPV + MUV MPV - MUV MPV * MUV

LRV + LEV LRV - LEV LRV * LEV
Fixed cost and Variable cost
Standard cost and Actual cost Normal cost and Abnormal cost
Establishment of Standards are Inaccurate unreliable and
difficult in practice Standards are required to outdated standards do more
be revised contineously harm than benefit
budget Plan Strategy
Budgetory control Scientific planning Standard costing
Deciding Budget centres and Preparation of Budget Determination of budget key
budget period manual factor
Flexible Budget Fixed Budget Sales budget
Surplus Budget Best budget Favourable budget
Surplus Budget Best budget Favourable budget
Budget Budgeting Budgetory control

Budget Decrease in selling price Standard Norm
Static budget Standard budget Master Budget
No profit no loss Less profit Expected profit
Cost Budget Labour Budget Employee budget
Cash Credit All financial
Fixed One Month One Year
Production budget Materil budget Cost Budget
Fixed budget Capital expenditure budget Cash Budget

D Answer
strategy A
manager B
co-operative socy A
co-operative socy C
selling C
all of the above D
cost accounting C
systems A
cost concept D
realization concept D
systems A
convention of realization D
double entry system A
ordinary transaction D
individual a/c A
individual a/c B
individual a/c C
two, one A
purchase A
purchase B
individual a/c A
individual a/c B
individual a/c C
ledger A
ledger C
subsidiary book A
subsidiary book B
account D
ledger posting A
salaries B
funds A
resources B
revenues D
revenues B
suppliers A
customers B
trial balance D
cash C
cost accounting D
cost accounting A
cost accounting B
cost accounting D
cost accounting B
SAP A
all of the above D
cost accounting A
overdraft C
overdraft B
five D
detail information A
D Answer
balance sheets D
balance sheets A
supplimentary note D
supplimentary note A
cash flow and fund flow A
public co. B
one man co. B
none of the above B
none of the above A
none of the above C
none of the above A
profit and loss a/c D
trading a/c cr.side B
trading a/c cr.side A
trading a/c cr.side D
drawing D
quantitative C
none of the above A
1st june B
31 st dec C
closing stock B
closing stock A
profit and loss a/c C
profit and loss a/c B
not deducted A
departmental A
trading a/c cr.side C
added in respective income C
added in respective income C
assets B
return outward D
return outward C
debtors D
creditors A
liability D
balance sheets assets side D
goodwill D
debtors D
creditors A
assets a/c C
D Answer
cost and financial

accounting A
fixed cost A
management accounting A
costing techinque D
costing techinque A
main cost C
general expenses A
indirect expenses D
factory overhead C
factory overhead C
factory cost A
semivariable overhead D
period cost D
period cost B
normal cost D
normal cost C
normal cost C
fixed cost A
fixed cost C
standard cost C
standard cost A
fixed cost B
imaginary cost D
imaginary cost A
cost division B
cost classification A
estimated cost sheet A
administrative overhead C
administrative overhead D
administrative overhead B
work cost C
product wages D
none of the above C
productive cost C
four C
variable cost A
variable cost C
variable cost D
variable cost C
variable cost A
future cost A
future C
selling overhead B
cost of direct material D
cost of goods sold A
none of the above D
selling overhead D
none of the above B
selling overhead B
costing and absorption
of cost A
D Answer
Job costing A
Job costing A
All of the above A
HML A
Ending point B
Contribution D
Gross margin D
Gross margin C
Gross margin A
40% B
50% C
410,000 B
410,000 A
30,000 A
300,000 B
200,000 A
All of the above D
All of the above D
convention A
Budgetory control A
D Answer
none of the above A
none of the above A
variable cost B
Budget Analysis B
four D
20
A
20
A
0
D
400
B
400
B
200
A
none of the above A
none of the above A
none of the above A

All of the above
D
Goal A
Marginal costing A
All of the above D

Cash budget A
Non favourable budget A
Non favourable budget B
none of the above C

Increse in selling price A
Flexible budget A
none of the above A
none of the above B
none of the above C
none of the above A
none of the above B
Purchase budget C
MCQ for Accounting for business decision
a) Shareholders
b) Creditors
c) Managers
a) Creditor
c) Controller
d) Treasurer
a) Service entities
d) All of these

c) Indirect labour
d) Direct labour

a) Cost
b)Financial
1
c) Management
d) All


d) None of these
a) Fixed asset
b) Current asset
c) Fictitious asset
d)Wasting asset
c) Cost accounting
d) Real Accounting

c) Both (a) & (b)
d) None of these
11.Bad debt amount should be credited to
a) Debtors account
c) Sales account
2
b)Real account- credit what comes in
b) net purchases
d)sales


c) Goods account
d) Purchase account
a) Cash account
b) Mahesh Account
c) Sales account
d) Purchase account

b) Rent account
c)Cash account
d) Expense account

a) Discount account
3
b)Customer’s account
c) Sales account
d) Cash account

Stock = …………………
a) Sales, Purchases


a) Historical
b) Forward looking
c) Analytical
d) Social


c) Labour unrest

a) Only to workers

4

a) Fixed cost
b) Variable cost
26. ………………..is a person or item for which cost may be ascertained. a) Cost unit
b) Cost centre
c) Cost object
d) Cost estimation

a) Prime cost
b) Factory overhead
c) Selling overhead
d) Office overhead
a) Opportunity cost
b) Sunk Cost
c) Incremental cost
d) Decremental cost
accounting concept

a) Loan
b) Unsecured Loan
c) Secured Loan
b) Advertising
c) Depreciation
d) Carriage
5
a) Practicability
b) Subjectivity

d) All the above
pursuance to:



b) Sales account
c) Purchase account

c) (a) &(b) above
6
40.All direct & indirect expenses related to business are charged:

b) Trading account
sheet
a) Investment
c) Provision
d) Lease Holds

c) P & L a/c
in……………….

a) Remains fixed
7

c) Journal
d) Both a and b

48. Cash Purchases:
a) Increases assets
c) Decreases assets


a) Machinery
b) Building
c) Cash
d) Creditor


8

b) Matching Concept
c) Consistency

a) Building
b) Bank Balance
c) Plant Patents
d) Goodwill
b) Matching Concept
c) Cost Concept
d) Cost Concept
a) Current assets
c) Fixed asset
d) Fixed liability

b) A liability
9
d) Both a and b
e) Both a and c
a) Debtors
b) Investors
c) Creditors
d) Shareholders
a) Dual concept
b) Divider concept
c) Entity concept
d) Landlord concept

a) Nominal capital
b) Paid up capital
c) Issues capital
d) None of these

10
d) None of these
d) All of these

a) Projected data
c) Historic data


and Science
b) Art
c) Science
d) Art or Science

a) Original
b) Duplicate
c) Personal
d) Nominal

b) Rules of Real
c) Rules of Nominal
d) All of these
b) Cash a/c
11
c) Short term loan
d) creditors
a)Discount
b) Depreciation
c)Reduction

d) None of these

a) Long term loan
b) Short term loan
c) Owner’s fund
d) All of these

a) Current asset
d) None of these
a) Cost
b) Net profit
c) Gross profit
d) Selling price
a) Management only
b) Government only
c) Investor only
d) All of these
a) Accrual concept
12
b) Cost concept
a) Provisions
a) Separate entity
b) Going concern
c) Consistency
d) Time period

c) Entity Concept

a) Income Statement
c) Balance Sheet
a) Loan from Mr.Y

b) loan to Mr.y
c) Both (a) (b)
d) None of these

13
a) (ii) (iii)(i)
b) (iii)(iv)(ii)
c) (i)(iii)(iv)
d) (i)(iv)

a) Accrual concept
b) Cost concept
a) Separate entity
b) Going concern
c) Consistency
d) Time period



a) Trading a/c
b) Balancesheet
d) Trial balance.
14
Sole proprietorship
b. Corporation
c. Partnership
d. All of them
a) Fiscal year
b) Calendar year
d) Accrual period

a) Personal a/c
b) Impersonal a/c
c) Real a/c
d) Nominal a/c


d) Matching concept
15
b) Corporation
c) Partnership
d) All of them
recognized when
a) Cash is received
following?
a) Accrual concept
b) Matching concept

103.Which of the following is time span into which the total life of a business is divided for the
a) Fiscal year
b) Calendar year
d) Accrual period
accounting concept?
b) Materiality
c) Prudence
d) Matching concept
105. Information about an item is ________ if its omission or misstatement might influence
a) Concrete
b) Complete
16
c) Immaterial
d) Material
106."Financial information should be neutral and bias free" is the dictation of which one of the
following?
d) Duality Concept
accounting books
d) None of These
d) All of the above
110.If the total assets of the company amount to Rs 1,50,000 and owner’s equity is Rs 70,000,the
a) Rs 70,000
b) Rs 80,000
c) Rs 90,000
d) Rs 1,00,000

a) Revenue Profit
b) Capital Profit
c) Loss
d) None of these
a) Profit
17
b) Assets
c) Company
d) Books of A/c
113.Which expenses is a Capital Nature?
a) Depreciation
b) Wages
c) Salary
d) Stationary

a) Assets
b) Liabilities
c) Capital
d) All of these
115.Accounting is the process of matching……..

a) Benefits & Costs
b) Revenues & Costs
116.Which one of the following is not an example of Intangible Assets?

a) Patents
b) Trade Marks
c) Copyright
d) Land
117.The prime function of accounting is to
118.The basic function of financial accounting is to


18
d) None of these

a) Practicability
b) Subjectivity
d) None of these
122.The system of recording transaction based on dual aspect concept is called

d) None of these
123.The practice of appending notes regarding contingent liabilities in accounting statement is
pursuant of
124.According to the money measurement concept the following will be recorded in the books of
125.The convention of conservatism when applied to the balance sheet result in.

d) None of these
126.The convention of conservatism is applicable a)

19
d) None of these
127.The amount brought in by the proprietor in the business should be credited to
a) Cash a/c
b) Capital a/c
c) Drawing a/c
d) Bank a/c
128.The amount of salary paid to Suresh should be debited to
b) Salaries a/c
c) Cash a/c
d) Bank a/c
129.The return of goods by the customer should be debited to

a) Customer a/c
b) Sales return a/c
c) Goods a/c
130.sales made by Mahesh for cash should be debited to
a) Cash a/c
b) Mahesh a/c
c) Sales a/c
d) Sales return a/c
131.The rent paid to land lord to be credited to
a) Land lord a/c
b) Rent a/c
c) Cash a/c
d) Tenant a/c
132.The cash discount allowed to a debtor should be credited to

a) Discount a/c
b) Customer a/c
c) Sales a/c
d) None of these
133.In case of a debt becoming bad, the amount should be credited to
a) Debtors Accounts
b) Bad debts a/c
c) Sales a/c
134.The primary objective of cost accounting is
20
d) None of these

accounting concept
d) None of these
d) None of these
137 Accounting principles are …………………………. which are adopted by the accountant

d) None of these
138.The convention of disclosure implies that all material information should be

c) Not disclosed
d) None of these
139.In accounting all business transaction are recorded as having
a) Single aspect
b) Dual aspect
c) Triple aspect
d) None of these
statements
21
d) None of these
d) None of these
142.Basic assumptions or conditions upon which the science of accounting is based.

d) None of these.
143.A system in which accounting entries are made on the basis of amounts having become due
a) Cash concept
b) Accrual concept
c) Matching concept
d) On-going concept
144.Debit the receiver credit the giver rule for
a) Real a/c
b) Personal a/c
c) Nominal a/c
d) None of these
145.Debit what come in Credit what goes out rule for
a) Real a/c
b) Personal a/c
c) Nominal a/c
d) None of these
146.Debit all expenses and losses Credit all gains and income.
a) Real a/c
b) Personal a/c
c) Nominal a/c
d) None of these
a) Journal
22
b) Ledger
c) Trial balance
d) None of these
b) Ledger
c) Trial balance
d) None of these

a) Compound Journal
b) Ledger
c) Trial balance
d) None of these
150.The transferring of debit and credit items from journal to the respective accounts in the
ledger is called as
a) Ledger
b) Posting
c) Forward journal
d) None of these
Land
b) Machine
c) Cash
d) Owner Equity
152.Which one of the following items would fall under the definition of a liability a)
Cash
b) Debtor
c) Owner’s equity
d) None of these
153.Which of the following statements are false?

23
Land Rs.1,000,000
Machinery Rs.20,000
Cash Rs.10,000
Debt Rs.0
Owner’s equity ?

a) Rs.1020000
b) Rs.1010000
c) Rs.1030000

a) 600,000
b) 1,400,000
c) 2,000,000
d) None of these

Land Rs.1, 500,000
Cash Rs.20, 000
Loan Rs.500, 000
Creditors?
a) Rs.200, 000
b) Rs.700, 000
c) Rs.800, 000
d) Rs1, 100,000
Land ?
Vehicles Rs.600,000
Cash Rs.30,000
Loan 5,00,000
24
Creditors Rs.50,000
e) 1,000,000
f) 1,550,000
g) 800,000
h) None of these

c) Cash = Assets
a) Only (a)
b) Both (a) (b)
c) All (a)(b)(c)(d)
d) None of these
a) Net Loss
b) Net income
c) Dividend


a) Accounts payable
c) Sales
d) Cash
Cash Rs.100
25
Bank Loan Rs.1,000
a) Rs.200
b) Rs.1900
c) Rs.1200
d) Rs.1700
informed reader

b. Sales

d.None of theses
b. Currency
c. Money orders
26
correct?
ledger.
true?


27
account credited.
assets
b. Investments

d. None of these

Planning
b) Decision making
c) Control
d) All of these
28
users.
departments.

d. All of these

a. Variable cost
c. Direct cost


29

c) Owners
184.The cost concept records the figures at

a) Market values
185.Going concern concept assumes

a) Asset
b) Liability
c) Accounts
c) recorded facts
a) Management
b) Creditors
c) Bankers
d) All of the above
30
a) Sundry creditors
b) Acceptances
a) Actual figures
b) Budgeted figures
c) Standard figures

a) 1910
b) 1939
c) 1950
d) 1960

a) Compulsory
b) Optional
c) Obligation

a) Trading account
c) Balance sheet
d) All of the above
a) Fixed asset
b) Investment
31
c) Current asset
d) Owners equity
a) Financial
b) Economic
c) Non financial
d) None of these
a) sales
b) Share capital
d) Unsecured loan
200.The word accounting can be classified in to:
201.If a company has contingent liabilities, they appear in the …………..

.
a) Balance Sheet

a) M. S. Gosav
b) Wheldon
c) LucoPacioli
d) R. N. Carter
203. The work of a book keeper is ____________ in nature. a)

Analytical
b) Clerical
32
c) Executive
d) Non- executive
204. Depreciation is a ____________. a)


205. _____________ system records only actual cash receipts and payments a)
Cash basis
b) Accrual basis
c) Mercantile basis
206. Which of the following is true for: -“In accounts recording is done of_ _ _ _ _” a)

c) Both
207. Salary is one of the ___________ expenses a)

Capital
b) Revenue
c) Direct
d) Non- cash
33
a) Nominal account
b) Real Account
209. _______________ is a summary of all transactions relating to particular account. a)

Balance sheet
b) Trial Balance
c) Ledger
d) Journal

a) cash account
b) capital account
c) drawings account
211. Amount of salary paid to Suresh should be debited to __________ a)

Account of Suresh
b) Salaries account
c) Cash account
212.All costs other than direct materials cost, direct labour cost and direct expenses are known as:
b) Overhead
e. Variable cost
34
g. Direct cost

d. All of these
g. Indirect labour
h. Direct labour
labour
b) Direct materials

classified as
a) A prime cost

expense
b) Direct materials
d) Immaterial items
35
Direct labour
b) Direct materials
d) Advertising

b) Direct Wages
c) Direct Expenses
d) Prime Cost

a) Work on cost
b) Work Cost
d) Direct Cost

a) Prime Cost
b) Factory Overhead
c) Selling overhead
d) Office overhead
Total Cost
b) Office Cost
c) Cost of sales
d) Selling overhead


(d) future costs
36
(a) Rs. 1,80,000
(b) Rs. 2,00,000
(c) Rs. 1,70,000
(d) Rs. 2,10,000
37
Chapter 1
private gain.

performed.
monetary terms.
profit.
decision-making.

(a) Tally (b) Marg
(c) Saral (d) SAP
(a) Cash (b) Debit
(a) Cash (b) Debit
(a) Two (b) Three
(c) Four (d) Five
1. (a) 11. (a) 21. (a) 31. (a) 41. (b)

2. (b) 12. (d) 22. (b) 32. (b) 42. (d)
3. (a) 13. (a) 23. (c) 33. (d) 43. (b)
4. (c) 14. (d) 24. (a) 34. (b) 44. (a)
5. (c) 15. (a) 25. (c) 35. (a) 45. (d)
6. (d) 16. (b) 26. (a) 36. (b) 46. (a)
7. (c) 17. (c) 27. (b) 37. (d) 47. (c)
8. (a) 18. (a) 28. (d) 38. (c) 48. (b)
9. (d) 19. (a) 29. (a) 39. (d) 49. (d)
10. (d) 20. (b) 30. (b) 40. (a) 50. (a)
Chapter 2
date.
reporting period.
(a) Dual (b) Single
(a) Dual (b) Single
Balance.

(a) Cash (b) Credit

income tax return.


1. (d) 11. (a) 21. (d) 31. (a) 41. (d)

2. (a) 12. (d) 22. (c) 32. (a) 42. (a)
3. (d) 13. (b) 23. (a) 33. (c) 43. (d)
4. (a) 14. (a) 24. (b) 34. (c) 44. (a)
5. (a) 15. (d) 25. (c) 35. (c) 45. (c)
6. (b) 16. (a) 26. (b) 36. (d) 46. (d)
7. (b) 17. (d) 27. (a) 37. (b) 47. (d)
8. (b) 18. (d) 28. (c) 38. (c) 48. (d)
9. (a) 19. (d) 29. (d) 39. (d) 49. (a)
10. (c) 20. (d) 30. (b) 40. (c) 50. (c)
Chapter 3
Cost Accounting
______________.
(a) Cost (b) Price

(a) One (b) Two
(c) Three (d) Four

______________.
______________.
cost.
______________ in Prime Cost.
ascertain cost.
1. (a) 11. (a) 21. (a) 31. (c) 41. (a)

2. (a) 12. (d) 22. (b) 32. (d) 42. (c)
3. (a) 13. (d) 23. (d) 33. (c) 43. (b)
4. (d) 14. (b) 24. (a) 34. (c) 44. (d)
5. (a) 15. (d) 25. (b) 35. (c) 45. (a)
6. (c) 16. (c) 26. (a) 36. (a) 46. (d)
7. (a) 17. (c) 27. (a) 37. (c) 47. (d)
8. (d) 18. (a) 28. (c) 38. (d) 48. (b)
9. (c) 19. (c) 29. (d) 39. (c) 49. (b)
10. (c) 20. (c) 30. (b) 40. (a) 50. (a)
Chapter 4
Cost Control
(a) EOQ (b) JIT
(c) ABC (d) HML
inventory value.
______________.
is ______________.

(a) LIFO (b) FIFO
Period)
Period)
Period)
Period)

______________.
specified period.
(a) Time (b) Motion
(a) Time (b) Motion

1. (a) 11. (d) 21. (a) 31. (d) 41. (d)

2. (b) 12. (b) 22. (a) 32. (d) 42. (b)
3. (a) 13. (a) 23. (d) 33. (d) 43. (a)
4. (c) 14. (b) 24. (b) 34. (d) 44. (a)
5. (a) 15. (c) 25. (d) 35. (a) 45. (d)
6. (a) 16. (d) 26. (a) 36. (a) 46. (d)
7. (b) 17. (a) 27. (b) 37. (a) 47. (a)
8. (c) 18. (d) 28. (b) 38. (b) 48. (b)
9. (d) 19. (c) 29. (a) 39. (c) 49. (b)
10. (c) 20. (d) 30. (d) 40. (a) 50. (c)
Chapter 5
(a) CVP (b) ABC
(c) JIT (d) HML
(a) 20% (b) 30%
(c) 33.33% (d) 1/3
(a) 70% (b) 80%
(c) ¾ (d) ½
(a) ` 4,16,667 (b) ` 3,83,333
(c) ` 3,75,000 (d) ` 4,10,000
(a) ` 1,00,000 (b) ` 6,00,000
(c) ` 3,75,000 (d) ` 4,10,000
(a) ` 40,000 (b) ` 10,000
(c) ` 25,000 (d) ` 30,000
(a) ` 4,00,000 (b) `2,00,000
(c) ` 2,50,000 (d) `3,00,000
(a) ` 2,40,000 (b) ` 80,000
(c) ` 2,70,000 (d) ` 2,00,000
______________.
future costs.
(a) One (b) Two
(c) Three (d) Four
Variance?
(a) 10 (b) –10
(c) 150 (d) 20
(a) 10 (b) –10
(c) 150 (d) 20
(a) 10 (b) –10
(c) 50 (d) 0
(a) 600 (b) –600
(c) 500 (d) 400
(a) 750 (b) –750
(c) 600 (d) 400
(a) 150 (b) –150
(c) 300 (d) 200
monetary terms.
(a) Budget (b) Plan
______________.
______________.
maximizing profits.
(a) Cash (b) Credit
1. (a) 11. (c) 21. (a) 31. (a) 41. (b)

2. (a) 12. (a) 22. (a) 32. (a) 42. (c)
3. (a) 13. (b) 23. (b) 33. (a) 43. (a)
4. (a) 14. (a) 24. (b) 34. (a) 44. (a)
5. (b) 15. (b) 25. (d) 35. (d) 45. (a)
6. (d) 16. (a) 26. (a) 36. (a) 46. (b)
7. (d) 17. (d) 27. (a) 37. (a) 47. (c)
8. (c) 18. (d) 28. (d) 38. (d) 48. (a)
9. (a) 19. (a) 29. (b) 39. (a) 49. (b)
10. (b) 20. (a) 30. (b) 40. (a) 50. (b)

EXECUTIVE PROGRAMME
COST AND MANAGEMENT ACCOUNTING
SAMPLE TEST PAPER
(This test paper is for practice and self study only and not to be sent to the institute)
Time allowed: 3 hours Maximum marks : 100
[Attempt all questions. Each question carries 1 mark. There is no negative mark for incorrect answers.]
Q.1. Which of these is not an objective of Cost Accounting?

(a) Ascertainment of Cost
(b) Determination of Selling Price
(c) Cost Control and Cost reduction
(d) Assisting Shareholders in decision making
Q.2. A profit centre is a centre

(c) Both of the above
Q.3. Responsibility Centre can be categorised into:

(d) Cost Centres, Profit Centres and Investment Centres
Q.4. Cost Unit is defined as:

(a) Unit of quantity of product, service or time in relation to which costs may be ascertained or
expressed
(b) A location, person or an item of equipment or a group of these for which costs are ascertained
and used for cost control.
Q.5. Fixed cost is a cost:

(b) which is partly fixed and partly variable in relation to output
(d) which remains same for each unit of output
Q.6. Uncontrollable costs are the costs which be influenced by the action of a specified member of an
undertaking.
(a) can not
(b) can
(c) may or may not
(d) must
Q.7. Element/s of Cost of a product are:

(a) Material only
(b) Labour only
(c) Expenses only
Q.8. Abnormal cost is the cost:

Q.9. Conversion cost includes cost of converting……….into……..

Q.10. Sunk costs are:

(d) future costs
Q.11. Describe the method of costing to be applied in case of Nursing Home:

(a) Operating Costing
(b) Process Costing
(c) Contract Costing
(d) Job Costing
Q.12. Describe the cost unit applicable to the Bicycle industry:

(a) per part of bicycle
(b) per bicycle
(c) per tonne
(d) per day
Q.13. Calculate the prime cost from the following information:

(a) Rs. 1,80,000
(b) Rs. 2,00,000
(c) Rs. 1,70,000
(d) Rs. 2,10,000
Q. 14. Total cost of a product: Rs. 10,000

Profit: 25% on Selling Price
Profit is:
(a) Rs. 2,500
(b) Rs. 3,000
(c) Rs. 3,333
(d) Rs. 2,000
Q.15. Calculate cost of sales from the following:

Net Works cost: Rs. 2,00,000
Office & Administration Overheads: Rs. 1,00,000
Opening stock of WIP: Rs. 10,000
Closing Stock of WIP: Rs. 20,000
Closing stock of finished goods: Rs. 30,000
There was no opening stock of finished goods.
Selling overheads: Rs. 10,000
(a) Rs. 2,70,000
(b) Rs. 2,80,000
(c) Rs. 3,00,000
(d) Rs. 3,20,000
Q.16. Calculate value of closing stock from the following:

Opening stock of finished goods (500 units) : Rs. 2,000
Cost of production (10000 units) : Rs. 50,000
Closing stock (1000 units):?
(a) Rs. 4,000
(b) Rs. 4,500
(c) Rs. 5,000
(d) Rs. 6,000
Q. 17. Which of these is not a Material control technique:

(a) ABC Analysis
(b) Fixation of raw material levels
(c) Maintaining stores ledger
(d) Control over slow moving and non moving items
Q.18. Out of the following, what is not the work of purchase department:
(a) Receiving purchase requisition
(b) Exploring the sources of material supply
(c) Preparation and execution of purchase orders
(d) Accounting for material received
Q.19. Bin Card is a

(a) Quantitative as well as value wise records of material received, issued and balance;
(b) Quantitative record of material received, issued and balance
(c) Value wise records of material received, issued and balance
(d) a record of labour attendance
Q.20. Stores Ledger is a:

(a) Quantitative as well as value wise records of material received, issued and balance;
(b) Quantitative record of material received, issued and balance
(c) Value wise records of material received, issued and balance
(d) a record of labour attendance
Q.21. Re-order level is calculated as:

(a) Maximum consumption x Maximum re-order period
(b) Minimum consumption x Minimum re-order period
(c) 1/2 of (Minimum + Maximum consumption)
(d) Maximum level - Minimum level
Q.22. Economic order quantity is that quantity at which cost of holding and carrying inventory is:
(a) Maximum and equal
(b) Minimum and equal
(c) It can be maximum or minimum depending upon case to case.
(d) Minimum and unequal
Q.23. ABC analysis is an inventory control technique in which:

(a) Inventory levels are maintained
(b) Inventory is classified into A, B and C category with A being the highest quantity, lowest value.
(c) Inventory is classified into A, B and C Category with A being the lowest quantity, highest value
(d) Either b or c.
Q.24. Which one out of the following is not an inventory valuation method?
(a) FIFO
(b) LIFO
(c) Weighted Average
(d) EOQ
Q.25. In case of rising prices (inflation), FIFO method will:

(a) provide lowest value of closing stock and profit
(b) provide highest value of closing stock and profit
(c) provide highest value of closing stock but lowest value of profit
(d) provide highest value of profit but lowest value of closing stock
Q.26. In case of rising prices (inflation), LIFO will:

(a) provide lowest value of closing stock and profit
(b) provide highest value of closing stock and profit
(c) provide highest value of closing stock but lowest value of profit
(d) provide highest value of profit but lowest value of closing stock
Q.27. Calculate Re-order level from the following:

Consumption per week: 100-200 units
Delivery period: 14-28 days
(a) 5600 units
(b) 800 units
(c) 1400 units
(d) 200 units
Q.28. Calculate EOQ (approx.) from the following details:

Annual Consumption: 24000 units
Ordering cost: Rs. 10 per order
Purchase price: Rs. 100 per unit
Carrying cost: 5%
(a) 310
(b) 400
(c) 290
(d) 300
Q.29. Calculate the value of closing stock from the following according to FIFO method:
1st January, 2014: Opening balance: 50 units @ Rs. 4
Receipts:
5th January, 2014: 100 units @ Rs. 5
12th January, 2014: 200 units @ Rs. 4.50
Issues:
2nd January, 2014: 30 units
18th January, 2014: 150 units
(a) Rs. 765
(b) Rs. 805
(c) Rs. 786
(d) Rs. 700
Q.30. Calculate the value of closing stock from the following according to LIFO method:
Receipts:
Issues:
(a) Rs. 765
(b) Rs. 805
(c) Rs. 786
(d) Rs. 700
Q.31. Calculate the value of closing stock from the following according to Weighted Average method:
Receipts:
Issues:
(a) Rs. 765
(b) Rs. 805
(c) Rs. 786
(d) Rs. 700
Q.32. Cost of abnormal wastage is:

(a) Charged to the product cost
(b) Charged to the profit & loss account
(c) charged partly to the product and partly profit & loss account
(d) not charged at all.
Q.33. Calculate re-order level from the following:

Safety stock: 1000 units
Consumption per week: 500 units
It takes 12 weeks to reach material from the date of ordering.
(a) 1000 units
(b) 6000 units
(c) 3000 units
(d) 7000 units
Q.34. From the following information, calculate the extra cost of material by following EOQ:
Annual consumption: = 45000 units
Ordering cost per order: = Rs. 10
Carrying cost per unit per annum: = Rs. 10
Purchase price per unit = Rs. 50
Re-order quantity at present = 45000 units
There is discount of 10% per unit in case of purchase of 45000 units in bulk.
(a) No saving
(b) Rs. 2,00,000
(c) Rs. 2,22,010
(d) Rs. 2,990
Q.35. Which of the following is an abnormal cause of Idle time:

(a) Time taken by workers to travel the distance between the main gate of factory and place of their
work
(b) Time lost between the finish of one job and starting of next job
(c) Time spent to meet their personal needs like taking lunch, tea etc.
(d) Machine break downs
Q.36. If overtime is resorted to at the desire of the customer, then the overtime premium:
(a) should be charged to costing profit and loss account;
(b) should not be charged at all
(c) should be charged to the job directly
(d) should be charged to the highest profit making department
Q.37. Labour turnover means:

(a) Turnover generated by labour
(b) Rate of change in composition of labour force during a specified period
(c) Either of the above
(d) Both of the above
Q.38. Which of the following is not an avoidable cause of labour turnover:

(a) Dissatisfaction with Job
(b) Lack of training facilities
(c) Low wages and allowances
(d) Disability, making a worker unfit for work
Q.39. Costs associated with the labour turnover can be categorised into:
(a) Preventive Costs only
(b) Replacement costs only
(c) Both of the above
(d) Machine costs
Q.40. Calculate workers left and discharged from the following:

Labour turnover rates are 20%, 10% and 6% respectively under Flux method, Replacement method and
Separation method. No. of workers replaced during the quarter is 80.
(a) 112
(b) 80
(c) 48
(d) 64
Q.41. Calculate workers recruited and joined from the following:
Labour turnover rates are 20%, 10% and 6% respectively under Flux method, Replacement method and
Separation method. No. of workers replaced during the quarter is 80.
(a) 112
(b) 80
(c) 48
(d) 64
Q.42. Calculate the labour turnover rate according to replacement method from the following:
No. of workers on the payroll:
- At the beginning of the month: 500
- At the end of the month: 600
During the month, 5 workers left, 20 workers were discharged and 75 workers were recruited. Of
these, 10 workers were recruited in the vacancies of those leaving and while the rest were
engaged for an expansion scheme.
(a) 4.55%
(b) 1.82%
(c) 6%
(d) 3%
Q.43. Calculate the labour turnover rate according to Separation method from the following:
No. of workers on the payroll:
- At the beginning of the month: 500
- At the end of the month: 600
During the month, 5 workers left, 20 workers were discharged and 75 workers were recruited. Of these,
10 workers were recruited in the vacancies of those leaving and while the rest were engaged for an
expansion scheme.
(a) 4.55%
(b) 1.82%
(c) 6%
(d) 3%
Q.44. A worker is allowed 60 hours to complete the job on a guaranteed wage of Rs. 10 per hour. Under
the Rowan Plan, he gets an hourly wage of Rs. 12 per hour. For the same saving in time, how much he
will get under the Halsey Plan?
(a) Rs. 720
(b) Rs. 540
(c) Rs. 600
(d) Rs. 900
Q.45. Overhead refers to:

(c) only Factory indirect costs
Q.46. Allotment of whole item of cost to a cost centre or cost unit is known as:
(a) Cost Apportionment
(b) Cost Allocation
(c) Cost Absorption
(d) Machine hour rate
Q. 47. Which of the following is not a method of cost absorption?

Q.48. Service departments costs should be allocated to:

(a) Only Service departments
(b) Only Production departments
(c) Both Production and service departments
(d) None of the production and service departments
Q.49. Most suitable basis for apportioning insurance of machine would be:
(a) Floor Area
(b) Value of Machines
(c) No. of Workers
(d) No. of Machines
Q. 50. Blanket overhead rate is:

(a) One single overhead absorption rate for the whole factory
(b) Rate which is blank or nil rate
(c) rate in which multiple overhead rates are calculated for each production department, service
department etc.
(d) Always a machine hour rate
Q.51. AT Co makes a single product and is preparing its material usage budget for next year. Each unit of
product requires 2kg of material, and 5,000 units of product are to be produced next year.
Opening inventory of material is budgeted to be 800 kg and AT co budgets to increase material inventory
at the end of next year by 20%
The material usage budget for next year is

(a) 8,000 Kg
((b) 9,840 kg
((c) 10,000 Kg
(d) 10,160 Kg
Q.52. During a period 17, 500 labour hours were worked at a standard cost of Rs 6.50 per hour. The
labour efficiency variance was Rs 7,800 favourable.
How many standard hours were produced?
(a) 1,200
(b) 16,300
(c) 17,500
(d) 18,700
Q.53. Which of the following is not a reason for an idle time variance?
(a) Wage rate increase
(b) Machine breakdown
(c) Illness or injury to worker
(d) Non- availability of material
Q.54. During September, 300 labour hours were worked for a total cost of Rs 4800. The variable
overhead expenditure variance was Rs 600 (A). Overheads are assumed to be related to direct labour
hours of active working.
What was the standard cost per labour hour?

(a) Rs 14
(b) Rs 16.50
(c) Rs 17.50
(d) Rs 18
Q.55. Which of the following would explain an adverse variable production overhead efficiency variance?
1. Employees were of a lower skill level than specified in the standard
2. Unexpected idle time resulted from a series of machine breakdown
3. Poor Quality material was difficult to process
(a) (1), (2) and (3)
(b) (1) and (2)
(c) (2) and (3)
(d) (1) and (3)
Q.56. Budgeted sales of X for March are 18000 units. At the end of the production process for X, 10% of
production units are scrapped as defective. Opening inventories of X for March are budgeted to be 15000
units and closing inventories will be 11,400 units. All inventories of finished goods must have successfully
passed the quality control check. The production budget for X for March, in units is:
(a) 12,960
(b) 14,400
(c) 15,840
(d) 16,000
Q.57. CG Co manufactures a single product T. Budgeted production output of product T during June is
200 units. Each unit of product T requires 6 labour hours for completion and CG Co anticipates 20 per
cent idle time. Labour is paid at a rate of Rs7 per hour. The direct labour cost budget for March is
(a) Rs 6,720
(b) 8,400
(c) 10,080
(d) 10,500
Q.58. A Local Authority is preparing cash Budget for its refuse disposal department. Which of the
following items would not be included in the cash budget?
Q.59. BDL Ltd. is currently preparing its cash budget for the year to 31 March 2014. An extract from its
sales budget for the same year shows the following sales values.
Rs
March 60,000
April 70,000
May 55,000
June 65,000
40% of its sales are expected to be for cash. Of its credit sales, 70% are expected to pay in month after
sale and take a 2% discount. 27% are expected to pay in the second month after the sale, and the
remaining 3% are expected to be bad debts. The value of sales budget to be shown in the cash budget
for May 2013 is
(a) Rs 60,532
(b) Rs 61,120
(c) Rs 66,532
(d) Rs 86,620
Q.60. The actual output of 162,500 units and actual fixed costs of Rs. 87000 were exactly as budgeted.
However, the actual expenditure of Rs 300,000 was Rs. 18,000 over budget.
What was the budget variable cost per unit?
(a) Rs 1.20
(b) Rs 1.31
(c) Rs1.42
(d) Rs 1.50
Q.61. CA Co manufactures a single product and has drawn up the following flexed budget for the year.
60% 70% 80%

Rs Rs Rs
Direct materials 120,000 140,000 160,000
Direct labour 90,000 105,000 120,000
Production overheads 54,000 58,000 62,000
Other overheads 40,000 40,000 40,000
Total Cost 304,000 343,000 382,000
What would be the total cost in a budget that is prepared at the 77% level of activity?
(a) Rs 330,300
(b) Rs 370,300
(c) Rs 373,300
(d) Rs 377,300
Q.62. A ltd is a manufacturing company that has no production resource limitations for the foreseeable
future. The Managing Director has asked the company mangers to coordinate the preparation of their
budgets for the next financial year. In what order should the following budgets be prepared?
(1) Sales budget
(2) Cash budget
(3) Production budget
(4) Purchase budget
(5) Finished goods inventory budget
(a) (2), (3), (4), (5), (1)
(b) (1), (5), (3), (4), (2)
(c) (1), (4), (5), (3), (2)
(d) (4), (5), (3), (1), (2)
Q.63. S produces and sells one product, P, for which the data are as follows:
Selling price Rs 28
Variable cost Rs 16
Fixed cost Rs 4
The fixed costs are based on a budgeted production and sales level of 25,000 units for the next period.
Due to market changes both the selling price and the variable cost are expected to increase above the
budgeted level in the next period.
If the selling price and variable cost per unit increase by 10% and 8% respectively, by how much must
sales volume change, compared with the original budgeted level, in order to achieve the original
budgeted profit for the period?
(a) 10.1% decrease
(b) 11.2% decrease
(c) 13.3% decrease
(d) 16.0% decrease
Q.64. In process costing, a joint product is

(a) a product which is later divided into many parts
(b) a product which is produced simultaneously with other products and is of similar value to at least
one of the other products.
(c) A product which is produced simultaneously with other products but which is of a greater value
than any of the other products.
(d) a product produced jointly with another organization
Q.65. Process B had no opening inventory. 13,500 units of raw material were transferred in at Rs 4.50
per unit. Additional material at Rs1.25per unit was added in process. Labour and overheads were Rs 6.25
per completed unit and Rs 2.50 per unit incomplete.
If 11,750completed units were transferred out, what was the closing inventory in Process B?
(a) Rs. 6562.50
(b) Rs. 12,250.00
(c) Rs. 14,437.50
(d) Rs. 25,375.00
Q.66. A process costing system for J Co used an input of 3,500Kg of materials at Rs20 per Kg and labour
hours of 2,750 at Rs25 per hour. Normal loss is 20% and losses can be sold at a scrap value of Rs5per
Kg. Output was 2,950 Kg. What is the value of the output?
(a) Rs 142,485
(b) Rs 146,183
(c) Rs 149,746
(d) Rs 152,986
Q.67. In process costing, if an abnormal loss arises, the process account is generally
(a) Debited with the scrap value of the abnormal loss units
(b) Debited with the full production cost of the abnormal loss units
(c) Credited with the scrap value of the abnormal loss units
(d) Credited with the full production cost of the abnormal loss units
Q.68. Which of the following statements is/are correct?

1. A materials requisition note is used to record the issue of direct material to a specific job.
2. A typical job cost will contain actual costs for material, labour and production overheads, and
non –production overheads are often added as a percentage of total production cost
3. The job costing method can be applied in costing batches
(a) (1) only
(b) (1) and (2) only
(c) (1) and (3) only
(d) (2) and (3) only
Q.69. A job is budgeted to require 3,300 productive hours after incurring 25% idle time. If the total labour
cost budgeted for the job is Rs36,300. What is the labour cost per hour( to the nearest cent)?
(a) Rs 8.25
(b) Rs 8.80
(c) Rs 11.00
(d) Rs 14.67
Q.70. A company calculates the prices of jobs by adding overheads to the prime cost and adding 30% to
total costs as a profit margin. Job number Y256 was sold for Rs1690 and incurred overheads of Rs 694.
What was the prime cost of the job?
(a) Rs 489
(b) Rs 606
(c) Rs 996
(d) Rs 1300
Q.71. State which of the following are the characteristics of service costing.
1. High levels of indirect costs as a proportion of total costs
2. Use of composite cost units
3. Use of equivalent units
(a) (1) only
(b) (1) and (2) only
(c) (2) only
(d) (2) and (3) only
Q.72. Which of the following organisations should not be advised to use service costing?
(a) Distribution service
(b) Hospital
(c) Maintenance division of a manufacturing company
(d) A light engineering company
Q.73. Calculate the most appropriate unit cost for a distribution division of a multinational company using
the following information.
Miles travelled 636,500
Tonnes carried 2,479
Number of drivers 20
Hours worked by drivers 35,520
Tonnes miles carried 375,200
Cost incurred 562,800
(a) Rs .88
(b) Rs 1.50
(c) Rs 15.84
(d) Rs28, 140
Q.74. The following information is available for the W hotel for the latest thirty day period.
Number of rooms available per night 40
Percentage occupancy achieved 65%
Room servicing cost incurred Rs. 3900
The room servicing cost per occupied room-night last period, to the nearest Rs, was:
(a) Rs 3.25
(b) Rs 5.00
(c) Rs 97.50
(d) Rs 150.00
Q.75. A company makes a single product and incurs fixed costs of Rs. 30,000 per annum. Variable cost
per unit is Rs. 5 and each unit sells for Rs. 15. Annual sales demand is 7,000 units. The breakeven point
is:
(a) 2,000 units
(b) 3,000 units
(c) 4,000 units
(d) 6,000 units
Q.76. A company manufactures a single product for which cost and selling price data are as follows:
Selling price per unit - Rs. 12
Variable cost per unit - Rs. 8
Fixed cost for a period - Rs. 98,000
Budgeted sales for a period - 30,000 units
The margin of safety, expressed as a percentage of budgeted sales,is:
(a) 20%
b) 25%
(c) 73%
(d) 125%
Information for Q.77 to Q.79:
Information concerning A Ltd.'s single product is as follows:

Selling price - Rs. 6 per unit
Variable production cost - RS. 1.20 per unit
Variable selling cost - Rs. 0.40 per unit
Fixed production cost - Rs. 4 per unit
Fixed selling cost - Rs. 0.80 per unit.
Budgeted production and sales for the year are 10,000 units.
Q.77. What is the company's breakeven point:
(a) 8,000 units
b) 8,333 units
(c) 10,000 units
(d) 10,909 units
Q.78. How many units must be sold if company wants to achieve a profit of Rs. 11,000 for the year?
(a) 2,500 units
(b) 9,833 units
(c) 10,625 units
(d) 13,409 units
Q.79. It is now expected that the variable production cost per unit and the selling price per unit will each
increase by 10%, and fixed production cost will rise by 25%. What will be the new break even point?
(a) 8,788 units
(b) 11,600 units
(c) 11,885 units
(d) 12,397 units
Q.80. A company's break even point is 6,000 units per annum. The selling price is Rs. 90 per unit and
the variable cost is Rs. 40 per unit. What are the company's annual fixed costs?
(a) Rs. 120
(b) Rs. 2,40,000
(c) Rs. 3,00,000
(d) Rs. 5,40,000
Q.81. Capital gearing ratio is ___________.

(a) Market test ratio
(b) Long-term solvency ratio
(c) Liquid ratio
(d) urnover ratio
Q.82. After inviting tenders for supply of raw materials, two quotations are received as follows—
Supplier P Rs. 2.20 per unit, Supplier Q Rs. 2.10 per unit plus Rs. 2,000 fixed charges irrespective of the
units ordered. The order quantity for which the purchase price per unit will be the same—
(a) 22,000 units
(b) 20,000 units
(c) 21,000 units
(d) None of the above.
Q.83. In case of joint products, the main objective of accounting of the cost is to apportion the joint costs
incurred up to the split off point. For cost apportionment one company has chosen Physical Quantity
Method. Three joint products ‘A’, ‘B’ and ‘C’ are produced in the same process. Up to the point of split off
the total production of A, B and C is 60,000 kg, out of which ‘A’ produces 30,000 kg and joint costs are
Rs. 3,60,000. Joint costs allocated to product A is
(a) Rs. 1,20,000
(b) Rs. 60,000
(c) Rs. 1,80,000
(d) None of the these
Q.84. A transport company is running five buses between two towns, which are 50 kms apart. Seating
capacity of each bus is 50 passengers. Actually passengers carried by each bus were 75% of seating
capacity. All buses ran on all days of the month. Each bus made one round trip per day.
Passenger kms are:
(a) 2,81,250
(b) 1,87,500
(c) 5,62,500
Q.85. The cost per unit of a product manufactured in a factory amounts to Rs. 160 (75% variable) when
the production is 10,000 units. When production increases by 25%, the cost of production will be Rs. per
unit.
(a) Rs. 145
(b) Rs. 150
(c) Rs. 152
(d) Rs. 140
Q.86. In ‘make or buy’ decision, it is profitable to buy from outside only when the supplier’s price is below
the firm’s own ______________.
(a) Fixed Cost
(b) Variable Cost
(c) Total Cost
(d) Prime Cost
Q.87. A budget which is prepared in a manner so as to give the budgeted cost for any level of activity is
known as:
(a) Master budget
((c) Functional budget
(d) Flexible budget
Q.88. _________ is also known as working capital ratio.

(a) Current ratio
(b) Quick ratio
((c) Liquid ratio
(d) Debt-equity ratio
Q.89. ___________ is a summary of all functional budgets in a capsule form.

(b) Master Budget
(d) Flexible Budget
Q.90. _____________ is a detailed budget of cash receipts and cash expenditure incorporating both
revenue and capital items.
(a) Cash Budget
(c) Sales Budget
(d) Overhead Budget
Q.91. Statutory cost audit are applicable only to:

(a) Firm
(b) Company
(c) Individual
(d) Society
Q.92. For the financial year ended as on March 31, 2013 the figures extracted from the balance sheet of
Xerox Limited as under:
Opening Stock Rs. 29,000; Purchases Rs. 2,42,000; Sales Rs. 3,20,000; Gross Profit 25% of Sales.
Stock Turnover Ratio will be :-
(a) 8 times
(b) 6 times
(c) 9 times
(d) 10 times
Q.93. If credit sales for the year is Rs. 5,40,000 and Debtors at the end of year is Rs. 90,000 the Average
Collection Period will be
(a) 30 days
(b) 61 days
(c) 90 days
(d) 120 days
Q.94. The summarized balance sheet of Rakesh udyog Limited shows the balances of previous and
current year of provision for taxation Rs. 50,000 and Rs. 65,000. If taxed paid during the current year
amounted to Rs. 70,000 then amount charge from Profit and Loss Account will be:
(a) Rs. 55,000
(b) Rs. 85,000
(c) Rs. 45,000
(d) Rs. 1,85,000
Q.95. The summarized balance sheet of Autolight Limited shows the balances of previous and current
year of retained earnings Rs. 25,000 and Rs. 35,000. If dividend paid during the current year amounted to
Rs. 5,000 then profit earned during the year will be:
(a) Rs. 5,000
(b) Rs. 55,000
(c) Rs. 15,000
(d) Rs. 65,000
Q.96. Following information is available of XYZ Limited for quarter ended June, 2013
Fixed cost Rs. 5,00,000
Variable cost Rs. 10 per unit
Selling price Rs. 15 per unit
Output level 1,50,000 units
What will be amount of profit earned during the quarter using the marginal costing technique?
(a) Rs. 2,50,000
(b) Rs. 10,00,000
(c) Rs. 5,00,000
(d) Rs. 17,50,000
Q.97. The P/v ratio of a company is 50% and margin of safety is 40%. If present sales is Rs. 30,00,000
then Break Even Point in Rs. will be
(a) Rs. 9,00,000
(b) Rs. 18,00,000
(c) Rs. 5,00,000
Q.98. Following information is available of PQR for year ended March, 2013: 4,000 units in process,
3,800 units output, 10% of input is normal wastage, Rs. 2.50 per unit is scrap value and Rs. 46,000
incurred towards total process cost then amount on account of abnormal gain to be transferred to Costing
P&L will be:-
(a) Rs. 2,500
(b) Rs. 2,000
(c) Rs. 4,000
(d) Rs. 3,500
Q.99. In element-wise classification of overheads, which one of the following is not included —
(a) Fixed overheads
(b) Indirect labour
(c) Indirect materials
(d) Indirect expenditure.
Q.100. When the sales increase from Rs. 40,000 to Rs. 60,000 and profit increases by Rs. 5,000, the P/V
ratio is —
(a) 20%
(b) 30%
(c) 25%
(d) 40%.
Test Papers 581
ANSWERS
1. d 35. d 69. a
2. a 36. c 70. b
3. d 37. b 71. b
4. a 38. d 72. d
5. c 39. c 73. b
6. a 40. c 74. b
7. d 41. a 75. b
8. b 42. b 76. a
9. b 43. a 77. d
10. b 44. b 78. d
11. a 45. b 79. c
12. b 46. b 80. c
13. c 47. d 81. b
14. c 48. c 82. b
15. b 49. b 83. c
16. c 50. a 84. c
17. c 51. c 85. c
18. d 52. d 86. b
19. b 53. a 87. d
20. a 54. a 88. a
21. a 55. d 89. b
22. b 56. d 90. a
23. c 57. d 91. b
24. d 58. b 92. a
25. b 59. a 93. b
26. a 60. a 94. b
27. b 61. b 95. c
28. a 62. b 96. a
29. a 63. b 97. b
30. b 64. b 98. a
31. c 65. c 99. a
32. b 66. a 100. c
33. d 67. d
34. d 68. c
BBA Semester-VI
_______.
(a) Variable cost
(b) Fixed cost
(c) Total cost
(a) Financial
(b) Spot
(c) Historical
(d) Administrative
(c) Flux Method
(b) Electricity
(a) Balance sheet
(c) General ledger
(b) Issue of shares
(a) Quantity
(b) Money
(a) Marginal cost
(b) Historical cost
(c) Standard cost
(a) Only in control
(a) Labour budget
(b) Cash budget
(d) Expenses budget
(a) Financial
(b) Cost
(a) 80,058 units
(b) 1,46,370 units
(c) 32,320 units
(d) 98,642 units
(a) Increases
(c) Decreases
(d) Constant
(a) Managers
(b) Budget officers
(c) Creditors
(a) Month wise
(b) Product wise
(c) Area wise
(a) R & D budget
(b) Master budget
(c) Sales budget
(a) Time
(b) Function
(c) Flexibility
(a) Limiting factor
(a) System
(b) Men
(d) None of these
(d) None of these
(d) None of these
(d) None of these
(a) Cost accounting
(d) None of these
(d) Auditor
(a) Expense centre
(b) Profit centre
(b) Expense centre
(c) Profit centre
concerned persons -
(b) To control cash
(a) Business centre
(b) Profit centre
organization.
(a) Feasible
(b) Necessary
(d) None of these
(c) Can’t say
(a) Can
(b) Cannot
(c) Sometimes
(d) Inadequate data
(a) Shareholders
(b) Management
(c) Creditors
(a) Master budget
(b) Flexible budget
(c) Cash budget
(d) Capital budget
making
decisions
operations
(a) Fixed Cost
(b) Variable Cost
(c) Total Cost
(d) Prime Cost
(a) Cash Budget
(c) Sales Budget
(d) Overhead Budget
(d) Future costs
(b) Shareholders
(c) The Government
(d) Bankers
of taxes owed.
Purchase Budget ?
ledger.
sales.
(a) Money
(b) Quantity
(d) None
(d) None
(b) Ratio analysis
(a) Management
(b) Share holders
(c) Creditors
(d) Employees
(a) Revenue
(b) Cost
(d) None
(b) Cost centre
(c) Profit centre
(d) Expense centre
(a) can not
(b) can
(c) may or may not
(d) must
(a) Material only
(b) Labour only
(c) Expenses only
(a) Master budget
(d) Flexible budget
(b) Master Budget
(d) Flexible Budget
the P/V ratio is -
(a) 20%
(b) 30%
(c) 25%
(d) 40%
(a) Simplicity
(b) Accountability
(c) Promptness
(d) Accuracy
(a) Routine
(b) Special
(c) Investigative
(d) External
(a) Routine
(b) Special
(c) External
(d) Control
(a) Share holders
(b) Government
(d) Creditors
(d) Shareholders
(b) Sales report
(c) Investigation

d. Cost accounting

decision making.
decisions.
operations.
income.

b. shareholders.
c. the government.
d. bankers.


96. Cost accounting
making.
system?
information system?
technology?
a. inventory.
b. capacity.
c. processing time.
d. none of these.
a. zero defects.
products?

and delivery.
a. planning.
b. control.
c. decision making.
d. both a and c.

internal users.
a. planning.
b. control.


d. all of the above

organization.
d. all of the above

goals.
No. No. No. No.
1 B 31 B 61 D 91 C
2 C 32 C 62 C 92 A
3 D 33 D 63 B 93 D
4 D 34 A 64 C 94 C
5 A 35 D 65 C 95 A
6 D 36 B 66 A 96 D
7 C 37 A 67 D 97 B
8 C 38 C 68 A 98 A
9 D 39 C 69 A 99 D
10 C 40 A 70 C 100 A
11 D 41 B 71 A 101 C
12 A 42 D 72 C 102 A
13 A 43 A 73 A 103 B
14 C 44 B 74 D 104 D
15 D 45 C 75 B 105 D
16 B 46 B 76 D 106 C
17 B 47 A 77 B 107 B
18 A 48 B 78 D 108 A
19 C 49 B 79 D 109 B
20 B 50 D 80 B 110 A
21 D 51 A 81 C 111 D
22 A 52 B 82 B 112 A
23 D 53 C 83 A 113 D
24 C 54 A 84 B 114 D
25 D 55 C 85 C 115 D
26 D 56 A 86 D 116 C
27 B 57 C 87 C
28 C 58 A 88 B
29 B 59 D 89 D
30 A 60 C 90 B
Sample Test for Management Accounting
Multiple Choice
Identify the letter of the choice that best completes the statement or answers the question.
1. Which phrase best describes the current role of the managerial accountant?
a. Managerial accountants prepare the financial statements for an organization.
b. Managerial accountants facilitate the decision-making process within an organization.
c. Managerial accountants make the key decisions within an organization.
d. Managerial accountants are primarily information collectors.
e. Managerial Accountants are solely staff advisors in an organization.
2. An example of qualitative data is:

a. product cost
b. customer satisfaction
c. net income
d. inventory cost
e. net worth.
3. Product and service costing information is prepared for

a. manufacturing companies with inventory.
b. merchandising companies.
c. service providers.
d. each of the other four answers..
e. manufacturing companies without inventory.
4. Manufacturing costs typically consist of

a. direct materials, direct labor, and manufacturing overhead.
b. production and shipping costs.
c. production and marketing costs.
d. direct materials, direct labor, and administrative costs.
e. direct materials, direct labor, marketing and administrative costs.
5. In comparison to the traditional manufacturing environment, overhead costs in a JIT

environment all the following are true except:
a. are more easily tracked to products.
b. are frequently direct in nature.
c. include rent, insurance and utilities.
d. most of the costs are likely to be indirect in nature.
e. labor need not be tracked to the product.
6. As production increases within the relevant range,

a. variable costs will vary on a per unit basis.
b. variable costs will vary in total.
c. fixed costs will vary in total.
d. fixed and variable cost stay the same in total.
e. none of the other four answers is true.
7. You are given the cost and volume information below:
Volume Cost
1 unit $ 15
10 units 150
100 units 1500
What type of a cost is given?

a. fixed cost
b. variable cost
c. step cost
d. mixed cost
e. rent cost.
8. Which of the following statements regarding graphs of fixed and variable costs is true?
a. Variable costs can be represented by a straight line where costs are the same for each
data point.
b. Fixed costs can be represented by a straight line starting at the origin and continuing
through each data point.
c. Fixed costs are zero when production is equal to zero.
d. Variable costs are zero when production is equal to zero.
e. Fixed and Variable costs are curvilinear form above zero on the “Y” axis.
9. All of the following statements regarding budgeting is true except

a. Budgeting helps managers determine the resources needed to meet their goals and
objectives.
b. Budgeting is a key ingredient in good decision-making.
c. Budgeting is a bookkeeping task
d. The focus of budgeting is planning.
e. Budgeting is an executive responsibility.
10. Broihan Corporation has the following purchases budget for the last half of 2002:
July $100,000 October $ 90,000

August 80,000 November 100,000
September 110,000 December 94,000
Historically, the company pays one half at the time of purchase and the remainder in the month
following purchase.
What are the expected cash disbursements in August?

a. $ 80,000.
b. $ 90,000.
c. $ 95,000.
d. $100,000
e. $105,000
11. The Inground Sprinkler Supply sells sprinkler systems suited for large or small yards. The
company has decided to adopt an activity-based costing system. Last year the company incurred
$1,000,000 in overhead costs related to the following activities:
Activity Allocation Base Overhead Cost

Purchasing number of purchase orders $ 350,000
Material handling number of shipments received 200,000
Quality inspection number of inspections 450,000
The activities for large and small yard systems were as follows:
Large Small
purchase orders 15,000 20,000
shipments received 7,500 12,500
inspections 11,500 11,000
If a customer requested a bid on a specially designed sprinkler that would probably require four
inspections, how much quality inspection overhead would you include in the bid?
a. $ 0
b. $40
c. $80
d. $120.
e. $160.
12. Bubblemania has three product lines - A, B, and C.
A B C Total
Sales $10,000 9,000 12,000 31,000
Variable costs 4,500 7,000 6,000 17,500
Contribution Margin 5,500 2,000 6,000 13,500
Fixed costs 3,500 6,000 3,000 12,500
Net income 2,000 (4,000) 3,000 1,000
Product line B appears unprofitable, and management is considering discontinuing the line. How
would the discontinuation of Product line B affect net income?
a. increase by $4,000
b. decrease by $4,000
c. increase by $2,000
d. decrease by $2,000
e. increase by $6,000
13. Coed Novelties manufactures key chains for college bookstores. During 2003, the company
had the following costs:
Direct materials used $ 31,000

Direct labor 18,000
Factory rent 12,000
Equipment deprecation – factory 2,000
Equipment depreciation – office 750
Marketing expense 2,500
Administrative expenses 40,000
35,000 units produced were in 2003. What is the product cost per unit?
a. approximately $1.24
b. $1.80
c. approximately $3.04
d. $1.40
e. approximately $1.82
14. The time value of money focuses on

a. accounting net income.
b. earnings per share.
c. cash flow.
d. current earnings
e. accrual net income.
15. The Unique Bookshelf Company is considering the purchase of a custom delivery van
costing approximately $50,000. Using a discount rate of 20%, the present value of future cost
savings is estimated at $51,200. To yield the 20% return, the actual cost of the van should not
exceed the $50,000 estimate by more than:
a. $50,000
b. $51,200
c. $25,000
d. $ 1,200
e. 20%
16. The Cape Cod Cotton Candy Company had the following information available regarding
last year's operations:
Sales (100,000 units) $200,000

Variable costs 100,000
Contribution margin 100,000
Fixed costs 50,000
Net Income 50,000
If sales were to increase by 200 units, what would be the effect on net income?
a. $400 increase
b. $200 increase
c. $150 increase
d. $100 increase
e. $200 loss
Sample Test for Management Accounting
Answer Section
MULTIPLE CHOICE
1. ANS: B
2. ANS: B
3. ANS: D
4. ANS: A
5. ANS: D
6. ANS: B
7. ANS: B
8. ANS: D
9. ANS: C
10. ANS: B
11. ANS: C
12. ANS: D
13. ANS: B
14. ANS: C
15. ANS: D
16. ANS: B
B COM SEMESTER 6- MCQ
Management Accounting
1. Statement of cash flows includes
A) Financing Activities
B) Operating Activities
D) All of the Above
2. In cash flows, when a firm invests in fixed assets and short-term financial investments
results in
A) Increased Equity
B) Increased Liabilities
C) Decreased Cash
D) Increased Cash
3. A firm that issues stocks and bonds to raise funds results in
A) Decreases Cash
B) Increases Cash
C) Increases Equity
D) Increases Liabilities
4. The purchase value of assets over its serviceable life is categorised as
A) Appreciated Liabilities
B) Appreciated Assets
C) Depreciation
D) Appreciation
5. The basic financial statements include
A) Statement of Cash Flows
B) Statement of Retained Earnings
C) Balance Sheet and Income Statement
D) None of the Above
6. The statement of cash flow clarifies cash flows according to
A) Operating and Non-operating Flows
B) Inflow and Outflow
C) Investing and Non-operating Flows
D) Operating, Investing, and Financing Activities
7. Cash flow example from a financial activity is
A) Payment of Dividend
B) Receipt of Dividend on Investment
C) Cash Received from Customers
D) Purchase of Fixed Asset
8. Cash flow example from an investing activity is
A) Issue of Debenture
B) Repayment of Long-term Loan
C) Purchase of Raw Materials for Cash
D) Sale of Investment by Non-Financial Enterprise
9. Cash flow example from an operating activity is
A) Purchase of Own Debenture
B) Sale of Fixed Assets
C) Interest Paid on Term-deposits by a Bank
D) Issue of Equity Share Capital
10. Which item comes under financial activities in cash flow?
A) Redemption of Preference Share
B) Issue of Preference Share
C) Interest Paid
D) All of the above
A) All enterprises
a) Both A and B
b) Both A and C
c) Both C and B
a) True
b) False
a) Operating activities
b) Financing activities
c) Investing activities
from ____.
a) True
b) False
a) A, B, C
b) B, C, D
c) C, D, A
a) Decrease in debtors
b) Issue of shares
c) Decrease in creditors
d) Sale of fixed assets
a) Increase in Prepaid expenses
b) Increase in debtors
c) Increase in stock
d) Increase in creditors
a) Absorption costing
b) Full Costing
c) Both a & b
a) On the basis of difference between sales and total cost.
b) By computation as per desired rate of profit on sales or cost
c) Both a and b
d) None of the above.
goods sold.
a) True
b) False
a) Fixed manufacturing expenses are included in unit cost
b) Fixed non-manufacturing expenses are included in unit cost
c) Both a and b
a) Price determination on basis of full cost
b) Solution of separation of costs
c) Calculation of gross and net profit
d) All of the above
a) Difference between product cost and period cost
b) Charged of fixed factory overheads on inventory
c) Both a and b
A) Absorption costing helps in preparation of fixed budget.
B) Absorption costing is dependent on level of level of output.
C) Absorption costing is very helpful in taking managerial decisions.
D) Absorption costing helps to conform with accrual and matching concept.
a) A and B
b) B and C
c) A and D
d) B and D
a) True
b) False
a) Prime Cost plus all variable overheads
b) Prime Cost minus all variable overheads
c) Variable overheads
30 in total cost is
a) Marginal cost
b) Prime cost
c) All variable overheads
a) Prime cost + All Variable overheads
b) Direct material + Direct labor + Direct Expenses + All variable overheads
c) Total costs – All fixed overheads
d) All of the above
a) Direct costing
b) Variable costing
c) Both a and b
A. Marginal costing is not an independent system of costing.
B. In marginal costing all elements of cost are divided into fixed and variable components.
C. In marginal costing fixed costs are treated as product cost.
D. Marginal costing is not a technique of cost analysis.
a) A and B
b) B and C
c) A and D
d) B and D
33. While computation of profit in marginal costing
a) Total marginal cost is deducted from total sales revenues
b) Total marginal cost is added to total sales revenues
c) Fixed cost is added to contribution
34. Which of the following are the assumptions of marginal costing?
A) All the elements of cost can be divided into fixed and variable components.
B) Total fixed cost remains constant at all levels of output.
C) Total variable costs varies in proportion to the volume of output.
D) Per unit selling price remain unchanged at all levels of operating activity.
a) A and B
b) B and C
c) A and D
d) A, B C and D
35. In two periods total costs amounts to Rs 50000 and Rs 40000 against production of 20000
and 15000 units respectively. Determine marginal cost per unit and fixed cost.
a) Rs 2 and Rs 10,000
b) Rs 4 and Rs 5000
c) Rs 10 and Rs 8000
a) Total fixed costs
b) Total costs
c) Total fixed costs
37. Given Maximum value of production and minimum value of production is 10,000 and
5000 units respectively. Maximum total cost is RS 25,000 and minimum total cost is Rs
15,000. Determine total fixed cost and per unit marginal cost.
a) Rs 2 per unit, Rs 5,000
b) Rs 5 per unit, Rs 2000
c) Rs 10 per unit, Rs 10,000
38. Under method of least squares, a linear equation is developed in the form of ______
wherein Y is total cost, a=fixed cost, b= marginal cost and X is output.
a) Y=a+bX
b) Y=a-bX
c) Y=a*bX
records.
a) True
b) False
40. Theory of contribution is the excess of sales over variable costs.
a) a)True
b) b)False
41. Which of the following statements related to Contribution Analysis are ture?
a) If contribution is zero, there is loss equal to fixed costs
b) If contribution is negative, loss is less than fixed costs
c) If contribution is positive and more than fixed cost there will be profit.
d) All of the above
42. When contribution is negative but less than fixed cost,
d) All of above are false
d) There will be neither profit not loss
a) Intensive Opportunities
b) Integrative Opportunities
c) Diversification Opportunities
a) Historical costing
b) Total costing
c) Both a and b
46. Given production is 1,00,000 units, fixed costs is Rs 2,00,000 Selling price is Rs 10 per
unit and variable cost is Rs 6 per unit. Determine profit using technique of marginal
costing.
a) Rs 2,00,000
b) Rs 8,00,000
c) Rs 6,00,000
a) In absorption costing, cost is divided into three major parts while in marginal costing cost
is divided into two main parts.
b) IN absorption costing period is important and in marginal costing product is important.
c) Both a and b
48. In context of net operating profit, which of the following statements are true?
a) If all costs are variable, the amount of profit obtained in marginal costing and absorption
costing will be same.
b) If the volume of sales and output is equal in a period, profit will be same in absorption
costing and marginal costing.
c) Both a and b
a) Profit
b) Contribution
c) Profit volume ratio
50. If sales is less than production and there is no opening stock, it suggests there is closing
stock. In such a scenario, profit under marginal costing will be less than the one shown by
absorption costing.
a) True
b) False
51. In the calculation of return on shareholders investments the referred investment deals with
A. All reserves
B. Preference and equity capital only
C. All appropriations
D. All of the above
52. Which of the following is an advantage of standard costing?
A. Measuring efficiency
B. Facilitates cost control
C. Determination of variance
D. All of the above
53. The assets of a business can be classified as
A. Only fixed assets
B. Only current assets
C. Fixed and current assets
54. Which of the following is the test of the long term liquidity of a business?
A. Interest coverage ratio
B. Stock turnover ratio
C. Operating ratio
D. Current ratio
55. The term management accounting was first coined in
a) 1960
b) 1950
c) 1945
d) 1955
56. Management accounting is
A) Subjective
B) Objective
a) Only A
b) Only B
c) Both A and B
a) Optional
b) Compulsory
c) Legally obligatory
d) Compulsory to some and optional to others
58. The management accounting can be stated an extension of
A) Cost Accounting
B) Financial Accounting
C) Responsibility Accounting
a) Both A and B
b) Both A and C
c) Both B and C
d) A, B, C
59. Which of the following is true about management accounting?
A) Management accounting is associated with presentation of accounting data.
B) Management accounting is extremely sensitive to investors needs.
a) Only A
b) Only B
c) Both A and B
60. Management accounting assists the management
a) Only in control
b) Only in direction
c) Only in planning
d) In planning, direction and control
61. Which of the following are tools of management accounting?
A) Decision accounting
B) Standard costing
C) Budgetary control
D) Human Resources Accounting
a) A, B and D
b) A, C and D
c) A, B and C
d) A, B , C, D
62. Management accounting is related with
a) The problem of choice making
b) Recording of transactions
c) Cause and effect relationships
A. A and B
B. B and C
C. A and C
D. All are false
63. Management accountancy is a structure for
A. Costing
B. Accounting
C. Decision making
D. Management
64. Who coined the concept of management accounting?
A. R.N Anthony
B. James H. Bliss
C. J. Batty
D. American Accounting
65. Management accounting deals with
A. Quantitative information
B. Qualitative information
C. Both a and b
66. Management accounting highlights staff relationship with top management as well as other
personnel.
A. True
B. False
67. The definition â˜Management Accounting is the presentation of accounting information
in such a way as to assist management in the creation of policy and the day-to-day
operation of an undertaking.â™
A. Ango-American Council on Productivity
B. AICPA
C. Robert N. Anthony
D. All of the above
68. The second term for Horizontal Analysis is
A. Dynamic Analysis
B. Inter-firm Analysis
C. Time-series Analysis
D. All of the above
69. Vertical analysis is also known as
A. Static analysis
B. Structural analysis
C. Cross-sectional analysis
D. All of the above
70. The assessment of financial statements by a shareholder is an example of
A. Vertical Analysis
B. Horizontal Analysis
C. Internal Analysis
D. External Analysis
71. Trend percentages and trend ratios are used in
A. Static Analysis
B. Dynamic Analysis
C. Horizontal Analysis
D. Vertical Analysis
A) Vertical Analysis is also termed as dynamic analysis.
B) Horizontal analysis is also termed as dynamic analysis.
C) Static Analysis is not extremely useful for the long-term financial planning.
A. Both A and B
B. Both A and C
C. Both B and C
D. A, B , C
A) Funds Flow statement is one of the ways to analysis & interpret financial statements.
B) Cash Flow Statement is one of the ways to analysis & interprets financial statements.
C) Common-size statement one of the ways to analysis & interprets financial statements.
A. Both A and B
B. Both A and C
C. Both B and C
D. A, B, C
74. Which of the following statements are true about Horizontal Analysis?
A) It do not examines the periodical trend
B) It is useful for long-term analysis.
C) It is useful for long â“term planning.
A. Both A and B
B. Both A and C
C. Both B and C
D. A, B, C
A) Comparative financial statement is an example of horizontal analysis.
B) Trend Analysis is an example of vertical analysis.
C) Cash flow analysis is an example of horizontal analysis.
A. Both A and B
B. Both A and C
C. Both B and C
D. A, B, C
76. John N. Myer stated that vertical and horizontal analysis forms the back-bone of financial
statement analysis technique.
A. True
B. False
77. Ratio analysis is an important approach of horizontal analysis.
A. True
B. False
78. The 3 Ps, i.e. the three objectives of analysis and interpretation of financial statements are :
Progress, Position and Prospects.
A. True
B. False
79. Comparison of financial statements highlights the trend of the _________ of the business.
A. Financial position
B. Performance
C. Profitability
D. All of the above
80. Analysis of any financial Statement comprises
A. Balance sheet
B. P&L Account
C. Trading account
D. All of the above
81. Which of the following are techniques, tools or methods of analysis and interpretation of
financial statements?
A. Ratio Analysis
B. Average Analysis
C. Trend Analysis
D. All of the above
82. Interpretation of accounts is the
A. Art and science of translating the figures
B. To know financial strengths and weaknesses of a business
C. To know the causes for the prevailing performance of business
D. All of the above
83. The only feasible purpose of financial management is
A. Wealth Maximization
B. Sales Maximization
C. Profit Maximization
D. Assets maximization
84. Financial management process deals with
A. Investments
B. Financing decisions
C. Both a and b
85. Agency cost consists of
A. Binding
B. Monitoring
C. Opportunity and structure cost
D. All of the above
86. Finance Function comprises
A. Safe custody of funds only
B. Expenditure of funds only
C. Procurement of finance only
D. Procurement & effective use of funds
87. The objective of wealth maximization takes into account
A. Amount of returns expected
B. Timing of anticipated returns
C. Risk associated with uncertainty of returns
D. All of the above
88. Financial management mainly focuses on
A. Efficient management of every business
B. Brand dimension
C. Arrangement of funds
D. All elements of acquiring and using means of financial resources for financial
activities
89. Time value of money indicates that
A. A unit of money obtained today is worth more than a unit of money obtained in
future
B. A unit of money obtained today is worth less than a unit of money obtained in
future
C. There is no difference in the value of money obtained today and tomorrow
90. Time value of money supports the comparison of cash flows recorded at different time
period by
A. Discounting all cash flows to a common point of time
B. Compounding all cash flows to a common point of time
C. Using either a or b
91. If the nominal rate of interest is 10% per annum and there is quarterly compounding, the
effective rate of interest will be:
A. 10% per annum
B. 10.10 per annum
C. 10.25%per annum
D. 10.38% per annum
92. Relationship between annual nominal rate of interest and annual effective rate of interest,
if frequency of compounding is greater than one:
A. Effective rate > Nominal rate
B. Effective rate < Nominal rate
C. Effective rate = Nominal rate
93. Mr. X takes a loan of Rs 50,000 from HDFC Bank. The rate of interest is 10% per annum.
The first installment will be paid at the end of year 5. Determine the amount of equal
annual installments if Mr. X wishes to repay the amount in five installments.
A. Rs 19500
B. Rs 19400
C. Rs 19310
94. If nominal rate of return is 10% per annum and annual effective rate of interest is 10.25%
per annum, determine the frequency of compounding:
A. 1
B. 2
C. 3
95. Present value tables for annuity cannot be straight away applied to varied stream of cash
flows.
A. True
B. False
96. Heterogeneous cash flows can be made comparable by
A. Discounting technique
B. Compounding technique
C. Either a or b
97. Risk of two securities with different expected return can be compared with:
A. Coefficient of variation
B. Standard deviation of securities
C. Variance of Securities
98. Efficient portfolios can be defined as those portfolios which for a given level of risk
provides
A. Maximum return
B. Average return
C. Minimum return
99. CAPM accounts for:
A. Unsystematic risk
B. Systematic risk
C. Both a and b
100. Which among the following presents a bird's-eyeview of the operations for the entire
period of a business?
A. Balance sheet
B. Profit and loss a/c
C. Cash flow statements
D. Position statement
101. ________ is the relationship between quick assets and current liabilities .
A. Current ratio
B. Absolute liquidity ratio
C. Acid test ratio
D. Proprietary ratio
102. When the concept of ratio is defined in respected to the items shown in the financial
statements, it is termed as
A. Accounting ratio
B. Financial ratio
C. Costing ratio
103. The definition, “The term accounting ratio is used to describe significant relationship
which exist between figures shown in a balance sheet, in a profit and loss account, in a
budgetary control system or in a any part of the accounting organization” is given by
A. Biramn and Dribin
B. Lord Keynes
C. J. Betty
104. The relationship between two financial variables can be expressed in:
A. Pure ratio
B. Percentage
C. Rate or time
D. Either of the above
105. Liquidity ratios are expressed in
A. Pure ratio form
B. Percentage
C. Rate or time
106. Which of the following statements are true about Ratio Analysis?
A) Ratio analysis is useful in financial analysis.
B) Ratio analysis is helpful in communication and coordination
C) Ratio Analysis is not helpful in identifying weak spots of the business.
D) Ratio Analysis is helpful in financial planning and forecasting.
a) A, B and D
b) A, C and D
c) A, B and C
d) A, B , C, D
107. Profit for the objective of calculating a ratio may be taken as
A. Profit before tax but after interest
B. Profit before interest and tax
C. Profit after interest and tax
D. All of the above
108. Which of the following falls under Profitability ratios?
A) General Profitability ratios
B) Overall Profitability ratios
C) Comprehensive Profitability ratios
A. A and B
B. A and C
C. B and C
109. General Profitability ratios are based on
A. Investments
B. Sales
C. a & B
110. Gross Profit ratio is also termed as
A. Gross Profit Margin
B. Gross Margin to net sales
C. Both a and b
D. All of the above
111. While calculating Gross Profit ratio,
A. Closing stock is deducted from cost of goods sold
B. Closing stock is added to cost of goods sold
C. Closing stock is ignored
112. While calculating Gross Profit, if net profit is given,
A. It can be converted into gross profit by adding interest to it
B. It can be converted into Gross profit by adding indirect expenses to it
C. Both a and b
113. Gross profit ratio is calculated by
A. (Gross Profit/Gross sales)*100
B. (Gross Profit/Net sales)*100
C. (Net Profit/Gross sales)*100
114. Given Sales is 1, 20,000 and Gross Profit is 30,000, the gross profit ratio is
A. 24%
B. 25%
C. 40%
D. 44%%
115. What will be the Gross Profit if, total sales is Rs 2,60,000 Cost of net goods sold is Rs
2,00,000 and Sales return is Rs 10,000?
A. 13%
B. 28%
C. 26%
D. 20%
116. If selling price is fixed 25% above the cost, the Gross Profit ratio is
A. 13%
B. 28%
C. 26%
D. 20%
117. Gross Profit ratio should be adequate to cover
A. Selling expenses
B. Administrative expenses
C. Dividends
D. All of the above
118. Which statement is prepared in the process of funds flow analysis?
A. Schedule of changes in working capital
C. Both a and b
119. Funds Flow Statement is prepared on the basis of data of P&L statement and two
consecutive balance sheets.
A. True
B. False
C. Value delivery
120. Which of the following rules stands true while preparation of Schedule of changes in
working capital?
A) An increase in current assets increases working capital.
B) An increase in current assets decreases working capital.
C) An increase in current liabilities decreases working capital.
D) An increase in current liabilities increases working capital
A. A and C
B. A and D
C. B and D
D. A, B, C and D
121. If reserve for bad and doubtful debts is mentioned in the question of Funds Flow Statement
Preparation, it can be shown as
A. In the schedule by deducting from total debtors under current assets
B. In the schedule separately under the heading of capital liabilities
C. Both a & b
122. Funds Flow Statement is also known as
A. Statement of Funds Flow
B. Statement of Sources and Application of Funds
C. Statement of Sources and Uses of Funds
D. All of the above
123. Given Net profit for the year Rs 2, 50,000 Transferred to general reserves Rs 40,000 and
old machinery bought for Rs 50,000 was sold for Rs 20,000. Calculate funds from
operations.
A. Rs 2, 80,000
B. Rs 2, 20,000
C. Rs 2, 90,000
D. Rs 3, 00,000
124. Which of the following are sources of funds?
A) Issue of bonus shares
B) Issue of shares against the purchase of fixed assets
C) Conversion of debentures into shares
D) Conversion of loans into shares
a) A and C
b) A and D
c) A, B, C and D
125. The share capital of A Ltd. stood at Rs 20,00,000 in 2013 and at Rs 26 lac in 2014. As per
records, the company bought asset of another company for Rs 6 lac payable in fully paid
shares. These assets included Goodwill Rs 2,00,000 Machinery Rs 1, 83, 600 and Stock Rs
2,16,400. What is the fund from issue of shares?
A. Rs 2,15,600
B. Rs 2,16,400
C. Rs 2,00,000
126. Debentures are Rs 2,50,000 and Rs 3,50,000 in the balance sheet of 2013 and 2014. 1000
of the debentures of Rs 100 each were issued at par in 2014 of which 400 debentures were
issued to a supplier for the purchase of a machine. Determine amount of issue for
debentures for the purpose of funds flow statement.
A. Rs 60,000
B. Rs 40,000
C. RS 10,000
127. In the balance sheet of Praveen for 2013 and 2014, 4% debentures are Rs 5,00,000 and Rs
4,00,000, respectively. Profit on redemption of debentures in 2013 is nil while in 2014 is
Rs 4,000. What is the amount of redemption for the purpose of funds flow statement?
A. Rs 96,000
B. Rs 1,04,000
C. Rs 9,00,000
D. Rs 9,04,000
128. The balance of property at cost has been RS 20,000 and Rs 17,000 in 2013 and 2014
respectively. The profit on sale of property of Rs 2000 is credited to Capital Reserves
Account. New property costing Rs 5000 bought in 2014. Determine sale of proceeds from
land.
A. Rs 3000
B. Rs 10,000
C. Rs 7000
D. Rs 15,000
129. of Ram at end of 2013 and 2014 disclose investments in shares of Rs 2000 and Rs 3000,
respectively. Rs 100 as pre-acquisition dividend has been credited to investments account.
Determine purchase of investments.
A. RS 5000
B. Rs 1000
C. Rs 1,100
130. The balance of fixed assets of Y Ltd. at cost at the end of 2013 and 2014 were Rs 5,70,800
and Rs 6,15,300. During the year 2014 a machinery costing Rs 60,000 was sold.
Determine the purchase of fixed assets.
A. Rs 1,04,500
B. Rs 1,40,500
C. Rs 1,64,500
131. Which of the following are applications of funds?
A. Payment of dividend on share capital
B. Payment of tax
C. Increase in working capital
D. All of above
132. Which of the following are treated as long term investments?
A. Non-current investments
B. Trade Investments
C. Sinking fund investments
D. All of the above
133. Provision of taxation is treated as
C. Either a or b
134. As per accounting standard AS3, provision for taxation should be treated as
C. Either a or b
135. Which of the following statement is true?
A. If the amount of good will increases during current year, the difference is treated as
purchase of goodwill.
B. If the amount of good will decreases during current year, It will treated as written
off.
C. Both a and b
136. The opening and closing balance of general reserves are Rs 10,000 and Rs 9,000,
respectively. It is stated in addition information that a loss of Rs 1000 has been written off
in general reserves. In such a case, decline in reserve and loss on investment will be
adjusted in P&L account.
A. True
B. False
137. As per Accounting Standard-3, Cash Flow is classified into
A. Operating activities and investing activities
B. Investing activities and financing activities
C. Operating activities and financing activities
D. Operating activities, financing activities and investing activities
138. Cash Flow Statement is also known as
A. Statement of Changes in Financial Position on Cash basis
B. Statement accounting for variation in cash
C. Both a and b
139. The objectives of Cash Flow Statement are
A) Analysis of cash position
B) Short-term cash planning
C) Evaluation of liquidity
D) Comparison of operating Performance
a) Both A and B
b) Both A and C
c) Both B and D
d) A, B, C, D
140. In cash flow statement, the item of interest is shown in
A) Operating Activities
B) Financing Activities
A. Both A and B
B. Both A and C
C. Both B and C
D. A, B, C
141. Cash Flow Statement is based upon
A. Cash basis of accounting
B. Accrual basis of accounting
C. Credit basis of accounting
A) Cash Flow Statement is helpful in the formation of policies.
B) Cash Flow Statement is useful for external analysis
C) Cash Flow Statement is helpful in estimating future cash flow
A. Both A and B
B. Both A and C
C. Both B and C
A) Cash flow reveals only the inflow of cash
B) Cash flow reveals only the outflow of cash
C) Cash flow is a substitute for income statement
D) Cash flow statement is not a replacement of funds flow statement.
A. Only A
B. Only B
C. Both B and C
D. Only D
144. Cash flow statement is based upon _________ while Funds Flow Statement recognizes
_______.
A. Cash basis of accounting, accrual basis of accounting
B. Accrual basis of accounting, cash basis of accounting
C. Both are based on cash basis of accounting
145. Statement of changes in working capital is prepared separately in
C. Both a and b
146. Cash Flow Statement studies causes of change in working capital.
A. True
B. False
147. _________ reconciles the opening cash balance with the closing cash balance of a given
period on the basis of net decrease or increase in cash during that period.
C. Both a and b
A) Cash flow statement is more useful for short term cash planning.
B) Funds Flow statement is more useful in planning medium term and long term
financing.
C) Cash Flow statement discloses the position of liquidity in a better way
A. Only A
B. Only B
C. Only C
D. A, B and C
149. _____ has/have accepted cash flow statement is more useful than funds flow statement,
particularly from view of analysis of liquidity of a firm.
A. Institute Of Chartered Accountants of India
B. FASB, America
C. SEBI
D. All of the above
150. Cash Flow Statement is prepared from
A. Profit and loss account
B. Balance Sheet
C. Additional Information
D. All of the above
151. Which of the following are cash flow from operating activities?
A) Cash Receipts from customers
B) Cash Paid to Supplier and Employees
C) Purchase of fixed assets
A. Both A and B
B. Both A and C
C. Both B and C
D. Both C and D
152. Match the column
A) Taxes Paid ------------------ i) Cash flow from investing activities
B) Repayment of loans -------------- ii) Cash flow from operating activities
C) Sale of fixed assets ----------------------- iii) Cash Flow from financing activities
A. A-ii), B-iii), C-i)
B. A-i), B-ii), C-iii)
C. A-iii), B-i), C-ii)
153. Cash payment to suppliers for services and goods is example of cash outflow.
A. True
B. False
Profit & Loss account are converted into payments and receipts actually in cash.
A. True
B. False
Profit & Loss account are converted into payments and receipts actually in cash by
eliminating
A. Non-cash revenue from the revenue earned
B. Non-cash expenses from expenses incurred
C. Both a & b
156. While preparing Cash Flow Statement, non-cash items and non-operating items are not
required to be adjusted under________
A. Indirect method
B. Direct method
C. Both a & b
157. Cash flow from sales is calculated by
A. Cash sales + Cash Collections
B. Sales + Opening debtors+ Opening B/R â“Closing Debtors â“ Closing B/R
C. Both a and b
158. Cash outflow on purchases is calculated by
A. Purchases + Opening Creditors + Opening B/P â“Closing Creditors-Closing B/P
B. Purchases + Opening Creditors - Closing Creditors +Closing B/P
C. Purchases - Opening Creditors - Opening B/P + Closing Creditors +Closing B/P
159. The amount of operating expenses which are actually been paid in cash are shown under:
A. Cash flow from sales
B. Cash outflow on purchases
C. Cash outflow on expenses
D. All of above are false
160. Given salary expenses Rs 40,000, Outstanding in the beginning of the year: Rs 5,000 and
outstanding at the end of the year Rs 10,000. Cash outflow on salary will be:
A. Rs 45,000
B. Rs 35000
C. Rs 55,000
D. Rs 15,000
161. In indirect method, net cash flow from operating activities is calculated on the basis of
A. Net Profit after tax
B. Net profit before tax
C. Both and b
A) Provision for tax made during the year
B) Proposed dividend made during the year
C) Interim dividend
D) Transfer to General reserves and other reserves
A. Both A and B
B. Both A and C
C. Both B and C
D. A, B, C and D
163. Which of the following are cash flow from investing activities?
C) Dividend received
E) Purchase of fixed assets
a) Both A and B
b) Both A and C
c) Both B and C
d) A, B, C and D
164. Which of the following are cash flow from financing activities?
B) Dividend received
C) Interest paid
D) Dividend paid
A. Both A and B
B. Both A and C
C. Both C and D
D. A, B, C and D
165. Acquisition and disposal of long term assets is included in
A. Cash flow from investing activities
B. Cash flow from financing activities
C. Cash flow from operating activities
166. Which of the following statements represent example of cash flow from investing
activities?
A. Cash advances and loans made by financial enterprises
B. Cash advances and loans made to third parties
C. Both a and b
167. ABC Ltd had investment of Rs 68,000 as on 31.3.2013 and investment of Rs 56,000 as on
31.3.2014. During the year ABC Ltd sold 40% of its investments being held in the
beginning of period at a profit of Rs 16,800. Determine cash flow from investing activities.
A. Rs 59,200
B. Rs 28,800
C. Rs 72,800
168. Financing activities brings changes in
A. Size and composition of ownerâ™s equities
B. Borrowing of the enterprise
C. Both a and b
169. For year 2013 Equity Share Capital is Rs 3,00,000 Preference Share Capital is 1,00,000
10% debentures is 2,00,000 and Share premium is 30,000. For year 2014 Equity Share
Capital is Rs 4,00,000 Preference Share Capital is 60,000 10% debentures is 1,00,000 and
Share premium is 40,000. Also given, Dividend paid on shares Rs 15,000 and Interest paid
on debentures RS 20,000. Determine net cash flow from financing activities.
A. Cash inflow of Rs 65,000
B. Cash outflow of Rs 65,000
C. Cash inflow of Rs 56,000
D. Cash outflow of Rs 56,000
A) All enterprises
A. Both A and B
B. Both A and C
C. Both C and B
A. True
B. False
A. Operating activities
B. Financing activities
C. Investing activities
from ____.
A. True
B. False
A. A, B, C
B. B, C, D
C. C, D, A
A. Decrease in debtors
B. Issue of shares
C. Decrease in creditors
D. Sale of fixed assets
A. Increase in Prepaid expenses
B. Increase in debtors
C. Increase in stock
D. Increase in creditors
B. Full Costing
C. Both a & b
A. On the basis of difference between sales and total cost.
B. By computation as per desired rate of profit on sales or cost
C. Both a and b
181. All costs are classified under ______ segments under absorption costing.
A. Five
B. Six
C. Four
D. Three
goods sold.
A. True
B. False
A. Fixed manufacturing expenses are included in unit cost
B. Fixed non-manufacturing expenses are included in unit cost
C. Both a and b
D. All of the above
A. Difference between product cost and period cost
B. Charged of fixed factory overheads on inventory
C. Both a and b
A. True
B. False
A. Prime Cost plus all variable overheads
B. Prime Cost minus all variable overheads
C. Variable overheads
30 in total cost is
A. Marginal cost
B. Prime cost
C. All variable overheads
A. Prime cost + All Variable overheads
B. Direct material + Direct labor + Direct Expenses + All variable overheads
C. Total costs – All fixed overheads
D. All of the above
A. Direct costing
B. Variable costing
C. Both a and b
A. Total fixed costs
B. Total costs
C. Total fixed costs
records.
A. True
B. False
A. There is loss equal to fixed costs
B. There is loss more than fixed costs
C. There will be loss less than fixed costs
D. There will be neither profit not loss
A. Intensive Opportunities
B. Integrative Opportunities
C. Diversification Opportunities
A. Historical costing
B. Total costing
C. Both a and b
A. Profit
B. Contribution
C. Profit volume ratio
197. Managers utilizes marginal costing for
A. Make or buy decision
B. Utilization of additional capacity
C. Determination of dumping price
D. All of the above
198. The problems associated with marginal costing are
A. Difficulties in divisions of costs
B. Problem of valuation of stocks
C. Ignores time elements
D. All of the above
199. ___________ is not suitable where selling price is determined on the basis of cost-plus
method.
B. Marginal costing
C. Both a and b
A. Provision for tax made during the year
B. Proposed dividend made during the year
C. Interim dividend
D. Transfer to General reserves and other reserves
a. Both A and B
b. Both A and C
c. Both B and C
d. A, B, C and D
D. All of the above
Answers
1. D) All of the Above 35. a) Rs 2 and Rs 10,000
36. b) Total costs
2. C) Decreased Cash 37. a) Rs 2 per unit, Rs 5,000
3. B) Increases Cash 38. a) Y=a+bX
4. C) Depreciation 39. a) True
5. D) None of the Above 40. a)True
6. D) Operating, Investing and 41. a) If contribution is zero, there is loss
Financing Activities equal to fixed costs
7. D) Purchase of Fixed Asset 42. c) There will be loss less than fixed
8. D) Sale of Investment by Non- costs
Financial Enterprise 43. d) There will be neither profit not
9. C) Interest Paid on Term-deposits by loss
a Bank 44. a) Intensive Opportunities
10. D) All of the above 45. c) Both a and b
11. c) Both C and B 46. a) Rs 2,00,000
13. a) Operating activities 48. c) Both a and b
14. b) Financing activities, investing 49. a) Profit
activities 50. a) True
15. a) True 51. D) All of the Above
16. b) Financing activities, investing 52. D) All of the Above
activities 53. Fixed and current assets
17. b) B, C, D 54. A) Interest coverage ratio
18. c) Decrease in creditors
19. d) Increase in creditors 55. b) 1950
20. c) Both a & b 56. a) Only A
21. c) Both a and b 57. a) Optional
22. a) True 58. d) A, B, C
23. a) Fixed manufacturing expenses are 59. a) Only A
included in unit cost 60. d) In planning, direction and control
24. a) Price determination on basis of full 61. c) A, B and C
cost 62. c) a and c
25. c) Both a and b 63. c) Decision making
26. d) B and D 64. b) James H. Bliss
28. a) Prime Cost plus all variable 66. b) False
overheads 67. a) Ango-American Council on
29. a) Marginal cost Productivity
30. a) Prime cost + All Variable 68. d) All of the above
overheads 69. d) All of the above
31. c) Both a and b 70. d) External Analysis
71. a) Static Analysis
32. a) A and B 72. c) Both B and C
33. a) Total marginal cost is deducted 73. d) A, B, C
from total sales revenues 74. c) Both B and C
34. d) A, B C and D 75. b) Both A and C
76. a) True 115. D) 20 %
77. b) False 116. B) 20%
78. a) True 117. D) All of the above
79. d) All of the above 118. A) Schedule of changes in working
80. d) All of the above capital
81. d) All of the above 119. A) True
82. d) All of the above 120. A) A and C
83. a) Wealth Maximization 121. C) Both a and b
84. b) Financing decisions 122. D) All of the above
85. d) All of the above 123. A) 2,80,000
86. d) Procurement & effective use of 124. d) None of the above
funds 125. B) Rs. 2,16,400
87. d) All of the above 126. A) Rs 60,000
88. d) All elements of acquiring and 127. A) 96,000
using means of financial resources for 128. B) 10,000
financial activities 129. C) 1,100
89. a) A unit of money obtained today is 130. A) 1,04,500
worth more than a unit of money 131. d) All of above
obtained in future 132. d) All of the above
90. c) Using either a or b 133. c) Either a or b
91. d) 10.38% per annum 134. b) As an appropriation of profits
92. a) Effective rate > Nominal rate 135. c) Both a and b
93. c) Rs 19310 136. b) False
94. b) 2 137. d) Operating activities, financing
95. a) True activities and investing activities
96. c) Either a or b 138. c) Both a and b
97. a) Coefficient of variation 139. d) A, B, C, D
98. a) Maximum return 140. c) Both B and C
99. b) Systematic risk 141. a) Cash basis of accounting
100. b) Profit and loss a/c 142. d) None of the above
101. c) Acid test ratio 143. D) only D
102. a) Accounting ratio 144. a) Cash basis of accounting, accrual
103. c) J. Betty basis of accounting
104. Either of the above 145. b) Funds Flow Statement
105. A) Pure ratio form 146. b) False
106. a) A, B and D 147. a) Cash Flow Statement
107. D) All of the above 148. d) A, B and C
108. A) A and B 149. d) All of the above
109. B) Sales 150. D) All of the above
110. C) Both A and B 151. a) Both a and b
111. A) Closing stock is deducted from 152. a) A-ii), B-iii), C-i)
cost of goods sold 153. b) False
112. a) It can be converted into gross 154. : a) True
profit by adding interest to it 155. c) Both a & b
113. ) (Gross profit / net sales) * 100 156. b) Direct method
114. B) 25 %
158. a) Purchases + Opening Creditors + 181. d) Three
Opening B/P â“Closing Creditors- 182. a) True
Closing B/P 183. a) Fixed manufacturing expenses are
159. c) Cash outflow on expenses included in unit cost
160. b) Rs 35000 184. a) Price determination on basis of full
161. b) Net profit before tax cost
162. d) A, B, C and D 186. a) True
163. d) A, B, C and D 187. a) Prime Cost plus all variable
164. c) Both C and D overheads
165. a) Cash flow from investing activities 188. a) Marginal cost
166. b) Cash advances and loans made to 189. a) Prime cost + All Variable
third parties overheads
167. b) Rs 28,800 190. c) Both a and b
168. c) Both a and b 191. b) Total costs
169. b) Cash outflow of Rs 65,000 192. a) True
170. c) Both C and B 193. d) There will be neither profit not
171. a) True loss
172. a) Operating activities 194. a) Intensive Opportunities
173. b) Financing activities, investing 195. c) Both a and b
activities 196. a) Profit
174. a) True 197. d) All of the above
175. b) Financing activities, investing 198. d) All of the above
activities 199. b) Marginal costing
176. b) B, C, D 200. d) A, B, C and D
177. c) Decrease in creditors 201. a) Price determination on basis of full
178. d) Increase in creditors cost
179. c) Both a & b
Arihant Education Foundation’s
ARIHANT COLLEGE OF ARTS, COMMERCE AND SCIENCE,
Camp, Pune – 411001.
COMMERCE DEPARTMENT
FINANCIAL ACCOUNTING – I
F.Y.B.COM (SEMESTER – I)

(MCQs)
With Answers
Prepared By
Mangesh Takpire
Asst. Professor, ACACSC, Camp, Pune
Arihant College of Arts, Commerce and Science, Camp, Pune – 01 Financial Accounting – I (F.Y.B.COM, SEM –I)
Que.1 Accounting is called as ……….. of business. Que.2 Specific business entity separate from
personnel affair of the owner is?
A. Concepts
B. Language A. Objectivity principle
C. Methods B. Stable currency principle
D. None of the above. C. Entity principle
D. Matching principle
Que.3 According to money measurement concept, Que.4 Contingent liability appears as a footnote in the
which one of the following will be recorded in the balance sheet. This is in accordance with the
books of accounts? accounting principle?
A. Excellent moral of workers A. Consistency
B. Cost of Machinery B. Disclosure
C. Managing ability of the manager C. Conservatism
D. Quality control in the business D. Materiality
Que.5 Connected with cost principles, assets required Que.6 Which one of the following concept may be
for used not for resale? stated as "for every debit, there is a credit"?
A. Cost principle A. Separate Entity Concept
B. Accounting principle B. Dual Aspect Concept
C. Going concern assumption C. Money Measurement Concept
D. None of them D. Accounting Period Concept
Que.7 Which of the following is the GAAP that Que.8 When the cost incurred on recruiting, training
requires the recording of depreciation? and developing the employees is considered for
determining the value of employees, it is called
A. Materially constraints
B. Matching principle A. the replacement cost approach
C. Cost principle B. the historical cost approach
D. Time-period principle C. the opportunity cost approach
D. none of the above
Que.9 Inflation Accounting is the practice of adjusting Que.10 The accounting methodology that deals with
financial statements according to……… energetics, ecology and economics is termed as……….
A. Book Record A. Inflation Accounting
B. Books of Accounts B. Creative Accounting
C. Prices indexes C. Economic Accounting
D. None of the above D. Environmental Accounting
Page - 1
Que.11 Forensic Accounting is a form of ………… Que.12 ………… capital means the capital which is more
accounting than the required capital according to the share of
profit an individual partner is sharing.
A. Investment
B. Investigative A. Fixed
C. International B. Current
D. None of the above C. Surplus
D. Deficit
Que.13 According to …….. concept, all expenses even Que.14 Accounting ……… are the general rules of
though not paid but under obligation to pay in near action or conduct, which are adopted by the
future, are also to be recorded. accountants universally while recording business
transactions.
A. Cash
B. Entity A. Records
C. Money measurement B. Entries
D. Accrual C. Principles
D. Methods
Que.15 GAAP stands for: Que.16 Which accounting principle states that
companies and owners should be treated as separate
A. Generally Accepted Accounting Provisions
entities.
B. Generally Accepted Accounting Policies
C. Generally Accepted Accounting Principles A. Monetary Unit Assumption
D. None of these B. Business Entity Concept
C. Periodicity Assumption
D. Going Concern Concept
Que.17 Cost or expenses must be recorded at the Que.18 The correct form of Accounting equation is
same time as the revenue to which they correspond is
A. Assets – Receivable = Equity
specified by which principle?
B. Assets + Receivable = Equity
A. Matching Principle C. Assets – Liabilities = Equity
B. Going Concern Principle D. Assets + Liabilities = Equity
C. Consistency Principle
D. Prudence Principle
Que.19 As per revenue recognition principle, sales Que.20 Due to which concept, accounting does not
revenues should be recognized at the time when? record non-financial transactions?
A. Order is taken for merchandise A. Going concern concept
B. Ownership of goods gets transferred from the B. Money measurement concept
seller to the buyer C. Accrual concept
C. Cash is received D. Cost concept
D. All of the above
Page - 2
Que.21 The owner of the business is treated as a Que.22 As per the accrual concept of accounting, any
creditor of the business according to which of the financial or business transaction should be recorded:
following concept?
A. when profit is computed
A. Entity concept B. when balance sheet is prepared
B. Materiality concept C. when cash is received or paid
C. Consistency concept D. when transaction occurs
D. Periodicity concept
Que.23 What is dissolution? Que.24 Piecemeal distribution of cash means______

A. Merger of firm A. After realized assets, liabilities paid off in pieces.
B. Discontinuation of firm B. Paid off liabilities by Net Assets Method
C. Sell of firm C. Paid off liabilities by Net payment Method
D. Purchase of new firm D. Paid off only capital after realisations of assets
Que.25 Which is not external Liability? Que.26 In Piecemeal Distribution of Cash which
liability paid off preferentially?
A. Loan from partners
B. Govt. Dues A. Realisation exp.
C. Realisation Expenses B. Govt. Dues
D. Secured Assets C. Loan from partner
D. Capital
Que.27 Surplus capital method is also known as_____ Que.28 Maximum Loss method is also known as____
A. Quotient method A. Surplus Capital Method
B. Maximum Loss Method B. High Relative Capital Method
C. National Loss Method C. National Loss Method
D. None of all these D. Excess Capital Method
Que.29 Solvent partner is_______ Que.30 Capital Deficiency is_______

A. able to cover his financial liability A. debit balance to the capital balance of an
B. doing not able to cover his financial liability insolvent partner
C. a proprietor B. credit balance to the capital balance of an
D. None of the above insolvent partner
C. debit balance to the capital balance of an solvent
partner
D. credit balance to the capital balance of a solvent
partner
Page - 3
Que.31 When is Garner V/s Murray Rulings is Que.32 Maximum Loss = Total of capital A/c. Balance
applicable? less __________
A. When insolvent partner did not able to pay off his A. Cash available
capital deficiency B. Cash paid
B. When insolvent partner able to pay off his capital C. Profit
deficiency D. None of these
C. When solvent partner did not able pay off his
capital deficiency
D. When solvent partner pay off his capital deficiency
Que.33 In Piecemeal distribution amounts realised Que.34 The liability of partners in a firm is..........
from assets are payable in the following order:
A. Limited
A. Realisation expenses, Outside Liabilities, Partners B. Certain
Loan, Partners Capital C. Unlimited
B. Partners Capital, outside Liabilities, Partners Loan, D. Fixed
Realisation Expenses
C. Partners Capital, Partners Loan, outside Liabilities,
Que.35 Reserve fund is distributed among the Que.36 Under Surplus Capital method in Piecemeal
partners in their.......ratio. Distribution, after the repayment of all outsider
liabilities, the.............are to be discharged on pro-rata
A. New
basis.
B. Profit sharing
C. Old A. partners capital
D. Partner B. partners loans
C. partners assets
Que.37 In piecemeal distribution, first pay Que.38 Single entry systems are maintained by
the.............liabilities.
A. Company
A. Unsecured B. Income tax authorities
B. Preferential C. Government
C. Secured D. Sole trader
Que.39 Single entry system of book keeping is Que.40 If closing capital is >opening capital, it denotes
A. Simple A. Loss
B. Unauthorized by tax authorities B. Profit
C. Unscientific C. No profit no loss
D. all of these D. Profit, if there is no introduction of fresh capital
Page - 4
Que.41 If closing capital is < opening capital, it Que.42 If capital at the end of the year is 40,000:
denotes that capital introduced during the year Rs. 30,000; drawings
20,000 and loss for the year is 60,000; then Capital at
A. Loss
the beginning of the year was:
B. Profit
C. No profit no loss A. 90000
D. Loss, if there is no introduction of fresh capital B. 80000
C. 70000
D. 10000
Que.43 If capital at the end of the year is 50,000: Que.44 Profit = capital at the end + drawings -
capital introduced during the year Rs. 30,000; drawings additional capital - …………..
20,000 and profit for the year is 30,000; then Capital at
A. Opening capital
the beginning of the year
B. Closing capital
A. 10,000 C. Loss
B. 30000 D. None of these
C. 20000
D. 35000
Que.45 What should be added in closing capital for Que.46 When the amount of closing capital (after
calculating opening capital? adjusting drawings ) is less than that of opening capital
the difference will be treated as:-
A. Loss and drawing
B. Profit and drawing A. Loss
C. Profit only B. Profit
D. Loss only C. Additional capital
D. None of them
Que.47 If opening capital is 24,000; closing capital Que.48 A system of accounting which is not based on
40,000; drawing 7,000; fresh capital 8,000. Calculate double entry system is called-
profit or loss.
A. Cash system
A. Profit 15,000 B. Mahajani system of accounting
B. Loss 15,000 C. Incomplete accounting system
C. Profit 20,000 D. None of these.
D. Loss 20,000
Que.49 Accounts which are maintained under single Que.50 Statement of affairs is prepared to-
entry system-
A. Know about assets
A. Personal accounts B. Know about liabilities
B. Impersonal accounts C. Calculate capital
C. (a) & (b) both D. Know financial position.
D. None of these.
Page - 5
Que.51 Liabilities and assets amount to Rs. 50,000 and Que.52 Generally incomplete records are maintained
Rs. 78,000 respectively. The difference amount will by-
represent-
A. Trader
A. Creditors B. Society
B. Debentures C. Company
C. Profit D. Government.
D. Capital.
Que.53 Statements of assets & liabilities prepared Que.54 In Single entry mostly:
under single entry system is called:
A. Personal aspects of transaction are recorded
A. Balance sheet B. Nominal aspects of transaction are recorded
B. Profit & loss statement C. Real aspects of transaction are recorded
C. Statement of affairs D. All of the above
D. Income Statement
Que.55 In double entry system: Que.56 GST stands for

A. Only one aspect of a transaction is recorded A. Goods and Supply Tax
B. Both aspect of a transaction is recorded B. Government Sales Tax
C. No aspect of a transaction is recorded C. Goods and Services Tax
D. None of these D. General Sales Tax
Que.57 In India GST became effective from Que.58 In India GST came effective from July 1st, 2017
India chosen________ model of dual GST
A. 1st April, 2017
B. 1st January, 2017 A. USA
C. 1st July, 2017 B. UK
D. 1st March, 2017 C. Canadian
D. China
Que.59 GST is a ___________ based tax on Que.60 Indian GST model has________rate structure
consumption of goods and services
A. 3
A. Duration B. 4
B. Destination C. 5
C. Dividend D. 6
D. Development
Page - 6
Arihant College of Arts, Commerce and Science, Camp, Pune – 01 Business Regulatory Framework (M.Law)
Que.61 What does "I" stands for in IGST Que.62 How many types of taxes will be in Indian GST
A. International A. 2
B. Intention B. 3
C. Integrated C. 4
D. Intra D. 5
Que.63 What are the taxes lavied on an Intra state Que.64 what is the maximum rate of cgst prescribed
supply under cgst act 2017?
A. CGST A. 0.28
B. SGST B. 0.2
C. CGST & SGST C. 0.12
D. IGST D. 0.18
Que.65 Which of the following tax was abolished by Que.66 The incidence of tax on tax is called
GST?
A. Tax Cascading
A. Corporate Tax B. Tax Pyramiding
B. Income Tax C. Tax evasion
C. Service Tax D. Indirect tax
D. Wealth Tax
Que.67 UTGST is applicable when Que.68 Integrated Goods and Services Tax is
applicable when
A. Sold from Union territory
B. Goods are purchased by Central Government A. Sold in Union territory
C. Sold from one union territory to another union B. Sold from one GST dealer to another GST dealer
territory C. Sold within a state
D. There is interstate supply D. There is interstate supply
Que.69 SGST is applicable when Que.70 When a GST dealer in Kerala sells a product o
a GST dealer or customer in Tamilnadu, the tax
A. Goods are sold within a state
collected is
B. Goods are sold from one GST dealer to a customer
C. Goods are sold by a GST dealer to another GST A. CGST
dealer B. SGST
D. Interstate supply C. CGST & SGST
D. IGST
Page - 7
Arihant College of Arts, Commerce and Science, Camp, Pune – 01
Answer Keys
Que 1 - Option B Que 2 - Option C Que 3 - Option B Que 4 - Option B Que 5 - Option C
Que 6 - Option B Que 7 - Option C Que 8 - Option B Que 9 - Option C Que 10 - Option D
Que 11 - Option B Que 12 - Option C Que 13 - Option D Que 14 - Option C Que 15 - Option C
Que 16 - Option B Que 17 - Option A Que 18 - Option C Que 19 - Option B Que 20 - Option B
Que 21 - Option A Que 22 - Option D Que 23 - Option B Que 24 - Option A Que 25 - Option A
Que 26 - Option A Que 27 - Option A Que 28 - Option C Que 29 - Option A Que 30 - Option A
Que 31 - Option A Que 32 - Option A Que 33 - Option A Que 34 - Option C Que 35 - Option B
Que 36 - Option B Que 37 - Option B Que 38 - Option D Que 39 - Option D Que 40 - Option D
Que 41 - Option D Que 42 - Option A Que 43 - Option A Que 44 - Option A Que 45 - Option A
Que 46 - Option A Que 47 - Option A Que 48 - Option C Que 49 - Option A Que 50 - Option C
Que 51 - Option D Que 52 - Option A Que 53 - Option C Que 54 - Option A Que 55 - Option B
Que 56 - Option C Que 57 - Option C Que 58 - Option C Que 59 - Option B Que 60 - Option 6
Que 61 - Option C Que 62 - Option B Que 63 - Option C Que 64 - Option B Que 65 - Option C
Que 66 - Option A Que 67 - Option A Que 68 - Option C Que 69 - Option A Que 70 - Option D
Best of Luck !!!
Page - 8
MULTIPLE CHOICE QUESTIONS ON BASIC ACCOUNTING
Q1] Which accounting concept satisfy the valuation criteria
A] Going concern, Realisation, Cost b) Going concern, Cost, Dual aspect
c) Cost, Dual aspect, Conservatism d) Realisation, Conservatism, Going concern.
Q2] A trader has made a sale of Rs.75,500 out of which cash sales amounted to
Rs.25,500. He showed trade receivables on 31-3-2014 at Rs.25,500. Which concept is
followed by him?
a) Going concern b) Cost c) Accrual d) Money measurement
Q3] In which of the following cases, accounting estimates are needed?
a) Employs benefit schemes b) Impairment of losses c) Inventory obsolescence d) All of
the above
Q4] Deewali advance given to an employee is
a) Revenue Expenditure b) Capital Expenditure c) Deferred Revenue Expenditure d) Not
an Expenditure
Q5] A firm has reported a profit of Rs.1,47,000 for the year ended 31-3-2014 after taking
into consideration the following items.
(i) The cost of an asset Rs.23,000 has been taken as an expense
(ii) The firm anticipated a profit of Rs.12,000 on the sale of an old furniture
(iii) Salary of Rs.7,000 outstanding for the year has not been taken into account.
(iv) An asset of Rs.85,000 was purchased for Rs.75,000 and was recorded in the books at
Rs.85,000.
What is the correct amount of profit to be reported in the books?
a) Rs.1,47,000 b) Rs. 1,51,000 c) Rs.1,63,000 d) Rs.1,41,000
Q6] The process of recording financial data upto trial balance is

a) Book keeping b) Classifying c) Summarising d) Analyzing
Q7] Rohit carrying on real estate business sold a piece of land for Rs.4,00,00,000 (cost
Rs.3,50,00,000) then the type of receipt is ______ nature and profit on sale is
a) Capital & transferred to capital reserve b) Revenue & transferred to P & L a/c c)
Capital & transferred to P & L a/c d) Revenue & transferred to general reserve
Q8] In income measurement & recognisation of assets & liabilities which of the
following concepts goes together ?
(a) Periodicity, Accural, Matching
(b) Cost, Accural, matching
(c) Going concern, cost, Realization
(d) Going concern, Periodicity, Reliability
Q9] Interpretation means
(a) Explanation of meaning and significance of the data in Financial Statements.
(b) Concerned with preparation and presentation of classified data
(c) Systematic analysis of recorded data
(d) Methodical classification of data given in Financial Statements.
Q10] A trader purchases goods for Rs. 2500000, of these 70% of goods were sold
during the year. At the end of 31st December 2009, the market value of such goods
were Rs. 500000. But the trader recorded in his books for Rs. 750000. Which of the
following concept is violated.
(a) Money measurement
(b) Conservatism
(c) Consistency
(d) None of these
Q11] Which of the following is wrong?

(a) All real and personal accounts are transferred to balance sheet
(b) Nominal accounts are transferred to P & L account
(c) Each account is opened separately in ledger
(d) Rent is a personal account, outstanding rent is nominal account
Q 12] is root cause for financial accounting

(a) Stewardship accounting
(b) Social accounting
(c) Management accounting
(d) Human resource accounting
Q 13]If nothing is given in the financial statements about the three accounting
assumptions then it is to be treated as it
a) Is assumed that it is not followed
b) Is assumed to be followed
c) Is assumed to be followed to some extent
Q14] The proprietor of the business is treated as creditor for the capital introduced
by him due to_____ concept.
a) Money measurement b) Cost c) Entity d) Dual aspect
Q15] Fixed assets are held by business for _____
a) Converting into cash b) Generating revenue c) Resale d) None of the above
Q16] Which accounting concept specifies the practice of crediting closing stock to
the trading account?
a) Cost b) Realisation c) Going concern d) Matching
Q17] Amount spent to increasing the earning capacity is a ______ expenditure

a) Capital b) Revenue c) Deferred revenue d) Capital Loss
Q18] Change in the capital A/c of proprietor may occur due to ______
a) Profit earned b) Loss incurred c) Capital Introduced d) All of the above
Q19] Consistency with reference to application of accounting procedures means

a) All companies in the same Industry should use identical accounting procedures
b) Income & assets have not been overstated
c) Accounting methods & procedures shall be followed uniform basis year after year
d) Any accounting method can be followed as per convenience
Q20] If one of the cars purchased by a car dealer is used for business purpose,
instead of resale, then it should be recorded by_____
a) Dr Drawing A/c & Cr Purchases A/c b) Dr Office Expenses A/c & Cr Motor Car A/c
c) Dr Motor Car A/c & Cr Purchases A/c d) Dr Motor Car & Cr Sales A/c
Q21] If wages are paid for construction of business premises ______ A/c is credited
and _____ A/c is debited.
a) Wages, Cash b) Premises, Cash c) Cash, Wages d) Cash, Premises
Q22] Human resources will not appear in the balance sheet according to ______
concept.
a) Accrual b) Going concern c) Money measurement concept d) None
Q23] Provision for discount on debtors is calculated on the amount of debtors.

a) Before deducting provision for doubtful debts.
b) After deducting provision for doubtful debts.
c) Before deducting actual debts and provision for doubtful debts.
d) After adding actual bad and doubtful debts.
Q24] Which of the following is not a Real Account?

a) Cash A/c b) Investments A/c c) Out standing rent A/c d) Purchases A/c
Q25] Value of goods withdrawn by the proprietor for his personal use should be
credited to ____
a) Capital A/c b) Sales A/c c) Drawings A/c d) Purchases A/c
Q26] Which of the following is incorrect?

a) Good will intangible asset b) Sundry debtors - current asset
c) Loose tools tangible fixed asset d) Outstanding expenses -current asset.
Q27] M/s Stationery Mart will debit the purchase of stationery to _______
a) Purchases A/c b) General Expenses A/c c) Stationery A/c d) None
Q28] Small items like, pencils, pens, files, etc. are written off within a year according
to _ concept.
a) Materiality b) consistency c) Conservatism d) Realisation
Q29] Business enterprise is separate from its owner according to _____ concept.
a) Money measurement concept b) Matching concept c) Entity concept d) Dual aspect
concept
Q30] The policy of anticipate no profit and provide for all possible losses arise due to
the concept of _____
a) Consistency b) Disclosure c) Conservatism d) Matching
Q31] According to which concept, the proprietor pays interest on drawings

a) Accrual concept b) Conservatism concept c) Entity concept d) Dual Aspect concept
Q32] Cost concept basically recognises ____

a) Fair Market value b) Historical cost c) Realisable value d) Replacement cost
Q33] If the Market value of closing Inventory is less than its cost price, inventory will
he shown at ____
a) Marketable value b) Fair Market value c) Both d) none
Q34] The Market price of good declined than the cost price. Then the concept that
plays a key role is ____
a) Materiality b) Going concern concept c) Realization d) Consistency
Q35] Fixed assets are double the current assets and half the capital. The current
assets are Rs.3,00,000 and investments are Rs.4,00,000. Then the current liabilities
recorded in balance sheet will be
a) 2,00,000 b) 1,00,000 c) 3,00,000 d) 4,00,000
Q36] Which of the following provide frame work and accounting policies so that the
financial statements of different enterprises become comparable.
a) Business Standards b) Accounting Standards c) Market Standards d) None
Q37] Which of the following factor is not considered while selecting accounting
policies?
a) Prudence b) Substance over form c) Accountancy d) Materiality
Q38] Debit the receiver & credit the giver is _____ account
a) Personal b) Real c) Nominal d) All the above
Q39] Cash a/c is a ______

a) Real a/c b) Nominal c) Personal d) None
Q40] As per accrual concept, which of the followings is not true

a) revenue – expenditure = profit b) revenue – profit = expenditure
c) sales + gross profit = revenue d) revenue = profit + expenditure
Q41] Mr. X sold goods to Mr. Y ask Mr. X to keep the goods with him for some time
a) symbolic delivery b) actual delivery c) constructive delivery d) none of these
Q42] If nothing is written about the accounting assumption to be followed it is

presumed that
a) They have been followed b) They have not been followed
c) They are followed to some extent d) none of these
Q43]Capital A/c is a _______ A/c.

a) Personal b) Real c) Nominal d) None
Q44] Cash A/c is a ________ A/c.

a) Personal b) Real c) Nominal d) None
Q45] The principle “Debit the receiver and credit the giver” is related to_____
a) Personal a/c b) Real a/c c) Nominal a/c d) None
Q46] As per the Matching concept, Revenue – ? = Profit

a) Expenses b) Liabilities c) Losses d) Assets
Q47] Sales – Gross Profit = ________
a) Cost of goods sold b) Net sales c) Gross Sales d) Liabilities
Q48] Which of the following is a Real A/c?

a) Building A/c b) Capital A/c c) Shyam A/c d) Rent A/c
Q49] Valuation of stock in accounting follows the principle of cost price or ____ which ever is
lower.
a) Market Price b) Average Price c) Net realizable Value d) None of these.
Q50] Which of the following is not a nominal Account?

A] Outstanding salaries Account B] Salaries account
C] Interest paid D] Commission received
Q51] Mr. X is a dealer in electronic goods (refrigerator, washing machine, air

conditioners, televisions, etc.) He purchased two air conditioners and installed in his
showroom. In the books of X the cost two air conditioners will be debited to
A] Drawing account B] Capital Account
C] Fixed assets D] Purchases account
Q52] A trader calculated his profit as Rs.150000 on 31/03/2014. It is an

A] Transaction B] Event
C] Transaction as well as event D] Neither transaction nor event
Q53] For every debit there will be an equal credit according to

A] Matching concept B] cost concept
C] Money measurement concept D] Dual aspect concept
Q54] Historical cost concept requires the valuation of an asset at

A] Original cost B] Replacement value
C] Net realizable value D] Market value
Q55] The comparison of financial statement of one year with that of another is
possible only when ----------------concept is followed
A] Going concern B] Accrual
C] Consistency D] Materiality
Q56] Profit and loss is calculated at the stage of

A] Recording B] Posting
C] Classifying D] Summarising
Q57] Which of the following is not the main objective of accounting?

A] Systematic recording of transactions B] Ascertaining profit or loss
C] Ascertainment of financial position D] Solving tax disputes with tax authorities
Q58] An asset was purchased for Rs.1000000 with the down payment of Rs.200000
and bills accepted for Rs.800000/-. What would be the effect on the total asset and
total liabilities in the balance sheet?
A] Assets increased by Rs.800000 and liabilities decreased by Rs.800000
B] Assets decreased by Rs.800000 and liabilities increased by Rs.800000
C] Assets increased by Rs.1000000 and liabilities increased by Rs.800000
D] Assets increased by Rs.800000 and liabilities increased by Rs.800000
Q59] The rule debit all expenses and losses and credit all income and gains relates to
A] Personal account B] Real account C] Nominal accounts
D] All
Q60] Matching concept means

A] Assets = capital + liabilities B] Transactions recorded at accrual concept
C] Anticipate no profit but recognize all losses
D] Expenses should be matched with the revenue of the period.
1] a 2]c 3] d 4] d 5] b 6] a 7] b 8] a 9] a 10] b
11] d 12] a 13] b 14] c 15] b 16] d 17] a 18] d 19] c 20] c
21] d 22] c 23] b 24] c 25] d 26] d 27] a 28] a 29] c 30] c
31] c 32] b 33] a 34] c 35] b 36] b 37] c 38] a 39] a 40] c
41] a 42] b 43] a 44] b 45] a 46] a 47] a 48] a 49]c 50] a
51] c 52] b 53] d 54] a 55] c 56] d 57] d 58] d 59] c 60] d
Chapter 1 Basic Concepts of Accounting
1. ______________ is nothing but the right process of selecting an appropriate, logical, practical and
achievable option from the available alternatives.
(a) Business Decision (b) Planning (c) Organizing (d) Strategy
(a) Partner (b) Sole-trader (c) Executive (d) Manager
3. The relationship between persons who agree to carry on business in a common with a view to private
gain.
(a) Partnership Firm (b) Sole-trading Firm (c) Joint Stock Company (d) Co-operative Society
4. A ______________ is a form of business organization in which the funds of large number of investors
are managed by a few persons for the purpose of earning profits.
(a) Marketing (b) Profit Earning Capacity (c) Accounting (d) Selling
(a) To calculate net profit or net loss of the business. (b) To know the financial condition of the firm. (c)
To provide information to the management for important managerial decisions. (d) All of the above
(a) Financial Accounting (b) Management Accounting (c) Human Resource Accounting (d) Cost
Accounting
8. Accounting ______________ are the Rules of Action or the Methods and Procedures of Accounting
commonly adopted while recording Business transactions.
(a) Principles (b) Concepts (c) Conventions (d) Systems
9. According to ______________ concept, assets purchased are generally recorded in accounting books at
the cost at which they are purchase(d)
(a) Business Entity Concept (b) Going Concern Concept (c) Money Measurement Concept (d) Cost
Concept
10. According to ______________ concept, revenue is recognized only when the sale is performed.
(a) Business Entity Concept (b) Going Concern Concept (c) Money Measurement Concept (d)
Realization Concept
11. Accounting ______________ are the traditions, usage andcustoms which are in used since long.
(a) Convention of Consistency (b) Convention of Disclosure (c) Convention of Conservatism (d)
Convention of Realization
(a) Non-Cash Entry System (b) Cash System (c) Single Entry System (d) Double Entry System
(a) Cash Transaction (b) Credit Transaction (c) Financial Transaction (d) Ordinary Transaction
(a) Personal Account (b) Real Account (c) Nominal Account (d) Individual Account
(a) two, two (b) one, one (c) one, two (d) two, one
19. A ______________ is an accounting entry that either increases an asset or expense account, or
(a) Debit (b) Credit (c) Sales (d) Purchase
20. A ______________ is an accounting entry that either increases a liability or equity account, or
decreases an asset or expense account.
(a) Entry (b) Recording (c) Monetary Transaction (d) Ledger
(a) Entry (b) Recording (c) Transaction (d) Ledger
(a) Journal (b) Ledger (c) Cash Book (d) Subsidiary Book
28. ______________ is a summarized record of transactions related to one person, one asset, one head of
expense/loss and one head of income/gain.
(a) Journal (b) Ledger (c) Cash Book (d) Account
(a) Casting (b) Summarizing (c) Journalizing (d) Ledger Posting
30. ______________ are obligations or debts that the enterprise must pay in money or services at some
time in the future.
(a) Assets (b) Liabilities (c) Responsibilities (d) Salaries
31. ______________ are economic resources of an enterprise that can be usefully expressed in monetary
terms.
(a) Assets (b) Liabilities (c) Cash & Bank Balance (d) Funds
32. ______________ are commodities, purchased or manufactured for resale with a view to earn profit.
(a) Assets (b) Goods (c) Investments (d) Resources
33. ______________ are the amounts the business earns by selling its products or providing services to
customers.
(a) Assets (b) Goods (c) Investments (d) Revenues
(a) Assets (b) Expenses (c) Investments (d) Revenues

35. ______________ are persons and/or other entities who owe to an enterprise an amount for receiving
goods and services on credit.
(a) Debtors (b) Creditors (c) Shareholders (d) Suppliers
36. ______________ are persons and/or other entities that have to be paid by an enterprise an amount for
providing the enterprise goods and services on credit.
(a) Debtors (b) Creditors (c) Shareholders (d) Customers
37. ______________ is a list of the entire general ledger account names and balances; it is prepared to
prove the ledger.
(a) Journal (b) Ledger (c) Cash Book (d) Trial Balance
(a) Debit (b) Credit (c) Balance (d) Cash
39. ______________ deals with expenses related to or identified with products, which may only be a part
of the organization.
Accounting
Accounting
41. The primary objective of ______________ is to provide necessary information to the management in
the process of its planning, controlling, and performance evaluation, and decision-making.
Accounting
Accounting
Accounting
(a) Tally (b) Marg (c) Saral (d) SAP

(a) Accounting softwares save Time and Money. (b) No scope for mistakes and errors. (c) Provides
accurate and updated information as and when require(d) (d) All of the above
Accounting
(a) Cash (b) Debit (c) Credit (d) Overdraft
(a) Two (b) Three (c) Four (d) Five
(a) Narration (b) Explanation (c) Brief information (d) Detail information
Chapter 2 Understanding of Financial Statements

1. ______________ shows the firm’s assets, liabilities, and stockholders’ equity as of the report date.
(a) Cash Flow (b) Funds Flow (c) Income Statement (d) Balance Sheet
2. ______________ shows the results of the firm’s operations and financial activities for the reporting
period.
(a) Trading and Profit & Loss Account (b) Expense Statement (c) Income Statement (d) Balance Sheet
3. ______________ includes explanations of various activities, additional details of some accounts, and
other items as mandated by the regulatory authorities, bodies from time to time.
(a) Trading and Profit & Loss Account (b) Expense Statement (c) Income Statement (d) Supplementary
Note
4. ______________ is a formal official record of the financial activities and position of a business,
person, or other entity.
(a) Financial Statement (b) Trading Account (c) Profit & Loss Account (d) Supplementary Note
5. ______________ provides the vital information related to the profitability, liquidity and solvency of
the business.
(a) Financial Statement (b) Trading Account (c) Profit & Loss Account (d) Cash Flow & Funds Flow
(a) Partnership Firm (b) Sole Trading Firm (c) Private Ltd. Company (d) Public Company
(a) Partnership Firm (b) Sole Proprietorship Firm (c) Private Ltd. Company (d) One Man Company
(a) Dual (b) Single (c) Triple (d) None of the above
10. ______________ are nothing but the entries which are not included in the original Trial Balance.
(a) Journal Proper (b) Ledger (c) Adjustments (d) None of the above
(a) One Debit & One Credit (b) Debit (c) Credit (d) None of the above
(a) BRS (b) Balance Sheet (c) Trading A/c (d) Profit and Loss A/c
(a) Profit and Loss A/c Debit Side (b) Profit and Loss A/c Credit Side (c) Trading A/c Debit Side (d)
Trading A/c Credit Side
(a) Balance Sheet Asset Side (b) Profit and Loss A/c Credit Side (c) Trading A/c Debit Side (d) Trading
A/c Credit Side

(a) Balance Sheet Liability Side (b) Profit and Loss A/c Credit Side (c) Balance Sheet Asset Side (d)
(a) Sales (b) Purchases (c) Capital (d) Drawings
(a) Capital A/c (b) Balance Sheet (c) Trading A/c (d) Profit and Loss A/c
(a) Journal A/c (b) Balance Sheet (c) Trading A/c (d) Profit and Loss A/c
(a) Capital A/c (b) Personal A/c (c) Trading A/c (d) Profit and Loss A/c
(a) Cash (b) Credit (c) Qualitative (d) Quantitative
(a) Accounting Concepts and Conventions (b) Accounting Concepts (c) Accounting Conventions (d)
None of the above
(a) 1st January (b) 1st April (c) 1st March (d) 1st June
(a) 31st January (b) 31st August (c) 31st March (d) 31st December
(a) Sales (b) Purchases (c) Stock (d) Closing stock
(a) Capital A/c (b) Balance Sheet Asset Side (c) Trading A/c (d) Profit and Loss A/c
(a) Added (b) Deducted (c) Not Added (d) Not deducted
32. In ______________ business, all incomes and losses are taxed on the individual’s personal income
tax return.
(a) Sole Proprietorship (b) Partnership (c) Cooperative (d) Departmental
(a) Added in respective asset (b) Added in respective liability (c) Added in respective expense (d) Added
in respective income
(a) Deducted from respective asset (b) Added in respective liability (c) Deducted from respective
expense (d) Added in respective income
(a) Income (b) Expense (c) Liability (d) Asset
(a) Inward (b) Outward (c) Return Inward (d) Return Outward
(a) Sales (b) Purchases (c) Creditors (d) Debtors
(a) Depreciation (b) Discount (c) Purchases (d) Creditors
(a) Income (b) Expense (c) Asset (d) Liability
(a) Profit and Loss A/c Debit Side (b) Profit and Loss A/c Credit Side (c) Balance Sheet Liability Side (d)
Balance Sheet Asset Side
(a) Stock (b) Investment (c) Cash (d) Goodwill
(a) Land (b) Building (c) Machinery (d) Debtors
(a) Capital (b) Loan (c) Bills Payable (d) Creditors
(a) Trading A/c (b) Income A/c (c) Capital A/c (d) Asset A/c
1. ______________ provides a specialized technique, which provides prompt and accurate information
regarding the cost of producing and selling an article.
(a) Cost Accounting (b) Financial Accounting (c) Management Accounting (d) Cost & Financial
Accounting
2. The amount of expenditure incurred on, or attributable to a given thing is called as ______________.
(a) Cost (b) Price (c) Expense (d) Fixed Cost
(a) Costing (b) Accounting (c) Financing (d) Management Accounting
(a) Costing Methods (b) Cost Accounting (c) Management Accounting (d) Costing Techniques
(a) Total Cost (b) Factory Cost (c) Prime Cost (d) Main Cost
(a) Chargeable Expenses (b) Factory Expenses (c) Works Expenses (d) General Expenses
(a) Direct Expenses (b) Factory Expenses (c) General Expenses (d) Indirect Expenses
(a) Total Cost (b) Total Expense (c) Overheads (d) Factory Overheads
(a) Total Cost (b) Cost of Production (c) Works Cost (d) Factory Overheads
(a) Total Cost (b) Cost of Production (c) Works Cost (d) Factory Cost
(a) Total Cost (b) Fixed Overheads (c) Variable Overheads (d) Semi-variable Overheads
(a) Total Cost (b) Direct Cost (c) Works Cost (d) Period Cost
(a) Fixed Cost (b) Controllable Cost (c) Non-controllable Cost (d) Period Cost
(a) Fixed Cost (b) Avoidable Cost (c) Non-controllable Cost (d) Normal Cost
(a) Fixed Cost (b) Unavoidable Cost (c) Abnormal Cost (d) Normal Cost
(a) Fixed Cost (b) Direct Cost (c) Capital Cost (d) Normal Cost
(a) Predetermined Cost (b) Direct Cost (c) Capital Cost (d) Fixed Cost
(a) Predetermined Cost (b) Direct Cost (c) Marginal Cost (d) Fixed Cost
(a) Predetermined Cost (b) Direct Cost (c) Unavoidable Cost (d) Standard Cost
(a) Differential Cost (b) Semi-variable Cost (c) Variable Cost (d) Standard Cost
(a) Differential Cost (b) Programmed Cost (c) Normal Cost (d) Fixed Cost
(a) Standard Cost (b) Programmed Cost (c) Normal Cost (d) Imaginary Cost
(a) Committed Cost (b) Programmed Cost (c) General Cost (d) Imaginary Cost
25. A Location, person, or item of equipment (or a group of these) for which costs may be ascertained and
used for the purpose of control is called as ______________.
(a) Cost Unit (b) Cost Centre (c) Cost Department (d) Cost Division
(a) Cost Sheet (b) Cost Account (c) Cost Report (d) Cost Classification
(a) Historical Cost Sheet (b) Cost Account (c) Cost Report (d) Estimated Cost Sheet
(a) Fixed Overheads (b) Direct Cost (c) Factory Overheads (d) Administration Overheads
(a) Fixed Overheads (b) Selling Overheads (c) Factory Overheads (d) Administration Overheads
(a) Factory Cost (b) Prime Cost (c) Cost of Production (d) Works Cost
(a) Factory Cost (b) Prime Cost (c) Fixed Wages (d) Productive Wages
(a) Units of Production (b) Units of Services (c) Both a and b (d) None of the above
(a) Factory Cost (b) Prime Cost (c) Conversion Cost (d) Productive Cost
(a) One (b) Two (c) Three (d) Four
(a) Revenue Cost (b) Differential Cost (c) Fixed Cost (d) Variable Cost
39. The Expenditure which has been incurred in an accounting period but it is applicable further periods
also is ______________.
(a) Revenue Cost (b) Differential Cost (c) Differed Revenue Cost (d) Variable Cost
40. The estimate of expenditure for different business operations for a specific period is ______________.
(a) Budgeted Cost (b) Differential Cost (c) Differed Revenue Cost (d) Variable Cost

______________.
(a) Incremental Cost (b) Differential Cost (c) Opportunity Cost (d) Future Cost
42. The value of benefit sacrificed in favour of an alternative course of action is ______________ cost.
(a) Incremental (b) Fixed (c) Opportunity (d) Future
______________ in Prime Cost.
(a) Direct Expenses (b) Factory Overheads (c) Office Overheads (d) Selling Overheads
(a) Cost of Direct Expenses (b) Cost of Direct Overheads (c) Cost of Direct Labour (d) Cost of Direct
Material
(a) Cost of Sales (b) Fixed Cost (c) Cost of Production (d) Cost of Goods Sold
(a) Cost of Sales (b) Cost of Production (c) Cost of Goods Sold (d) None of the above
(a) Added (b) Deducted (c) Not Considered (d) None of the above
50. ______________ is the process of ascertaining costs whereas ______________ is the process of
recording various costs in a systematic manner, in order to prepare statistical date to ascertain cost.
(a) Costing, Cost Accounting (b) Cost Accounting, Costing (c) Costing and Allocation Cost (d) Costing
and Absorption of Cost
Chapter 4 Cost Control

(a) Inventory Carrying Cost (b) Order Placing Cost (c) Buying Cost (d) Fixed Cost
(a) Inventory Carrying Cost (b) Variable Cost (c) Buying Cost (d) Fixed Cost
(a) Minimize (b) Control (c) Maintain (d) Avoid
(a) EOQ (b) JIT (c) ABC (d) HML
5. Calculate EOQ if Cost of material per unit ` 40, Annual requirement 1600 units, Cost of placing and
receiving one purchase order ` 50, Annual carrying cost of inventory is 10% of inventory value.
(a) 200 Units (b) 175 Units (c) 225 Units (d) 250 Units
(a) Maximum Stock Level (b) Minimum Level (c) Re-order Stock Level (d) Danger Stock Level
______________.
9. A level below which the stock should never be allowed to fall under emergency circumstances is
______________.
10. A strategy for inventory management in which raw materials and components are delivered from the
vendor or supplier immediately before they are needed in the manufacturing process is ______________.
(a) Scientific Purchasing (b) Immediate Buying (c) JIT (d) None of the above
(a) LIFO (b) FIFO (c) Simple Average (d) All of the above
(a) Latest in First Out (b) Last in First Out (c) Largest in First Out (d) Lowest in First Out
(a) Maximum Consumption × Maximum Reorder Period (b) Reorder Level − (Normal Consumption
× Normal Reorder Period) (c) Reorder Level + Reorder Quantity − (Minimum Consumption × Minimum
Reorder Period) (d) Average Usage × Maximum Reorder Period for Emergency Purchases
(a) Maximum Consumption× Maximum Reorder Period (b) Reorder Level − (Normal Consumption ×
Normal Reorder Period) (c) Reorder Level + Reorder Quantity − (Minimum Consumption × Minimum
Normal Reorder Period) (c) Reorder Level + Reorder Quantity − (Minimum Consumption ×
Minimum Reorder Period) (d) Average Usage × Maximum Reorder Period for Emergency Purchases
(a) Normal and Abnormal (b) Avoidable and Unavoidable (c) Controllable and Non-controllable (d)
Fixed and Variable
(a) Wastage (b) Scarp (c) Spoilage or Defectives (d) All of the above
(a) Fixed Cost Control (b) Debtors Control (c) Inventory Control (d) Creditors Control
(a) To protect materials from losses and damages (b) To avoid over and under-stocking of materials (c)
To minimize the storage costs of materials (d) All of the above
21. Wages which can be indentified with and allocated to cost centers and cost units is ______________.
(a) Direct Labour Cost (b) Indirect Labour Cost (c) Fixed Labour Cost (d) Variable Labour Cost
22. ______________ is defined as the rate of change of labour force in an organization during a specified
period.
(a) Labour Turnover (b) Labour Rate (c) Labour Cost (d) Employee Change Rate
(a) Personal Causes (b) Avoidable Causes (c) Unavoidable Causes (d) All of the above
24. ______________ includes all those costs which are incurred to keep the workers satisfied, so that they
are prevented from leaving the organization.
(a) Direct Labour Cost (b) Preventive Cost (c) Maintenance Cost (d) Variable Labour Cost
(a) Separation Method (b) Replacement Method (c) Flux Method (d) All of the above
(a) Time Keeping (b) Time Booking (c) Time Noting (d) All of the above
28. ______________ study is concerned with determining the proper method for performing the job so
that there is no wastage in movement.
(a) Time (b) Motion (c) General (d) Special
29. ______________ study is concerned with the determination of standard time required by a person of
average ability to perform a jo(b)
(a) Assessment of Manpower Requirement (b) Time and Motion Study (c) Control over Idle Time and
Overtime (d) All of the above
(a) Personnel and Payroll Department (b) Time Keeping Department (c) Engineering and Work Study
Department (d) All of the above
(a) Direct Labour Cost (b) Preventive Cost (c) Maintenance Cost (d) Replacement Cost
(a) Attendance Register Method (b) Token or Disc Method (c) Time Recording Clocks & Dial Time
Records (d) All of the above
(a) Daily Time Sheet (b) Weekly Time Sheet (c) Job Cards or Job Tickets (d) All of the above
35. ______________ refers to the estimation of standard time, i.e., the time allowed for completing one
piece of job using the given metho(d)
(a) Work Measurement (b) Time Measurement (c) Period Measurement (d) None of the above
36. ______________ costs are the operating costs of a business enterprise which cannot be traced to a
particular unit of output.
(a) Material (b) Labour (c) Overhead (d) Foxed & Variable
(a) Collection of Overhead (b) Allocation of Overhead (c) Apportionment of Overhead (d) Classification
of Overhead
of Overhead
39. ______________ means, the allotment to two or more departments or cost centers of proportions of
common items of cost on estimated basis of benefit received.
(a) Collection of Overhead (b) Allocation of Overhead (c) Apportionment of Overhead (d)
Classification of Overhead
(a) Departmentalization (b) Centralization (c) Decentralization (d) Classification
(a) Primary Distribution of Overhead (b) Secondary Distribution of Overhead (c) Simultaneous Equation
Method of Overhead (d) All of the above
42. The overhead, which can be easily identified with a particular department that is charged only to the
specific department, is called ______________.
(a) Collection (b) Allocation (c) Apportionment (d) Classification
(a) Value of Plant (b) Ratio of Plant (c) Quantity of Production (d) None of the above
(a) No. of Workers (b) Days Spend by Workers (c) Time Spent by Workers (d) None of the above
(a) Horse Power (b) KWH (c) No. of Machine Hours (d) All of the above
(a) Value of Materials (b) No. of Stores Requisitions (c) Weight or Value of Materials (d) All of the
above
(a) direct (b) indirect (c) fixed (d) variable
of Overhead
Chapter 5 Decision-making Tools

(a) Variable Costing (b) Standard Costing (c) Material Costing (d) Job Costing
(a) Marginal Costing (b) Standard Costing (c) Material Costing (d) Job Costing

(a) Contribution to Sales Ratio (b) Contribution Margin Ratio (c) Variable Profit Ratio (d) All of the
above
(a) CVP (b) ABC (c) JIT (d) HML
(a) Centre Point (b) BEP (c) Starting Point (d) Ending Point
(a) P/V Ratio (b) BEP (c) MOS (d) Contribution
(a) P/V Ratio (b) Net Margin (c) MOS (d) Gross Margin
9. ______________ is an angle where sales line intersects total cost line which indicates profit earning
capacity over the BEP.
(a) Angle of Incidence (b) Contribution (c) Margin of Safety (d) Gross Margin
(a) 20% (b) 30% (c) 33.33% (d) 1/3
(a) 70% (b) 80% (c) ¾ (d) ½
(a) ` 4,16,667 (b) ` 3,83,333 (c) ` 3,75,000 (d) ` 4,10,000
(a) ` 1,00,000 (b) ` 6,00,000 (c) ` 3,75,000 (d) ` 4,10,000
(a) ` 40,000 (b) ` 10,000 (c) ` 25,000 (d) ` 30,000
(a) ` 4,00,000 (b) `2,00,000 (c) ` 2,50,000 (d) `3,00,000

(a) ` 2,40,000 (b) ` 80,000 (c) ` 2,70,000 (d) ` 2,00,000
(a) Contribution = Sales – Variable Cost (b) Contribution = Fixed Cost + Profit or – Loss (c) Contribution
= Sales × P/ V Ratio (d) All of the above
(a) P/ V Ratio = [Contribution/Sales ] × 100 (b) P/ V Ratio = [Change in Profit/Change in Sales ] × 100
(c) P/ V Ratio = [Sales−Variable Cost/Sales] × 100 (d) All of the above
(a) Technique (b) Method (c) System (d) Convention
20. Under absorption and over absorption of overheads problems are not arisen under ______________.
(a) Marginal Costing (b) Standard Costing (c) Job Costing (d) Budgetary Control
(a) Pre-determined (b) Pre-decided (c) Pre-planned (d) None of the above
(a) Standard Costing (b) Marginal Costing (c) Budgetary Control (d) None of the above
23. ______________ means difference between standard cost and actual cost. (a) Balance Cost (b)
Variance (c) Marginal Cost (d) Variable Cost
24. ______________ helps management to understand the present costs and then to control the future
costs.
(a) ABC Analysis (b) Variance Analysis (c) Marginal Analysis (d) Budget Analysis
a) One (b) Two (c) Three (d) Four
26. If Standard Cost ` 80 and Actual Cost ` 70, then what is the amount of Material Cost Variance?
(a) 10 (b) –10 (c) 150 (d) 20
27. If Standard Price ` 8 & Standard Qty.10, Actual Price ` 7 & Actual Qty.10, then what is the amount of
Material Price Variance?
(a) 10 (b) –10 (c) 150 (d) 20

Material Usage Variance?
(a) 10 (b) –10 (c) 50 (d) 0
29. If Standard Rate ` 1.50 & Standard Hours 1600, Actual Rate ` 2 & Actual Hours 1500, then what is
the amount of Labour Cost Variance?
(a) 600 (b) –600 (c) 500 (d) 400
the amount of Labour Rate Variance?
(a) 750 (b) –750 (c) 600 (d) 400
31. If Standard Rate ` 1.50 & Standard Hours 1600, Actual Rate `2 & Actual Hours 1500, then what is the
amount of Labour Efficiency Variance?
(a) 150 (b) –150 (c) 300 (d) 200
(a) MCV = MPV + MUV (b) MCV = MPV – MUV (c) MCV = MPV × MUV (d) None of the above
(a) LCV = LRV + LEV (b) LCV = LRV – LEV (c) LCV = LRV × LEV (d) None of the above
(a) Standard Cost and Actual Cost (b) Fixed Cost and Variable Cost (c) Normal Cost and Abnormal
Cost (d) None of the above
(a) Establishments of standards are difficult in practice. (b) Standards are requires to revise continuously.
(c) Inaccurate, unreliable and outdated standards do more harm than benefit (d) All of the above
36. ______________ is a concrete precise picture of the total operation of an enterprise in monetary
terms.
(a) Budget (b) Plan (c) Strategy (d) Goal
(a) Budgetary Control (b) Scientific Planning (c) Standard Costing (d) Marginal Costing
38. Pre- requisitions for effective implementation of Budgetary Control system is/are ______________.
(a) Deciding budget centres & budget period (b) Preparation of a budget manual (c) Determination of
budget key factor (d) All of the above
39. ______________ is the budget in which adjustment is possible according to change in business
conditions.
(a) Flexible Budget (b) Fixed Budget (c) Sales Budget (d) Cash Budget
40. When forecasts about budget shows greater revenue to be received or generated than the expenses to
be incurred during budgeted period that is known as ______________.
(a) Surplus Budget (b) Best Budget (c) Favourable Budget (d) Non-favourable Budget
41. ______________ budget highlights that the expenditures to be incurred in budget period will be
greater than the revenues to be received during the same period.
(a) Surplus Budget (b) Deficit Budget (c) Favourable Budget (d) Non-favourable Budget
42. The establishment of budgets relating the responsibilities of executives to the requirements of a policy
and the continuous comparison of actual with budgeted results, either to secure by individual action the
objective of that policy or to provide basis for its revision is called as ______________.
(a) Budget (b) Budgeting (c) Budgetary Control (d) None of the above
43. A ______________ is a powerful tool available to the management for the purpose of maximizing
profits.
(a) Budget (b) Decrease in selling price (c) Standard Norm (d) Increase in selling price
(a) Static Budget (b) Standard Budget (c) Master Budget (d) Flexible Budget
(a) No Profit No Loss (b) Less Profit (c) Expected Profit (d) None of the above
(a) Cost Budget (b) Labour Budget (c) Employee Budget (d) None of the above
(a) Cash (b) Credit (c) all financial (d) None of the above
(a) Fixed (b) One Month (c) One Year (d) None of the above
(a) Production Budget (b) Material Budget (c) Cost Budget (d) None of the above

(a) Fixed Budget (b) Capital Expenditure Budget (c) Cash Budget (d) Purchase Budget
Managerial Accounting (IMP)
1. In marginal costing technique, fixed costs are sometimes called as___?
A) Period cost
B) Prime cost
C) Overhead cost
D) Variable cost
2. Of the following____: provides strategic, decision based financial and operative information to the
board of directors.
B) Cost Accountant
D) Accounts Clerk
3. The difference between fixed and Variable cost has a special significance in the preparation of____?
A) Flexible Budget
B) Master Budget
C) Cash Budget
D) Sales Budget
relation to the old contribution margin will be____?
A) Lower
B) Unchanged
C) Higher
D) Indeterminate
5. marginal costing is a___?
6. The prime objective of marginal costing is to___?
D) Predict profits
7. A Budget which is designed to remain unchanged in respect of the level of activity actually attained is
called_____?
A) Flexible Budget
B) Cash Budget
C) Fixed Budget
D) Master Budget
function of___?
A) Decision Making
B) Planning
C) Controlling
9. Percentage of level of activity attained over a period of time is called___?
A) Budgeted Ratio
B) Capacity Ratio
C) Activity Ratio
D) Efficiency Ratio
10. An increase in variable costs____?
11. Management Accounting deals with___?
A) Nothing
12. Budgetary controls helps management to plan &___?
A) Control
B) Generate losses
C) Increase losses
D) Dissolve
13. A Large Margin of Safety indicates___?
B) Over production
C) Under production
A) 40 percentage
B) 30 percentage
C) 50 percentage
D) 60 percentage
15. An estimate made about future production, sales and financial requirements in the specific period is
called as___?
A) Forecasting
B) Planning
C) Budgeting
D) Decision making
16. Accounting designed to serve management in decision making process is called as___?
A) Cost accounting
17. Cash budget starts with opening balance of___?
B) Fixed assets
C) Creditors
D) Expenses
18. Cost accounting is one of the subdivision of___?
B) Cost accounting
19. A Budget is a____?

20. In case of material the key factor may be___?
21. Marginal costing is known as____?
A) Variable costing
B) Fixed costing
C) Standard costing
22. Margin of safety means____?
C) Safety operation
D) Marginal costs
23. The basic function of accounting is to_____?
24. A plan and blueprint for future period is called as____?
A) Estimate
B) Future plan
C) Long term plan
D) Budget
25. The factors whose influence should be measured before preparing Budget is called as___?
A) Important factor
C) Key factor
D) Economic factor
26. Break even point is that level of sales where_____?

27. Cash Budget is prepared by____?
A) Cashier
B) Sales manager
D) Chief Accountant
28. Production cost under marginal costing includes___?
B) Prime cost only
29. Break Even Point is a point___?
D) None of these
30. An increase in selling price without increase in cost___?

31. Master budget incorporates all_____Budgets.
A) Distribution
B) Functional
C) Production
D) Selling
32. Contribution margin of safety is equal to the____?
A) Sales
B) Variable costs
C) Fixed cost
D) Profit
33. management accounting usually provides information to____?

34. Angle of incidence is the angle between___?
35. Under marginal costing method, cost per unit ascertained only on the basis of____?
A) Fixed cost
B) Variable cost
C) Semi fixed cost
D) None of these
ANSWER: B
A. overproduction.
ANSWER: C
ANSWER: A
ANSWER: B
A. fixed
B. equity
C. preference
D. variable
ANSWER: A
106. 1f` fixed costs decrease while variable cost per unit remains constant, the new B.E.P in relation to
the old B.E.P will be ___.
A. lower.
B. higher.
C. unchanged.
D. indeterminate.
ANSWER: B
107. If fixed costs decrease while the variable cost per unit remains constant, the new contribution margin
in relation to the old contribution margin will be __.
A. lower.
B. unchanged.
C. higher.
D. indeterminate.
ANSWER: B
production
in units ___.
A. 10,000.
B. 16,300.
C. 2,000.
D. 2,500.
ANSWER: A
A. Rs. 7,936.
B. Rs. 7,353.
C. Rs. 8,333.
D. Rs. 9,090.
ANSWER: B
110. Fixed cost Rs. 80,000; Variable cost Rs. 2 per unit; Selling price_Rs. 10 per unit; Turnover required
for a
A. Rs. 1,75,000.
B. Rs. 1,17,400.
C. Rs. .57,000.
D. Rs. 1,86,667.
ANSWER: A
A. 40 percent
B. 80 percent
C. 15 percent
D. 30 percent
ANSWER: A
112. Sales Rs. 50,000; Variable cost Rs. 30,000; Net profit Rs. 6,000; fixed cost is____.
A. Rs. I0,000.
B. Rs.l4,000.
C. Rs. 12,000.
D. Rs. 8,000.
ANSWER: B
113. Actual sales Rs .4,00,000; Break-even sales Rs. 2,50,000; Margin of Safety in percentage is___.
A. 33.3 percent
B. 66.67 percent
C. 37.5 percent
D. 76.33 percent
ANSWER: C
A. Rs. 50.
B. Rs. 40.
C. Rs. 30.
D. Rs. 55.
ANSWER: A
115. Fixed cost Rs. 2,00,000; Sales Rs. 8,00,000; P/V Ratio 30%; the amount of’ profit is____.
A. Rs. 50,000.
B. Rs. 40,000.
C. Rs. 35,000.
D. Rs. 45,000.
ANSWER: B
116. P/V Ratio is 25% and Margin of Safety is Rs; 3,00,000, the amount of profit is___.
A. Rs. 1,00,000.
B. Rs. 80,000.
C. Rs. 75,000.
D. Rs. 60,000.
ANSWER: C
117. Total sales Rs. 20,00,000; Fixed expenses Rs. 4,00,000; P/V Ratio 40 percent Break-even capacity in
percentage is___.
A. 40
B. 60
C. 50
D. 45
ANSWER: C
118. Break-even point occurs at 40 percent of total capacity, margin of safety will be ___ percent.
A. 40
B. 60
C. 80
D. 85
ANSWER: B
119. If the P/V Ratio of a product is 30 percent and selling price is Rs. 25 per unit, the marginal cost of
the product would be _____.
A. Rs.18.75.
B. Rs.16.
C. Rs. 15.
D. Rs.20.
ANSWER: A
B. real costing.
D. real costing.
ANSWER: A
121. Under marginal costing, stock are valued at ___.
A. cost less
B. cost more.
C. variable cost.
D. market price.
ANSWER: C
122. Absorption costing lays emphasis on ___.
A. production.
B. sales.
C. marketing.
D. advertising.
ANSWER: A
123. Marginal costing lays emphasis on _____.
A. production.
B. sales.
C. marketing.
D. advertising.
ANSWER: B
124. Selling price – marginal cost =____.
A. fixed cost.
C. contribution.
ANSWER: C
A. fixed cost.
C. contribution.
ANSWER: C
126. Fixed cost + net profit =____.
A. BEP
D. contribution.
ANSWER: D
127. A high P/V ratio indicates___.
C. high loss.
D. break even.
ANSWER: A
128. Fixed cost / P/V ratio =_____.

A. Contribution
D. Variable cost.
ANSWER: C
129. Profit / P/V ratio =_____.
C. Contribution.
D. Variable cost.
ANSWER: B
130. Marginal costing is a technique of ___.
A. cost reduction.
B. cost control.
C. budgeting.
ANSWER: B
131. The budget is a____.
D. calculation.
ANSWER: C
132. One of the most important tools of cost planning is_____.
A. budget.
B. direct cost.
C. unit cost.
D. cost sheet.
ANSWER: A
133. Sales budget is a____.
C. master budget.
D. flexible budget.
ANSWER: A
known as ___.
A. flexible budget.
B. master budget.
C. cash budget.
D. purchase budget.
ANSWER: B
A. Fixed budget.
B. Cash budget.
C. Sales budget.
ANSWER: D
A. capital budget.
B. cash budget.
C. master budget.
D. flexible budget.
ANSWER: D
137. The budget, which is prepared first of all is_____.
A. master budget.
B. cash budget.
D. none of these.
ANSWER: C
is_____.
A. formula method.
D. none of these.
ANSWER: B
A. master budget.
B. rolling budget.
C. flexible budget.
ANSWER: B
ANSWER: D

A. planning.
B. organizing.
C. budgeting.
D. controlling.
ANSWER: C
A. planning.
B. organizing.
C. budgeting.
D. controlling.
ANSWER: C
A. planning.
B. organizing.
C. budgeting.
D. control.
ANSWER: D
A. fixed budget.
B. flexible budget
C. sales budget.
ANSWER: A
A. 1 year.
B. 1-3 years
C. 1-5 years.
D. 5-10 years.
ANSWER: D
variable and semi-fixed categories is ____.
A. fixed budget.
B. flexible budget.
C. sales budget.
ANSWER: B
147. Budget which shows the quantity of finished products to be sold and the price at which they are to be
sold is______.
A. fixed budget.
B. flexible budget.
C. sales budget.
ANSWER: C
148. The budget which shows the budgeted quantity of output to be produced during a specific period
is_____.
A. fixed budget
B. flexible budget.
C. sales budget.
ANSWER: D
A. sales budget.
C. fixed budget.
D. flexible budget.
ANSWER: B
factory is __.
A. production overhead budget.
D. master budget.
ANSWER: A
MCQs
a. Shareholders
b. Creditors
c. Managers
a. Creditor
c. Controller
d. Treasurer
a. Service entities
d. All of

c. Indirect labour
d. Direct labour
a. Cost
b. Financial
c. Management
d. All
d. None of these
a. Fixed asset
b. Current asset
c. Fictitious asset
d. Wasting asset
c. Cost accounting
d. Real Accounting
c. Both (a) & (b)
d. None of these
a. Debtors account
c. Sales account
a. opening stock
b. net purchases
d. sales
c. Goods account
d. Purchase account
a. Cash account
b. Mahesh Account
c. Sales account
d. Purchase account
b. Rent account
c. Cash account
d. Expense account
a. Discount account
c. Sales account
d. Cash account
Stock = …………………
a. Sales, Purchases

a. Historical
b. Forward looking
c. Analytical
d. Social
c. Labour unrest
a. Only to workers
a. Fixed cost
b. Variable cost
a. Cost unit
b. Cost centre
c. Cost object
d. Cost estimation
a. Prime cost
b. Factory overhead
c. Selling overhead
d. Office overhead
a. Opportunity cost
b. Sunk Cost
c. Incremental cost
d. Decremental cost
a. Loan
b. Unsecured Loan
c. Secured Loan
b. Advertising
c. Depreciation
d. Carriage
a. Practicability
b. Subjectivity
d. All the above
is in pursuance to:

b. Sales account
c. Purchase account
c. (a) &(b) above
b. Trading account
Balance sheet
a. Investment
c. Provision
d. Lease Holds
c. P & L a/c
in……………….
a. Remains fixed
c. Journal
d. Both a and b

48. Cash Purchases:
a. Increases assets
c. Decreases assets
a. Machinery
b. Building
c. Cash
d. Creditor
b. Matching Concept
c. Consistency
a. Building
b. Bank Balance
c. Plant Patents
d. Goodwill
b. Matching Concept
c. Cost Concept
d. Cost Concept
a. Current assets
c. Fixed asset
d. Fixed liability
b. A liability

d. Both a and b
e. Both a and c
a. Dual concept
b. Divider concept
c. Entity concept
d. Landlord concept
a. Nominal Capital
c. Issues capital
d. None of these

d. None of these
d. All of these
a. Projected data
c. Historic data
a. Art and Science
b. Art
c. Science
d. Art or Science
a. Original
b. Duplicate
c. Personal
d. Nominal
b. Rules of Real
c. Rules of Nominal
d. All of these
b. Cash a/c
c. Short term loan
d. creditors
a. Discount
b. Depreciation
c. Reduction

d. None of these
a. Long term loan
b. Short term loan
c. Owner’s fund
d. All of these
a. Current asset
d. None of these
a. Cost
b. Net profit
c. Gross profit
d. Selling price
a. Management only
b. Government only
c. Investor only
d. All of these
a. Provision
a. Provision
a. Separate entity
b. Going concern
c. Consistency
d. Time period
c. Entity Concept
OWNER'S EQUITY
a. Income Statement
c. Balance Sheet
a. Loan from Mr.Y
b. loan to Mr.y
c. Both (a) (b)
d. None of these

a. (ii) (iii)(i)
b. (iii)(iv)(ii)
d. (i)(iv)
a. Accrual concept
b. Cost concept
a. Separate entity
b. Going concern
c. Consistency
d. Time period
a. Trading a/c
b. Balance sheet
d. Trial balance.
b. Corporation
c. Partnership
d. All of them
a. Fiscal year
b. Calendar year
d. Accrual period
a. Personal a/c
b. Impersonal a/c
c. Real a/c
d. Nominal a/c

d. Matching concept
b. Corporation
c. Partnership
d. All of them
recognized when
a. Cash is received
following?
a. Accurual concept
b. Matching concept

a. Fiscal year
b. Calendar year
d. Accrual period
accounting concept?
b. Materiality
c. Prudence
d. Matching concept
a. Concrete
b. Complete
c. Immaterial
d. Material
following?
d. Duality Concept
d. None of These
d. All of the above
a. Rs 70,000
b. Rs 80,000
c. Rs 90,000
d. Rs 1,00,000
a. Revenue Profit
c. Loss
d. None of these
a. Profit
b. Assets
c. Company
d. Books of A/c
a. Depreciation
b. Wages
c. Salary
d. Stationary
a. Assets
b. Liabilities
c. Capital
d. All of these
a. Benefits & Costs
b. Revenues & Costs
a. Patents
b. Trade Marks
c. Copyright
d. Land

d. None of these
a. Practicability
b. Subjectivity
d. None of these
d. None of these
pursuant of

d. None of these
d. None of these
a. Cash a/c
b. Capital a/c
c. Drawing a/c
d. Bank a/c
b. Salaries a/c
c. Cash a/c
d. Bank a/c
a. Customer a/c
b. Sales return a/c
c. Goods a/c
a. Cash a/c
b. Mahesh a/c
c. Sales a/c
d. Sales return a/c
a. Land lord a/c
b. Rent a/c
c. Cash a/c
d. Tenant a/c
a. Discount a/c
b. Customer a/c
c. Sales a/c
d. None of these
a. Debtors Accounts
b. Bad debts a/c
c. Sales a/c
d. None of these
accounting concept
d. None of these
d. None of these
d. None of these
c. Not disclosed
d. None of these
a. Single aspect
b. Dual aspect
c. Triple aspect
d. None of these
Statements
d. None of these
d. None of these
d. None of these.
a. Cash concept
b. Accrual concept
c. Matching concept
d. On-going concept
a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these
a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these
a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these
a. Journal
b. Ledger
c. Trial balance
d. None of these
a. Compound Journal
b. Ledger
c. Trial balance
d. None of these
a. Compound Journal
b. Ledger
c. Trial balance
d. None of these
ledger is called as
a. Ledger
b. Posting
c. Forward journal
d. None of these
a. Land
b. Machine
c. Cash
d. Owner Equity
a. Cash
b. Debtor
c. Owner’s equity
d. None of these
a. Rs.1020000
b. Rs.1010000
c. Rs.1030000
a. 600,000
b. 1,400,000
c. 2,000,000
d. None of these
a. Rs.200, 000
b. Rs.700, 000
c. Rs.800, 000
d. Rs1, 100,000
a. 000,000
b. 1,550,000
c. 800,000
d. None of these
a. Only (a)
b. Both (a) (b)
c. All (a)(b)(c)(d)
d. None of these
a. Net Loss
b. Net income
c. Dividend
a. Accounts payable
c. Sales
d. Cash
liabilities?
a. Rs.200
b. Rs.1900
c. Rs.1200
d. Rs.1700
informed reader
a. Goodwill
b. Sales
d. None of theses
b. Currency
c. Money orders
correct?
ledger.
is true?

account credited.
a. Current assets
b. Investments
d. None of these
a. Planning
b. Decision making
c. Control
d. All of these
departments.
d. All of these
a. Variable cost
c. Direct cost

c. Owners
a. Market values
a. Asset
b. Liability
c. Accounts
c. recorded facts
a. Management
b. Creditors
c. Bankers
d. All of the above
a. Sundry creditors
b. Acceptances
a. Actual figures
b. Budgeted figures
c. Standard figures
a. 1910
b. 1939
c. 1950
d. 1960
a. Compulsory
b. Optional
c. Obligation
a. Trading account
c. Balance sheet
d. All of the above
a. Fixed asset
b. Investment
c. Current asset
d. Owners equity.
a. Financial
b. Economic
c. Non financial
d. None of these.
a. sales
b. Share capital
d. Unsecured loan
a. Balance Sheet
a. M. S. Gosav
b. Wheldon
c. LucoPacioli
d. R. N. Carter
a. Analytical
b. Clerical
c. Executive
d. Non- executive
a. Cash basis
b. Accrual basis
c. Mercantile basis
c. Both
a. Capital
b. Revenue
c. Direct
d. Non- cash
a) Nominal account
b) Real Account
a) Balance sheet
b) Trial Balance
c) Ledger
d) Journal
a. cash account
b. capital account
c. drawings account

b. Salaries account
c. Cash account
as:
b. Overhead
a. Variable cost
c. Direct cost
d. All of these
c. Indirect labour
d. Direct labour
a. Indirect labour
b. Direct materials
classified as
a. A prime cost
b. Direct materials
d. Immaterial items
a. Direct labour
b. Direct materials
d. Advertising
b. Direct Wages
c. Direct Expenses
d. Prime Cost
a. Work on cost
b. Work Cost
d. Direct Cost
a. Prime Cost
b. Factory Overhead
c. Selling overhead
d. Office overhead
a. Total Cost
b. Office Cost
c. Cost of sales
d. Selling overhead
d. future costs
a. Rs. 1,80,000
b. Rs. 2,00,000
c. Rs. 1,70,000
d. Rs. 2,10,000
Answers
1. (c) 2. (a) 3. (d) 4. (a) 5. (d) 6. (b) 7. (c) 8. (d) 9. (b) 10. (b)
11. (a) 12. (b) 13. (d) 14. (b) 15. (a) 16. (c) 17. (b) 18. (c) 19. (c) 20. (a)
21. (c) 22. (d) 23. (d) 24. (d) 25. (b) 26. (b) 27. (b) 28. (b) 29. (a) 30. (c)
31. (c) 32, (c) 33. (a) 34. (b) 35. (a) 36. (c) 37. (c) 38. (c) 39. (c) 40. (c)
41. (c) 42. (b) 43. (a) 44. (b) 45. (d) 46. (e) 47. (a) 48. (c) 49. (c) 50. (d)
51. (c) 52. (a) 53. (b) 54. (b) 55. (d) 56. (c) 57. (a) 58. (e) 59. (e) 60. (a)
61. (c) 62. (a) 63. (a) 64. (d) 65. (b) 66. (c) 67. (a) 68. (c) 69. (c) 70. (b)
71. (b) 72. (b) 73. (e) 74. (d) 75. (d) 76. (e) 77. (a) 78. (a) 79. (d) 80. (d)
81. (a) 82. (b) 83. (c) 84. (c) 85. (a) 86. (d) 87. (d) 88. (b) 89. (d) 90. (a)
91. (c) 92. (d) 93. (c) 94. (d) 95. (b) 96. (c) 97. (d) 98. (c) 99. (d) 100. (c)
101.(c) 102.(a) 103.(c) 104.(d) 105.(b) 106.(c) 107.(d) 108.(b) 109.(d) 110.(b)
111.(b) 112.(a) 113.(a) 114.(d) 115.(b) 116.(d) 117.(c) 118.(b) 119.(a) 120.(a)
121.(a) 122.(b) 123.(c) 124.(c) 125.(a) 126.(b) 127.(b) 128.(b) 129.(b) 130.(a)
131.(c) 132.(c) 133.(a) 134.(a) 135.(a) 136.(c) 137.(a) 138.(a) 139.(b) 140.(c)
141.(c) 142.(b) 143.(b) 144.(b) 145.(a) 146.(c) 147.(a) 148.(b) 149.(c) 150.(b)
151.(d) 152.(c) 153.(d) 154.(c) 155.(c) 156.(a) 157.(c) 158.(d) 159.(b) 160.(d)
161.(c) 162.(b) 163.(d) 164.(d) 165.(b) 166.(a) 167.(c) 168.(b) 169.(d) 170.(d)
171.(c) 172.(d) 173.(a) 174.() 175.(b) 176.(c) 177.(d) 178.(a) 179.(d) 180.(c)
181.(d) 182.(b) 183.(b) 184.(a) 185.(b) 186.(c) 187.(c) 188.(a) 189.(d) 190.(d)
191.(b) 192.(a) 193.(c) 194.(c) 195.(b) 196.(d) 197.(d) 198.(a) 199.(a) 200.(c)
201.(a) 202.(c) 203.(b) 204.(b) 205.(a) 206.(a) 207.(b) 208.(d) 209.(c) 210.(b)
211.(b) 212.(b) 213.(d) 214.(d) 215.(d) 216.(b) 217.(d) 218.(b) 219.(c) 220.(a)
221.(d) 222.(b) 223.(b) 224.(a) 225.(b) 226.(b) 227.(c)

BBA Semester-VI
_______.
(a) Variable cost
(b) Fixed cost
(c) Total cost
(a) Financial
(b) Spot
(c) Historical
(d) Administrative
(c) Flux Method
(b) Electricity
(a) Balance sheet
(c) General ledger
(b) Issue of shares
(a) Quantity
(b) Money
(a) Marginal cost
(b) Historical cost
(c) Standard cost
(a) Only in control
(a) Labour budget
(b) Cash budget
(d) Expenses budget
(a) Financial
(b) Cost
(a) 80,058 units
(b) 1,46,370 units
(c) 32,320 units
(d) 98,642 units
(a) Increases
(c) Decreases
(d) Constant
(a) Managers
(b) Budget officers
(c) Creditors
(a) Month wise
(b) Product wise
(c) Area wise
(a) R & D budget
(b) Master budget
(c) Sales budget
(a) Time
(b) Function
(c) Flexibility
(a) Limiting factor
(a) System
(b) Men
(d) None of these
(d) None of these
(d) None of these
(d) None of these
(a) Cost accounting
(d) None of these
(d) Auditor
(a) Expense centre
(b) Profit centre
(b) Expense centre
(c) Profit centre
concerned persons -
(b) To control cash
(a) Business centre
(b) Profit centre
organization.
(a) Feasible
(b) Necessary
(d) None of these
(c) Can’t say
(a) Can
(b) Cannot
(c) Sometimes
(d) Inadequate data
(a) Shareholders
(b) Management
(c) Creditors
(a) Master budget
(b) Flexible budget
(c) Cash budget
(d) Capital budget
making
decisions
operations
(a) Fixed Cost
(b) Variable Cost
(c) Total Cost
(d) Prime Cost
(a) Cash Budget
(c) Sales Budget
(d) Overhead Budget
(d) Future costs
(b) Shareholders
(c) The Government
(d) Bankers
of taxes owed.
Purchase Budget ?
ledger.
sales.
(a) Money
(b) Quantity
(d) None
(d) None
(b) Ratio analysis
(a) Management
(b) Share holders
(c) Creditors
(d) Employees
(a) Revenue
(b) Cost
(d) None
(b) Cost centre
(c) Profit centre
(d) Expense centre
(a) can not
(b) can
(c) may or may not
(d) must
(a) Material only
(b) Labour only
(c) Expenses only
(a) Master budget
(d) Flexible budget
(b) Master Budget
(d) Flexible Budget
the P/V ratio is -
(a) 20%
(b) 30%
(c) 25%
(d) 40%
(a) Simplicity
(b) Accountability
(c) Promptness
(d) Accuracy
(a) Routine
(b) Special
(c) Investigative
(d) External
(a) Routine
(b) Special
(c) External
(d) Control
(a) Share holders
(b) Government
(d) Creditors
(d) Shareholders
(b) Sales report
(c) Investigation

d. Cost accounting

decision making.
decisions.
operations.
income.

b. shareholders.
c. the government.
d. bankers.


96. Cost accounting
making.
system?
information system?
technology?
a. inventory.
b. capacity.
c. processing time.
d. none of these.
a. zero defects.
products?

and delivery.
a. planning.
b. control.
c. decision making.
d. both a and c.

internal users.
a. planning.
b. control.


d. all of the above

organization.
d. all of the above

goals.
No. No. No. No.
1 B 31 B 61 D 91 C
2 C 32 C 62 C 92 A
3 D 33 D 63 B 93 D
4 D 34 A 64 C 94 C
5 A 35 D 65 C 95 A
6 D 36 B 66 A 96 D
7 C 37 A 67 D 97 B
8 C 38 C 68 A 98 A
9 D 39 C 69 A 99 D
10 C 40 A 70 C 100 A
11 D 41 B 71 A 101 C
12 A 42 D 72 C 102 A
13 A 43 A 73 A 103 B
14 C 44 B 74 D 104 D
15 D 45 C 75 B 105 D
16 B 46 B 76 D 106 C
17 B 47 A 77 B 107 B
18 A 48 B 78 D 108 A
19 C 49 B 79 D 109 B
20 B 50 D 80 B 110 A
21 D 51 A 81 C 111 D
22 A 52 B 82 B 112 A
23 D 53 C 83 A 113 D
24 C 54 A 84 B 114 D
25 D 55 C 85 C 115 D
26 D 56 A 86 D 116 C
27 B 57 C 87 C
28 C 58 A 88 B
29 B 59 D 89 D
30 A 60 C 90 B

A. tax compliance.
B. financial audit.
D. profit analysis.
ANSWER: C

A. each department.
C. each month.
D. each executive.
ANSWER: B

ANSWER: A
A. notional cost.
B. real cost.
C. normal cost.
D. variable cost.
ANSWER: A

B. contractors.
ANSWER: D
A. hospitals.
C. transport firms.
ANSWER: B

A. two ways.
B. three ways.
C. four ways.
D. several ways.
ANSWER: D

ANSWER: A

ANSWER: A
A. the same firm.
ANSWER: A
A. direct cost.
B. indirect cost.
C. sunk cost.
D. imputed cost.
ANSWER: A
A. imputed cost.
B. historical cost.
C. sunk cost.
D. shutdown cost
ANSWER: D

ANSWER: C

A. three types.
B. four types.
C. five types.
D. seven types.
ANSWER: A

A. major expenses.
D. sundry expenses.
ANSWER: B

A. office overhead.
ANSWER: D

A. prime cost.
B. factory cost.
D. production cost.
ANSWER: C

A. prime cost.
B. factory cost.
C. labour cost.
ANSWER: B
A. Factory cost.
C. Selling cost.
D. Labour cost.
ANSWER: B

A. prime cost.
B. works cost.
D. cost of sales.
ANSWER: C
21. Tender is an.

ANSWER: C

A. selling price.
D. value of stocks.
ANSWER: A

ANSWER: C

A. prime cost.
B. works cost.
C. cost of sales.
ANSWER: A

ANSWER: A

A. works on cost.
ANSWER: D

ANSWER: D

A. material cost.
B. labour cost.
C. prime cost.
D. direct expenses
ANSWER: A

A. material cost.
B. labour cost.
C. prime cost.
D. factory cost.
ANSWER: C

A. material cost.
B. labour cost.
C. prime cost.
D. factory cost.
ANSWER: C
A. turnover ratios
ANSWER: A
A. turnover ratios.
ANSWER: B

ANSWER: C

A. turnover ratio.
ANSWER: D

A. turnover ratio.
ANSWER: A
D. turnover ratio.
ANSWER: A

D. turnover ratio.
ANSWER: B

D. turnover ratio.
ANSWER: B

D. turnover ratio.
ANSWER: D
C. operating ratio.
ANSWER: A
ANSWER: C
ANSWER: D

A. fixed assets.
B. current assets.
ANSWER: C

A. fixed assets.
B. current assets.
ANSWER: B
ANSWER: C
is
B. pay out ratio
ANSWER: A
B. pay out ratio.
ANSWER: D
is .
ANSWER: A
.
ANSWER: B

ANSWER: D

A. activity ratios.
B. solvency ratios.
ANSWER: A

ANSWER: A
investment?
8
ANSWER: A
inventory is
ANSWER: A

A. net profit.
ANSWER: D

A. net profit.
ANSWER: D
ANSWER: B

ANSWER: B

ANSWER: C
9
ANSWER: C

D. long term funds.
ANSWER: A
known as .
A. fixed assets.
B. current assets.
D. wasting assets.
ANSWER: B
year are called _.
B. overdraft.
ANSWER: D
Affect .
A. profit.
B. funds.
C. working capital.
D. capital.
ANSWER: B
affect .
A. profit.
B. funds.
C. working capital.
D. capital.
ANSWER: B
ANSWER: A
ANSWER: B
ANSWER: B
ANSWER: A

ANSWER: D

ANSWER: C
the treatment of .
A. prime cost .
B. fixed overheads.
ANSWER: B

ANSWER: B

B. gross profit.
C. net profit.
D. net loss.
ANSWER: A

A. overhead costs .
B. prime cost.
C. variable cost.
D. fixed costs.
ANSWER: D

ANSWER: A

ANSWER: D


ANSWER: B

ANSWER: C

ANSWER: B

A. over production.
ANSWER: C

ANSWER: A

ANSWER: A

ANSWER: B
old B.E.P will be .
A. lower .
B. higher.
C. . unchanged .
D. indeterminate.
ANSWER: B
A. lower .
B. unchanged .
C. higher.
D. indeterminate.
ANSWER: B
A. 10,000.
B. 16,300.
C. 2,000.
D. 2,500.
ANSWER: D
in value .
A. Rs. 7,936.
B. Rs. 7,353.
C. Rs. 8,333.
D. Rs. 9,090.
ANSWER: B
A. Rs. 1,75,000.
B. Rs. 1,17,400.
C. Rs. 1.57,000.
D. Rs. 1,86,667.
ANSWER: A
A. 40% .
B. 80%
C. 15%
D. 30%.
ANSWER: A
A. Rs. 10,000.
B. b. Rs. l4,000 .
C. Rs. 12,000.
D. Rs. 8,000.
ANSWER: B
percentage is _.
A. 33.33%.
B. 66.67%
C. 37.5% .
D. 76.33%.
ANSWER: C
A. Rs. 50 .
B. Rs. 40.
C. Rs. 30 .
D. Rs. 55.
ANSWER: A
A. Rs. 50,000.
B. Rs. 40,000 .
C. Rs. 35,000 .
D. Rs. 45,000 .
ANSWER: B
A. Rs. 1,00,000.
B. Rs. 80,000.
C. Rs. 75,000.
D. . Rs. 60,000.
ANSWER: C
in percentage is .
A. 40% .
B. 60% .
C. 50% .
D. 45%.
ANSWER: C
A. 40% .
B. 60% .
C. 80% .
D. 85% .
ANSWER: B
product would be .
A. Rs.18.75 .
B. Rs.16 .
C. Rs. 15 .
D. Rs.20 .
ANSWER: A

B. real costing.
D. real costing .
ANSWER: A

A. fixed cost.
C. variable cost.
D. market price.
ANSWER: C

D. calculation .
ANSWER: C

A. budget.
B. direct cost.
C. unit cost.
D. cost sheet.
ANSWER: A
C. Master budget .
D. Flexible budget.
ANSWER: A
known as
B. Master budget.
C. Cash budget .
D. Purchase budget.
ANSWER: B

A. .Fixed budget.
B. Cash budget.
C. Sales budget
ANSWER: D
A. Capital budget.
B. Cash budget.
C. Master budget .
ANSWER: D

A. Master budget.
B. Cash budget.
D. Flexible budget.
ANSWER: C
.
A. Formula method.
ANSWER: B
A. Master budget.
B. Rolling budget.
ANSWER: B

ANSWER: D

A. Planning.
B. Organizing.
C. Budgeting.
D. Controlling.
ANSWER: C

A. Planning.
B. Organizing.
C. Budgeting.
D. Controlling.
ANSWER: C

A. Planning.
B. Organizing
C. Budgeting.
D. Control.
ANSWER: D
called .
A. Fixed budget.
B. Flexible budget.
C. Sales budget.
ANSWER: A

A. 1 year.
B. 1-3 years.
C. 1-5 years.
D. 5-10 years.
ANSWER: D
A. Fixed budget.
B. Flexible budget.
C. Sales budget.
ANSWER: D

B. Sales budget.
C. Fixed budget.
D. Flexible budget.
ANSWER: A

D. Material budget.
ANSWER: A

18
D. Material budget.
ANSWER: B

A. Fixed budget.
B. Sales budget.
D. Flexible budget.
ANSWER: C

ANSWER: A
factory is .
D. Master budget.
ANSWER: A
D. Master budget.
ANSWER: B
.
D. Master budget
ANSWER: C
19
ANSWER: D
ANSWER: A
ANSWER: A

ANSWER: A

ANSWER: B

A. Master budget.
B. Flexible budget.
D. Fixed budget.
ANSWER: C

A. At Best Control.
ANSWER: B

A. . Just In Time.
20
C. Job In Time.
ANSWER: A

ANSWER: A
134. FIFO is .
C. Fast In Fast Out
ANSWER: D

ANSWER: A

ANSWER: D
137. Scrap is .
ANSWER: A
B. material order.
ANSWER: A

ANSWER: A
ANSWER: B

A. Master budget.
B. Flexible budget.
D. Fixed budget.
ANSWER: C

B. Master budget.
C. Flexible budget.
D. Fixed budget.
ANSWER: A

B. Expected sales.
D. Expected loss.
ANSWER: A
A. expense.
B. sales.
C. purchase.
D. material.
ANSWER: B

A. expense.
B. sales.
C. purchase.
D. material.
ANSWER: B
A. Rs. 4,50,000.
B. Rs. 4,75,000.
C. Rs. 5,25,000.
D. Rs. 5, 50,000.
ANSWER: B
cast?
A. 20%.
B. 25%.
C. 33.33%.
D. 35%.
ANSWER: B

ANSWER: C

ANSWER: B

ANSWER: B
VIM101 Name : ______________________________________________________
Marks: 441 Roll No : ______________________________________________________
Date : ______________________ Signature : ______________________
Id: 44690
Explanation:
Id: 44573
Explanation:
Id: 44433
3) Credit 4) Debit
Explanation:
Explanation:
Id: 44507
Explanation:
cycle Id: 38724
Explanation:
Id: 44452
Explanation:
1) 10000 2) 10500
3) 11500 4) 12700
Explanation:
Id: 44563
persons
Explanation:
1) Rs. 2,10,000 2) Rs. 1,90,000
3) Rs. 2,00,000 4) Rs. 1,80,000
Explanation:
Explanation:
Explanation:
Id: 44400
Explanation:
Id: 44428
Explanation:
Id: 44497
1) Debit 2) Credit
3) Nominal 4) Real
Explanation:
Id: 44642
Explanation:
Id: 44777
Explanation:
Id: 44425
Explanation:
Id: 44432
and users
Explanation:
Id: 44448
Explanation:
1) 12000 dr side 2) 12000 cr side
3) 6000 dr side 4) 2000 cr side
Explanation:
1) Rs.3,80,000. 2) Rs.4,00,000.
3) Rs.2,30,000. 4) Rs.1,50,000.
Explanation:
Explanation:
statements.
Explanation:
Explanation:
(i) Balance Sheet
Explanation:
Id: 44729
Explanation:
Id: 44561
Explanation:
Id: 44645
Explanation:
1) AS1 2) AS2
3) AS7 4) AS10
Explanation:
shared Id: 44741
partnership firm.
Explanation:
Id: 44409
persons.
Explanation:
Id: 44466
Explanation:
Explanation:
Id: 38723
Explanation:
Id: 44434
Explanation:
Explanation:
Id: 44570
Explanation:
Id: 44733
Explanation:
Id: 44583
Explanation:
Id: 44694
Explanation:
Explanation:
Id: 44543
1) 90000 2) 210000
3) 180000 4) 270000
Explanation:
Explanation:
Id: 44480
Explanation:
Id: 44406
Explanation:
Id: 44786
owners
business
Explanation:
Id: 44421
Explanation:
Id: 44796
Explanation:
Explanation:
Id: 44514
Explanation:
Company? Id: 44678
ii. Unsecured loan
iii. Share capital
v. Secured loan
Explanation:
Explanation:
Id: 44811
Explanation:
Id: 44518
Office Equipment
Explanation:
Id: 44688
Explanation:
Id: 44683
Explanation:
Id: 44619
Explanation:
Id: 44439
Explanation:
Id: 44730
Explanation:
Explanation:
Id: 44526
4)
Explanation:
Id: 44810
Explanation:
Id: 44684
Explanation:
Explanation:
Explanation:
Explanation:
40000 Id: 44536
1) 40000 2) 42000
3) 44000 4) 48000
Explanation:
______account(s). Id: 44762
1) One 2) Two
3) Three 4) Four
Explanation:
Id: 44682
Explanation:
Id: 44614
Explanation:
Explanation:
1) 840 2) 820
3) 720 4) 960
Explanation:
Id: 44758
Rs.1,000.
Explanation:
1) 50000 2) 20000
3) 30000 4) Nil.
Explanation:
3) Cash 4) Treasury
Explanation:
Id: 44578
1) Good 2) Book
Explanation:
Id: 44736
Explanation:
Id: 44774
Explanation:
is Id: 44708
Explanation:
Id: 44643
Explanation:
Id: 44528
1) (1) c (2) a (3) b 2) (1) b (2) c (3) a
3) (1) a (2) c (4) b 4) (1) c (2) b (3) a
Explanation:
Id: 44553
1) (ii) (iii)(i) 2) (iii)(iv)(ii)
3) (i)(iii)(iv) 4) (i)(iv)
Explanation:
Id: 44401
Explanation:
Id: 44555
Explanation:
_____. Id: 44813
1) 0.09 2) 0.06
3) 0.07 4) 0.1
Explanation:
Id: 44806
Explanation:
___________________ concept. Id: 44803
Explanation:
Id: 44584
firm.
the firm.
Explanation:
Id: 44463
Explanation:
customer
invoiced
Explanation:
Id: 44483
Explanation:
Id: 44412
Explanation:
1) 53000 2) 55000
3) 80000 4) 51000
Explanation:
Id: 44636
Explanation:
Id: 44711
Explanation:
Id: 44542
1) 1100000 2) 1125000
3) 1175000 4) 1130000
Explanation:
Explanation:
Explanation:
Id: 44655
Explanation:
come, is a ______. Id: 44385
Explanation:
Id: 44478
Explanation:
Explanation:
Id: 44393
Explanation:
Id: 44700
Explanation:
Id: 44689
Explanation:
Id: 44556
Explanation:
Id: 44489
Explanation:
Id: 44419
1) Basic 2) Primary
Explanation:
Id: 44775
Explanation:
Id: 44572
Explanation:
Explanation:
Id: 44511
for all
4) All the above
Explanation:
to Id: 44554
Explanation:
Id: 44503
Explanation:
Id: 44416
given date. goods.
Explanation:
Explanation:
Id: 44597
1) 10% to 20% 2) 15% to 25%
3) 30% to 40% 4) 20% to 30%
Explanation:
Id: 44605
Explanation:
Explanation:
____. Id: 44622
Explanation:
Id: 44387
Explanation:
……….. Id: 44505
Explanation:
Id: 44604
Explanation:
Id: 44618
Explanation:
Id: 44675
Explanation:
Id: 44657
Explanation:
Id: 44451
Explanation:
Id: 44467
Explanation:
Company? Id: 44679
iii. Fixed assets
v. Investments
Explanation:
Explanation:
Explanation:
Id: 44685
works
Explanation:
Explanation:
Id: 44721
Explanation:
Id: 44664
Explanation:
Id: 44509
Explanation:
Id: 44568
Explanation:
Id: 44640
Explanation:
Id: 44649
Explanation:
Id: 44756
Explanation:
Explanation:
Id: 44580
Explanation:
Explanation:
by Rs.10,000
1) Rs. 4,80,000 2) Rs. 4,60,000
3) Rs. 4,75,000 4) Rs. 5,10,000
Explanation:
Id: 44538
1) 700000 2) 800000
3) 900000 4) 1000000
Explanation:
Explanation:
shown as: Id: 44732
Explanation:
1) Three 2) One
3) Two 4) Five
Explanation:
Id: 44524
Explanation:
Id: 44477
Explanation:
Id: 44587
Explanation:
Explanation:
Id: 44424
Explanation:
Id: 44534
1) 104000 2) 140000
3) 114000 4) 124000
Explanation:
Explanation:
Id: 44402
Explanation:
Id: 44574
Explanation:
Id: 44499
Explanation:
Id: 44626
current Liability
Explanation:
factors
Explanation:
Explanation:
Id: 44656
issue reserve
the debentures
Explanation:
Id: 44613
Explanation:
Id: 44537
1) 250000 2) 260000
3) 270000 4) 280000
Explanation:
Id: 44650
Explanation:
Id: 44405
intervals.
Explanation:
Id: 44804
1) real 2) nominal
Explanation:
Id: 44496
Explanation:
Explanation:
Id: 44545
Explanation:
Explanation:
Id: 44413
Explanation:
Explanation:
Id: 44750
Explanation:
Id: 44672
Explanation:
Id: 44420
Explanation:
1) 45000 2) 5000
Explanation:
Id: 44415
proprietor.
Explanation:
Id: 44608
expired
or services
Explanation:
Id: 44407
persons.
Explanation:
Id: 44492
Explanation:
Id: 44676
Explanation:
Id: 44437
Explanation:
Id: 44535
1) 50000 2) 60000
3) 70000 4) 80000
Explanation:
Id: 44461
Explanation:
Id: 44714
Explanation:
Id: 38725
Explanation:
Id: 44460
Explanation:
Explanation:
Id: 44501
Explanation:
Id: 44493
Explanation:
Id: 44602
Explanation:
1) 11000 2) 10450
Explanation:
Id: 44465
Explanation:
Id: 44389
Explanation:
Explanation:
Id: 44674
Explanation:
Id: 44571
Explanation:
Id: 44728
Explanation:
Explanation:
Id: 44418
Explanation:
Id: 44696
Explanation:
Id: 44718
Explanation:
Explanation:
Id: 44550
1) Loss 2) Profit
3) Balanced 4) None
Explanation:
on Id: 44764
1) HIFO 2) LIFO
Explanation:
Id: 44567
Explanation:
Id: 44785
owner.
Explanation:
Explanation:
Id: 44598
Explanation:
Id: 44695
Explanation:
Explanation:
Id: 44658
Explanation:
Id: 44673
Explanation:
Id: 44508
Explanation:
Id: 44639
Explanation:
1) 12500 2) 11000
3) 14375 4) 13800
Explanation:
based on Id: 44662
Explanation:
Id: 44458
values values
Explanation:
Id: 44681
Explanation:
Explanation:
Id: 44641
Explanation:
Explanation:
Id: 44812
Explanation:
Id: 44560
Explanation:
Id: 44435
Explanation:
Id: 44557
Explanation:
recognition of
Explanation:
Explanation:
Explanation:
Id: 44444
Explanation:
Id: 44472
Explanation:
business business
business business
Explanation:
Id: 44591
they differ
3) Yes, always
at the year end
Explanation:
Id: 44794
Explanation:
Id: 44742
Explanation:
Id: 44752
Explanation:
1) 36000 2) 30000
3) 42000 4) 38000
Explanation:
Id: 44436
Explanation:
Explanation:
Explanation:
Id: 44759
of business entity.
Explanation:
Id: 38728
Explanation:
Id: 44663
meant for resale
Explanation:
Id: 44566
Explanation:
Id: 44799
Explanation:
Id: 44513
Explanation:
Id: 44482
Explanation:
Id: 44801
industries
Explanation:
Id: 44760
Explanation:
Id: 44403
Explanation:
Id: 44653
Explanation:
Id: 44638
Explanation:
Explanation:
1) a&b 2) b&c
3) c&d 4) b&d
Explanation:
Id: 44633
3) Slogan 4) Land
Explanation:
Explanation:
Id: 44411
Explanation:
meeting
Explanation:
1) 1833 2) 2000
Explanation:
Id: 38729
Explanation:
Explanation:
Id: 44431
Explanation:
Id: 44410
Explanation:
Explanation:
Id: 44739
Explanation:
1) 10000 2) 10100
3) 100 4) NIL
Explanation:
Explanation:
Id: 44624
Explanation:
Id: 44749
Explanation:
Id: 44723
Explanation:
Id: 44615
Table A
Explanation:
1) ` 26950 2) ` 27930
3) ` 29400 4) ` 28812
Explanation:
Id: 44595
Explanation:
Explanation:
Id: 44767
Explanation:
Id: 44692
Explanation:
Id: 44590
1) 57000 2) 105700
3) 48000 4) Rs. 148, 500
Explanation:
Explanation:
Id: 44539
1) 50000 2) 54000
3) 60000 4) 64000
Explanation:
Id: 44427
Explanation:
Id: 44763
Explanation:
Id: 44394
Explanation:
Id: 44715
Explanation:
Id: 44541
1) 2000000 2) 2200000
3) 2800000 4) 3000000
Explanation:
Id: 44577
Explanation:
Id: 44606
Explanation:
Id: 44719
Explanation:
Id: 44521
Explanation:
Id: 44809
Explanation:
Id: 44724
Explanation:
date is: Id: 44781
Explanation:
Id: 44620
Explanation:
Id: 44726
Explanation:
Id: 44731
Explanation:
Explanation:
Explanation:
Id: 44665
Explanation:
Id: 44517
of business entity
Explanation:
Explanation:
Id: 44611
Explanation:
Id: 44712
Explanation:
Id: 44474
Explanation:
Explanation:
business. Id: 44815
1) 15 2) 8
3) 12 4) 20
Explanation:
Explanation:
Explanation:
Id: 44625
Explanation:
Explanation:
Id: 44500
Explanation:
Id: 44525
Explanation:
Id: 44473
Explanation:
Id: 44735
Explanation:
Explanation:
Id: 44768
Explanation:
Id: 44527
Explanation:
Id: 44717
Liabilities
Explanation:
Id: 44677
Explanation:
Explanation:
Id: 44609
Explanation:
Id: 44647
Explanation:
Id: 44586
Explanation:
Id: 44588
Explanation:
Explanation:
Id: 44417
information
Explanation:
Id: 44440
Explanation:
1) 80500 2) 74900
3) 74700 4) 80900
Explanation:
Explanation:
1) 35000 2) 38000
3) 5000 4) 27000
Explanation:
Id: 44481
Explanation:
Id: 44392
Explanation:
Id: 44648
Explanation:
Id: 44612
Explanation:
Id: 44704
Explanation:
Id: 44780
Explanation:
1) 2000 2) 4000
Explanation:
Id: 44471
Explanation:
Id: 44607
Explanation:
Id: 44808
1) rent 2) drawings
3) cash 4) land
Explanation:
Explanation:
based on
Explanation:
Id: 44787
Explanation:
Id: 44693
Explanation:
Id: 44484
Explanation:
Id: 44798
Explanation:
Explanation:
Explanation:
Id: 44504
Explanation:
Id: 44502
Explanation:
Id: 44548
Explanation:
Explanation:
Id: 44589
Explanation:
Id: 44734
Explanation:
Id: 44462
Explanation:
Id: 44386
Explanation:
Explanation:
Id: 44520
Explanation:
Id: 44443
Explanation:
Explanation:
Id: 44576
Explanation:
Id: 44423
Explanation:
Id: 44716
Explanation:
Id: 44779
Explanation:
Id: 38726
Explanation:
Id: 44540
1) 12000 2) 15000
3) 18000 4) 20000
Explanation:
Explanation:
Explanation:
Id: 44468
Explanation:
Id: 44701
Explanation:
Explanation:
Id: 44637
Explanation:
Id: 44579
3) Profit 4) Loss
Explanation:
Id: 44652
Explanation:
Id: 44651
Explanation:
1) 10000 2) 10500
3) 11500 4) 12700
Explanation:
Explanation:
Id: 44464
Explanation:
Id: 44610
Explanation:
Id: 44807
1) Real 2) Nominal
Explanation:
Id: 44699
Explanation:
Id: 44783
Explanation:
Id: 44746
Explanation:
Id: 44414
Explanation:
Explanation:
1) 2000 2) 1500
Explanation:
Id: 44559
Explanation:
Id: 44581
Explanation:
Id: 44510
Explanation:
Id: 44814
Explanation:
Id: 44422
Explanation:
Id: 44805
Explanation:
Id: 44398
dividends
Explanation:
Explanation:
Explanation:
Id: 44709
Explanation:
norms are
Explanation:
Id: 44391
Explanation:
Id: 44486
Accounting
Explanation:
Id: 44601
Explanation:
Id: 44593
Explanation:
business? Id: 44558
1) 20 2) 4
3) 10 4) 2
Explanation:
Id: 44687
Explanation:
Id: 44390
Explanation:
to Id: 44757
Explanation:
Explanation:
Id: 44404
Explanation:
Id: 44395
Explanation:
Id: 44516
Explanation:
Id: 44459
Explanation:
Id: 44751
Explanation:
Id: 44727
decision making
Explanation:
Explanation:
Id: 44686
Explanation:
Id: 44703
Explanation:
Id: 44585
Explanation:
Explanation:
Explanation:
Explanation:
Id: 44634
Explanation:
Id: 44491
Explanation:
Id: 44582
Explanation:
Id: 44680
Explanation:
Id: 44442
Explanation:
Id: 44519
Explanation:
Id: 44490
Explanation:
Id: 38722
Explanation:
Id: 44671
countries the world
countries
Explanation:
Explanation:
Id: 44797
Explanation:
Id: 44617
Explanation:
Id: 44575
Explanation:
Id: 44594
Explanation:
Id: 44802
Explanation:
1) 600000 2) 1400000
Explanation:
Id: 44408
persons.
Explanation:
Id: 38730
Explanation:
Id: 44475
Explanation:
Id: 44426
1) Cash 2) Trade
Explanation:
Id: 44564
Explanation:
Id: 44603
Explanation:

A. tax compliance.
B. financial audit.
D. profit analysis.
ANSWER: C

A. each department.
C. each month.
D. each executive.
ANSWER: B

ANSWER: A
A. notional cost.
B. real cost.
C. normal cost.
D. variable cost.
ANSWER: A

B. contractors.
ANSWER: D
A. hospitals.
C. transport firms.
ANSWER: B

A. two ways.
B. three ways.
C. four ways.
D. several ways.
ANSWER: D

ANSWER: A

ANSWER: A
A. the same firm.
ANSWER: A
A. direct cost.
B. indirect cost.
C. sunk cost.
D. imputed cost.
ANSWER: A
A. imputed cost.
B. historical cost.
C. sunk cost.
D. shutdown cost
ANSWER: D

ANSWER: C

A. three types.
B. four types.
C. five types.
D. seven types.
ANSWER: A

A. major expenses.
D. sundry expenses.
ANSWER: B

A. office overhead.
ANSWER: D

A. prime cost.
B. factory cost.
D. production cost.
ANSWER: C

A. prime cost.
B. factory cost.
C. labour cost.
ANSWER: B
A. Factory cost.
C. Selling cost.
D. Labour cost.
ANSWER: B

A. prime cost.
B. works cost.
D. cost of sales.
ANSWER: C
21. Tender is an.

ANSWER: C

A. selling price.
D. value of stocks.
ANSWER: A

ANSWER: C

A. prime cost.
B. works cost.
C. cost of sales.
ANSWER: A

ANSWER: A

A. works on cost.
ANSWER: D

ANSWER: D

A. material cost.
B. labour cost.
C. prime cost.
D. direct expenses
ANSWER: A

A. material cost.
B. labour cost.
C. prime cost.
D. factory cost.
ANSWER: C

A. material cost.
B. labour cost.
C. prime cost.
D. factory cost.
ANSWER: C
A. turnover ratios
ANSWER: A
A. turnover ratios.
ANSWER: B

ANSWER: C

A. turnover ratio.
ANSWER: D

A. turnover ratio.
ANSWER: A
D. turnover ratio.
ANSWER: A

D. turnover ratio.
ANSWER: B

D. turnover ratio.
ANSWER: B

D. turnover ratio.
ANSWER: D
C. operating ratio.
ANSWER: A
ANSWER: C
ANSWER: D

A. fixed assets.
B. current assets.
ANSWER: C

A. fixed assets.
B. current assets.
ANSWER: B
ANSWER: C
is
B. pay out ratio
ANSWER: A
B. pay out ratio.
ANSWER: D
is .
ANSWER: A
.
ANSWER: B

ANSWER: D

A. activity ratios.
B. solvency ratios.
ANSWER: A

ANSWER: A
investment?
8
ANSWER: A
inventory is
ANSWER: A

A. net profit.
ANSWER: D

A. net profit.
ANSWER: D
ANSWER: B

ANSWER: B

ANSWER: C
9
ANSWER: C

D. long term funds.
ANSWER: A
known as .
A. fixed assets.
B. current assets.
D. wasting assets.
ANSWER: B
year are called _.
B. overdraft.
ANSWER: D
Affect .
A. profit.
B. funds.
C. working capital.
D. capital.
ANSWER: B
affect .
A. profit.
B. funds.
C. working capital.
D. capital.
ANSWER: B
ANSWER: A
ANSWER: B
ANSWER: B
ANSWER: A

ANSWER: D

ANSWER: C
the treatment of .
A. prime cost .
B. fixed overheads.
ANSWER: B

ANSWER: B

B. gross profit.
C. net profit.
D. net loss.
ANSWER: A

A. overhead costs .
B. prime cost.
C. variable cost.
D. fixed costs.
ANSWER: D

ANSWER: A

ANSWER: D


ANSWER: B

ANSWER: C

ANSWER: B

A. over production.
ANSWER: C

ANSWER: A

ANSWER: A

ANSWER: B
old B.E.P will be .
A. lower .
B. higher.
C. . unchanged .
D. indeterminate.
ANSWER: B
A. lower .
B. unchanged .
C. higher.
D. indeterminate.
ANSWER: B
A. 10,000.
B. 16,300.
C. 2,000.
D. 2,500.
ANSWER: D
in value .
A. Rs. 7,936.
B. Rs. 7,353.
C. Rs. 8,333.
D. Rs. 9,090.
ANSWER: B
A. Rs. 1,75,000.
B. Rs. 1,17,400.
C. Rs. 1.57,000.
D. Rs. 1,86,667.
ANSWER: A
A. 40% .
B. 80%
C. 15%
D. 30%.
ANSWER: A
A. Rs. 10,000.
B. b. Rs. l4,000 .
C. Rs. 12,000.
D. Rs. 8,000.
ANSWER: B
percentage is _.
A. 33.33%.
B. 66.67%
C. 37.5% .
D. 76.33%.
ANSWER: C
A. Rs. 50 .
B. Rs. 40.
C. Rs. 30 .
D. Rs. 55.
ANSWER: A
A. Rs. 50,000.
B. Rs. 40,000 .
C. Rs. 35,000 .
D. Rs. 45,000 .
ANSWER: B
A. Rs. 1,00,000.
B. Rs. 80,000.
C. Rs. 75,000.
D. . Rs. 60,000.
ANSWER: C
in percentage is .
A. 40% .
B. 60% .
C. 50% .
D. 45%.
ANSWER: C
A. 40% .
B. 60% .
C. 80% .
D. 85% .
ANSWER: B
product would be .
A. Rs.18.75 .
B. Rs.16 .
C. Rs. 15 .
D. Rs.20 .
ANSWER: A

B. real costing.
D. real costing .
ANSWER: A

A. fixed cost.
C. variable cost.
D. market price.
ANSWER: C

D. calculation .
ANSWER: C

A. budget.
B. direct cost.
C. unit cost.
D. cost sheet.
ANSWER: A
C. Master budget .
D. Flexible budget.
ANSWER: A
known as
B. Master budget.
C. Cash budget .
D. Purchase budget.
ANSWER: B

A. .Fixed budget.
B. Cash budget.
C. Sales budget
ANSWER: D
A. Capital budget.
B. Cash budget.
C. Master budget .
ANSWER: D

A. Master budget.
B. Cash budget.
D. Flexible budget.
ANSWER: C
.
A. Formula method.
ANSWER: B
A. Master budget.
B. Rolling budget.
ANSWER: B

ANSWER: D

A. Planning.
B. Organizing.
C. Budgeting.
D. Controlling.
ANSWER: C

A. Planning.
B. Organizing.
C. Budgeting.
D. Controlling.
ANSWER: C

A. Planning.
B. Organizing
C. Budgeting.
D. Control.
ANSWER: D
called .
A. Fixed budget.
B. Flexible budget.
C. Sales budget.
ANSWER: A

A. 1 year.
B. 1-3 years.
C. 1-5 years.
D. 5-10 years.
ANSWER: D
A. Fixed budget.
B. Flexible budget.
C. Sales budget.
ANSWER: D

B. Sales budget.
C. Fixed budget.
D. Flexible budget.
ANSWER: A

D. Material budget.
ANSWER: A

18
D. Material budget.
ANSWER: B

A. Fixed budget.
B. Sales budget.
D. Flexible budget.
ANSWER: C

ANSWER: A
factory is .
D. Master budget.
ANSWER: A
D. Master budget.
ANSWER: B
.
D. Master budget
ANSWER: C
19
ANSWER: D
ANSWER: A
ANSWER: A

ANSWER: A

ANSWER: B

A. Master budget.
B. Flexible budget.
D. Fixed budget.
ANSWER: C

A. At Best Control.
ANSWER: B

A. . Just In Time.
20
C. Job In Time.
ANSWER: A

ANSWER: A
134. FIFO is .
C. Fast In Fast Out
ANSWER: D

ANSWER: A

ANSWER: D
137. Scrap is .
ANSWER: A
B. material order.
ANSWER: A

ANSWER: A
ANSWER: B

A. Master budget.
B. Flexible budget.
D. Fixed budget.
ANSWER: C

B. Master budget.
C. Flexible budget.
D. Fixed budget.
ANSWER: A

B. Expected sales.
D. Expected loss.
ANSWER: A
A. expense.
B. sales.
C. purchase.
D. material.
ANSWER: B

A. expense.
B. sales.
C. purchase.
D. material.
ANSWER: B
A. Rs. 4,50,000.
B. Rs. 4,75,000.
C. Rs. 5,25,000.
D. Rs. 5, 50,000.
ANSWER: B
cast?
A. 20%.
B. 25%.
C. 33.33%.
D. 35%.
ANSWER: B

ANSWER: C

ANSWER: B

ANSWER: B
SPPU All Course MCQ

BSC /MSC /BCA/ BCOM


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…………………
a. Shareholders
b. Creditors
c. Managers

information?
a. Creditor
c. Controller
d. Treasurer
a. Service entities
d. All of these



c. Indirect labour
d. Direct labour

a. Cost
b. Financial
c. Management
d. All

d. None of these
a. Fixed asset
b. Current asset
c. Fictitious asset
d. Wasting asset
c. Cost accounting
d. Real Accounting
10


c. Both (a) & (b)
d. None of these

a. Debtors account
c. Sales account

a. opening stock
b. net purchases
d. sales

c. Goods account
d. Purchase account

a. Cash account
b. Mahesh Account
c. Sales account
d. Purchase account


b. Rent account
c. Cash account
d. Expense account

a. Discount account
c. Sales account
d. Cash account
Stock = …………………
a. Sales, Purchases
a. Historical
b. Forward looking
c. Analytical
d. Social

c. Labour unrest
a. Only to workers



a. Fixed cost
b. Variable cost

a. Cost unit
b. Cost Centre
c. Cost object
d. Cost estimation

a. Prime cost
b. Factory overhead
c. Selling overhead
d. Office overhead
a. Opportunity cost
b. Sunk Cost
c. Incremental cost
d. Decremental cost


a. Loan
b. Unsecured Loan
c. Secured Loan

b. Advertising
c. Depreciation
d. Carriage
a. Practicability
b. Subjectivity
d. All the above
b. Sales account
c. Purchase account
c. (a) &(b) above

b. Trading account

a. Investment
c. Provision
d. Lease Holds
c. P & L a/c

a. Remains fixed


c. Journal
d. Both a and b

a. Increases assets
c. Decreases assets

a. Machinery
b. Building
c. Cash
d. Creditor


is

b. Matching Concept
c. Consistency
a. Building
b. Bank Balance
c. Plant Patents
d. Goodwill
b. Matching Concept
c. Cost Concept
d. Cost Concept
a. Current assets
c. Fixed asset
d. Fixed liability

b. A liability


d. Both a and b
e. Both a and c
a. Debtors
b. Investors
c. Creditors
d. Shareholders
a. Dual concept
b. Divider concept
c. Entity concept
d. Landlord concept
a. Nominal capital
b. Paid up capital
c. Issues capital
d. None of these
of operation
d. None of these
d. All of these


a. Projected data
c. Historic data


a. Art and Science
b. Art
c. Science
d. Art or Science
a. Original
b. Duplicate
c. Personal
d. Nominal

b. Rules of Real
c. Rules of Nominal
d. All of these
Balance?
b. Cash a/c
c. Short term loan
d. creditors
factor is
a. Discount
b. Depreciation
c. Reduction



d. None of these

a. Long term loan
b. Short term loan
c. Owner’s fund
d. All of these

a. Current asset
d. None of these

a. Cost
b. Net profit
c. Gross profit
d. Selling price

a. Management only
b. Government only
c. Investor only
d. All of these


a. Accrual concept
b. Cost concept

head:
a. Provisions
a. Separate entity
b. Going concern
c. Consistency
d. Time period

c. Entity Concept

a. Income Statement
c. Balance Sheet
a. Loan from Mr.Y
b. loan to Mr.y
c. Both (a) (b)
d. None of these

a. Accrual concept
b. Cost concept


e. Accrual concept
f. Cost concept

head:
e. Provisions
e. Separate entity
f. Going concern
g. Consistency
h. Time period

g. Entity Concept

e. Income Statement
g. Balance Sheet
e. Loan from Mr.Y
f. loan to Mr.y
g. Both (a) (b)
h. None of these

e. Accrual concept
f. Cost concept

a. Separate entity
b. Going concern
c. Consistency
d. Time period



a. Trading a/c
b. Balance sheet
d. Trial balance.

businesses?
b. Corporation
c. Partnership
d. All of them
a. Fiscal year
b. Calendar year
d. Accrual period


a. Personal a/c
b. Impersonal a/c
c. Real a/c
d. Nominal a/c


concept?
concepts?
d. Matching concept
b. Corporation
c. Partnership
d. All of them
a. Cash is received

of the following?
a. Accrual concept
b. Matching concept

a. Fiscal year
b. Calendar year
d. Accrual period
b. Materiality
c. Prudence
d. Matching concept
information
a. Concrete
b. Complete
c. Immaterial
d. Material
d. Duality Concept

d. None of These
d. All of the above
a. Rs 70,000
b. Rs 80,000
c. Rs 90,000
d. Rs 1,00,000

a. Revenue Profit
b. Capital Profit
c. Loss
d. None of these

a. Profit
b. Assets
c. Company
d. Books of A/c


a. Depreciation
b. Wages
c. Salary
d. Stationary

a. Assets
b. Liabilities
c. Capital
d. All of these

a. Benefits & Costs
b. Revenues & Costs

a. Patents
b. Trade Marks
c. Copyright
d. Land



performing
d. None of these


recorded data
in.
d. None of these

d. None of these
to
a. Cash a/c
b. Capital a/c
c. Drawing a/c
d. Bank a/c
b. Salaries a/c
c. Cash a/c
d. Bank a/c

a. Customer a/c
b. Sales return a/c
c. Goods a/c


a. Cash a/c
b. Mahesh a/c
c. Sales a/c
d. Sales return a/c

a. Land lord a/c
b. Rent a/c
c. Cash a/c
d. Tenant a/c

b. Prolonged delays
d. All of the above

a. Discount a/c
b. Customer a/c
c. Sales a/c
d. None of these

d. None of these
c. Not disclosed
d. None of these


a. Single aspect
b. Dual aspect
c. Triple aspect
d. None of these
d. None of these

d. None of these
a. Cash concept
b. Accrual concept
c. Matching concept
d. On-going concept

a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these
a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these

a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these

record
a. Journal
b. Ledger
c. Trial balance
d. None of these
accounts is called
a. Compound Journal
b. Ledger
c. Trial balance
d. None of these

a. Compound Journal
b. Ledger
c. Trial balance
d. None of these
a. Ledger
b. Posting
c. Forward journal
d. None of these
a. Land
b. Machine
c. Cash
d. Owner Equity

liability
a. Cash
b. Debtor
c. Owner’s equity
d. None of these


Land Rs.1,000,000
Owner’s equity ?
a. Rs.1020000
b. Rs.1010000
c. Rs.1030000
a. 600,000
b. 1,400,000
c. 2,000,000
d. None of these
Land Rs.1, 500,000
Cash Rs.20, 000
Creditors?
a. Rs.200, 000
b. Rs.700, 000
c. Rs.800, 000
d. Rs1, 100,000


Creditors Rs.50,000
a. 1,000,000
b. 1,550,000
c. 800,000
d. None of these

c) Cash = Assets
a. Only (a)
b. Both (a) (b)
c. All (a)(b)(c)(d)
d. d) None of these
a. Net Loss
b. Net income
c. Dividend


a. Accounts payable
c. Sales
d. Cash

Cash Rs.100

a. Rs.200
b. Rs.1900
c. Rs.1200
d. Rs.1700
statements.
a. Goodwill
b. Sales
reporting?
decisions.
prospective
d. None of theses
following items?
b. Currency
c. Money orders


journal.
the general ledger.
statement is true?
affected accounts.

balance?
balance.
balance.
account.
trial balance.


sheet?
a. Current assets
b. Investments

d. None of these


facilitate?
a. Planning
b. Decision making
c. Control
d. All of these



d. All of these

overhead.
a. Variable cost
c. Direct cost



c. Owners
a. Market values



a. Asset
b. Liability
c. Accounts
c. recorded facts
a. Management
b. Creditors
c. Bankers
d. All of the above
a. Sundry creditors
b. Acceptances
a. Actual figures
b. Budgeted figures
c. Standard figures
a. 1910
b. 1939
c. 1950
d. 1960


a. Trading account
c. Balance sheet
d. All of the above
a. Fixed asset
b. Investment
c. Current asset
d. Owners equity
a. sales
b. Share capital
d. Unsecured loan
.
a. Balance Sheet

a. M. S. Gosav
b. Wheldon
c. Luco Pacioli
d. R. N. Carter
a. Financial terms
c. Both
b. Definite period

d. Six months
d. Sales activities
a. Management
b. Share holders
c. Creditors
d. Employees
d. All
c. Both
d. None
a. Marginal costing
b. Ratio analysis
c. Standard costing
b. Issue of shares
d. All of these
c. Both
a. Bonus shares
b. Rights shares
d. None
remuneration based
on…

c. Both
d. None

a. Can
b. Cannot
c. Sometimes
d. Inadequate data
cooperation of…
a. Shareholders
b. Management
c. Creditors
d. None
a. Unnecessary
c. Necessary
d. Inadequate data
c. Both
a. Money
b. Quantity
c. Both
d. None
d. All of these


d. All of the above
operations is
known as budget.
a. Operational
b. Financial
c. Functional
objectives of
efficiency.
a. Budgetary
b. Inventory
c. Capability
with
budgetary control.
a. Centralizing
b. De-centralizing
c. Planning
the
a. Cost centre
b. Budget centre
c. Cost Unit
the routine
________ .
a. Budget Policy
b. Budget Book
c. Budget Manual
term
a. Functions
b. Control
c. Time

budget and
________ budget.
a. variable
b. Semi-variable
c. Constant
a. Fixed
b. Semi-variable
c. Flexible
budgets.
a. Period
b. Controls
c. Functions
a. Flexible
b. Cash
c. Fixed
changes
a. Fixed
b. Flexible
c. Sales
realistic and
a. realistic
b. non-realistic
c. Predictable
goods to be
business.
a. Sales
b. Cash
c. Purchase
cash
a. purchase
b. cash
c. sales


a. Finance
b. Stores
c. Purchase
b. Sales budget
c. Cost budget
make
400 units of Z
are 50.
a. 112%, 140%, 140%
b. 140%, 112%, 140%
c. 140%, 140%, 112%
b. Current budget
c. Long-term budget
a. True
b. False

a. Key factor
b. Abnormal factor
c. Linking factor
budget in
b. Master budget
100
Actual hours
worked) * 100


BBudgeted hours)
* 100
A-ii, B-iii, C-i
b. A-i, B-ii, C-iii
c. A-iii, B-i, C-ii
Rs 20
variable)
cost per unit
a. Rs 1,01,000
b. Rs 126.25
c. Rs 122
d. Rs 1,22,000
a. True
b. False
quarter,
40,000)
the total
a. Rs 1,12,000
b. 1,12,000 units
d. All
c. Both
d. None


c. Both

Chapter 1
private gain.

performed.
monetary terms.
profit.
decision-making.

(a) Tally (b) Marg
(c) Saral (d) SAP
(a) Cash (b) Debit
(a) Cash (b) Debit
(a) Two (b) Three
(c) Four (d) Five
1. (a) 11. (a) 21. (a) 31. (a) 41. (b)

2. (b) 12. (d) 22. (b) 32. (b) 42. (d)
3. (a) 13. (a) 23. (c) 33. (d) 43. (b)
4. (c) 14. (d) 24. (a) 34. (b) 44. (a)
5. (c) 15. (a) 25. (c) 35. (a) 45. (d)
6. (d) 16. (b) 26. (a) 36. (b) 46. (a)
7. (c) 17. (c) 27. (b) 37. (d) 47. (c)
8. (a) 18. (a) 28. (d) 38. (c) 48. (b)
9. (d) 19. (a) 29. (a) 39. (d) 49. (d)
10. (d) 20. (b) 30. (b) 40. (a) 50. (a)
Chapter 2
date.
reporting period.
(a) Dual (b) Single
(a) Dual (b) Single
Balance.

(a) Cash (b) Credit

income tax return.


1. (d) 11. (a) 21. (d) 31. (a) 41. (d)

2. (a) 12. (d) 22. (c) 32. (a) 42. (a)
3. (d) 13. (b) 23. (a) 33. (c) 43. (d)
4. (a) 14. (a) 24. (b) 34. (c) 44. (a)
5. (a) 15. (d) 25. (c) 35. (c) 45. (c)
6. (b) 16. (a) 26. (b) 36. (d) 46. (d)
7. (b) 17. (d) 27. (a) 37. (b) 47. (d)
8. (b) 18. (d) 28. (c) 38. (c) 48. (d)
9. (a) 19. (d) 29. (d) 39. (d) 49. (a)
10. (c) 20. (d) 30. (b) 40. (c) 50. (c)
Chapter 3
Cost Accounting
______________.
(a) Cost (b) Price

(a) One (b) Two
(c) Three (d) Four

______________.
______________.
cost.
______________ in Prime Cost.
ascertain cost.
1. (a) 11. (a) 21. (a) 31. (c) 41. (a)

2. (a) 12. (d) 22. (b) 32. (d) 42. (c)
3. (a) 13. (d) 23. (d) 33. (c) 43. (b)
4. (d) 14. (b) 24. (a) 34. (c) 44. (d)
5. (a) 15. (d) 25. (b) 35. (c) 45. (a)
6. (c) 16. (c) 26. (a) 36. (a) 46. (d)
7. (a) 17. (c) 27. (a) 37. (c) 47. (d)
8. (d) 18. (a) 28. (c) 38. (d) 48. (b)
9. (c) 19. (c) 29. (d) 39. (c) 49. (b)
10. (c) 20. (c) 30. (b) 40. (a) 50. (a)
Chapter 4
Cost Control
(a) EOQ (b) JIT
(c) ABC (d) HML
inventory value.
______________.
is ______________.

(a) LIFO (b) FIFO
Period)
Period)
Period)
Period)

______________.
specified period.
(a) Time (b) Motion
(a) Time (b) Motion

1. (a) 11. (d) 21. (a) 31. (d) 41. (d)

2. (b) 12. (b) 22. (a) 32. (d) 42. (b)
3. (a) 13. (a) 23. (d) 33. (d) 43. (a)
4. (c) 14. (b) 24. (b) 34. (d) 44. (a)
5. (a) 15. (c) 25. (d) 35. (a) 45. (d)
6. (a) 16. (d) 26. (a) 36. (a) 46. (d)
7. (b) 17. (a) 27. (b) 37. (a) 47. (a)
8. (c) 18. (d) 28. (b) 38. (b) 48. (b)
9. (d) 19. (c) 29. (a) 39. (c) 49. (b)
10. (c) 20. (d) 30. (d) 40. (a) 50. (c)
Chapter 5
(a) CVP (b) ABC
(c) JIT (d) HML
(a) 20% (b) 30%
(c) 33.33% (d) 1/3
(a) 70% (b) 80%
(c) ¾ (d) ½
(a) ` 4,16,667 (b) ` 3,83,333
(c) ` 3,75,000 (d) ` 4,10,000
(a) ` 1,00,000 (b) ` 6,00,000
(c) ` 3,75,000 (d) ` 4,10,000
(a) ` 40,000 (b) ` 10,000
(c) ` 25,000 (d) ` 30,000
(a) ` 4,00,000 (b) `2,00,000
(c) ` 2,50,000 (d) `3,00,000
(a) ` 2,40,000 (b) ` 80,000
(c) ` 2,70,000 (d) ` 2,00,000
______________.
future costs.
(a) One (b) Two
(c) Three (d) Four
Variance?
(a) 10 (b) –10
(c) 150 (d) 20
(a) 10 (b) –10
(c) 150 (d) 20
(a) 10 (b) –10
(c) 50 (d) 0
(a) 600 (b) –600
(c) 500 (d) 400
(a) 750 (b) –750
(c) 600 (d) 400
(a) 150 (b) –150
(c) 300 (d) 200
monetary terms.
(a) Budget (b) Plan
______________.
______________.
maximizing profits.
(a) Cash (b) Credit
1. (a) 11. (c) 21. (a) 31. (a) 41. (b)

2. (a) 12. (a) 22. (a) 32. (a) 42. (c)
3. (a) 13. (b) 23. (b) 33. (a) 43. (a)
4. (a) 14. (a) 24. (b) 34. (a) 44. (a)
5. (b) 15. (b) 25. (d) 35. (d) 45. (a)
6. (d) 16. (a) 26. (a) 36. (a) 46. (b)
7. (d) 17. (d) 27. (a) 37. (a) 47. (c)
8. (c) 18. (d) 28. (d) 38. (d) 48. (a)
9. (a) 19. (a) 29. (b) 39. (a) 49. (b)
10. (b) 20. (a) 30. (b) 40. (a) 50. (b)


Chapter 1
private gain.

performed.
monetary terms.
profit.
decision-making.
(a) Tally (b) Marg
(c) Saral (d) SAP
(a) Cash (b) Debit
(a) Cash (b) Debit
(a) Two (b) Three
(c) Four (d) Five
1. (a) 11. (a) 21. (a) 31. (a) 41. (b)

2. (b) 12. (d) 22. (b) 32. (b) 42. (d)
3. (a) 13. (a) 23. (c) 33. (d) 43. (b)
4. (c) 14. (d) 24. (a) 34. (b) 44. (a)
5. (c) 15. (a) 25. (c) 35. (a) 45. (d)
6. (d) 16. (b) 26. (a) 36. (b) 46. (a)
7. (c) 17. (c) 27. (b) 37. (d) 47. (c)
8. (a) 18. (a) 28. (d) 38. (c) 48. (b)
9. (d) 19. (a) 29. (a) 39. (d) 49. (d)
10. (d) 20. (b) 30. (b) 40. (a) 50. (a)
Chapter 2
date.
reporting period.
(a) Dual (b) Single
(a) Dual (b) Single
Balance.
(a) Cash (b) Credit

income tax return.

1. (d) 11. (a) 21. (d) 31. (a) 41. (d)

2. (a) 12. (d) 22. (c) 32. (a) 42. (a)
3. (d) 13. (b) 23. (a) 33. (c) 43. (d)
4. (a) 14. (a) 24. (b) 34. (c) 44. (a)
5. (a) 15. (d) 25. (c) 35. (c) 45. (c)
6. (b) 16. (a) 26. (b) 36. (d) 46. (d)
7. (b) 17. (d) 27. (a) 37. (b) 47. (d)
8. (b) 18. (d) 28. (c) 38. (c) 48. (d)
9. (a) 19. (d) 29. (d) 39. (d) 49. (a)
10. (c) 20. (d) 30. (b) 40. (c) 50. (c)
Chapter 3
Cost Accounting
.
(a) Cost (b) Price

(a) One (b) Two
(c) Three (d) Four

periods also is .
.
.
cost.
in Prime Cost.
ascertain cost.
1. (a) 11. (a) 21. (a) 31. (c) 41. (a)

2. (a) 12. (d) 22. (b) 32. (d) 42. (c)
3. (a) 13. (d) 23. (d) 33. (c) 43. (b)
4. (d) 14. (b) 24. (a) 34. (c) 44. (d)
5. (a) 15. (d) 25. (b) 35. (c) 45. (a)
6. (c) 16. (c) 26. (a) 36. (a) 46. (d)
7. (a) 17. (c) 27. (a) 37. (c) 47. (d)
8. (d) 18. (a) 28. (c) 38. (d) 48. (b)
9. (c) 19. (c) 29. (d) 39. (c) 49. (c)
10. (c) 20. (c) 30. (b) 40. (a) 50. (a)
Chapter 4
(a) CVP (b) ABC
(c) JIT (d) HML
Ratio? (a) 20% (b) 30%
(c) 33.33% (d) 1/3
(a) 70% (b) 80%
(c) ¾ (d) ½
`? (a) ` 4,16,667 (b) ` 3,83,333
(c) ` 3,75,000 (d) ` 4,10,000
Contribution? (a) ` 1,00,000 (b) ` 6,00,000
(c) ` 3,75,000 (d) ` 4,10,000
Cost? (a) ` 40,000 (b) ` 10,000
(c) ` 25,000 (d) ` 30,000
Cost? (a) ` 4,00,000 (b) `2,00,000
(c) ` 2,50,000 (d) `3,00,000
Cost? (a) ` 2,40,000 (b) ` 80,000
(c) ` 2,70,000 (d) ` 2,00,000
.
future costs.
(a) One (b) Two
(c) Three (d) Four
Variance?
(a) 10 (b) –10
(c) 150 (d) 20
(a) 10 (b) –10
(c) 150 (d) 20
(a) 10 (b) –10
(c) 50 (d) 0
(a) 600 (b) –600
(c) 500 (d) 400
(a) 750 (b) –750
(c) 600 (d) 400
(a) 150 (b) –150
(c) 300 (d) 200

monetary terms.
(a) Budget (b) Plan
.
.
maximizing profits.
(a) Cash (b) Credit
1. (a) 11. (c) 21. (a) 31. (a) 41. (b)

2. (a) 12. (a) 22. (a) 32. (a) 42. (c)
3. (a) 13. (b) 23. (b) 33. (a) 43. (a)
4. (a) 14. (a) 24. (b) 34. (a) 44. (a)
5. (b) 15. (b) 25. (d) 35. (d) 45. (a)
6. (d) 16. (a) 26. (a) 36. (a) 46. (b)
7. (d) 17. (d) 27. (a) 37. (a) 47. (c)
8. (c) 18. (d) 28. (d) 38. (d) 48. (a)
9. (a) 19. (a) 29. (b) 39. (a) 49. (b)
10. (b) 20. (a) 30. (b) 40. (a) 50. (b)

a) Shareholders
b) Creditors
c) Managers
a) Creditor
c) Controller
d) Treasurer
a) Service entities
d) All of these

c) Indirect labour
d) Direct labour

a) Cost
b)Financial
37
c) Management
d) All

d) None of these
a) Fixed asset
b) Current asset
c) Fictitious asset
d) Wasting asset
c) Cost accounting
d) Real Accounting

c) Both (a) & (b)
d) None of these
a) Debtors account
c) Sales account
37
b) net purchases
d)sales


c) Goods account
d) Purchase account
a) Cash account
b) Mahesh Account
c) Sales account
d) Purchase account

b) Rent account
c)Cash account
d) Expense account

a) Discount account
37
c) Sales account
d) Cash account

Stock = …………………
a) Sales, Purchases


a) Historical
b) Forward looking
c) Analytical
d) Social


c) Labour unrest

a) Only to workers

37

a) Fixed cost
b) Variable cost
b) Cost centre
c) Cost object
d) Cost estimation

a) Prime cost
b) Factory overhead
c) Selling overhead
d) Office overhead
a) Opportunity cost
b) Sunk Cost
c) Incremental cost
d) Decremental cost
accounting concept

a) Loan
b) Unsecured Loan
c) Secured Loan
b) Advertising
c) Depreciation
d) Carriage
37
a) Practicability
b) Subjectivity

d) All the above
pursuance to:



b) Sales account
c) Purchase account

c) (a) &(b) above
37
b) Trading account
sheet
a) Investment
c) Provision
d) Lease Holds

c) P & L a/c
in……………….

a) Remains fixed
37

c) Journal
d) Both a and b

48. Cash Purchases:
a) Increases assets
c) Decreases assets


a) Machinery
b) Building
c) Cash
d) Creditor


37

b) Matching Concept
c) Consistency

a) Building
b) Bank Balance
c) Plant Patents
d) Goodwill
b) Matching Concept
c) Cost Concept
d) Cost Concept
a) Current assets
c) Fixed asset
d) Fixed liability

b) A liability
37
d) Both a and b
e) Both a and c
a) Debtors
b) Investors
c) Creditors
d) Shareholders
a) Dual concept
b) Divider concept
c) Entity concept
d) Landlord concept
a) Nominal capital
b) Paid up capital
c) Issues capital
d) None of these

37
d) None of these
d) All of these

a) Projected data
c) Historic data


and Science
b) Art
c) Science
d) Art or Science

a) Original
b) Duplicate
c) Personal
d) Nominal

b) Rules of Real
c) Rules of Nominal
d) All of these
b) Cash a/c
37
c) Short term loan
d) creditors
a)Discount
b) Depreciation
c)Reduction

d) None of these
a) Long term loan
b) Short term loan
c) Owner’s fund
d) All of these

a) Current asset
d) None of these
a) Cost
b) Net profit
c) Gross profit
d) Selling price
a) Management only
b) Government only
c) Investor only
d) All of these
a) Accrual concept
37
b) Cost concept
a) Provisions
a) Separate entity
b) Going concern
c) Consistency
d) Time period

c) Entity Concept

a) Income Statement
c) Balance Sheet
a) Loan from Mr.Y

b) loan to Mr.y
c) Both (a) (b)
d) None of these

37
a) (ii) (iii)(i)
b) (iii)(iv)(ii)
c) (i)(iii)(iv)
d) (i)(iv)

a) Accrual concept
b) Cost concept
a) Separate entity
b) Going concern
c) Consistency
d) Time period



a) Trading a/c
b) Balancesheet
d) Trial balance.
37
Sole proprietorship
b. Corporation
c. Partnership
d. All of them
a) Fiscal year
b) Calendar year
d) Accrual period

a) Personal a/c
b) Impersonal a/c
c) Real a/c
d) Nominal a/c


d) Matching concept
37
b) Corporation
c) Partnership
d) All of them
recognized when
a) Cash is received
following?
a) Accrual concept
b) Matching concept

a) Fiscal year
b) Calendar year
d) Accrual period
accounting concept?
b) Materiality
c) Prudence
d) Matching concept
a) Concrete
b) Complete
37
c) Immaterial
d) Material
following?
d) Duality Concept
accounting books
d) None of These
d) All of the above
a) Rs 70,000
b) Rs 80,000
c) Rs 90,000
d) Rs 1,00,000

a) Revenue Profit
b) Capital Profit
c) Loss
d) None of these
a) Profit
37
b) Assets
c) Company
d) Books of A/c
a) Depreciation
b) Wages
c) Salary
d) Stationary

a) Assets
b) Liabilities
c) Capital
d) All of these
a) Benefits & Costs

b) Revenues & Costs
a) Patents
b) Trade Marks
c) Copyright
d) Land



37
d) None of these

a) Practicability
b) Subjectivity
d) None of these

d) None of these
pursuant of

d) None of these

37
d) None of these
a) Cash a/c
b) Capital a/c
c) Drawing a/c
d) Bank a/c

b) Salaries a/c
c) Cash a/c
d) Bank a/c
a) Customer a/c
b) Sales return a/c
c) Goods a/c
a) Cash a/c
b) Mahesh a/c
c) Sales a/c
d) Sales return a/c
a) Land lord a/c

b) Rent a/c
c) Cash a/c
d) Tenant a/c
a) Discount a/c
b) Customer a/c
c) Sales a/c
d) None of these
a) Debtors Accounts
b) Bad debts a/c
c) Sales a/c
37
d) None of these

accounting concept
d) None of these
d) None of these


d) None of these

c) Not disclosed
d) None of these
a) Single aspect
b) Dual aspect
c) Triple aspect
d) None of these
statements
37
d) None of these
d) None of these
d) None of these.
a) Cash concept
b) Accrual concept
c) Matching concept
d) On-going concept
a) Real a/c
b) Personal a/c
c) Nominal a/c
d) None of these
a) Real a/c
b) Personal a/c
c) Nominal a/c
d) None of these
a) Real a/c
b) Personal a/c
c) Nominal a/c
d) None of these
a) Journal
37
b) Ledger
c) Trial balance
d) None of these

b) Ledger
c) Trial balance
d) None of these

a) Compound Journal
b) Ledger
c) Trial balance
d) None of these
ledger is called as
a) Ledger
b) Posting
c) Forward journal
d) None of these
Land
b) Machine
c) Cash
d) Owner Equity
Cash
b) Debtor
c) Owner’s equity
d) None of these

37
Land Rs.1,000,000
Machinery Rs.20,000
Cash Rs.10,000
Debt Rs.0
Owner’s equity ?

a) Rs.1020000
b) Rs.1010000
c) Rs.1030000

a) 600,000
b) 1,400,000
c) 2,000,000
d) None of these

Land Rs.1, 500,000
Cash Rs.20, 000
Loan Rs.500, 000
Creditors?
a) Rs.200, 000
b) Rs.700, 000
c) Rs.800, 000
d) Rs1, 100,000
Land ?
Vehicles Rs.600,000
Cash Rs.30,000
Loan 5,00,000
37
Creditors Rs.50,000
e) 1,000,000
f) 1,550,000
g) 800,000
h) None of these

c) Cash = Assets
a) Only (a)
b) Both (a) (b)
c) All (a)(b)(c)(d)
d) None of these
a) Net Loss
b) Net income
c) Dividend


a) Accounts payable
c) Sales
d) Cash
Cash Rs.100
37
Bank Loan Rs.1,000
a) Rs.200
b) Rs.1900
c) Rs.1200
d) Rs.1700
informed reader

b. Sales

d.None of theses
b. Currency
c. Money orders
37
correct?
ledger.
true?


37
account credited.
assets
b. Investments

d. None of these

Planning
b) Decision making
c) Control
d) All of these
37
users.
departments.

d. All of these

a. Variable cost
c. Direct cost


37

c) Owners

a) Market values

a) Asset
b) Liability
c) Accounts
c) recorded facts
a) Management
b) Creditors
c) Bankers
d) All of the above
37
a) Sundry creditors
b) Acceptances
a) Actual figures
b) Budgeted figures
c) Standard figures
a) 1910
b) 1939
c) 1950
d) 1960

a) Compulsory
b) Optional
c) Obligation
a) Trading account
c) Balance sheet
d) All of the above
a) Fixed asset
b) Investment
37
c) Current asset
d) Owners equity
a) Financial
b) Economic
c) Non financial
d) None of these
a) sales
b) Share capital
d) Unsecured loan


.
a) Balance Sheet

a) M. S. Gosav
b) Wheldon
c) LucoPacioli
d) R. N. Carter

Analytical
b) Clerical
37
c) Executive
d) Non- executive

Cash basis
b) Accrual basis
c) Mercantile basis

c) Both

Capital
b) Revenue
c) Direct
d) Non- cash
37
a) Nominal account
b) Real Account


Balance sheet
b) Trial Balance
c) Ledger
d) Journal
a) cash account
b) capital account
c) drawings account

Account of Suresh
b) Salaries account
c) Cash account
b) Overhead
e. Variable cost
37
g. Direct cost

d. All of these
g. Indirect labour
h. Direct labour
labour
b) Direct materials

classified as
a) A prime cost

expense
b) Direct materials
d) Immaterial items
37
Direct labour
b) Direct materials
d) Advertising

b) Direct Wages
c) Direct Expenses
d) Prime Cost

a) Work on cost
b) Work Cost
d) Direct Cost

a) Prime Cost
b) Factory Overhead
c) Selling overhead
d) Office overhead
Total Cost
b) Office Cost
c) Cost of sales
d) Selling overhead


(d) future costs
37
(a) Rs. 1,80,000
(b) Rs. 2,00,000
(c) Rs. 1,70,000
(d) Rs. 2,10,000
37
…………………
a. Shareholders
b. Creditors
c. Managers

information?
a. Creditor
c. Controller
d. Treasurer
a. Service entities
d. All of these



c. Indirect labour
d. Direct labour

a. Cost
b. Financial
c. Management
d. All

d. None of these
a. Fixed asset
b. Current asset
c. Fictitious asset
d. Wasting asset
c. Cost accounting
d. Real Accounting
10


c. Both (a) & (b)
d. None of these

a. Debtors account
c. Sales account

a. opening stock
b. net purchases
d. sales

c. Goods account
d. Purchase account

a. Cash account
b. Mahesh Account
c. Sales account
d. Purchase account


b. Rent account
c. Cash account
d. Expense account

a. Discount account
c. Sales account
d. Cash account
Stock = …………………
a. Sales, Purchases
a. Historical
b. Forward looking
c. Analytical
d. Social

c. Labour unrest
a. Only to workers



a. Fixed cost
b. Variable cost

a. Cost unit
b. Cost Centre
c. Cost object
d. Cost estimation

a. Prime cost
b. Factory overhead
c. Selling overhead
d. Office overhead
a. Opportunity cost
b. Sunk Cost
c. Incremental cost
d. Decremental cost


a. Loan
b. Unsecured Loan
c. Secured Loan

b. Advertising
c. Depreciation
d. Carriage
a. Practicability
b. Subjectivity
d. All the above
b. Sales account
c. Purchase account
c. (a) &(b) above

b. Trading account

a. Investment
c. Provision
d. Lease Holds
c. P & L a/c

a. Remains fixed


c. Journal
d. Both a and b

a. Increases assets
c. Decreases assets

a. Machinery
b. Building
c. Cash
d. Creditor


is

b. Matching Concept
c. Consistency
a. Building
b. Bank Balance
c. Plant Patents
d. Goodwill
b. Matching Concept
c. Cost Concept
d. Cost Concept
a. Current assets
c. Fixed asset
d. Fixed liability

b. A liability


d. Both a and b
e. Both a and c
a. Debtors
b. Investors
c. Creditors
d. Shareholders
a. Dual concept
b. Divider concept
c. Entity concept
d. Landlord concept
a. Nominal capital
b. Paid up capital
c. Issues capital
d. None of these
of operation
d. None of these
d. All of these


a. Projected data
c. Historic data


a. Art and Science
b. Art
c. Science
d. Art or Science
a. Original
b. Duplicate
c. Personal
d. Nominal

b. Rules of Real
c. Rules of Nominal
d. All of these
Balance?
b. Cash a/c
c. Short term loan
d. creditors
factor is
a. Discount
b. Depreciation
c. Reduction



d. None of these

a. Long term loan
b. Short term loan
c. Owner’s fund
d. All of these

a. Current asset
d. None of these

a. Cost
b. Net profit
c. Gross profit
d. Selling price

a. Management only
b. Government only
c. Investor only
d. All of these


a. Accrual concept
b. Cost concept

head:
a. Provisions
a. Separate entity
b. Going concern
c. Consistency
d. Time period

c. Entity Concept

a. Income Statement
c. Balance Sheet
a. Loan from Mr.Y
b. loan to Mr.y
c. Both (a) (b)
d. None of these

a. Accrual concept
b. Cost concept


e. Accrual concept
f. Cost concept

head:
e. Provisions
e. Separate entity
f. Going concern
g. Consistency
h. Time period

g. Entity Concept

e. Income Statement
g. Balance Sheet
e. Loan from Mr.Y
f. loan to Mr.y
g. Both (a) (b)
h. None of these

e. Accrual concept
f. Cost concept

a. Separate entity
b. Going concern
c. Consistency
d. Time period



a. Trading a/c
b. Balance sheet
d. Trial balance.

businesses?
b. Corporation
c. Partnership
d. All of them
a. Fiscal year
b. Calendar year
d. Accrual period


a. Personal a/c
b. Impersonal a/c
c. Real a/c
d. Nominal a/c


concept?
concepts?
d. Matching concept
b. Corporation
c. Partnership
d. All of them
a. Cash is received

of the following?
a. Accrual concept
b. Matching concept

a. Fiscal year
b. Calendar year
d. Accrual period
b. Materiality
c. Prudence
d. Matching concept
information
a. Concrete
b. Complete
c. Immaterial
d. Material
d. Duality Concept

d. None of These
d. All of the above
a. Rs 70,000
b. Rs 80,000
c. Rs 90,000
d. Rs 1,00,000

a. Revenue Profit
b. Capital Profit
c. Loss
d. None of these

a. Profit
b. Assets
c. Company
d. Books of A/c


a. Depreciation
b. Wages
c. Salary
d. Stationary

a. Assets
b. Liabilities
c. Capital
d. All of these

a. Benefits & Costs
b. Revenues & Costs

a. Patents
b. Trade Marks
c. Copyright
d. Land



performing
d. None of these


recorded data
in.
d. None of these

d. None of these
to
a. Cash a/c
b. Capital a/c
c. Drawing a/c
d. Bank a/c
b. Salaries a/c
c. Cash a/c
d. Bank a/c

a. Customer a/c
b. Sales return a/c
c. Goods a/c


a. Cash a/c
b. Mahesh a/c
c. Sales a/c
d. Sales return a/c

a. Land lord a/c
b. Rent a/c
c. Cash a/c
d. Tenant a/c

b. Prolonged delays
d. All of the above

a. Discount a/c
b. Customer a/c
c. Sales a/c
d. None of these

d. None of these
c. Not disclosed
d. None of these


a. Single aspect
b. Dual aspect
c. Triple aspect
d. None of these
d. None of these

d. None of these
a. Cash concept
b. Accrual concept
c. Matching concept
d. On-going concept

a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these
a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these

a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these

record
a. Journal
b. Ledger
c. Trial balance
d. None of these
accounts is called
a. Compound Journal
b. Ledger
c. Trial balance
d. None of these

a. Compound Journal
b. Ledger
c. Trial balance
d. None of these
a. Ledger
b. Posting
c. Forward journal
d. None of these
a. Land
b. Machine
c. Cash
d. Owner Equity

liability
a. Cash
b. Debtor
c. Owner’s equity
d. None of these


Land Rs.1,000,000
Owner’s equity ?
a. Rs.1020000
b. Rs.1010000
c. Rs.1030000
a. 600,000
b. 1,400,000
c. 2,000,000
d. None of these
Land Rs.1, 500,000
Cash Rs.20, 000
Creditors?
a. Rs.200, 000
b. Rs.700, 000
c. Rs.800, 000
d. Rs1, 100,000


Creditors Rs.50,000
a. 1,000,000
b. 1,550,000
c. 800,000
d. None of these

c) Cash = Assets
a. Only (a)
b. Both (a) (b)
c. All (a)(b)(c)(d)
d. d) None of these
a. Net Loss
b. Net income
c. Dividend


a. Accounts payable
c. Sales
d. Cash

Cash Rs.100

a. Rs.200
b. Rs.1900
c. Rs.1200
d. Rs.1700
statements.
a. Goodwill
b. Sales
reporting?
decisions.
prospective
d. None of theses
following items?
b. Currency
c. Money orders


journal.
the general ledger.
statement is true?
affected accounts.

balance?
balance.
balance.
account.
trial balance.


sheet?
a. Current assets
b. Investments

d. None of these


facilitate?
a. Planning
b. Decision making
c. Control
d. All of these



d. All of these

overhead.
a. Variable cost
c. Direct cost



c. Owners
a. Market values



a. Asset
b. Liability
c. Accounts
c. recorded facts
a. Management
b. Creditors
c. Bankers
d. All of the above
a. Sundry creditors
b. Acceptances
a. Actual figures
b. Budgeted figures
c. Standard figures
a. 1910
b. 1939
c. 1950
d. 1960


a. Trading account
c. Balance sheet
d. All of the above
a. Fixed asset
b. Investment
c. Current asset
d. Owners equity
a. sales
b. Share capital
d. Unsecured loan
.
a. Balance Sheet

a. M. S. Gosav
b. Wheldon
c. Luco Pacioli
d. R. N. Carter
a. Financial terms
c. Both
b. Definite period

d. Six months
d. Sales activities
a. Management
b. Share holders
c. Creditors
d. Employees
d. All
c. Both
d. None
a. Marginal costing
b. Ratio analysis
c. Standard costing
b. Issue of shares
d. All of these
c. Both
a. Bonus shares
b. Rights shares
d. None
remuneration based
on…

c. Both
d. None

a. Can
b. Cannot
c. Sometimes
d. Inadequate data
cooperation of…
a. Shareholders
b. Management
c. Creditors
d. None
a. Unnecessary
c. Necessary
d. Inadequate data
c. Both
a. Money
b. Quantity
c. Both
d. None
d. All of these


d. All of the above
operations is
known as budget.
a. Operational
b. Financial
c. Functional
objectives of
efficiency.
a. Budgetary
b. Inventory
c. Capability
with
budgetary control.
a. Centralizing
b. De-centralizing
c. Planning
the
a. Cost centre
b. Budget centre
c. Cost Unit
the routine
________ .
a. Budget Policy
b. Budget Book
c. Budget Manual
term
a. Functions
b. Control
c. Time

budget and
________ budget.
a. variable
b. Semi-variable
c. Constant
a. Fixed
b. Semi-variable
c. Flexible
budgets.
a. Period
b. Controls
c. Functions
a. Flexible
b. Cash
c. Fixed
changes
a. Fixed
b. Flexible
c. Sales
realistic and
a. realistic
b. non-realistic
c. Predictable
goods to be
business.
a. Sales
b. Cash
c. Purchase
cash
a. purchase
b. cash
c. sales


a. Finance
b. Stores
c. Purchase
b. Sales budget
c. Cost budget
make
400 units of Z
are 50.
a. 112%, 140%, 140%
b. 140%, 112%, 140%
c. 140%, 140%, 112%
b. Current budget
c. Long-term budget
a. True
b. False

a. Key factor
b. Abnormal factor
c. Linking factor
budget in
b. Master budget
100
Actual hours
worked) * 100


BBudgeted hours)
* 100
A-ii, B-iii, C-i
b. A-i, B-ii, C-iii
c. A-iii, B-i, C-ii
Rs 20
variable)
cost per unit
a. Rs 1,01,000
b. Rs 126.25
c. Rs 122
d. Rs 1,22,000
a. True
b. False
quarter,
40,000)
the total
a. Rs 1,12,000
b. 1,12,000 units
d. All
c. Both
d. None


c. Both

COMMERCE DEPARTMENT

(MCQs)
With Answers
Prepared By
Mangesh Takpire
A. Concepts
Page - 1
A. Investment
D. Deficit
transactions.
A. Cash
D. Methods
entities.
D. All of the above
Page - 2
following concept?

D. Capital

partner
partner
Page - 3
capital deficiency
A. Limited
A. New
basis.
B. Profit sharing
C. partners assets
A. Company
A. Simple A. Loss
Page - 4
A. Loss
B. Profit
C. 70000
D. 10000
A. Opening capital
B. Closing capital
A. 10,000 C. Loss
C. 20000
D. 35000
A. Loss and drawing
D. None of them
profit or loss.
A. Cash system
D. Loss 20,000
entry system-
D. None of these.
Page - 5
represent-
A. Trader
D. Capital.
D. Income Statement

A. 1st April, 2017
D. China
A. 3
A. Duration B. 4
B. Destination C. 5
C. Dividend D. 6
D. Development
Page - 6
B. Intention B. 3
C. Integrated C. 4
D. Intra D. 5
A. CGST A. 0.28
B. SGST B. 0.2
D. IGST D. 0.18
GST?
A. Tax Cascading
D. Wealth Tax
applicable when
collected is
dealer B. SGST
D. IGST
Page - 7
Answer Keys
Best of Luck !!!
Page - 8
MCQs
a. Shareholders
b. Creditors
c. Managers
a. Creditor
c. Controller
d. Treasurer
a. Service entities
d. All of

c. Indirect labour
d. Direct labour
a. Cost
b. Financial
c. Management
d. All
d. None of these
a. Fixed asset
b. Current asset
c. Fictitious asset
d. Wasting asset
c. Cost accounting
d. Real Accounting
c. Both (a) & (b)
d. None of these
a. Debtors account
c. Sales account
a. opening stock
b. net purchases
d. sales
c. Goods account
d. Purchase account
a. Cash account
b. Mahesh Account
c. Sales account
d. Purchase account
b. Rent account
c. Cash account
d. Expense account
a. Discount account
c. Sales account
d. Cash account
Stock = …………………
a. Sales, Purchases

a. Historical
b. Forward looking
c. Analytical
d. Social
c. Labour unrest
a. Only to workers
a. Fixed cost
b. Variable cost
a. Cost unit
b. Cost centre
c. Cost object
d. Cost estimation
a. Prime cost
b. Factory overhead
c. Selling overhead
d. Office overhead
a. Opportunity cost
b. Sunk Cost
c. Incremental cost
d. Decremental cost
a. Loan
b. Unsecured Loan
c. Secured Loan
b. Advertising
c. Depreciation
d. Carriage
a. Practicability
b. Subjectivity
d. All the above
is in pursuance to:

b. Sales account
c. Purchase account
c. (a) &(b) above
b. Trading account
Balance sheet
a. Investment
c. Provision
d. Lease Holds
c. P & L a/c
in……………….
a. Remains fixed
c. Journal
d. Both a and b

48. Cash Purchases:
a. Increases assets
c. Decreases assets
a. Machinery
b. Building
c. Cash
d. Creditor
b. Matching Concept
c. Consistency
a. Building
b. Bank Balance
c. Plant Patents
d. Goodwill
b. Matching Concept
c. Cost Concept
d. Cost Concept
a. Current assets
c. Fixed asset
d. Fixed liability
b. A liability

d. Both a and b
e. Both a and c
a. Dual concept
b. Divider concept
c. Entity concept
d. Landlord concept
a. Nominal Capital
c. Issues capital
d. None of these

d. None of these
d. All of these
a. Projected data
c. Historic data
a. Art and Science
b. Art
c. Science
d. Art or Science
a. Original
b. Duplicate
c. Personal
d. Nominal
b. Rules of Real
c. Rules of Nominal
d. All of these
b. Cash a/c
c. Short term loan
d. creditors
a. Discount
b. Depreciation
c. Reduction

d. None of these
a. Long term loan
b. Short term loan
c. Owner’s fund
d. All of these
a. Current asset
d. None of these
a. Cost
b. Net profit
c. Gross profit
d. Selling price
a. Management only
b. Government only
c. Investor only
d. All of these
a. Provision
a. Provision
a. Separate entity
b. Going concern
c. Consistency
d. Time period
c. Entity Concept
OWNER'S EQUITY
a. Income Statement
c. Balance Sheet
a. Loan from Mr.Y
b. loan to Mr.y
c. Both (a) (b)
d. None of these

a. (ii) (iii)(i)
b. (iii)(iv)(ii)
d. (i)(iv)
a. Accrual concept
b. Cost concept
a. Separate entity
b. Going concern
c. Consistency
d. Time period
a. Trading a/c
b. Balance sheet
d. Trial balance.
b. Corporation
c. Partnership
d. All of them
a. Fiscal year
b. Calendar year
d. Accrual period
a. Personal a/c
b. Impersonal a/c
c. Real a/c
d. Nominal a/c

d. Matching concept
b. Corporation
c. Partnership
d. All of them
recognized when
a. Cash is received
following?
a. Accurual concept
b. Matching concept

a. Fiscal year
b. Calendar year
d. Accrual period
accounting concept?
b. Materiality
c. Prudence
d. Matching concept
a. Concrete
b. Complete
c. Immaterial
d. Material
following?
d. Duality Concept
d. None of These
d. All of the above
a. Rs 70,000
b. Rs 80,000
c. Rs 90,000
d. Rs 1,00,000
a. Revenue Profit
c. Loss
d. None of these
a. Profit
b. Assets
c. Company
d. Books of A/c
a. Depreciation
b. Wages
c. Salary
d. Stationary
a. Assets
b. Liabilities
c. Capital
d. All of these
a. Benefits & Costs
b. Revenues & Costs
a. Patents
b. Trade Marks
c. Copyright
d. Land

d. None of these
a. Practicability
b. Subjectivity
d. None of these
d. None of these
pursuant of

d. None of these
d. None of these
a. Cash a/c
b. Capital a/c
c. Drawing a/c
d. Bank a/c
b. Salaries a/c
c. Cash a/c
d. Bank a/c
a. Customer a/c
b. Sales return a/c
c. Goods a/c
a. Cash a/c
b. Mahesh a/c
c. Sales a/c
d. Sales return a/c
a. Land lord a/c
b. Rent a/c
c. Cash a/c
d. Tenant a/c
a. Discount a/c
b. Customer a/c
c. Sales a/c
d. None of these
a. Debtors Accounts
b. Bad debts a/c
c. Sales a/c
d. None of these
accounting concept
d. None of these
d. None of these
d. None of these
c. Not disclosed
d. None of these
a. Single aspect
b. Dual aspect
c. Triple aspect
d. None of these
Statements
d. None of these
d. None of these
d. None of these.
a. Cash concept
b. Accrual concept
c. Matching concept
d. On-going concept
a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these
a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these
a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these
a. Journal
b. Ledger
c. Trial balance
d. None of these
a. Compound Journal
b. Ledger
c. Trial balance
d. None of these
a. Compound Journal
b. Ledger
c. Trial balance
d. None of these
ledger is called as
a. Ledger
b. Posting
c. Forward journal
d. None of these
a. Land
b. Machine
c. Cash
d. Owner Equity
a. Cash
b. Debtor
c. Owner’s equity
d. None of these
a. Rs.1020000
b. Rs.1010000
c. Rs.1030000
a. 600,000
b. 1,400,000
c. 2,000,000
d. None of these
a. Rs.200, 000
b. Rs.700, 000
c. Rs.800, 000
d. Rs1, 100,000
a. 000,000
b. 1,550,000
c. 800,000
d. None of these
a. Only (a)
b. Both (a) (b)
c. All (a)(b)(c)(d)
d. None of these
a. Net Loss
b. Net income
c. Dividend
a. Accounts payable
c. Sales
d. Cash
liabilities?
a. Rs.200
b. Rs.1900
c. Rs.1200
d. Rs.1700
informed reader
a. Goodwill
b. Sales
d. None of theses
b. Currency
c. Money orders
correct?
ledger.
is true?

account credited.
a. Current assets
b. Investments
d. None of these
a. Planning
b. Decision making
c. Control
d. All of these
departments.
d. All of these
a. Variable cost
c. Direct cost

c. Owners
a. Market values
a. Asset
b. Liability
c. Accounts
c. recorded facts
a. Management
b. Creditors
c. Bankers
d. All of the above
a. Sundry creditors
b. Acceptances
a. Actual figures
b. Budgeted figures
c. Standard figures
a. 1910
b. 1939
c. 1950
d. 1960
a. Compulsory
b. Optional
c. Obligation
a. Trading account
c. Balance sheet
d. All of the above
a. Fixed asset
b. Investment
c. Current asset
d. Owners equity.
a. Financial
b. Economic
c. Non financial
d. None of these.
a. sales
b. Share capital
d. Unsecured loan
a. Balance Sheet
a. M. S. Gosav
b. Wheldon
c. LucoPacioli
d. R. N. Carter
a. Analytical
b. Clerical
c. Executive
d. Non- executive
a. Cash basis
b. Accrual basis
c. Mercantile basis
c. Both
a. Capital
b. Revenue
c. Direct
d. Non- cash
a) Nominal account
b) Real Account
a) Balance sheet
b) Trial Balance
c) Ledger
d) Journal
a. cash account
b. capital account
c. drawings account

b. Salaries account
c. Cash account
as:
b. Overhead
a. Variable cost
c. Direct cost
d. All of these
c. Indirect labour
d. Direct labour
a. Indirect labour
b. Direct materials
classified as
a. A prime cost
b. Direct materials
d. Immaterial items
a. Direct labour
b. Direct materials
d. Advertising
b. Direct Wages
c. Direct Expenses
d. Prime Cost
a. Work on cost
b. Work Cost
d. Direct Cost
a. Prime Cost
b. Factory Overhead
c. Selling overhead
d. Office overhead
a. Total Cost
b. Office Cost
c. Cost of sales
d. Selling overhead
d. future costs
a. Rs. 1,80,000
b. Rs. 2,00,000
c. Rs. 1,70,000
d. Rs. 2,10,000
Answers
1. (c) 2. (a) 3. (d) 4. (a) 5. (d) 6. (b) 7. (c) 8. (d) 9. (b) 10. (b)
11. (a) 12. (b) 13. (d) 14. (b) 15. (a) 16. (c) 17. (b) 18. (c) 19. (c) 20. (a)
21. (c) 22. (d) 23. (d) 24. (d) 25. (b) 26. (b) 27. (b) 28. (b) 29. (a) 30. (c)
31. (c) 32, (c) 33. (a) 34. (b) 35. (a) 36. (c) 37. (c) 38. (c) 39. (c) 40. (c)
41. (c) 42. (b) 43. (a) 44. (b) 45. (d) 46. (e) 47. (a) 48. (c) 49. (c) 50. (d)
51. (c) 52. (a) 53. (b) 54. (b) 55. (d) 56. (c) 57. (a) 58. (e) 59. (e) 60. (a)
61. (c) 62. (a) 63. (a) 64. (d) 65. (b) 66. (c) 67. (a) 68. (c) 69. (c) 70. (b)
71. (b) 72. (b) 73. (e) 74. (d) 75. (d) 76. (e) 77. (a) 78. (a) 79. (d) 80. (d)
81. (a) 82. (b) 83. (c) 84. (c) 85. (a) 86. (d) 87. (d) 88. (b) 89. (d) 90. (a)
91. (c) 92. (d) 93. (c) 94. (d) 95. (b) 96. (c) 97. (d) 98. (c) 99. (d) 100. (c)
101.(c) 102.(a) 103.(c) 104.(d) 105.(b) 106.(c) 107.(d) 108.(b) 109.(d) 110.(b)
111.(b) 112.(a) 113.(a) 114.(d) 115.(b) 116.(d) 117.(c) 118.(b) 119.(a) 120.(a)
121.(a) 122.(b) 123.(c) 124.(c) 125.(a) 126.(b) 127.(b) 128.(b) 129.(b) 130.(a)
131.(c) 132.(c) 133.(a) 134.(a) 135.(a) 136.(c) 137.(a) 138.(a) 139.(b) 140.(c)
141.(c) 142.(b) 143.(b) 144.(b) 145.(a) 146.(c) 147.(a) 148.(b) 149.(c) 150.(b)
151.(d) 152.(c) 153.(d) 154.(c) 155.(c) 156.(a) 157.(c) 158.(d) 159.(b) 160.(d)
161.(c) 162.(b) 163.(d) 164.(d) 165.(b) 166.(a) 167.(c) 168.(b) 169.(d) 170.(d)
171.(c) 172.(d) 173.(a) 174.() 175.(b) 176.(c) 177.(d) 178.(a) 179.(d) 180.(c)
181.(d) 182.(b) 183.(b) 184.(a) 185.(b) 186.(c) 187.(c) 188.(a) 189.(d) 190.(d)
191.(b) 192.(a) 193.(c) 194.(c) 195.(b) 196.(d) 197.(d) 198.(a) 199.(a) 200.(c)
201.(a) 202.(c) 203.(b) 204.(b) 205.(a) 206.(a) 207.(b) 208.(d) 209.(c) 210.(b)
211.(b) 212.(b) 213.(d) 214.(d) 215.(d) 216.(b) 217.(d) 218.(b) 219.(c) 220.(a)
221.(d) 222.(b) 223.(b) 224.(a) 225.(b) 226.(b) 227.(c)

BBA Semester-VI
_______.
(a) Variable cost
(b) Fixed cost
(c) Total cost
(a) Financial
(b) Spot
(c) Historical
(d) Administrative
(c) Flux Method
(b) Electricity
(a) Balance sheet
(c) General ledger
(b) Issue of shares
(a) Quantity
(b) Money
(a) Marginal cost
(b) Historical cost
(c) Standard cost
(a) Only in control
(a) Labour budget
(b) Cash budget
(d) Expenses budget
(a) Financial
(b) Cost
(a) 80,058 units
(b) 1,46,370 units
(c) 32,320 units
(d) 98,642 units
(a) Increases
(c) Decreases
(d) Constant
(a) Managers
(b) Budget officers
(c) Creditors
(a) Month wise
(b) Product wise
(c) Area wise
(a) R & D budget
(b) Master budget
(c) Sales budget
(a) Time
(b) Function
(c) Flexibility
(a) Limiting factor
(a) System
(b) Men
(d) None of these
(d) None of these
(d) None of these
(d) None of these
(a) Cost accounting
(d) None of these
(d) Auditor
(a) Expense centre
(b) Profit centre
(b) Expense centre
(c) Profit centre
concerned persons -
(b) To control cash
(a) Business centre
(b) Profit centre
organization.
(a) Feasible
(b) Necessary
(d) None of these
(c) Can’t say
(a) Can
(b) Cannot
(c) Sometimes
(d) Inadequate data
(a) Shareholders
(b) Management
(c) Creditors
(a) Master budget
(b) Flexible budget
(c) Cash budget
(d) Capital budget
making
decisions
operations
(a) Fixed Cost
(b) Variable Cost
(c) Total Cost
(d) Prime Cost
(a) Cash Budget
(c) Sales Budget
(d) Overhead Budget
(d) Future costs
(b) Shareholders
(c) The Government
(d) Bankers
of taxes owed.
Purchase Budget ?
ledger.
sales.
(a) Money
(b) Quantity
(d) None
(d) None
(b) Ratio analysis
(a) Management
(b) Share holders
(c) Creditors
(d) Employees
(a) Revenue
(b) Cost
(d) None
(b) Cost centre
(c) Profit centre
(d) Expense centre
(a) can not
(b) can
(c) may or may not
(d) must
(a) Material only
(b) Labour only
(c) Expenses only
(a) Master budget
(d) Flexible budget
(b) Master Budget
(d) Flexible Budget
the P/V ratio is -
(a) 20%
(b) 30%
(c) 25%
(d) 40%
(a) Simplicity
(b) Accountability
(c) Promptness
(d) Accuracy
(a) Routine
(b) Special
(c) Investigative
(d) External
(a) Routine
(b) Special
(c) External
(d) Control
(a) Share holders
(b) Government
(d) Creditors
(d) Shareholders
(b) Sales report
(c) Investigation

d. Cost accounting

decision making.
decisions.
operations.
income.

b. shareholders.
c. the government.
d. bankers.


96. Cost accounting
making.
system?
information system?
technology?
a. inventory.
b. capacity.
c. processing time.
d. none of these.
a. zero defects.
products?

and delivery.
a. planning.
b. control.
c. decision making.
d. both a and c.

internal users.
a. planning.
b. control.


d. all of the above

organization.
d. all of the above

goals.
No. No. No. No.
1 B 31 B 61 D 91 C
2 C 32 C 62 C 92 A
3 D 33 D 63 B 93 D
4 D 34 A 64 C 94 C
5 A 35 D 65 C 95 A
6 D 36 B 66 A 96 D
7 C 37 A 67 D 97 B
8 C 38 C 68 A 98 A
9 D 39 C 69 A 99 D
10 C 40 A 70 C 100 A
11 D 41 B 71 A 101 C
12 A 42 D 72 C 102 A
13 A 43 A 73 A 103 B
14 C 44 B 74 D 104 D
15 D 45 C 75 B 105 D
16 B 46 B 76 D 106 C
17 B 47 A 77 B 107 B
18 A 48 B 78 D 108 A
19 C 49 B 79 D 109 B
20 B 50 D 80 B 110 A
21 D 51 A 81 C 111 D
22 A 52 B 82 B 112 A
23 D 53 C 83 A 113 D
24 C 54 A 84 B 114 D
25 D 55 C 85 C 115 D
26 D 56 A 86 D 116 C
27 B 57 C 87 C
28 C 58 A 88 B
29 B 59 D 89 D
30 A 60 C 90 B

A. tax compliance.
B. financial audit.
D. profit analysis.
ANSWER: C

A. each department.
C. each month.
D. each executive.
ANSWER: B

ANSWER: A
A. notional cost.
B. real cost.
C. normal cost.
D. variable cost.
ANSWER: A

B. contractors.
ANSWER: D
A. hospitals.
C. transport firms.
ANSWER: B

A. two ways.
B. three ways.
C. four ways.
D. several ways.
ANSWER: D

ANSWER: A

ANSWER: A
A. the same firm.
ANSWER: A
A. direct cost.
B. indirect cost.
C. sunk cost.
D. imputed cost.
ANSWER: A
A. imputed cost.
B. historical cost.
C. sunk cost.
D. shutdown cost
ANSWER: D

ANSWER: C

A. three types.
B. four types.
C. five types.
D. seven types.
ANSWER: A

A. major expenses.
D. sundry expenses.
ANSWER: B

A. office overhead.
ANSWER: D

A. prime cost.
B. factory cost.
D. production cost.
ANSWER: C

A. prime cost.
B. factory cost.
C. labour cost.
ANSWER: B
A. Factory cost.
C. Selling cost.
D. Labour cost.
ANSWER: B

A. prime cost.
B. works cost.
D. cost of sales.
ANSWER: C
21. Tender is an.

ANSWER: C

A. selling price.
D. value of stocks.
ANSWER: A

ANSWER: C

A. prime cost.
B. works cost.
C. cost of sales.
ANSWER: A

ANSWER: A

A. works on cost.
ANSWER: D

ANSWER: D

A. material cost.
B. labour cost.
C. prime cost.
D. direct expenses
ANSWER: A

A. material cost.
B. labour cost.
C. prime cost.
D. factory cost.
ANSWER: C

A. material cost.
B. labour cost.
C. prime cost.
D. factory cost.
ANSWER: C
A. turnover ratios
ANSWER: A
A. turnover ratios.
ANSWER: B

ANSWER: C

A. turnover ratio.
ANSWER: D

A. turnover ratio.
ANSWER: A
D. turnover ratio.
ANSWER: A

D. turnover ratio.
ANSWER: B

D. turnover ratio.
ANSWER: B

D. turnover ratio.
ANSWER: D
C. operating ratio.
ANSWER: A
ANSWER: C
ANSWER: D

A. fixed assets.
B. current assets.
ANSWER: C

A. fixed assets.
B. current assets.
ANSWER: B
ANSWER: C
is
B. pay out ratio
ANSWER: A
B. pay out ratio.
ANSWER: D
is .
ANSWER: A
.
ANSWER: B

ANSWER: D

A. activity ratios.
B. solvency ratios.
ANSWER: A

ANSWER: A
investment?
8
ANSWER: A
inventory is
ANSWER: A

A. net profit.
ANSWER: D

A. net profit.
ANSWER: D
ANSWER: B

ANSWER: B

ANSWER: C
9
ANSWER: C

D. long term funds.
ANSWER: A
known as .
A. fixed assets.
B. current assets.
D. wasting assets.
ANSWER: B
year are called _.
B. overdraft.
ANSWER: D
Affect .
A. profit.
B. funds.
C. working capital.
D. capital.
ANSWER: B
affect .
A. profit.
B. funds.
C. working capital.
D. capital.
ANSWER: B
ANSWER: A
ANSWER: B
ANSWER: B
ANSWER: A

ANSWER: D

ANSWER: C
the treatment of .
A. prime cost .
B. fixed overheads.
ANSWER: B

ANSWER: B

B. gross profit.
C. net profit.
D. net loss.
ANSWER: A

A. overhead costs .
B. prime cost.
C. variable cost.
D. fixed costs.
ANSWER: D

ANSWER: A

ANSWER: D


ANSWER: B

ANSWER: C

ANSWER: B

A. over production.
ANSWER: C

ANSWER: A

ANSWER: A

ANSWER: B
old B.E.P will be .
A. lower .
B. higher.
C. . unchanged .
D. indeterminate.
ANSWER: B
A. lower .
B. unchanged .
C. higher.
D. indeterminate.
ANSWER: B
A. 10,000.
B. 16,300.
C. 2,000.
D. 2,500.
ANSWER: D
in value .
A. Rs. 7,936.
B. Rs. 7,353.
C. Rs. 8,333.
D. Rs. 9,090.
ANSWER: B
A. Rs. 1,75,000.
B. Rs. 1,17,400.
C. Rs. 1.57,000.
D. Rs. 1,86,667.
ANSWER: A
A. 40% .
B. 80%
C. 15%
D. 30%.
ANSWER: A
A. Rs. 10,000.
B. b. Rs. l4,000 .
C. Rs. 12,000.
D. Rs. 8,000.
ANSWER: B
percentage is _.
A. 33.33%.
B. 66.67%
C. 37.5% .
D. 76.33%.
ANSWER: C
A. Rs. 50 .
B. Rs. 40.
C. Rs. 30 .
D. Rs. 55.
ANSWER: A
A. Rs. 50,000.
B. Rs. 40,000 .
C. Rs. 35,000 .
D. Rs. 45,000 .
ANSWER: B
A. Rs. 1,00,000.
B. Rs. 80,000.
C. Rs. 75,000.
D. . Rs. 60,000.
ANSWER: C
in percentage is .
A. 40% .
B. 60% .
C. 50% .
D. 45%.
ANSWER: C
A. 40% .
B. 60% .
C. 80% .
D. 85% .
ANSWER: B
product would be .
A. Rs.18.75 .
B. Rs.16 .
C. Rs. 15 .
D. Rs.20 .
ANSWER: A

B. real costing.
D. real costing .
ANSWER: A

A. fixed cost.
C. variable cost.
D. market price.
ANSWER: C

D. calculation .
ANSWER: C

A. budget.
B. direct cost.
C. unit cost.
D. cost sheet.
ANSWER: A
C. Master budget .
D. Flexible budget.
ANSWER: A
known as
B. Master budget.
C. Cash budget .
D. Purchase budget.
ANSWER: B

A. .Fixed budget.
B. Cash budget.
C. Sales budget
ANSWER: D
A. Capital budget.
B. Cash budget.
C. Master budget .
ANSWER: D

A. Master budget.
B. Cash budget.
D. Flexible budget.
ANSWER: C
.
A. Formula method.
ANSWER: B
A. Master budget.
B. Rolling budget.
ANSWER: B

ANSWER: D

A. Planning.
B. Organizing.
C. Budgeting.
D. Controlling.
ANSWER: C

A. Planning.
B. Organizing.
C. Budgeting.
D. Controlling.
ANSWER: C

A. Planning.
B. Organizing
C. Budgeting.
D. Control.
ANSWER: D
called .
A. Fixed budget.
B. Flexible budget.
C. Sales budget.
ANSWER: A

A. 1 year.
B. 1-3 years.
C. 1-5 years.
D. 5-10 years.
ANSWER: D
A. Fixed budget.
B. Flexible budget.
C. Sales budget.
ANSWER: D

B. Sales budget.
C. Fixed budget.
D. Flexible budget.
ANSWER: A

D. Material budget.
ANSWER: A

18
D. Material budget.
ANSWER: B

A. Fixed budget.
B. Sales budget.
D. Flexible budget.
ANSWER: C

ANSWER: A
factory is .
D. Master budget.
ANSWER: A
D. Master budget.
ANSWER: B
.
D. Master budget
ANSWER: C
19
ANSWER: D
ANSWER: A
ANSWER: A

ANSWER: A

ANSWER: B

A. Master budget.
B. Flexible budget.
D. Fixed budget.
ANSWER: C

A. At Best Control.
ANSWER: B

A. . Just In Time.
20
C. Job In Time.
ANSWER: A

ANSWER: A
134. FIFO is .
C. Fast In Fast Out
ANSWER: D

ANSWER: A

ANSWER: D
137. Scrap is .
ANSWER: A
B. material order.
ANSWER: A

ANSWER: A
ANSWER: B

A. Master budget.
B. Flexible budget.
D. Fixed budget.
ANSWER: C

B. Master budget.
C. Flexible budget.
D. Fixed budget.
ANSWER: A

B. Expected sales.
D. Expected loss.
ANSWER: A
A. expense.
B. sales.
C. purchase.
D. material.
ANSWER: B

A. expense.
B. sales.
C. purchase.
D. material.
ANSWER: B
A. Rs. 4,50,000.
B. Rs. 4,75,000.
C. Rs. 5,25,000.
D. Rs. 5, 50,000.
ANSWER: B
cast?
A. 20%.
B. 25%.
C. 33.33%.
D. 35%.
ANSWER: B

ANSWER: C

ANSWER: B

ANSWER: B
VIM101 Name : ______________________________________________________
Marks: 441 Roll No : ______________________________________________________
Date : ______________________ Signature : ______________________
Id: 44690
Explanation:
Id: 44573
Explanation:
Id: 44433
3) Credit 4) Debit
Explanation:
Explanation:
Id: 44507
Explanation:
cycle Id: 38724
Explanation:
Id: 44452
Explanation:
1) 10000 2) 10500
3) 11500 4) 12700
Explanation:
Id: 44563
persons
Explanation:
1) Rs. 2,10,000 2) Rs. 1,90,000
3) Rs. 2,00,000 4) Rs. 1,80,000
Explanation:
Explanation:
Explanation:
Id: 44400
Explanation:
Id: 44428
Explanation:
Id: 44497
1) Debit 2) Credit
3) Nominal 4) Real
Explanation:
Id: 44642
Explanation:
Id: 44777
Explanation:
Id: 44425
Explanation:
Id: 44432
and users
Explanation:
Id: 44448
Explanation:
1) 12000 dr side 2) 12000 cr side
3) 6000 dr side 4) 2000 cr side
Explanation:
1) Rs.3,80,000. 2) Rs.4,00,000.
3) Rs.2,30,000. 4) Rs.1,50,000.
Explanation:
Explanation:
statements.
Explanation:
Explanation:
(i) Balance Sheet
Explanation:
Id: 44729
Explanation:
Id: 44561
Explanation:
Id: 44645
Explanation:
1) AS1 2) AS2
3) AS7 4) AS10
Explanation:
shared Id: 44741
partnership firm.
Explanation:
Id: 44409
persons.
Explanation:
Id: 44466
Explanation:
Explanation:
Id: 38723
Explanation:
Id: 44434
Explanation:
Explanation:
Id: 44570
Explanation:
Id: 44733
Explanation:
Id: 44583
Explanation:
Id: 44694
Explanation:
Explanation:
Id: 44543
1) 90000 2) 210000
3) 180000 4) 270000
Explanation:
Explanation:
Id: 44480
Explanation:
Id: 44406
Explanation:
Id: 44786
owners
business
Explanation:
Id: 44421
Explanation:
Id: 44796
Explanation:
Explanation:
Id: 44514
Explanation:
Company? Id: 44678
ii. Unsecured loan
iii. Share capital
v. Secured loan
Explanation:
Explanation:
Id: 44811
Explanation:
Id: 44518
Office Equipment
Explanation:
Id: 44688
Explanation:
Id: 44683
Explanation:
Id: 44619
Explanation:
Id: 44439
Explanation:
Id: 44730
Explanation:
Explanation:
Id: 44526
4)
Explanation:
Id: 44810
Explanation:
Id: 44684
Explanation:
Explanation:
Explanation:
Explanation:
40000 Id: 44536
1) 40000 2) 42000
3) 44000 4) 48000
Explanation:
______account(s). Id: 44762
1) One 2) Two
3) Three 4) Four
Explanation:
Id: 44682
Explanation:
Id: 44614
Explanation:
Explanation:
1) 840 2) 820
3) 720 4) 960
Explanation:
Id: 44758
Rs.1,000.
Explanation:
1) 50000 2) 20000
3) 30000 4) Nil.
Explanation:
3) Cash 4) Treasury
Explanation:
Id: 44578
1) Good 2) Book
Explanation:
Id: 44736
Explanation:
Id: 44774
Explanation:
is Id: 44708
Explanation:
Id: 44643
Explanation:
Id: 44528
1) (1) c (2) a (3) b 2) (1) b (2) c (3) a
3) (1) a (2) c (4) b 4) (1) c (2) b (3) a
Explanation:
Id: 44553
1) (ii) (iii)(i) 2) (iii)(iv)(ii)
3) (i)(iii)(iv) 4) (i)(iv)
Explanation:
Id: 44401
Explanation:
Id: 44555
Explanation:
_____. Id: 44813
1) 0.09 2) 0.06
3) 0.07 4) 0.1
Explanation:
Id: 44806
Explanation:
___________________ concept. Id: 44803
Explanation:
Id: 44584
firm.
the firm.
Explanation:
Id: 44463
Explanation:
customer
invoiced
Explanation:
Id: 44483
Explanation:
Id: 44412
Explanation:
1) 53000 2) 55000
3) 80000 4) 51000
Explanation:
Id: 44636
Explanation:
Id: 44711
Explanation:
Id: 44542
1) 1100000 2) 1125000
3) 1175000 4) 1130000
Explanation:
Explanation:
Explanation:
Id: 44655
Explanation:
come, is a ______. Id: 44385
Explanation:
Id: 44478
Explanation:
Explanation:
Id: 44393
Explanation:
Id: 44700
Explanation:
Id: 44689
Explanation:
Id: 44556
Explanation:
Id: 44489
Explanation:
Id: 44419
1) Basic 2) Primary
Explanation:
Id: 44775
Explanation:
Id: 44572
Explanation:
Explanation:
Id: 44511
for all
4) All the above
Explanation:
to Id: 44554
Explanation:
Id: 44503
Explanation:
Id: 44416
given date. goods.
Explanation:
Explanation:
Id: 44597
1) 10% to 20% 2) 15% to 25%
3) 30% to 40% 4) 20% to 30%
Explanation:
Id: 44605
Explanation:
Explanation:
____. Id: 44622
Explanation:
Id: 44387
Explanation:
……….. Id: 44505
Explanation:
Id: 44604
Explanation:
Id: 44618
Explanation:
Id: 44675
Explanation:
Id: 44657
Explanation:
Id: 44451
Explanation:
Id: 44467
Explanation:
Company? Id: 44679
iii. Fixed assets
v. Investments
Explanation:
Explanation:
Explanation:
Id: 44685
works
Explanation:
Explanation:
Id: 44721
Explanation:
Id: 44664
Explanation:
Id: 44509
Explanation:
Id: 44568
Explanation:
Id: 44640
Explanation:
Id: 44649
Explanation:
Id: 44756
Explanation:
Explanation:
Id: 44580
Explanation:
Explanation:
by Rs.10,000
1) Rs. 4,80,000 2) Rs. 4,60,000
3) Rs. 4,75,000 4) Rs. 5,10,000
Explanation:
Id: 44538
1) 700000 2) 800000
3) 900000 4) 1000000
Explanation:
Explanation:
shown as: Id: 44732
Explanation:
1) Three 2) One
3) Two 4) Five
Explanation:
Id: 44524
Explanation:
Id: 44477
Explanation:
Id: 44587
Explanation:
Explanation:
Id: 44424
Explanation:
Id: 44534
1) 104000 2) 140000
3) 114000 4) 124000
Explanation:
Explanation:
Id: 44402
Explanation:
Id: 44574
Explanation:
Id: 44499
Explanation:
Id: 44626
current Liability
Explanation:
factors
Explanation:
Explanation:
Id: 44656
issue reserve
the debentures
Explanation:
Id: 44613
Explanation:
Id: 44537
1) 250000 2) 260000
3) 270000 4) 280000
Explanation:
Id: 44650
Explanation:
Id: 44405
intervals.
Explanation:
Id: 44804
1) real 2) nominal
Explanation:
Id: 44496
Explanation:
Explanation:
Id: 44545
Explanation:
Explanation:
Id: 44413
Explanation:
Explanation:
Id: 44750
Explanation:
Id: 44672
Explanation:
Id: 44420
Explanation:
1) 45000 2) 5000
Explanation:
Id: 44415
proprietor.
Explanation:
Id: 44608
expired
or services
Explanation:
Id: 44407
persons.
Explanation:
Id: 44492
Explanation:
Id: 44676
Explanation:
Id: 44437
Explanation:
Id: 44535
1) 50000 2) 60000
3) 70000 4) 80000
Explanation:
Id: 44461
Explanation:
Id: 44714
Explanation:
Id: 38725
Explanation:
Id: 44460
Explanation:
Explanation:
Id: 44501
Explanation:
Id: 44493
Explanation:
Id: 44602
Explanation:
1) 11000 2) 10450
Explanation:
Id: 44465
Explanation:
Id: 44389
Explanation:
Explanation:
Id: 44674
Explanation:
Id: 44571
Explanation:
Id: 44728
Explanation:
Explanation:
Id: 44418
Explanation:
Id: 44696
Explanation:
Id: 44718
Explanation:
Explanation:
Id: 44550
1) Loss 2) Profit
3) Balanced 4) None
Explanation:
on Id: 44764
1) HIFO 2) LIFO
Explanation:
Id: 44567
Explanation:
Id: 44785
owner.
Explanation:
Explanation:
Id: 44598
Explanation:
Id: 44695
Explanation:
Explanation:
Id: 44658
Explanation:
Id: 44673
Explanation:
Id: 44508
Explanation:
Id: 44639
Explanation:
1) 12500 2) 11000
3) 14375 4) 13800
Explanation:
based on Id: 44662
Explanation:
Id: 44458
values values
Explanation:
Id: 44681
Explanation:
Explanation:
Id: 44641
Explanation:
Explanation:
Id: 44812
Explanation:
Id: 44560
Explanation:
Id: 44435
Explanation:
Id: 44557
Explanation:
recognition of
Explanation:
Explanation:
Explanation:
Id: 44444
Explanation:
Id: 44472
Explanation:
business business
business business
Explanation:
Id: 44591
they differ
3) Yes, always
at the year end
Explanation:
Id: 44794
Explanation:
Id: 44742
Explanation:
Id: 44752
Explanation:
1) 36000 2) 30000
3) 42000 4) 38000
Explanation:
Id: 44436
Explanation:
Explanation:
Explanation:
Id: 44759
of business entity.
Explanation:
Id: 38728
Explanation:
Id: 44663
meant for resale
Explanation:
Id: 44566
Explanation:
Id: 44799
Explanation:
Id: 44513
Explanation:
Id: 44482
Explanation:
Id: 44801
industries
Explanation:
Id: 44760
Explanation:
Id: 44403
Explanation:
Id: 44653
Explanation:
Id: 44638
Explanation:
Explanation:
1) a&b 2) b&c
3) c&d 4) b&d
Explanation:
Id: 44633
3) Slogan 4) Land
Explanation:
Explanation:
Id: 44411
Explanation:
meeting
Explanation:
1) 1833 2) 2000
Explanation:
Id: 38729
Explanation:
Explanation:
Id: 44431
Explanation:
Id: 44410
Explanation:
Explanation:
Id: 44739
Explanation:
1) 10000 2) 10100
3) 100 4) NIL
Explanation:
Explanation:
Id: 44624
Explanation:
Id: 44749
Explanation:
Id: 44723
Explanation:
Id: 44615
Table A
Explanation:
1) ` 26950 2) ` 27930
3) ` 29400 4) ` 28812
Explanation:
Id: 44595
Explanation:
Explanation:
Id: 44767
Explanation:
Id: 44692
Explanation:
Id: 44590
1) 57000 2) 105700
3) 48000 4) Rs. 148, 500
Explanation:
Explanation:
Id: 44539
1) 50000 2) 54000
3) 60000 4) 64000
Explanation:
Id: 44427
Explanation:
Id: 44763
Explanation:
Id: 44394
Explanation:
Id: 44715
Explanation:
Id: 44541
1) 2000000 2) 2200000
3) 2800000 4) 3000000
Explanation:
Id: 44577
Explanation:
Id: 44606
Explanation:
Id: 44719
Explanation:
Id: 44521
Explanation:
Id: 44809
Explanation:
Id: 44724
Explanation:
date is: Id: 44781
Explanation:
Id: 44620
Explanation:
Id: 44726
Explanation:
Id: 44731
Explanation:
Explanation:
Explanation:
Id: 44665
Explanation:
Id: 44517
of business entity
Explanation:
Explanation:
Id: 44611
Explanation:
Id: 44712
Explanation:
Id: 44474
Explanation:
Explanation:
business. Id: 44815
1) 15 2) 8
3) 12 4) 20
Explanation:
Explanation:
Explanation:
Id: 44625
Explanation:
Explanation:
Id: 44500
Explanation:
Id: 44525
Explanation:
Id: 44473
Explanation:
Id: 44735
Explanation:
Explanation:
Id: 44768
Explanation:
Id: 44527
Explanation:
Id: 44717
Liabilities
Explanation:
Id: 44677
Explanation:
Explanation:
Id: 44609
Explanation:
Id: 44647
Explanation:
Id: 44586
Explanation:
Id: 44588
Explanation:
Explanation:
Id: 44417
information
Explanation:
Id: 44440
Explanation:
1) 80500 2) 74900
3) 74700 4) 80900
Explanation:
Explanation:
1) 35000 2) 38000
3) 5000 4) 27000
Explanation:
Id: 44481
Explanation:
Id: 44392
Explanation:
Id: 44648
Explanation:
Id: 44612
Explanation:
Id: 44704
Explanation:
Id: 44780
Explanation:
1) 2000 2) 4000
Explanation:
Id: 44471
Explanation:
Id: 44607
Explanation:
Id: 44808
1) rent 2) drawings
3) cash 4) land
Explanation:
Explanation:
based on
Explanation:
Id: 44787
Explanation:
Id: 44693
Explanation:
Id: 44484
Explanation:
Id: 44798
Explanation:
Explanation:
Explanation:
Id: 44504
Explanation:
Id: 44502
Explanation:
Id: 44548
Explanation:
Explanation:
Id: 44589
Explanation:
Id: 44734
Explanation:
Id: 44462
Explanation:
Id: 44386
Explanation:
Explanation:
Id: 44520
Explanation:
Id: 44443
Explanation:
Explanation:
Id: 44576
Explanation:
Id: 44423
Explanation:
Id: 44716
Explanation:
Id: 44779
Explanation:
Id: 38726
Explanation:
Id: 44540
1) 12000 2) 15000
3) 18000 4) 20000
Explanation:
Explanation:
Explanation:
Id: 44468
Explanation:
Id: 44701
Explanation:
Explanation:
Id: 44637
Explanation:
Id: 44579
3) Profit 4) Loss
Explanation:
Id: 44652
Explanation:
Id: 44651
Explanation:
1) 10000 2) 10500
3) 11500 4) 12700
Explanation:
Explanation:
Id: 44464
Explanation:
Id: 44610
Explanation:
Id: 44807
1) Real 2) Nominal
Explanation:
Id: 44699
Explanation:
Id: 44783
Explanation:
Id: 44746
Explanation:
Id: 44414
Explanation:
Explanation:
1) 2000 2) 1500
Explanation:
Id: 44559
Explanation:
Id: 44581
Explanation:
Id: 44510
Explanation:
Id: 44814
Explanation:
Id: 44422
Explanation:
Id: 44805
Explanation:
Id: 44398
dividends
Explanation:
Explanation:
Explanation:
Id: 44709
Explanation:
norms are
Explanation:
Id: 44391
Explanation:
Id: 44486
Accounting
Explanation:
Id: 44601
Explanation:
Id: 44593
Explanation:
business? Id: 44558
1) 20 2) 4
3) 10 4) 2
Explanation:
Id: 44687
Explanation:
Id: 44390
Explanation:
to Id: 44757
Explanation:
Explanation:
Id: 44404
Explanation:
Id: 44395
Explanation:
Id: 44516
Explanation:
Id: 44459
Explanation:
Id: 44751
Explanation:
Id: 44727
decision making
Explanation:
Explanation:
Id: 44686
Explanation:
Id: 44703
Explanation:
Id: 44585
Explanation:
Explanation:
Explanation:
Explanation:
Id: 44634
Explanation:
Id: 44491
Explanation:
Id: 44582
Explanation:
Id: 44680
Explanation:
Id: 44442
Explanation:
Id: 44519
Explanation:
Id: 44490
Explanation:
Id: 38722
Explanation:
Id: 44671
countries the world
countries
Explanation:
Explanation:
Id: 44797
Explanation:
Id: 44617
Explanation:
Id: 44575
Explanation:
Id: 44594
Explanation:
Id: 44802
Explanation:
1) 600000 2) 1400000
Explanation:
Id: 44408
persons.
Explanation:
Id: 38730
Explanation:
Id: 44475
Explanation:
Id: 44426
1) Cash 2) Trade
Explanation:
Id: 44564
Explanation:
Id: 44603
Explanation:

A. tax compliance.
B. financial audit.
D. profit analysis.
ANSWER: C

A. each department.
C. each month.
D. each executive.
ANSWER: B

ANSWER: A
A. notional cost.
B. real cost.
C. normal cost.
D. variable cost.
ANSWER: A

B. contractors.
ANSWER: D
A. hospitals.
C. transport firms.
ANSWER: B

A. two ways.
B. three ways.
C. four ways.
D. several ways.
ANSWER: D

ANSWER: A

ANSWER: A
A. the same firm.
ANSWER: A
A. direct cost.
B. indirect cost.
C. sunk cost.
D. imputed cost.
ANSWER: A
A. imputed cost.
B. historical cost.
C. sunk cost.
D. shutdown cost
ANSWER: D

ANSWER: C

A. three types.
B. four types.
C. five types.
D. seven types.
ANSWER: A

A. major expenses.
D. sundry expenses.
ANSWER: B

A. office overhead.
ANSWER: D

A. prime cost.
B. factory cost.
D. production cost.
ANSWER: C

A. prime cost.
B. factory cost.
C. labour cost.
ANSWER: B
A. Factory cost.
C. Selling cost.
D. Labour cost.
ANSWER: B

A. prime cost.
B. works cost.
D. cost of sales.
ANSWER: C
21. Tender is an.

ANSWER: C

A. selling price.
D. value of stocks.
ANSWER: A

ANSWER: C

A. prime cost.
B. works cost.
C. cost of sales.
ANSWER: A

ANSWER: A

A. works on cost.
ANSWER: D

ANSWER: D

A. material cost.
B. labour cost.
C. prime cost.
D. direct expenses
ANSWER: A

A. material cost.
B. labour cost.
C. prime cost.
D. factory cost.
ANSWER: C

A. material cost.
B. labour cost.
C. prime cost.
D. factory cost.
ANSWER: C
A. turnover ratios
ANSWER: A
A. turnover ratios.
ANSWER: B

ANSWER: C

A. turnover ratio.
ANSWER: D

A. turnover ratio.
ANSWER: A
D. turnover ratio.
ANSWER: A

D. turnover ratio.
ANSWER: B

D. turnover ratio.
ANSWER: B

D. turnover ratio.
ANSWER: D
C. operating ratio.
ANSWER: A
ANSWER: C
ANSWER: D

A. fixed assets.
B. current assets.
ANSWER: C

A. fixed assets.
B. current assets.
ANSWER: B
ANSWER: C
is
B. pay out ratio
ANSWER: A
B. pay out ratio.
ANSWER: D
is .
ANSWER: A
.
ANSWER: B

ANSWER: D

A. activity ratios.
B. solvency ratios.
ANSWER: A

ANSWER: A
investment?
8
ANSWER: A
inventory is
ANSWER: A

A. net profit.
ANSWER: D

A. net profit.
ANSWER: D
ANSWER: B

ANSWER: B

ANSWER: C
9
ANSWER: C

D. long term funds.
ANSWER: A
known as .
A. fixed assets.
B. current assets.
D. wasting assets.
ANSWER: B
year are called _.
B. overdraft.
ANSWER: D
Affect .
A. profit.
B. funds.
C. working capital.
D. capital.
ANSWER: B
affect .
A. profit.
B. funds.
C. working capital.
D. capital.
ANSWER: B
ANSWER: A
ANSWER: B
ANSWER: B
ANSWER: A

ANSWER: D

ANSWER: C
the treatment of .
A. prime cost .
B. fixed overheads.
ANSWER: B

ANSWER: B

B. gross profit.
C. net profit.
D. net loss.
ANSWER: A

A. overhead costs .
B. prime cost.
C. variable cost.
D. fixed costs.
ANSWER: D

ANSWER: A

ANSWER: D


ANSWER: B

ANSWER: C

ANSWER: B

A. over production.
ANSWER: C

ANSWER: A

ANSWER: A

ANSWER: B
old B.E.P will be .
A. lower .
B. higher.
C. . unchanged .
D. indeterminate.
ANSWER: B
A. lower .
B. unchanged .
C. higher.
D. indeterminate.
ANSWER: B
A. 10,000.
B. 16,300.
C. 2,000.
D. 2,500.
ANSWER: D
in value .
A. Rs. 7,936.
B. Rs. 7,353.
C. Rs. 8,333.
D. Rs. 9,090.
ANSWER: B
A. Rs. 1,75,000.
B. Rs. 1,17,400.
C. Rs. 1.57,000.
D. Rs. 1,86,667.
ANSWER: A
A. 40% .
B. 80%
C. 15%
D. 30%.
ANSWER: A
A. Rs. 10,000.
B. b. Rs. l4,000 .
C. Rs. 12,000.
D. Rs. 8,000.
ANSWER: B
percentage is _.
A. 33.33%.
B. 66.67%
C. 37.5% .
D. 76.33%.
ANSWER: C
A. Rs. 50 .
B. Rs. 40.
C. Rs. 30 .
D. Rs. 55.
ANSWER: A
A. Rs. 50,000.
B. Rs. 40,000 .
C. Rs. 35,000 .
D. Rs. 45,000 .
ANSWER: B
A. Rs. 1,00,000.
B. Rs. 80,000.
C. Rs. 75,000.
D. . Rs. 60,000.
ANSWER: C
in percentage is .
A. 40% .
B. 60% .
C. 50% .
D. 45%.
ANSWER: C
A. 40% .
B. 60% .
C. 80% .
D. 85% .
ANSWER: B
product would be .
A. Rs.18.75 .
B. Rs.16 .
C. Rs. 15 .
D. Rs.20 .
ANSWER: A

B. real costing.
D. real costing .
ANSWER: A

A. fixed cost.
C. variable cost.
D. market price.
ANSWER: C

D. calculation .
ANSWER: C

A. budget.
B. direct cost.
C. unit cost.
D. cost sheet.
ANSWER: A
C. Master budget .
D. Flexible budget.
ANSWER: A
known as
B. Master budget.
C. Cash budget .
D. Purchase budget.
ANSWER: B

A. .Fixed budget.
B. Cash budget.
C. Sales budget
ANSWER: D
A. Capital budget.
B. Cash budget.
C. Master budget .
ANSWER: D

A. Master budget.
B. Cash budget.
D. Flexible budget.
ANSWER: C
.
A. Formula method.
ANSWER: B
A. Master budget.
B. Rolling budget.
ANSWER: B

ANSWER: D

A. Planning.
B. Organizing.
C. Budgeting.
D. Controlling.
ANSWER: C

A. Planning.
B. Organizing.
C. Budgeting.
D. Controlling.
ANSWER: C

A. Planning.
B. Organizing
C. Budgeting.
D. Control.
ANSWER: D
called .
A. Fixed budget.
B. Flexible budget.
C. Sales budget.
ANSWER: A

A. 1 year.
B. 1-3 years.
C. 1-5 years.
D. 5-10 years.
ANSWER: D
A. Fixed budget.
B. Flexible budget.
C. Sales budget.
ANSWER: D

B. Sales budget.
C. Fixed budget.
D. Flexible budget.
ANSWER: A

D. Material budget.
ANSWER: A

18
D. Material budget.
ANSWER: B

A. Fixed budget.
B. Sales budget.
D. Flexible budget.
ANSWER: C

ANSWER: A
factory is .
D. Master budget.
ANSWER: A
D. Master budget.
ANSWER: B
.
D. Master budget
ANSWER: C
19
ANSWER: D
ANSWER: A
ANSWER: A

ANSWER: A

ANSWER: B

A. Master budget.
B. Flexible budget.
D. Fixed budget.
ANSWER: C

A. At Best Control.
ANSWER: B

A. . Just In Time.
20
C. Job In Time.
ANSWER: A

ANSWER: A
134. FIFO is .
C. Fast In Fast Out
ANSWER: D

ANSWER: A

ANSWER: D
137. Scrap is .
ANSWER: A
B. material order.
ANSWER: A

ANSWER: A
ANSWER: B

A. Master budget.
B. Flexible budget.
D. Fixed budget.
ANSWER: C

B. Master budget.
C. Flexible budget.
D. Fixed budget.
ANSWER: A

B. Expected sales.
D. Expected loss.
ANSWER: A
A. expense.
B. sales.
C. purchase.
D. material.
ANSWER: B

A. expense.
B. sales.
C. purchase.
D. material.
ANSWER: B
A. Rs. 4,50,000.
B. Rs. 4,75,000.
C. Rs. 5,25,000.
D. Rs. 5, 50,000.
ANSWER: B
cast?
A. 20%.
B. 25%.
C. 33.33%.
D. 35%.
ANSWER: B

ANSWER: C

ANSWER: B

ANSWER: B
SPPU All Course MCQ

BSC /MSC /BCA/ BCOM


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…………………
a. Shareholders
b. Creditors
c. Managers

information?
a. Creditor
c. Controller
d. Treasurer
a. Service entities
d. All of these



c. Indirect labour
d. Direct labour

a. Cost
b. Financial
c. Management
d. All

d. None of these
a. Fixed asset
b. Current asset
c. Fictitious asset
d. Wasting asset
c. Cost accounting
d. Real Accounting
10


c. Both (a) & (b)
d. None of these

a. Debtors account
c. Sales account

a. opening stock
b. net purchases
d. sales

c. Goods account
d. Purchase account

a. Cash account
b. Mahesh Account
c. Sales account
d. Purchase account


b. Rent account
c. Cash account
d. Expense account

a. Discount account
c. Sales account
d. Cash account
Stock = …………………
a. Sales, Purchases
a. Historical
b. Forward looking
c. Analytical
d. Social

c. Labour unrest
a. Only to workers



a. Fixed cost
b. Variable cost

a. Cost unit
b. Cost Centre
c. Cost object
d. Cost estimation

a. Prime cost
b. Factory overhead
c. Selling overhead
d. Office overhead
a. Opportunity cost
b. Sunk Cost
c. Incremental cost
d. Decremental cost


a. Loan
b. Unsecured Loan
c. Secured Loan

b. Advertising
c. Depreciation
d. Carriage
a. Practicability
b. Subjectivity
d. All the above
b. Sales account
c. Purchase account
c. (a) &(b) above

b. Trading account

a. Investment
c. Provision
d. Lease Holds
c. P & L a/c

a. Remains fixed


c. Journal
d. Both a and b

a. Increases assets
c. Decreases assets

a. Machinery
b. Building
c. Cash
d. Creditor


is

b. Matching Concept
c. Consistency
a. Building
b. Bank Balance
c. Plant Patents
d. Goodwill
b. Matching Concept
c. Cost Concept
d. Cost Concept
a. Current assets
c. Fixed asset
d. Fixed liability

b. A liability


d. Both a and b
e. Both a and c
a. Debtors
b. Investors
c. Creditors
d. Shareholders
a. Dual concept
b. Divider concept
c. Entity concept
d. Landlord concept
a. Nominal capital
b. Paid up capital
c. Issues capital
d. None of these
of operation
d. None of these
d. All of these


a. Projected data
c. Historic data


a. Art and Science
b. Art
c. Science
d. Art or Science
a. Original
b. Duplicate
c. Personal
d. Nominal

b. Rules of Real
c. Rules of Nominal
d. All of these
Balance?
b. Cash a/c
c. Short term loan
d. creditors
factor is
a. Discount
b. Depreciation
c. Reduction



d. None of these

a. Long term loan
b. Short term loan
c. Owner’s fund
d. All of these

a. Current asset
d. None of these

a. Cost
b. Net profit
c. Gross profit
d. Selling price

a. Management only
b. Government only
c. Investor only
d. All of these


a. Accrual concept
b. Cost concept

head:
a. Provisions
a. Separate entity
b. Going concern
c. Consistency
d. Time period

c. Entity Concept

a. Income Statement
c. Balance Sheet
a. Loan from Mr.Y
b. loan to Mr.y
c. Both (a) (b)
d. None of these

a. Accrual concept
b. Cost concept


e. Accrual concept
f. Cost concept

head:
e. Provisions
e. Separate entity
f. Going concern
g. Consistency
h. Time period

g. Entity Concept

e. Income Statement
g. Balance Sheet
e. Loan from Mr.Y
f. loan to Mr.y
g. Both (a) (b)
h. None of these

e. Accrual concept
f. Cost concept

a. Separate entity
b. Going concern
c. Consistency
d. Time period



a. Trading a/c
b. Balance sheet
d. Trial balance.

businesses?
b. Corporation
c. Partnership
d. All of them
a. Fiscal year
b. Calendar year
d. Accrual period


a. Personal a/c
b. Impersonal a/c
c. Real a/c
d. Nominal a/c


concept?
concepts?
d. Matching concept
b. Corporation
c. Partnership
d. All of them
a. Cash is received

of the following?
a. Accrual concept
b. Matching concept

a. Fiscal year
b. Calendar year
d. Accrual period
b. Materiality
c. Prudence
d. Matching concept
information
a. Concrete
b. Complete
c. Immaterial
d. Material
d. Duality Concept

d. None of These
d. All of the above
a. Rs 70,000
b. Rs 80,000
c. Rs 90,000
d. Rs 1,00,000

a. Revenue Profit
b. Capital Profit
c. Loss
d. None of these

a. Profit
b. Assets
c. Company
d. Books of A/c


a. Depreciation
b. Wages
c. Salary
d. Stationary

a. Assets
b. Liabilities
c. Capital
d. All of these

a. Benefits & Costs
b. Revenues & Costs

a. Patents
b. Trade Marks
c. Copyright
d. Land



performing
d. None of these


recorded data
in.
d. None of these

d. None of these
to
a. Cash a/c
b. Capital a/c
c. Drawing a/c
d. Bank a/c
b. Salaries a/c
c. Cash a/c
d. Bank a/c

a. Customer a/c
b. Sales return a/c
c. Goods a/c


a. Cash a/c
b. Mahesh a/c
c. Sales a/c
d. Sales return a/c

a. Land lord a/c
b. Rent a/c
c. Cash a/c
d. Tenant a/c

b. Prolonged delays
d. All of the above

a. Discount a/c
b. Customer a/c
c. Sales a/c
d. None of these

d. None of these
c. Not disclosed
d. None of these


a. Single aspect
b. Dual aspect
c. Triple aspect
d. None of these
d. None of these

d. None of these
a. Cash concept
b. Accrual concept
c. Matching concept
d. On-going concept

a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these
a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these

a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these

record
a. Journal
b. Ledger
c. Trial balance
d. None of these
accounts is called
a. Compound Journal
b. Ledger
c. Trial balance
d. None of these

a. Compound Journal
b. Ledger
c. Trial balance
d. None of these
a. Ledger
b. Posting
c. Forward journal
d. None of these
a. Land
b. Machine
c. Cash
d. Owner Equity

liability
a. Cash
b. Debtor
c. Owner’s equity
d. None of these


Land Rs.1,000,000
Owner’s equity ?
a. Rs.1020000
b. Rs.1010000
c. Rs.1030000
a. 600,000
b. 1,400,000
c. 2,000,000
d. None of these
Land Rs.1, 500,000
Cash Rs.20, 000
Creditors?
a. Rs.200, 000
b. Rs.700, 000
c. Rs.800, 000
d. Rs1, 100,000


Creditors Rs.50,000
a. 1,000,000
b. 1,550,000
c. 800,000
d. None of these

c) Cash = Assets
a. Only (a)
b. Both (a) (b)
c. All (a)(b)(c)(d)
d. d) None of these
a. Net Loss
b. Net income
c. Dividend


a. Accounts payable
c. Sales
d. Cash

Cash Rs.100

a. Rs.200
b. Rs.1900
c. Rs.1200
d. Rs.1700
statements.
a. Goodwill
b. Sales
reporting?
decisions.
prospective
d. None of theses
following items?
b. Currency
c. Money orders


journal.
the general ledger.
statement is true?
affected accounts.

balance?
balance.
balance.
account.
trial balance.


sheet?
a. Current assets
b. Investments

d. None of these


facilitate?
a. Planning
b. Decision making
c. Control
d. All of these



d. All of these

overhead.
a. Variable cost
c. Direct cost



c. Owners
a. Market values



a. Asset
b. Liability
c. Accounts
c. recorded facts
a. Management
b. Creditors
c. Bankers
d. All of the above
a. Sundry creditors
b. Acceptances
a. Actual figures
b. Budgeted figures
c. Standard figures
a. 1910
b. 1939
c. 1950
d. 1960


a. Trading account
c. Balance sheet
d. All of the above
a. Fixed asset
b. Investment
c. Current asset
d. Owners equity
a. sales
b. Share capital
d. Unsecured loan
.
a. Balance Sheet

a. M. S. Gosav
b. Wheldon
c. Luco Pacioli
d. R. N. Carter
a. Financial terms
c. Both
b. Definite period

d. Six months
d. Sales activities
a. Management
b. Share holders
c. Creditors
d. Employees
d. All
c. Both
d. None
a. Marginal costing
b. Ratio analysis
c. Standard costing
b. Issue of shares
d. All of these
c. Both
a. Bonus shares
b. Rights shares
d. None
remuneration based
on…

c. Both
d. None

a. Can
b. Cannot
c. Sometimes
d. Inadequate data
cooperation of…
a. Shareholders
b. Management
c. Creditors
d. None
a. Unnecessary
c. Necessary
d. Inadequate data
c. Both
a. Money
b. Quantity
c. Both
d. None
d. All of these


d. All of the above
operations is
known as budget.
a. Operational
b. Financial
c. Functional
objectives of
efficiency.
a. Budgetary
b. Inventory
c. Capability
with
budgetary control.
a. Centralizing
b. De-centralizing
c. Planning
the
a. Cost centre
b. Budget centre
c. Cost Unit
the routine
________ .
a. Budget Policy
b. Budget Book
c. Budget Manual
term
a. Functions
b. Control
c. Time

budget and
________ budget.
a. variable
b. Semi-variable
c. Constant
a. Fixed
b. Semi-variable
c. Flexible
budgets.
a. Period
b. Controls
c. Functions
a. Flexible
b. Cash
c. Fixed
changes
a. Fixed
b. Flexible
c. Sales
realistic and
a. realistic
b. non-realistic
c. Predictable
goods to be
business.
a. Sales
b. Cash
c. Purchase
cash
a. purchase
b. cash
c. sales


a. Finance
b. Stores
c. Purchase
b. Sales budget
c. Cost budget
make
400 units of Z
are 50.
a. 112%, 140%, 140%
b. 140%, 112%, 140%
c. 140%, 140%, 112%
b. Current budget
c. Long-term budget
a. True
b. False

a. Key factor
b. Abnormal factor
c. Linking factor
budget in
b. Master budget
100
Actual hours
worked) * 100


BBudgeted hours)
* 100
A-ii, B-iii, C-i
b. A-i, B-ii, C-iii
c. A-iii, B-i, C-ii
Rs 20
variable)
cost per unit
a. Rs 1,01,000
b. Rs 126.25
c. Rs 122
d. Rs 1,22,000
a. True
b. False
quarter,
40,000)
the total
a. Rs 1,12,000
b. 1,12,000 units
d. All
c. Both
d. None


c. Both

Chapter 1
private gain.

performed.
monetary terms.
profit.
decision-making.

(a) Tally (b) Marg
(c) Saral (d) SAP
(a) Cash (b) Debit
(a) Cash (b) Debit
(a) Two (b) Three
(c) Four (d) Five
1. (a) 11. (a) 21. (a) 31. (a) 41. (b)

2. (b) 12. (d) 22. (b) 32. (b) 42. (d)
3. (a) 13. (a) 23. (c) 33. (d) 43. (b)
4. (c) 14. (d) 24. (a) 34. (b) 44. (a)
5. (c) 15. (a) 25. (c) 35. (a) 45. (d)
6. (d) 16. (b) 26. (a) 36. (b) 46. (a)
7. (c) 17. (c) 27. (b) 37. (d) 47. (c)
8. (a) 18. (a) 28. (d) 38. (c) 48. (b)
9. (d) 19. (a) 29. (a) 39. (d) 49. (d)
10. (d) 20. (b) 30. (b) 40. (a) 50. (a)
Chapter 2
date.
reporting period.
(a) Dual (b) Single
(a) Dual (b) Single
Balance.

(a) Cash (b) Credit

income tax return.


1. (d) 11. (a) 21. (d) 31. (a) 41. (d)

2. (a) 12. (d) 22. (c) 32. (a) 42. (a)
3. (d) 13. (b) 23. (a) 33. (c) 43. (d)
4. (a) 14. (a) 24. (b) 34. (c) 44. (a)
5. (a) 15. (d) 25. (c) 35. (c) 45. (c)
6. (b) 16. (a) 26. (b) 36. (d) 46. (d)
7. (b) 17. (d) 27. (a) 37. (b) 47. (d)
8. (b) 18. (d) 28. (c) 38. (c) 48. (d)
9. (a) 19. (d) 29. (d) 39. (d) 49. (a)
10. (c) 20. (d) 30. (b) 40. (c) 50. (c)
Chapter 3
Cost Accounting
______________.
(a) Cost (b) Price

(a) One (b) Two
(c) Three (d) Four

______________.
______________.
cost.
______________ in Prime Cost.
ascertain cost.
1. (a) 11. (a) 21. (a) 31. (c) 41. (a)

2. (a) 12. (d) 22. (b) 32. (d) 42. (c)
3. (a) 13. (d) 23. (d) 33. (c) 43. (b)
4. (d) 14. (b) 24. (a) 34. (c) 44. (d)
5. (a) 15. (d) 25. (b) 35. (c) 45. (a)
6. (c) 16. (c) 26. (a) 36. (a) 46. (d)
7. (a) 17. (c) 27. (a) 37. (c) 47. (d)
8. (d) 18. (a) 28. (c) 38. (d) 48. (b)
9. (c) 19. (c) 29. (d) 39. (c) 49. (b)
10. (c) 20. (c) 30. (b) 40. (a) 50. (a)
Chapter 4
Cost Control
(a) EOQ (b) JIT
(c) ABC (d) HML
inventory value.
______________.
is ______________.

(a) LIFO (b) FIFO
Period)
Period)
Period)
Period)

______________.
specified period.
(a) Time (b) Motion
(a) Time (b) Motion

1. (a) 11. (d) 21. (a) 31. (d) 41. (d)

2. (b) 12. (b) 22. (a) 32. (d) 42. (b)
3. (a) 13. (a) 23. (d) 33. (d) 43. (a)
4. (c) 14. (b) 24. (b) 34. (d) 44. (a)
5. (a) 15. (c) 25. (d) 35. (a) 45. (d)
6. (a) 16. (d) 26. (a) 36. (a) 46. (d)
7. (b) 17. (a) 27. (b) 37. (a) 47. (a)
8. (c) 18. (d) 28. (b) 38. (b) 48. (b)
9. (d) 19. (c) 29. (a) 39. (c) 49. (b)
10. (c) 20. (d) 30. (d) 40. (a) 50. (c)
Chapter 5
(a) CVP (b) ABC
(c) JIT (d) HML
(a) 20% (b) 30%
(c) 33.33% (d) 1/3
(a) 70% (b) 80%
(c) ¾ (d) ½
(a) ` 4,16,667 (b) ` 3,83,333
(c) ` 3,75,000 (d) ` 4,10,000
(a) ` 1,00,000 (b) ` 6,00,000
(c) ` 3,75,000 (d) ` 4,10,000
(a) ` 40,000 (b) ` 10,000
(c) ` 25,000 (d) ` 30,000
(a) ` 4,00,000 (b) `2,00,000
(c) ` 2,50,000 (d) `3,00,000
(a) ` 2,40,000 (b) ` 80,000
(c) ` 2,70,000 (d) ` 2,00,000
______________.
future costs.
(a) One (b) Two
(c) Three (d) Four
Variance?
(a) 10 (b) –10
(c) 150 (d) 20
(a) 10 (b) –10
(c) 150 (d) 20
(a) 10 (b) –10
(c) 50 (d) 0
(a) 600 (b) –600
(c) 500 (d) 400
(a) 750 (b) –750
(c) 600 (d) 400
(a) 150 (b) –150
(c) 300 (d) 200
monetary terms.
(a) Budget (b) Plan
______________.
______________.
maximizing profits.
(a) Cash (b) Credit
1. (a) 11. (c) 21. (a) 31. (a) 41. (b)

2. (a) 12. (a) 22. (a) 32. (a) 42. (c)
3. (a) 13. (b) 23. (b) 33. (a) 43. (a)
4. (a) 14. (a) 24. (b) 34. (a) 44. (a)
5. (b) 15. (b) 25. (d) 35. (d) 45. (a)
6. (d) 16. (a) 26. (a) 36. (a) 46. (b)
7. (d) 17. (d) 27. (a) 37. (a) 47. (c)
8. (c) 18. (d) 28. (d) 38. (d) 48. (a)
9. (a) 19. (a) 29. (b) 39. (a) 49. (b)
10. (b) 20. (a) 30. (b) 40. (a) 50. (b)


Chapter 1
private gain.

performed.
monetary terms.
profit.
decision-making.
(a) Tally (b) Marg
(c) Saral (d) SAP
(a) Cash (b) Debit
(a) Cash (b) Debit
(a) Two (b) Three
(c) Four (d) Five
1. (a) 11. (a) 21. (a) 31. (a) 41. (b)

2. (b) 12. (d) 22. (b) 32. (b) 42. (d)
3. (a) 13. (a) 23. (c) 33. (d) 43. (b)
4. (c) 14. (d) 24. (a) 34. (b) 44. (a)
5. (c) 15. (a) 25. (c) 35. (a) 45. (d)
6. (d) 16. (b) 26. (a) 36. (b) 46. (a)
7. (c) 17. (c) 27. (b) 37. (d) 47. (c)
8. (a) 18. (a) 28. (d) 38. (c) 48. (b)
9. (d) 19. (a) 29. (a) 39. (d) 49. (d)
10. (d) 20. (b) 30. (b) 40. (a) 50. (a)
Chapter 2
date.
reporting period.
(a) Dual (b) Single
(a) Dual (b) Single
Balance.
(a) Cash (b) Credit

income tax return.

1. (d) 11. (a) 21. (d) 31. (a) 41. (d)

2. (a) 12. (d) 22. (c) 32. (a) 42. (a)
3. (d) 13. (b) 23. (a) 33. (c) 43. (d)
4. (a) 14. (a) 24. (b) 34. (c) 44. (a)
5. (a) 15. (d) 25. (c) 35. (c) 45. (c)
6. (b) 16. (a) 26. (b) 36. (d) 46. (d)
7. (b) 17. (d) 27. (a) 37. (b) 47. (d)
8. (b) 18. (d) 28. (c) 38. (c) 48. (d)
9. (a) 19. (d) 29. (d) 39. (d) 49. (a)
10. (c) 20. (d) 30. (b) 40. (c) 50. (c)
Chapter 3
Cost Accounting
.
(a) Cost (b) Price

(a) One (b) Two
(c) Three (d) Four

periods also is .
.
.
cost.
in Prime Cost.
ascertain cost.
1. (a) 11. (a) 21. (a) 31. (c) 41. (a)

2. (a) 12. (d) 22. (b) 32. (d) 42. (c)
3. (a) 13. (d) 23. (d) 33. (c) 43. (b)
4. (d) 14. (b) 24. (a) 34. (c) 44. (d)
5. (a) 15. (d) 25. (b) 35. (c) 45. (a)
6. (c) 16. (c) 26. (a) 36. (a) 46. (d)
7. (a) 17. (c) 27. (a) 37. (c) 47. (d)
8. (d) 18. (a) 28. (c) 38. (d) 48. (b)
9. (c) 19. (c) 29. (d) 39. (c) 49. (c)
10. (c) 20. (c) 30. (b) 40. (a) 50. (a)
Chapter 4
(a) CVP (b) ABC
(c) JIT (d) HML
Ratio? (a) 20% (b) 30%
(c) 33.33% (d) 1/3
(a) 70% (b) 80%
(c) ¾ (d) ½
`? (a) ` 4,16,667 (b) ` 3,83,333
(c) ` 3,75,000 (d) ` 4,10,000
Contribution? (a) ` 1,00,000 (b) ` 6,00,000
(c) ` 3,75,000 (d) ` 4,10,000
Cost? (a) ` 40,000 (b) ` 10,000
(c) ` 25,000 (d) ` 30,000
Cost? (a) ` 4,00,000 (b) `2,00,000
(c) ` 2,50,000 (d) `3,00,000
Cost? (a) ` 2,40,000 (b) ` 80,000
(c) ` 2,70,000 (d) ` 2,00,000
.
future costs.
(a) One (b) Two
(c) Three (d) Four
Variance?
(a) 10 (b) –10
(c) 150 (d) 20
(a) 10 (b) –10
(c) 150 (d) 20
(a) 10 (b) –10
(c) 50 (d) 0
(a) 600 (b) –600
(c) 500 (d) 400
(a) 750 (b) –750
(c) 600 (d) 400
(a) 150 (b) –150
(c) 300 (d) 200

monetary terms.
(a) Budget (b) Plan
.
.
maximizing profits.
(a) Cash (b) Credit
1. (a) 11. (c) 21. (a) 31. (a) 41. (b)

2. (a) 12. (a) 22. (a) 32. (a) 42. (c)
3. (a) 13. (b) 23. (b) 33. (a) 43. (a)
4. (a) 14. (a) 24. (b) 34. (a) 44. (a)
5. (b) 15. (b) 25. (d) 35. (d) 45. (a)
6. (d) 16. (a) 26. (a) 36. (a) 46. (b)
7. (d) 17. (d) 27. (a) 37. (a) 47. (c)
8. (c) 18. (d) 28. (d) 38. (d) 48. (a)
9. (a) 19. (a) 29. (b) 39. (a) 49. (b)
10. (b) 20. (a) 30. (b) 40. (a) 50. (b)

a) Shareholders
b) Creditors
c) Managers
a) Creditor
c) Controller
d) Treasurer
a) Service entities
d) All of these

c) Indirect labour
d) Direct labour

a) Cost
b)Financial
37
c) Management
d) All

d) None of these
a) Fixed asset
b) Current asset
c) Fictitious asset
d) Wasting asset
c) Cost accounting
d) Real Accounting

c) Both (a) & (b)
d) None of these
a) Debtors account
c) Sales account
37
b) net purchases
d)sales


c) Goods account
d) Purchase account
a) Cash account
b) Mahesh Account
c) Sales account
d) Purchase account

b) Rent account
c)Cash account
d) Expense account

a) Discount account
37
c) Sales account
d) Cash account

Stock = …………………
a) Sales, Purchases


a) Historical
b) Forward looking
c) Analytical
d) Social


c) Labour unrest

a) Only to workers

37

a) Fixed cost
b) Variable cost
b) Cost centre
c) Cost object
d) Cost estimation

a) Prime cost
b) Factory overhead
c) Selling overhead
d) Office overhead
a) Opportunity cost
b) Sunk Cost
c) Incremental cost
d) Decremental cost
accounting concept

a) Loan
b) Unsecured Loan
c) Secured Loan
b) Advertising
c) Depreciation
d) Carriage
37
a) Practicability
b) Subjectivity

d) All the above
pursuance to:



b) Sales account
c) Purchase account

c) (a) &(b) above
37
b) Trading account
sheet
a) Investment
c) Provision
d) Lease Holds

c) P & L a/c
in……………….

a) Remains fixed
37

c) Journal
d) Both a and b

48. Cash Purchases:
a) Increases assets
c) Decreases assets


a) Machinery
b) Building
c) Cash
d) Creditor


37

b) Matching Concept
c) Consistency

a) Building
b) Bank Balance
c) Plant Patents
d) Goodwill
b) Matching Concept
c) Cost Concept
d) Cost Concept
a) Current assets
c) Fixed asset
d) Fixed liability

b) A liability
37
d) Both a and b
e) Both a and c
a) Debtors
b) Investors
c) Creditors
d) Shareholders
a) Dual concept
b) Divider concept
c) Entity concept
d) Landlord concept
a) Nominal capital
b) Paid up capital
c) Issues capital
d) None of these

37
d) None of these
d) All of these

a) Projected data
c) Historic data


and Science
b) Art
c) Science
d) Art or Science

a) Original
b) Duplicate
c) Personal
d) Nominal

b) Rules of Real
c) Rules of Nominal
d) All of these
b) Cash a/c
37
c) Short term loan
d) creditors
a)Discount
b) Depreciation
c)Reduction

d) None of these
a) Long term loan
b) Short term loan
c) Owner’s fund
d) All of these

a) Current asset
d) None of these
a) Cost
b) Net profit
c) Gross profit
d) Selling price
a) Management only
b) Government only
c) Investor only
d) All of these
a) Accrual concept
37
b) Cost concept
a) Provisions
a) Separate entity
b) Going concern
c) Consistency
d) Time period

c) Entity Concept

a) Income Statement
c) Balance Sheet
a) Loan from Mr.Y

b) loan to Mr.y
c) Both (a) (b)
d) None of these

37
a) (ii) (iii)(i)
b) (iii)(iv)(ii)
c) (i)(iii)(iv)
d) (i)(iv)

a) Accrual concept
b) Cost concept
a) Separate entity
b) Going concern
c) Consistency
d) Time period



a) Trading a/c
b) Balancesheet
d) Trial balance.
37
Sole proprietorship
b. Corporation
c. Partnership
d. All of them
a) Fiscal year
b) Calendar year
d) Accrual period

a) Personal a/c
b) Impersonal a/c
c) Real a/c
d) Nominal a/c


d) Matching concept
37
b) Corporation
c) Partnership
d) All of them
recognized when
a) Cash is received
following?
a) Accrual concept
b) Matching concept

a) Fiscal year
b) Calendar year
d) Accrual period
accounting concept?
b) Materiality
c) Prudence
d) Matching concept
a) Concrete
b) Complete
37
c) Immaterial
d) Material
following?
d) Duality Concept
accounting books
d) None of These
d) All of the above
a) Rs 70,000
b) Rs 80,000
c) Rs 90,000
d) Rs 1,00,000

a) Revenue Profit
b) Capital Profit
c) Loss
d) None of these
a) Profit
37
b) Assets
c) Company
d) Books of A/c
a) Depreciation
b) Wages
c) Salary
d) Stationary

a) Assets
b) Liabilities
c) Capital
d) All of these
a) Benefits & Costs

b) Revenues & Costs
a) Patents
b) Trade Marks
c) Copyright
d) Land



37
d) None of these

a) Practicability
b) Subjectivity
d) None of these

d) None of these
pursuant of

d) None of these

37
d) None of these
a) Cash a/c
b) Capital a/c
c) Drawing a/c
d) Bank a/c

b) Salaries a/c
c) Cash a/c
d) Bank a/c
a) Customer a/c
b) Sales return a/c
c) Goods a/c
a) Cash a/c
b) Mahesh a/c
c) Sales a/c
d) Sales return a/c
a) Land lord a/c

b) Rent a/c
c) Cash a/c
d) Tenant a/c
a) Discount a/c
b) Customer a/c
c) Sales a/c
d) None of these
a) Debtors Accounts
b) Bad debts a/c
c) Sales a/c
37
d) None of these

accounting concept
d) None of these
d) None of these


d) None of these

c) Not disclosed
d) None of these
a) Single aspect
b) Dual aspect
c) Triple aspect
d) None of these
statements
37
d) None of these
d) None of these
d) None of these.
a) Cash concept
b) Accrual concept
c) Matching concept
d) On-going concept
a) Real a/c
b) Personal a/c
c) Nominal a/c
d) None of these
a) Real a/c
b) Personal a/c
c) Nominal a/c
d) None of these
a) Real a/c
b) Personal a/c
c) Nominal a/c
d) None of these
a) Journal
37
b) Ledger
c) Trial balance
d) None of these

b) Ledger
c) Trial balance
d) None of these

a) Compound Journal
b) Ledger
c) Trial balance
d) None of these
ledger is called as
a) Ledger
b) Posting
c) Forward journal
d) None of these
Land
b) Machine
c) Cash
d) Owner Equity
Cash
b) Debtor
c) Owner’s equity
d) None of these

37
Land Rs.1,000,000
Machinery Rs.20,000
Cash Rs.10,000
Debt Rs.0
Owner’s equity ?

a) Rs.1020000
b) Rs.1010000
c) Rs.1030000

a) 600,000
b) 1,400,000
c) 2,000,000
d) None of these

Land Rs.1, 500,000
Cash Rs.20, 000
Loan Rs.500, 000
Creditors?
a) Rs.200, 000
b) Rs.700, 000
c) Rs.800, 000
d) Rs1, 100,000
Land ?
Vehicles Rs.600,000
Cash Rs.30,000
Loan 5,00,000
37
Creditors Rs.50,000
e) 1,000,000
f) 1,550,000
g) 800,000
h) None of these

c) Cash = Assets
a) Only (a)
b) Both (a) (b)
c) All (a)(b)(c)(d)
d) None of these
a) Net Loss
b) Net income
c) Dividend


a) Accounts payable
c) Sales
d) Cash
Cash Rs.100
37
Bank Loan Rs.1,000
a) Rs.200
b) Rs.1900
c) Rs.1200
d) Rs.1700
informed reader

b. Sales

d.None of theses
b. Currency
c. Money orders
37
correct?
ledger.
true?


37
account credited.
assets
b. Investments

d. None of these

Planning
b) Decision making
c) Control
d) All of these
37
users.
departments.

d. All of these

a. Variable cost
c. Direct cost


37

c) Owners

a) Market values

a) Asset
b) Liability
c) Accounts
c) recorded facts
a) Management
b) Creditors
c) Bankers
d) All of the above
37
a) Sundry creditors
b) Acceptances
a) Actual figures
b) Budgeted figures
c) Standard figures
a) 1910
b) 1939
c) 1950
d) 1960

a) Compulsory
b) Optional
c) Obligation
a) Trading account
c) Balance sheet
d) All of the above
a) Fixed asset
b) Investment
37
c) Current asset
d) Owners equity
a) Financial
b) Economic
c) Non financial
d) None of these
a) sales
b) Share capital
d) Unsecured loan


.
a) Balance Sheet

a) M. S. Gosav
b) Wheldon
c) LucoPacioli
d) R. N. Carter

Analytical
b) Clerical
37
c) Executive
d) Non- executive

Cash basis
b) Accrual basis
c) Mercantile basis

c) Both

Capital
b) Revenue
c) Direct
d) Non- cash
37
a) Nominal account
b) Real Account


Balance sheet
b) Trial Balance
c) Ledger
d) Journal
a) cash account
b) capital account
c) drawings account

Account of Suresh
b) Salaries account
c) Cash account
b) Overhead
e. Variable cost
37
g. Direct cost

d. All of these
g. Indirect labour
h. Direct labour
labour
b) Direct materials

classified as
a) A prime cost

expense
b) Direct materials
d) Immaterial items
37
Direct labour
b) Direct materials
d) Advertising

b) Direct Wages
c) Direct Expenses
d) Prime Cost

a) Work on cost
b) Work Cost
d) Direct Cost

a) Prime Cost
b) Factory Overhead
c) Selling overhead
d) Office overhead
Total Cost
b) Office Cost
c) Cost of sales
d) Selling overhead


(d) future costs
37
(a) Rs. 1,80,000
(b) Rs. 2,00,000
(c) Rs. 1,70,000
(d) Rs. 2,10,000
37
…………………
a. Shareholders
b. Creditors
c. Managers

information?
a. Creditor
c. Controller
d. Treasurer
a. Service entities
d. All of these



c. Indirect labour
d. Direct labour

a. Cost
b. Financial
c. Management
d. All

d. None of these
a. Fixed asset
b. Current asset
c. Fictitious asset
d. Wasting asset
c. Cost accounting
d. Real Accounting
10


c. Both (a) & (b)
d. None of these

a. Debtors account
c. Sales account

a. opening stock
b. net purchases
d. sales

c. Goods account
d. Purchase account

a. Cash account
b. Mahesh Account
c. Sales account
d. Purchase account


b. Rent account
c. Cash account
d. Expense account

a. Discount account
c. Sales account
d. Cash account
Stock = …………………
a. Sales, Purchases
a. Historical
b. Forward looking
c. Analytical
d. Social

c. Labour unrest
a. Only to workers



a. Fixed cost
b. Variable cost

a. Cost unit
b. Cost Centre
c. Cost object
d. Cost estimation

a. Prime cost
b. Factory overhead
c. Selling overhead
d. Office overhead
a. Opportunity cost
b. Sunk Cost
c. Incremental cost
d. Decremental cost


a. Loan
b. Unsecured Loan
c. Secured Loan

b. Advertising
c. Depreciation
d. Carriage
a. Practicability
b. Subjectivity
d. All the above
b. Sales account
c. Purchase account
c. (a) &(b) above

b. Trading account

a. Investment
c. Provision
d. Lease Holds
c. P & L a/c

a. Remains fixed


c. Journal
d. Both a and b

a. Increases assets
c. Decreases assets

a. Machinery
b. Building
c. Cash
d. Creditor


is

b. Matching Concept
c. Consistency
a. Building
b. Bank Balance
c. Plant Patents
d. Goodwill
b. Matching Concept
c. Cost Concept
d. Cost Concept
a. Current assets
c. Fixed asset
d. Fixed liability

b. A liability


d. Both a and b
e. Both a and c
a. Debtors
b. Investors
c. Creditors
d. Shareholders
a. Dual concept
b. Divider concept
c. Entity concept
d. Landlord concept
a. Nominal capital
b. Paid up capital
c. Issues capital
d. None of these
of operation
d. None of these
d. All of these


a. Projected data
c. Historic data


a. Art and Science
b. Art
c. Science
d. Art or Science
a. Original
b. Duplicate
c. Personal
d. Nominal

b. Rules of Real
c. Rules of Nominal
d. All of these
Balance?
b. Cash a/c
c. Short term loan
d. creditors
factor is
a. Discount
b. Depreciation
c. Reduction



d. None of these

a. Long term loan
b. Short term loan
c. Owner’s fund
d. All of these

a. Current asset
d. None of these

a. Cost
b. Net profit
c. Gross profit
d. Selling price

a. Management only
b. Government only
c. Investor only
d. All of these


a. Accrual concept
b. Cost concept

head:
a. Provisions
a. Separate entity
b. Going concern
c. Consistency
d. Time period

c. Entity Concept

a. Income Statement
c. Balance Sheet
a. Loan from Mr.Y
b. loan to Mr.y
c. Both (a) (b)
d. None of these

a. Accrual concept
b. Cost concept


e. Accrual concept
f. Cost concept

head:
e. Provisions
e. Separate entity
f. Going concern
g. Consistency
h. Time period

g. Entity Concept

e. Income Statement
g. Balance Sheet
e. Loan from Mr.Y
f. loan to Mr.y
g. Both (a) (b)
h. None of these

e. Accrual concept
f. Cost concept

a. Separate entity
b. Going concern
c. Consistency
d. Time period



a. Trading a/c
b. Balance sheet
d. Trial balance.

businesses?
b. Corporation
c. Partnership
d. All of them
a. Fiscal year
b. Calendar year
d. Accrual period


a. Personal a/c
b. Impersonal a/c
c. Real a/c
d. Nominal a/c


concept?
concepts?
d. Matching concept
b. Corporation
c. Partnership
d. All of them
a. Cash is received

of the following?
a. Accrual concept
b. Matching concept

a. Fiscal year
b. Calendar year
d. Accrual period
b. Materiality
c. Prudence
d. Matching concept
information
a. Concrete
b. Complete
c. Immaterial
d. Material
d. Duality Concept

d. None of These
d. All of the above
a. Rs 70,000
b. Rs 80,000
c. Rs 90,000
d. Rs 1,00,000

a. Revenue Profit
b. Capital Profit
c. Loss
d. None of these

a. Profit
b. Assets
c. Company
d. Books of A/c


a. Depreciation
b. Wages
c. Salary
d. Stationary

a. Assets
b. Liabilities
c. Capital
d. All of these

a. Benefits & Costs
b. Revenues & Costs

a. Patents
b. Trade Marks
c. Copyright
d. Land



performing
d. None of these


recorded data
in.
d. None of these

d. None of these
to
a. Cash a/c
b. Capital a/c
c. Drawing a/c
d. Bank a/c
b. Salaries a/c
c. Cash a/c
d. Bank a/c

a. Customer a/c
b. Sales return a/c
c. Goods a/c


a. Cash a/c
b. Mahesh a/c
c. Sales a/c
d. Sales return a/c

a. Land lord a/c
b. Rent a/c
c. Cash a/c
d. Tenant a/c

b. Prolonged delays
d. All of the above

a. Discount a/c
b. Customer a/c
c. Sales a/c
d. None of these

d. None of these
c. Not disclosed
d. None of these


a. Single aspect
b. Dual aspect
c. Triple aspect
d. None of these
d. None of these

d. None of these
a. Cash concept
b. Accrual concept
c. Matching concept
d. On-going concept

a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these
a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these

a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these

record
a. Journal
b. Ledger
c. Trial balance
d. None of these
accounts is called
a. Compound Journal
b. Ledger
c. Trial balance
d. None of these

a. Compound Journal
b. Ledger
c. Trial balance
d. None of these
a. Ledger
b. Posting
c. Forward journal
d. None of these
a. Land
b. Machine
c. Cash
d. Owner Equity

liability
a. Cash
b. Debtor
c. Owner’s equity
d. None of these


Land Rs.1,000,000
Owner’s equity ?
a. Rs.1020000
b. Rs.1010000
c. Rs.1030000
a. 600,000
b. 1,400,000
c. 2,000,000
d. None of these
Land Rs.1, 500,000
Cash Rs.20, 000
Creditors?
a. Rs.200, 000
b. Rs.700, 000
c. Rs.800, 000
d. Rs1, 100,000


Creditors Rs.50,000
a. 1,000,000
b. 1,550,000
c. 800,000
d. None of these

c) Cash = Assets
a. Only (a)
b. Both (a) (b)
c. All (a)(b)(c)(d)
d. d) None of these
a. Net Loss
b. Net income
c. Dividend


a. Accounts payable
c. Sales
d. Cash

Cash Rs.100

a. Rs.200
b. Rs.1900
c. Rs.1200
d. Rs.1700
statements.
a. Goodwill
b. Sales
reporting?
decisions.
prospective
d. None of theses
following items?
b. Currency
c. Money orders


journal.
the general ledger.
statement is true?
affected accounts.

balance?
balance.
balance.
account.
trial balance.


sheet?
a. Current assets
b. Investments

d. None of these


facilitate?
a. Planning
b. Decision making
c. Control
d. All of these



d. All of these

overhead.
a. Variable cost
c. Direct cost



c. Owners
a. Market values



a. Asset
b. Liability
c. Accounts
c. recorded facts
a. Management
b. Creditors
c. Bankers
d. All of the above
a. Sundry creditors
b. Acceptances
a. Actual figures
b. Budgeted figures
c. Standard figures
a. 1910
b. 1939
c. 1950
d. 1960


a. Trading account
c. Balance sheet
d. All of the above
a. Fixed asset
b. Investment
c. Current asset
d. Owners equity
a. sales
b. Share capital
d. Unsecured loan
.
a. Balance Sheet

a. M. S. Gosav
b. Wheldon
c. Luco Pacioli
d. R. N. Carter
a. Financial terms
c. Both
b. Definite period

d. Six months
d. Sales activities
a. Management
b. Share holders
c. Creditors
d. Employees
d. All
c. Both
d. None
a. Marginal costing
b. Ratio analysis
c. Standard costing
b. Issue of shares
d. All of these
c. Both
a. Bonus shares
b. Rights shares
d. None
remuneration based
on…

c. Both
d. None

a. Can
b. Cannot
c. Sometimes
d. Inadequate data
cooperation of…
a. Shareholders
b. Management
c. Creditors
d. None
a. Unnecessary
c. Necessary
d. Inadequate data
c. Both
a. Money
b. Quantity
c. Both
d. None
d. All of these


d. All of the above
operations is
known as budget.
a. Operational
b. Financial
c. Functional
objectives of
efficiency.
a. Budgetary
b. Inventory
c. Capability
with
budgetary control.
a. Centralizing
b. De-centralizing
c. Planning
the
a. Cost centre
b. Budget centre
c. Cost Unit
the routine
________ .
a. Budget Policy
b. Budget Book
c. Budget Manual
term
a. Functions
b. Control
c. Time

budget and
________ budget.
a. variable
b. Semi-variable
c. Constant
a. Fixed
b. Semi-variable
c. Flexible
budgets.
a. Period
b. Controls
c. Functions
a. Flexible
b. Cash
c. Fixed
changes
a. Fixed
b. Flexible
c. Sales
realistic and
a. realistic
b. non-realistic
c. Predictable
goods to be
business.
a. Sales
b. Cash
c. Purchase
cash
a. purchase
b. cash
c. sales


a. Finance
b. Stores
c. Purchase
b. Sales budget
c. Cost budget
make
400 units of Z
are 50.
a. 112%, 140%, 140%
b. 140%, 112%, 140%
c. 140%, 140%, 112%
b. Current budget
c. Long-term budget
a. True
b. False

a. Key factor
b. Abnormal factor
c. Linking factor
budget in
b. Master budget
100
Actual hours
worked) * 100


BBudgeted hours)
* 100
A-ii, B-iii, C-i
b. A-i, B-ii, C-iii
c. A-iii, B-i, C-ii
Rs 20
variable)
cost per unit
a. Rs 1,01,000
b. Rs 126.25
c. Rs 122
d. Rs 1,22,000
a. True
b. False
quarter,
40,000)
the total
a. Rs 1,12,000
b. 1,12,000 units
d. All
c. Both
d. None


c. Both

COMMERCE DEPARTMENT

(MCQs)
With Answers
Prepared By
Mangesh Takpire
A. Concepts
Page - 1
A. Investment
D. Deficit
transactions.
A. Cash
D. Methods
entities.
D. All of the above
Page - 2
following concept?

D. Capital

partner
partner
Page - 3
capital deficiency
A. Limited
A. New
basis.
B. Profit sharing
C. partners assets
A. Company
A. Simple A. Loss
Page - 4
A. Loss
B. Profit
C. 70000
D. 10000
A. Opening capital
B. Closing capital
A. 10,000 C. Loss
C. 20000
D. 35000
A. Loss and drawing
D. None of them
profit or loss.
A. Cash system
D. Loss 20,000
entry system-
D. None of these.
Page - 5
represent-
A. Trader
D. Capital.
D. Income Statement

A. 1st April, 2017
D. China
A. 3
A. Duration B. 4
B. Destination C. 5
C. Dividend D. 6
D. Development
Page - 6
B. Intention B. 3
C. Integrated C. 4
D. Intra D. 5
A. CGST A. 0.28
B. SGST B. 0.2
D. IGST D. 0.18
GST?
A. Tax Cascading
D. Wealth Tax
applicable when
collected is
dealer B. SGST
D. IGST
Page - 7
Answer Keys
Best of Luck !!!
Page - 8
VIM101 Name : ______________________________________________________
Marks: 441 Roll No : ______________________________________________________
Date : ______________________ Signature : ______________________
Id: 44690
Explanation:
Id: 44573
Explanation:
Id: 44433
3) Credit 4) Debit
Explanation:
Explanation:
Id: 44507
Explanation:
cycle Id: 38724
Explanation:
Id: 44452
Explanation:
1) 10000 2) 10500
3) 11500 4) 12700
Explanation:
Id: 44563
persons
Explanation:
1) Rs. 2,10,000 2) Rs. 1,90,000
3) Rs. 2,00,000 4) Rs. 1,80,000
Explanation:
Explanation:
Explanation:
Id: 44400
Explanation:
Id: 44428
Explanation:
Id: 44497
1) Debit 2) Credit
3) Nominal 4) Real
Explanation:
Id: 44642
Explanation:
Id: 44777
Explanation:
Id: 44425
Explanation:
Id: 44432
and users
Explanation:
Id: 44448
Explanation:
1) 12000 dr side 2) 12000 cr side
3) 6000 dr side 4) 2000 cr side
Explanation:
1) Rs.3,80,000. 2) Rs.4,00,000.
3) Rs.2,30,000. 4) Rs.1,50,000.
Explanation:
Explanation:
statements.
Explanation:
Explanation:
(i) Balance Sheet
Explanation:
Id: 44729
Explanation:
Id: 44561
Explanation:
Id: 44645
Explanation:
1) AS1 2) AS2
3) AS7 4) AS10
Explanation:
shared Id: 44741
partnership firm.
Explanation:
Id: 44409
persons.
Explanation:
Id: 44466
Explanation:
Explanation:
Id: 38723
Explanation:
Id: 44434
Explanation:
Explanation:
Id: 44570
Explanation:
Id: 44733
Explanation:
Id: 44583
Explanation:
Id: 44694
Explanation:
Explanation:
Id: 44543
1) 90000 2) 210000
3) 180000 4) 270000
Explanation:
Explanation:
Id: 44480
Explanation:
Id: 44406
Explanation:
Id: 44786
owners
business
Explanation:
Id: 44421
Explanation:
Id: 44796
Explanation:
Explanation:
Id: 44514
Explanation:
Company? Id: 44678
ii. Unsecured loan
iii. Share capital
v. Secured loan
Explanation:
Explanation:
Id: 44811
Explanation:
Id: 44518
Office Equipment
Explanation:
Id: 44688
Explanation:
Id: 44683
Explanation:
Id: 44619
Explanation:
Id: 44439
Explanation:
Id: 44730
Explanation:
Explanation:
Id: 44526
4)
Explanation:
Id: 44810
Explanation:
Id: 44684
Explanation:
Explanation:
Explanation:
Explanation:
40000 Id: 44536
1) 40000 2) 42000
3) 44000 4) 48000
Explanation:
______account(s). Id: 44762
1) One 2) Two
3) Three 4) Four
Explanation:
Id: 44682
Explanation:
Id: 44614
Explanation:
Explanation:
1) 840 2) 820
3) 720 4) 960
Explanation:
Id: 44758
Rs.1,000.
Explanation:
1) 50000 2) 20000
3) 30000 4) Nil.
Explanation:
3) Cash 4) Treasury
Explanation:
Id: 44578
1) Good 2) Book
Explanation:
Id: 44736
Explanation:
Id: 44774
Explanation:
is Id: 44708
Explanation:
Id: 44643
Explanation:
Id: 44528
1) (1) c (2) a (3) b 2) (1) b (2) c (3) a
3) (1) a (2) c (4) b 4) (1) c (2) b (3) a
Explanation:
Id: 44553
1) (ii) (iii)(i) 2) (iii)(iv)(ii)
3) (i)(iii)(iv) 4) (i)(iv)
Explanation:
Id: 44401
Explanation:
Id: 44555
Explanation:
_____. Id: 44813
1) 0.09 2) 0.06
3) 0.07 4) 0.1
Explanation:
Id: 44806
Explanation:
___________________ concept. Id: 44803
Explanation:
Id: 44584
firm.
the firm.
Explanation:
Id: 44463
Explanation:
customer
invoiced
Explanation:
Id: 44483
Explanation:
Id: 44412
Explanation:
1) 53000 2) 55000
3) 80000 4) 51000
Explanation:
Id: 44636
Explanation:
Id: 44711
Explanation:
Id: 44542
1) 1100000 2) 1125000
3) 1175000 4) 1130000
Explanation:
Explanation:
Explanation:
Id: 44655
Explanation:
come, is a ______. Id: 44385
Explanation:
Id: 44478
Explanation:
Explanation:
Id: 44393
Explanation:
Id: 44700
Explanation:
Id: 44689
Explanation:
Id: 44556
Explanation:
Id: 44489
Explanation:
Id: 44419
1) Basic 2) Primary
Explanation:
Id: 44775
Explanation:
Id: 44572
Explanation:
Explanation:
Id: 44511
for all
4) All the above
Explanation:
to Id: 44554
Explanation:
Id: 44503
Explanation:
Id: 44416
given date. goods.
Explanation:
Explanation:
Id: 44597
1) 10% to 20% 2) 15% to 25%
3) 30% to 40% 4) 20% to 30%
Explanation:
Id: 44605
Explanation:
Explanation:
____. Id: 44622
Explanation:
Id: 44387
Explanation:
……….. Id: 44505
Explanation:
Id: 44604
Explanation:
Id: 44618
Explanation:
Id: 44675
Explanation:
Id: 44657
Explanation:
Id: 44451
Explanation:
Id: 44467
Explanation:
Company? Id: 44679
iii. Fixed assets
v. Investments
Explanation:
Explanation:
Explanation:
Id: 44685
works
Explanation:
Explanation:
Id: 44721
Explanation:
Id: 44664
Explanation:
Id: 44509
Explanation:
Id: 44568
Explanation:
Id: 44640
Explanation:
Id: 44649
Explanation:
Id: 44756
Explanation:
Explanation:
Id: 44580
Explanation:
Explanation:
by Rs.10,000
1) Rs. 4,80,000 2) Rs. 4,60,000
3) Rs. 4,75,000 4) Rs. 5,10,000
Explanation:
Id: 44538
1) 700000 2) 800000
3) 900000 4) 1000000
Explanation:
Explanation:
shown as: Id: 44732
Explanation:
1) Three 2) One
3) Two 4) Five
Explanation:
Id: 44524
Explanation:
Id: 44477
Explanation:
Id: 44587
Explanation:
Explanation:
Id: 44424
Explanation:
Id: 44534
1) 104000 2) 140000
3) 114000 4) 124000
Explanation:
Explanation:
Id: 44402
Explanation:
Id: 44574
Explanation:
Id: 44499
Explanation:
Id: 44626
current Liability
Explanation:
factors
Explanation:
Explanation:
Id: 44656
issue reserve
the debentures
Explanation:
Id: 44613
Explanation:
Id: 44537
1) 250000 2) 260000
3) 270000 4) 280000
Explanation:
Id: 44650
Explanation:
Id: 44405
intervals.
Explanation:
Id: 44804
1) real 2) nominal
Explanation:
Id: 44496
Explanation:
Explanation:
Id: 44545
Explanation:
Explanation:
Id: 44413
Explanation:
Explanation:
Id: 44750
Explanation:
Id: 44672
Explanation:
Id: 44420
Explanation:
1) 45000 2) 5000
Explanation:
Id: 44415
proprietor.
Explanation:
Id: 44608
expired
or services
Explanation:
Id: 44407
persons.
Explanation:
Id: 44492
Explanation:
Id: 44676
Explanation:
Id: 44437
Explanation:
Id: 44535
1) 50000 2) 60000
3) 70000 4) 80000
Explanation:
Id: 44461
Explanation:
Id: 44714
Explanation:
Id: 38725
Explanation:
Id: 44460
Explanation:
Explanation:
Id: 44501
Explanation:
Id: 44493
Explanation:
Id: 44602
Explanation:
1) 11000 2) 10450
Explanation:
Id: 44465
Explanation:
Id: 44389
Explanation:
Explanation:
Id: 44674
Explanation:
Id: 44571
Explanation:
Id: 44728
Explanation:
Explanation:
Id: 44418
Explanation:
Id: 44696
Explanation:
Id: 44718
Explanation:
Explanation:
Id: 44550
1) Loss 2) Profit
3) Balanced 4) None
Explanation:
on Id: 44764
1) HIFO 2) LIFO
Explanation:
Id: 44567
Explanation:
Id: 44785
owner.
Explanation:
Explanation:
Id: 44598
Explanation:
Id: 44695
Explanation:
Explanation:
Id: 44658
Explanation:
Id: 44673
Explanation:
Id: 44508
Explanation:
Id: 44639
Explanation:
1) 12500 2) 11000
3) 14375 4) 13800
Explanation:
based on Id: 44662
Explanation:
Id: 44458
values values
Explanation:
Id: 44681
Explanation:
Explanation:
Id: 44641
Explanation:
Explanation:
Id: 44812
Explanation:
Id: 44560
Explanation:
Id: 44435
Explanation:
Id: 44557
Explanation:
recognition of
Explanation:
Explanation:
Explanation:
Id: 44444
Explanation:
Id: 44472
Explanation:
business business
business business
Explanation:
Id: 44591
they differ
3) Yes, always
at the year end
Explanation:
Id: 44794
Explanation:
Id: 44742
Explanation:
Id: 44752
Explanation:
1) 36000 2) 30000
3) 42000 4) 38000
Explanation:
Id: 44436
Explanation:
Explanation:
Explanation:
Id: 44759
of business entity.
Explanation:
Id: 38728
Explanation:
Id: 44663
meant for resale
Explanation:
Id: 44566
Explanation:
Id: 44799
Explanation:
Id: 44513
Explanation:
Id: 44482
Explanation:
Id: 44801
industries
Explanation:
Id: 44760
Explanation:
Id: 44403
Explanation:
Id: 44653
Explanation:
Id: 44638
Explanation:
Explanation:
1) a&b 2) b&c
3) c&d 4) b&d
Explanation:
Id: 44633
3) Slogan 4) Land
Explanation:
Explanation:
Id: 44411
Explanation:
meeting
Explanation:
1) 1833 2) 2000
Explanation:
Id: 38729
Explanation:
Explanation:
Id: 44431
Explanation:
Id: 44410
Explanation:
Explanation:
Id: 44739
Explanation:
1) 10000 2) 10100
3) 100 4) NIL
Explanation:
Explanation:
Id: 44624
Explanation:
Id: 44749
Explanation:
Id: 44723
Explanation:
Id: 44615
Table A
Explanation:
1) ` 26950 2) ` 27930
3) ` 29400 4) ` 28812
Explanation:
Id: 44595
Explanation:
Explanation:
Id: 44767
Explanation:
Id: 44692
Explanation:
Id: 44590
1) 57000 2) 105700
3) 48000 4) Rs. 148, 500
Explanation:
Explanation:
Id: 44539
1) 50000 2) 54000
3) 60000 4) 64000
Explanation:
Id: 44427
Explanation:
Id: 44763
Explanation:
Id: 44394
Explanation:
Id: 44715
Explanation:
Id: 44541
1) 2000000 2) 2200000
3) 2800000 4) 3000000
Explanation:
Id: 44577
Explanation:
Id: 44606
Explanation:
Id: 44719
Explanation:
Id: 44521
Explanation:
Id: 44809
Explanation:
Id: 44724
Explanation:
date is: Id: 44781
Explanation:
Id: 44620
Explanation:
Id: 44726
Explanation:
Id: 44731
Explanation:
Explanation:
Explanation:
Id: 44665
Explanation:
Id: 44517
of business entity
Explanation:
Explanation:
Id: 44611
Explanation:
Id: 44712
Explanation:
Id: 44474
Explanation:
Explanation:
business. Id: 44815
1) 15 2) 8
3) 12 4) 20
Explanation:
Explanation:
Explanation:
Id: 44625
Explanation:
Explanation:
Id: 44500
Explanation:
Id: 44525
Explanation:
Id: 44473
Explanation:
Id: 44735
Explanation:
Explanation:
Id: 44768
Explanation:
Id: 44527
Explanation:
Id: 44717
Liabilities
Explanation:
Id: 44677
Explanation:
Explanation:
Id: 44609
Explanation:
Id: 44647
Explanation:
Id: 44586
Explanation:
Id: 44588
Explanation:
Explanation:
Id: 44417
information
Explanation:
Id: 44440
Explanation:
1) 80500 2) 74900
3) 74700 4) 80900
Explanation:
Explanation:
1) 35000 2) 38000
3) 5000 4) 27000
Explanation:
Id: 44481
Explanation:
Id: 44392
Explanation:
Id: 44648
Explanation:
Id: 44612
Explanation:
Id: 44704
Explanation:
Id: 44780
Explanation:
1) 2000 2) 4000
Explanation:
Id: 44471
Explanation:
Id: 44607
Explanation:
Id: 44808
1) rent 2) drawings
3) cash 4) land
Explanation:
Explanation:
based on
Explanation:
Id: 44787
Explanation:
Id: 44693
Explanation:
Id: 44484
Explanation:
Id: 44798
Explanation:
Explanation:
Explanation:
Id: 44504
Explanation:
Id: 44502
Explanation:
Id: 44548
Explanation:
Explanation:
Id: 44589
Explanation:
Id: 44734
Explanation:
Id: 44462
Explanation:
Id: 44386
Explanation:
Explanation:
Id: 44520
Explanation:
Id: 44443
Explanation:
Explanation:
Id: 44576
Explanation:
Id: 44423
Explanation:
Id: 44716
Explanation:
Id: 44779
Explanation:
Id: 38726
Explanation:
Id: 44540
1) 12000 2) 15000
3) 18000 4) 20000
Explanation:
Explanation:
Explanation:
Id: 44468
Explanation:
Id: 44701
Explanation:
Explanation:
Id: 44637
Explanation:
Id: 44579
3) Profit 4) Loss
Explanation:
Id: 44652
Explanation:
Id: 44651
Explanation:
1) 10000 2) 10500
3) 11500 4) 12700
Explanation:
Explanation:
Id: 44464
Explanation:
Id: 44610
Explanation:
Id: 44807
1) Real 2) Nominal
Explanation:
Id: 44699
Explanation:
Id: 44783
Explanation:
Id: 44746
Explanation:
Id: 44414
Explanation:
Explanation:
1) 2000 2) 1500
Explanation:
Id: 44559
Explanation:
Id: 44581
Explanation:
Id: 44510
Explanation:
Id: 44814
Explanation:
Id: 44422
Explanation:
Id: 44805
Explanation:
Id: 44398
dividends
Explanation:
Explanation:
Explanation:
Id: 44709
Explanation:
norms are
Explanation:
Id: 44391
Explanation:
Id: 44486
Accounting
Explanation:
Id: 44601
Explanation:
Id: 44593
Explanation:
business? Id: 44558
1) 20 2) 4
3) 10 4) 2
Explanation:
Id: 44687
Explanation:
Id: 44390
Explanation:
to Id: 44757
Explanation:
Explanation:
Id: 44404
Explanation:
Id: 44395
Explanation:
Id: 44516
Explanation:
Id: 44459
Explanation:
Id: 44751
Explanation:
Id: 44727
decision making
Explanation:
Explanation:
Id: 44686
Explanation:
Id: 44703
Explanation:
Id: 44585
Explanation:
Explanation:
Explanation:
Explanation:
Id: 44634
Explanation:
Id: 44491
Explanation:
Id: 44582
Explanation:
Id: 44680
Explanation:
Id: 44442
Explanation:
Id: 44519
Explanation:
Id: 44490
Explanation:
Id: 38722
Explanation:
Id: 44671
countries the world
countries
Explanation:
Explanation:
Id: 44797
Explanation:
Id: 44617
Explanation:
Id: 44575
Explanation:
Id: 44594
Explanation:
Id: 44802
Explanation:
1) 600000 2) 1400000
Explanation:
Id: 44408
persons.
Explanation:
Id: 38730
Explanation:
Id: 44475
Explanation:
Id: 44426
1) Cash 2) Trade
Explanation:
Id: 44564
Explanation:
Id: 44603
Explanation:

A. tax compliance.
B. financial audit.
D. profit analysis.
ANSWER: C

A. each department.
C. each month.
D. each executive.
ANSWER: B

ANSWER: A
A. notional cost.
B. real cost.
C. normal cost.
D. variable cost.
ANSWER: A

B. contractors.
ANSWER: D
A. hospitals.
C. transport firms.
ANSWER: B

A. two ways.
B. three ways.
C. four ways.
D. several ways.
ANSWER: D

ANSWER: A

ANSWER: A
A. the same firm.
ANSWER: A
A. direct cost.
B. indirect cost.
C. sunk cost.
D. imputed cost.
ANSWER: A
A. imputed cost.
B. historical cost.
C. sunk cost.
D. shutdown cost
ANSWER: D

ANSWER: C

A. three types.
B. four types.
C. five types.
D. seven types.
ANSWER: A

A. major expenses.
D. sundry expenses.
ANSWER: B

A. office overhead.
ANSWER: D

A. prime cost.
B. factory cost.
D. production cost.
ANSWER: C

A. prime cost.
B. factory cost.
C. labour cost.
ANSWER: B
A. Factory cost.
C. Selling cost.
D. Labour cost.
ANSWER: B

A. prime cost.
B. works cost.
D. cost of sales.
ANSWER: C
21. Tender is an.

ANSWER: C

A. selling price.
D. value of stocks.
ANSWER: A

ANSWER: C

A. prime cost.
B. works cost.
C. cost of sales.
ANSWER: A

ANSWER: A

A. works on cost.
ANSWER: D

ANSWER: D

A. material cost.
B. labour cost.
C. prime cost.
D. direct expenses
ANSWER: A

A. material cost.
B. labour cost.
C. prime cost.
D. factory cost.
ANSWER: C

A. material cost.
B. labour cost.
C. prime cost.
D. factory cost.
ANSWER: C
A. turnover ratios
ANSWER: A
A. turnover ratios.
ANSWER: B

ANSWER: C

A. turnover ratio.
ANSWER: D

A. turnover ratio.
ANSWER: A
D. turnover ratio.
ANSWER: A

D. turnover ratio.
ANSWER: B

D. turnover ratio.
ANSWER: B

D. turnover ratio.
ANSWER: D
C. operating ratio.
ANSWER: A
ANSWER: C
ANSWER: D

A. fixed assets.
B. current assets.
ANSWER: C

A. fixed assets.
B. current assets.
ANSWER: B
ANSWER: C
is
B. pay out ratio
ANSWER: A
B. pay out ratio.
ANSWER: D
is .
ANSWER: A
.
ANSWER: B

ANSWER: D

A. activity ratios.
B. solvency ratios.
ANSWER: A

ANSWER: A
investment?
8
ANSWER: A
inventory is
ANSWER: A

A. net profit.
ANSWER: D

A. net profit.
ANSWER: D
ANSWER: B

ANSWER: B

ANSWER: C
9
ANSWER: C

D. long term funds.
ANSWER: A
known as .
A. fixed assets.
B. current assets.
D. wasting assets.
ANSWER: B
year are called _.
B. overdraft.
ANSWER: D
Affect .
A. profit.
B. funds.
C. working capital.
D. capital.
ANSWER: B
affect .
A. profit.
B. funds.
C. working capital.
D. capital.
ANSWER: B
ANSWER: A
ANSWER: B
ANSWER: B
ANSWER: A

ANSWER: D

ANSWER: C
the treatment of .
A. prime cost .
B. fixed overheads.
ANSWER: B

ANSWER: B

B. gross profit.
C. net profit.
D. net loss.
ANSWER: A

A. overhead costs .
B. prime cost.
C. variable cost.
D. fixed costs.
ANSWER: D

ANSWER: A

ANSWER: D


ANSWER: B

ANSWER: C

ANSWER: B

A. over production.
ANSWER: C

ANSWER: A

ANSWER: A

ANSWER: B
old B.E.P will be .
A. lower .
B. higher.
C. . unchanged .
D. indeterminate.
ANSWER: B
A. lower .
B. unchanged .
C. higher.
D. indeterminate.
ANSWER: B
A. 10,000.
B. 16,300.
C. 2,000.
D. 2,500.
ANSWER: D
in value .
A. Rs. 7,936.
B. Rs. 7,353.
C. Rs. 8,333.
D. Rs. 9,090.
ANSWER: B
A. Rs. 1,75,000.
B. Rs. 1,17,400.
C. Rs. 1.57,000.
D. Rs. 1,86,667.
ANSWER: A
A. 40% .
B. 80%
C. 15%
D. 30%.
ANSWER: A
A. Rs. 10,000.
B. b. Rs. l4,000 .
C. Rs. 12,000.
D. Rs. 8,000.
ANSWER: B
percentage is _.
A. 33.33%.
B. 66.67%
C. 37.5% .
D. 76.33%.
ANSWER: C
A. Rs. 50 .
B. Rs. 40.
C. Rs. 30 .
D. Rs. 55.
ANSWER: A
A. Rs. 50,000.
B. Rs. 40,000 .
C. Rs. 35,000 .
D. Rs. 45,000 .
ANSWER: B
A. Rs. 1,00,000.
B. Rs. 80,000.
C. Rs. 75,000.
D. . Rs. 60,000.
ANSWER: C
in percentage is .
A. 40% .
B. 60% .
C. 50% .
D. 45%.
ANSWER: C
A. 40% .
B. 60% .
C. 80% .
D. 85% .
ANSWER: B
product would be .
A. Rs.18.75 .
B. Rs.16 .
C. Rs. 15 .
D. Rs.20 .
ANSWER: A

B. real costing.
D. real costing .
ANSWER: A

A. fixed cost.
C. variable cost.
D. market price.
ANSWER: C

D. calculation .
ANSWER: C

A. budget.
B. direct cost.
C. unit cost.
D. cost sheet.
ANSWER: A
C. Master budget .
D. Flexible budget.
ANSWER: A
known as
B. Master budget.
C. Cash budget .
D. Purchase budget.
ANSWER: B

A. .Fixed budget.
B. Cash budget.
C. Sales budget
ANSWER: D
A. Capital budget.
B. Cash budget.
C. Master budget .
ANSWER: D

A. Master budget.
B. Cash budget.
D. Flexible budget.
ANSWER: C
.
A. Formula method.
ANSWER: B
A. Master budget.
B. Rolling budget.
ANSWER: B

ANSWER: D

A. Planning.
B. Organizing.
C. Budgeting.
D. Controlling.
ANSWER: C

A. Planning.
B. Organizing.
C. Budgeting.
D. Controlling.
ANSWER: C

A. Planning.
B. Organizing
C. Budgeting.
D. Control.
ANSWER: D
called .
A. Fixed budget.
B. Flexible budget.
C. Sales budget.
ANSWER: A

A. 1 year.
B. 1-3 years.
C. 1-5 years.
D. 5-10 years.
ANSWER: D
A. Fixed budget.
B. Flexible budget.
C. Sales budget.
ANSWER: D

B. Sales budget.
C. Fixed budget.
D. Flexible budget.
ANSWER: A

D. Material budget.
ANSWER: A

18
D. Material budget.
ANSWER: B

A. Fixed budget.
B. Sales budget.
D. Flexible budget.
ANSWER: C

ANSWER: A
factory is .
D. Master budget.
ANSWER: A
D. Master budget.
ANSWER: B
.
D. Master budget
ANSWER: C
19
ANSWER: D
ANSWER: A
ANSWER: A

ANSWER: A

ANSWER: B

A. Master budget.
B. Flexible budget.
D. Fixed budget.
ANSWER: C

A. At Best Control.
ANSWER: B

A. . Just In Time.
20
C. Job In Time.
ANSWER: A

ANSWER: A
134. FIFO is .
C. Fast In Fast Out
ANSWER: D

ANSWER: A

ANSWER: D
137. Scrap is .
ANSWER: A
B. material order.
ANSWER: A

ANSWER: A
ANSWER: B

A. Master budget.
B. Flexible budget.
D. Fixed budget.
ANSWER: C

B. Master budget.
C. Flexible budget.
D. Fixed budget.
ANSWER: A

B. Expected sales.
D. Expected loss.
ANSWER: A
A. expense.
B. sales.
C. purchase.
D. material.
ANSWER: B

A. expense.
B. sales.
C. purchase.
D. material.
ANSWER: B
A. Rs. 4,50,000.
B. Rs. 4,75,000.
C. Rs. 5,25,000.
D. Rs. 5, 50,000.
ANSWER: B
cast?
A. 20%.
B. 25%.
C. 33.33%.
D. 35%.
ANSWER: B

ANSWER: C

ANSWER: B

ANSWER: B
SPPU All Course MCQ

BSC /MSC /BCA/ BCOM


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…………………
a. Shareholders
b. Creditors
c. Managers

information?
a. Creditor
c. Controller
d. Treasurer
a. Service entities
d. All of these



c. Indirect labour
d. Direct labour

a. Cost
b. Financial
c. Management
d. All

d. None of these
a. Fixed asset
b. Current asset
c. Fictitious asset
d. Wasting asset
c. Cost accounting
d. Real Accounting
10


c. Both (a) & (b)
d. None of these

a. Debtors account
c. Sales account

a. opening stock
b. net purchases
d. sales

c. Goods account
d. Purchase account

a. Cash account
b. Mahesh Account
c. Sales account
d. Purchase account


b. Rent account
c. Cash account
d. Expense account

a. Discount account
c. Sales account
d. Cash account
Stock = …………………
a. Sales, Purchases
a. Historical
b. Forward looking
c. Analytical
d. Social

c. Labour unrest
a. Only to workers



a. Fixed cost
b. Variable cost

a. Cost unit
b. Cost Centre
c. Cost object
d. Cost estimation

a. Prime cost
b. Factory overhead
c. Selling overhead
d. Office overhead
a. Opportunity cost
b. Sunk Cost
c. Incremental cost
d. Decremental cost


a. Loan
b. Unsecured Loan
c. Secured Loan

b. Advertising
c. Depreciation
d. Carriage
a. Practicability
b. Subjectivity
d. All the above
b. Sales account
c. Purchase account
c. (a) &(b) above

b. Trading account

a. Investment
c. Provision
d. Lease Holds
c. P & L a/c

a. Remains fixed


c. Journal
d. Both a and b

a. Increases assets
c. Decreases assets

a. Machinery
b. Building
c. Cash
d. Creditor


is

b. Matching Concept
c. Consistency
a. Building
b. Bank Balance
c. Plant Patents
d. Goodwill
b. Matching Concept
c. Cost Concept
d. Cost Concept
a. Current assets
c. Fixed asset
d. Fixed liability

b. A liability


d. Both a and b
e. Both a and c
a. Debtors
b. Investors
c. Creditors
d. Shareholders
a. Dual concept
b. Divider concept
c. Entity concept
d. Landlord concept
a. Nominal capital
b. Paid up capital
c. Issues capital
d. None of these
of operation
d. None of these
d. All of these


a. Projected data
c. Historic data


a. Art and Science
b. Art
c. Science
d. Art or Science
a. Original
b. Duplicate
c. Personal
d. Nominal

b. Rules of Real
c. Rules of Nominal
d. All of these
Balance?
b. Cash a/c
c. Short term loan
d. creditors
factor is
a. Discount
b. Depreciation
c. Reduction



d. None of these

a. Long term loan
b. Short term loan
c. Owner’s fund
d. All of these

a. Current asset
d. None of these

a. Cost
b. Net profit
c. Gross profit
d. Selling price

a. Management only
b. Government only
c. Investor only
d. All of these


a. Accrual concept
b. Cost concept

head:
a. Provisions
a. Separate entity
b. Going concern
c. Consistency
d. Time period

c. Entity Concept

a. Income Statement
c. Balance Sheet
a. Loan from Mr.Y
b. loan to Mr.y
c. Both (a) (b)
d. None of these

a. Accrual concept
b. Cost concept


e. Accrual concept
f. Cost concept

head:
e. Provisions
e. Separate entity
f. Going concern
g. Consistency
h. Time period

g. Entity Concept

e. Income Statement
g. Balance Sheet
e. Loan from Mr.Y
f. loan to Mr.y
g. Both (a) (b)
h. None of these

e. Accrual concept
f. Cost concept

a. Separate entity
b. Going concern
c. Consistency
d. Time period



a. Trading a/c
b. Balance sheet
d. Trial balance.

businesses?
b. Corporation
c. Partnership
d. All of them
a. Fiscal year
b. Calendar year
d. Accrual period


a. Personal a/c
b. Impersonal a/c
c. Real a/c
d. Nominal a/c


concept?
concepts?
d. Matching concept
b. Corporation
c. Partnership
d. All of them
a. Cash is received

of the following?
a. Accrual concept
b. Matching concept

a. Fiscal year
b. Calendar year
d. Accrual period
b. Materiality
c. Prudence
d. Matching concept
information
a. Concrete
b. Complete
c. Immaterial
d. Material
d. Duality Concept

d. None of These
d. All of the above
a. Rs 70,000
b. Rs 80,000
c. Rs 90,000
d. Rs 1,00,000

a. Revenue Profit
b. Capital Profit
c. Loss
d. None of these

a. Profit
b. Assets
c. Company
d. Books of A/c


a. Depreciation
b. Wages
c. Salary
d. Stationary

a. Assets
b. Liabilities
c. Capital
d. All of these

a. Benefits & Costs
b. Revenues & Costs

a. Patents
b. Trade Marks
c. Copyright
d. Land



performing
d. None of these


recorded data
in.
d. None of these

d. None of these
to
a. Cash a/c
b. Capital a/c
c. Drawing a/c
d. Bank a/c
b. Salaries a/c
c. Cash a/c
d. Bank a/c

a. Customer a/c
b. Sales return a/c
c. Goods a/c


a. Cash a/c
b. Mahesh a/c
c. Sales a/c
d. Sales return a/c

a. Land lord a/c
b. Rent a/c
c. Cash a/c
d. Tenant a/c

b. Prolonged delays
d. All of the above

a. Discount a/c
b. Customer a/c
c. Sales a/c
d. None of these

d. None of these
c. Not disclosed
d. None of these


a. Single aspect
b. Dual aspect
c. Triple aspect
d. None of these
d. None of these

d. None of these
a. Cash concept
b. Accrual concept
c. Matching concept
d. On-going concept

a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these
a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these

a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these

record
a. Journal
b. Ledger
c. Trial balance
d. None of these
accounts is called
a. Compound Journal
b. Ledger
c. Trial balance
d. None of these

a. Compound Journal
b. Ledger
c. Trial balance
d. None of these
a. Ledger
b. Posting
c. Forward journal
d. None of these
a. Land
b. Machine
c. Cash
d. Owner Equity

liability
a. Cash
b. Debtor
c. Owner’s equity
d. None of these


Land Rs.1,000,000
Owner’s equity ?
a. Rs.1020000
b. Rs.1010000
c. Rs.1030000
a. 600,000
b. 1,400,000
c. 2,000,000
d. None of these
Land Rs.1, 500,000
Cash Rs.20, 000
Creditors?
a. Rs.200, 000
b. Rs.700, 000
c. Rs.800, 000
d. Rs1, 100,000


Creditors Rs.50,000
a. 1,000,000
b. 1,550,000
c. 800,000
d. None of these

c) Cash = Assets
a. Only (a)
b. Both (a) (b)
c. All (a)(b)(c)(d)
d. d) None of these
a. Net Loss
b. Net income
c. Dividend


a. Accounts payable
c. Sales
d. Cash

Cash Rs.100

a. Rs.200
b. Rs.1900
c. Rs.1200
d. Rs.1700
statements.
a. Goodwill
b. Sales
reporting?
decisions.
prospective
d. None of theses
following items?
b. Currency
c. Money orders


journal.
the general ledger.
statement is true?
affected accounts.

balance?
balance.
balance.
account.
trial balance.


sheet?
a. Current assets
b. Investments

d. None of these


facilitate?
a. Planning
b. Decision making
c. Control
d. All of these



d. All of these

overhead.
a. Variable cost
c. Direct cost



c. Owners
a. Market values



a. Asset
b. Liability
c. Accounts
c. recorded facts
a. Management
b. Creditors
c. Bankers
d. All of the above
a. Sundry creditors
b. Acceptances
a. Actual figures
b. Budgeted figures
c. Standard figures
a. 1910
b. 1939
c. 1950
d. 1960


a. Trading account
c. Balance sheet
d. All of the above
a. Fixed asset
b. Investment
c. Current asset
d. Owners equity
a. sales
b. Share capital
d. Unsecured loan
.
a. Balance Sheet

a. M. S. Gosav
b. Wheldon
c. Luco Pacioli
d. R. N. Carter
a. Financial terms
c. Both
b. Definite period

d. Six months
d. Sales activities
a. Management
b. Share holders
c. Creditors
d. Employees
d. All
c. Both
d. None
a. Marginal costing
b. Ratio analysis
c. Standard costing
b. Issue of shares
d. All of these
c. Both
a. Bonus shares
b. Rights shares
d. None
remuneration based
on…

c. Both
d. None

a. Can
b. Cannot
c. Sometimes
d. Inadequate data
cooperation of…
a. Shareholders
b. Management
c. Creditors
d. None
a. Unnecessary
c. Necessary
d. Inadequate data
c. Both
a. Money
b. Quantity
c. Both
d. None
d. All of these


d. All of the above
operations is
known as budget.
a. Operational
b. Financial
c. Functional
objectives of
efficiency.
a. Budgetary
b. Inventory
c. Capability
with
budgetary control.
a. Centralizing
b. De-centralizing
c. Planning
the
a. Cost centre
b. Budget centre
c. Cost Unit
the routine
________ .
a. Budget Policy
b. Budget Book
c. Budget Manual
term
a. Functions
b. Control
c. Time

budget and
________ budget.
a. variable
b. Semi-variable
c. Constant
a. Fixed
b. Semi-variable
c. Flexible
budgets.
a. Period
b. Controls
c. Functions
a. Flexible
b. Cash
c. Fixed
changes
a. Fixed
b. Flexible
c. Sales
realistic and
a. realistic
b. non-realistic
c. Predictable
goods to be
business.
a. Sales
b. Cash
c. Purchase
cash
a. purchase
b. cash
c. sales


a. Finance
b. Stores
c. Purchase
b. Sales budget
c. Cost budget
make
400 units of Z
are 50.
a. 112%, 140%, 140%
b. 140%, 112%, 140%
c. 140%, 140%, 112%
b. Current budget
c. Long-term budget
a. True
b. False

a. Key factor
b. Abnormal factor
c. Linking factor
budget in
b. Master budget
100
Actual hours
worked) * 100


BBudgeted hours)
* 100
A-ii, B-iii, C-i
b. A-i, B-ii, C-iii
c. A-iii, B-i, C-ii
Rs 20
variable)
cost per unit
a. Rs 1,01,000
b. Rs 126.25
c. Rs 122
d. Rs 1,22,000
a. True
b. False
quarter,
40,000)
the total
a. Rs 1,12,000
b. 1,12,000 units
d. All
c. Both
d. None


c. Both

Chapter 1
private gain.

performed.
monetary terms.
profit.
decision-making.

(a) Tally (b) Marg
(c) Saral (d) SAP
(a) Cash (b) Debit
(a) Cash (b) Debit
(a) Two (b) Three
(c) Four (d) Five
1. (a) 11. (a) 21. (a) 31. (a) 41. (b)

2. (b) 12. (d) 22. (b) 32. (b) 42. (d)
3. (a) 13. (a) 23. (c) 33. (d) 43. (b)
4. (c) 14. (d) 24. (a) 34. (b) 44. (a)
5. (c) 15. (a) 25. (c) 35. (a) 45. (d)
6. (d) 16. (b) 26. (a) 36. (b) 46. (a)
7. (c) 17. (c) 27. (b) 37. (d) 47. (c)
8. (a) 18. (a) 28. (d) 38. (c) 48. (b)
9. (d) 19. (a) 29. (a) 39. (d) 49. (d)
10. (d) 20. (b) 30. (b) 40. (a) 50. (a)
Chapter 2
date.
reporting period.
(a) Dual (b) Single
(a) Dual (b) Single
Balance.

(a) Cash (b) Credit

income tax return.


1. (d) 11. (a) 21. (d) 31. (a) 41. (d)

2. (a) 12. (d) 22. (c) 32. (a) 42. (a)
3. (d) 13. (b) 23. (a) 33. (c) 43. (d)
4. (a) 14. (a) 24. (b) 34. (c) 44. (a)
5. (a) 15. (d) 25. (c) 35. (c) 45. (c)
6. (b) 16. (a) 26. (b) 36. (d) 46. (d)
7. (b) 17. (d) 27. (a) 37. (b) 47. (d)
8. (b) 18. (d) 28. (c) 38. (c) 48. (d)
9. (a) 19. (d) 29. (d) 39. (d) 49. (a)
10. (c) 20. (d) 30. (b) 40. (c) 50. (c)
Chapter 3
Cost Accounting
______________.
(a) Cost (b) Price

(a) One (b) Two
(c) Three (d) Four

______________.
______________.
cost.
______________ in Prime Cost.
ascertain cost.
1. (a) 11. (a) 21. (a) 31. (c) 41. (a)

2. (a) 12. (d) 22. (b) 32. (d) 42. (c)
3. (a) 13. (d) 23. (d) 33. (c) 43. (b)
4. (d) 14. (b) 24. (a) 34. (c) 44. (d)
5. (a) 15. (d) 25. (b) 35. (c) 45. (a)
6. (c) 16. (c) 26. (a) 36. (a) 46. (d)
7. (a) 17. (c) 27. (a) 37. (c) 47. (d)
8. (d) 18. (a) 28. (c) 38. (d) 48. (b)
9. (c) 19. (c) 29. (d) 39. (c) 49. (b)
10. (c) 20. (c) 30. (b) 40. (a) 50. (a)
Chapter 4
Cost Control
(a) EOQ (b) JIT
(c) ABC (d) HML
inventory value.
______________.
is ______________.

(a) LIFO (b) FIFO
Period)
Period)
Period)
Period)

______________.
specified period.
(a) Time (b) Motion
(a) Time (b) Motion

1. (a) 11. (d) 21. (a) 31. (d) 41. (d)

2. (b) 12. (b) 22. (a) 32. (d) 42. (b)
3. (a) 13. (a) 23. (d) 33. (d) 43. (a)
4. (c) 14. (b) 24. (b) 34. (d) 44. (a)
5. (a) 15. (c) 25. (d) 35. (a) 45. (d)
6. (a) 16. (d) 26. (a) 36. (a) 46. (d)
7. (b) 17. (a) 27. (b) 37. (a) 47. (a)
8. (c) 18. (d) 28. (b) 38. (b) 48. (b)
9. (d) 19. (c) 29. (a) 39. (c) 49. (b)
10. (c) 20. (d) 30. (d) 40. (a) 50. (c)
Chapter 5
(a) CVP (b) ABC
(c) JIT (d) HML
(a) 20% (b) 30%
(c) 33.33% (d) 1/3
(a) 70% (b) 80%
(c) ¾ (d) ½
(a) ` 4,16,667 (b) ` 3,83,333
(c) ` 3,75,000 (d) ` 4,10,000
(a) ` 1,00,000 (b) ` 6,00,000
(c) ` 3,75,000 (d) ` 4,10,000
(a) ` 40,000 (b) ` 10,000
(c) ` 25,000 (d) ` 30,000
(a) ` 4,00,000 (b) `2,00,000
(c) ` 2,50,000 (d) `3,00,000
(a) ` 2,40,000 (b) ` 80,000
(c) ` 2,70,000 (d) ` 2,00,000
______________.
future costs.
(a) One (b) Two
(c) Three (d) Four
Variance?
(a) 10 (b) –10
(c) 150 (d) 20
(a) 10 (b) –10
(c) 150 (d) 20
(a) 10 (b) –10
(c) 50 (d) 0
(a) 600 (b) –600
(c) 500 (d) 400
(a) 750 (b) –750
(c) 600 (d) 400
(a) 150 (b) –150
(c) 300 (d) 200
monetary terms.
(a) Budget (b) Plan
______________.
______________.
maximizing profits.
(a) Cash (b) Credit
1. (a) 11. (c) 21. (a) 31. (a) 41. (b)

2. (a) 12. (a) 22. (a) 32. (a) 42. (c)
3. (a) 13. (b) 23. (b) 33. (a) 43. (a)
4. (a) 14. (a) 24. (b) 34. (a) 44. (a)
5. (b) 15. (b) 25. (d) 35. (d) 45. (a)
6. (d) 16. (a) 26. (a) 36. (a) 46. (b)
7. (d) 17. (d) 27. (a) 37. (a) 47. (c)
8. (c) 18. (d) 28. (d) 38. (d) 48. (a)
9. (a) 19. (a) 29. (b) 39. (a) 49. (b)
10. (b) 20. (a) 30. (b) 40. (a) 50. (b)


Chapter 1
private gain.

performed.
monetary terms.
profit.
decision-making.
(a) Tally (b) Marg
(c) Saral (d) SAP
(a) Cash (b) Debit
(a) Cash (b) Debit
(a) Two (b) Three
(c) Four (d) Five
1. (a) 11. (a) 21. (a) 31. (a) 41. (b)

2. (b) 12. (d) 22. (b) 32. (b) 42. (d)
3. (a) 13. (a) 23. (c) 33. (d) 43. (b)
4. (c) 14. (d) 24. (a) 34. (b) 44. (a)
5. (c) 15. (a) 25. (c) 35. (a) 45. (d)
6. (d) 16. (b) 26. (a) 36. (b) 46. (a)
7. (c) 17. (c) 27. (b) 37. (d) 47. (c)
8. (a) 18. (a) 28. (d) 38. (c) 48. (b)
9. (d) 19. (a) 29. (a) 39. (d) 49. (d)
10. (d) 20. (b) 30. (b) 40. (a) 50. (a)
Chapter 2
date.
reporting period.
(a) Dual (b) Single
(a) Dual (b) Single
Balance.
(a) Cash (b) Credit

income tax return.

1. (d) 11. (a) 21. (d) 31. (a) 41. (d)

2. (a) 12. (d) 22. (c) 32. (a) 42. (a)
3. (d) 13. (b) 23. (a) 33. (c) 43. (d)
4. (a) 14. (a) 24. (b) 34. (c) 44. (a)
5. (a) 15. (d) 25. (c) 35. (c) 45. (c)
6. (b) 16. (a) 26. (b) 36. (d) 46. (d)
7. (b) 17. (d) 27. (a) 37. (b) 47. (d)
8. (b) 18. (d) 28. (c) 38. (c) 48. (d)
9. (a) 19. (d) 29. (d) 39. (d) 49. (a)
10. (c) 20. (d) 30. (b) 40. (c) 50. (c)
Chapter 3
Cost Accounting
.
(a) Cost (b) Price

(a) One (b) Two
(c) Three (d) Four

periods also is .
.
.
cost.
in Prime Cost.
ascertain cost.
1. (a) 11. (a) 21. (a) 31. (c) 41. (a)

2. (a) 12. (d) 22. (b) 32. (d) 42. (c)
3. (a) 13. (d) 23. (d) 33. (c) 43. (b)
4. (d) 14. (b) 24. (a) 34. (c) 44. (d)
5. (a) 15. (d) 25. (b) 35. (c) 45. (a)
6. (c) 16. (c) 26. (a) 36. (a) 46. (d)
7. (a) 17. (c) 27. (a) 37. (c) 47. (d)
8. (d) 18. (a) 28. (c) 38. (d) 48. (b)
9. (c) 19. (c) 29. (d) 39. (c) 49. (c)
10. (c) 20. (c) 30. (b) 40. (a) 50. (a)
Chapter 4
(a) CVP (b) ABC
(c) JIT (d) HML
Ratio? (a) 20% (b) 30%
(c) 33.33% (d) 1/3
(a) 70% (b) 80%
(c) ¾ (d) ½
`? (a) ` 4,16,667 (b) ` 3,83,333
(c) ` 3,75,000 (d) ` 4,10,000
Contribution? (a) ` 1,00,000 (b) ` 6,00,000
(c) ` 3,75,000 (d) ` 4,10,000
Cost? (a) ` 40,000 (b) ` 10,000
(c) ` 25,000 (d) ` 30,000
Cost? (a) ` 4,00,000 (b) `2,00,000
(c) ` 2,50,000 (d) `3,00,000
Cost? (a) ` 2,40,000 (b) ` 80,000
(c) ` 2,70,000 (d) ` 2,00,000
.
future costs.
(a) One (b) Two
(c) Three (d) Four
Variance?
(a) 10 (b) –10
(c) 150 (d) 20
(a) 10 (b) –10
(c) 150 (d) 20
(a) 10 (b) –10
(c) 50 (d) 0
(a) 600 (b) –600
(c) 500 (d) 400
(a) 750 (b) –750
(c) 600 (d) 400
(a) 150 (b) –150
(c) 300 (d) 200

monetary terms.
(a) Budget (b) Plan
.
.
maximizing profits.
(a) Cash (b) Credit
1. (a) 11. (c) 21. (a) 31. (a) 41. (b)

2. (a) 12. (a) 22. (a) 32. (a) 42. (c)
3. (a) 13. (b) 23. (b) 33. (a) 43. (a)
4. (a) 14. (a) 24. (b) 34. (a) 44. (a)
5. (b) 15. (b) 25. (d) 35. (d) 45. (a)
6. (d) 16. (a) 26. (a) 36. (a) 46. (b)
7. (d) 17. (d) 27. (a) 37. (a) 47. (c)
8. (c) 18. (d) 28. (d) 38. (d) 48. (a)
9. (a) 19. (a) 29. (b) 39. (a) 49. (b)
10. (b) 20. (a) 30. (b) 40. (a) 50. (b)

a) Shareholders
b) Creditors
c) Managers
a) Creditor
c) Controller
d) Treasurer
a) Service entities
d) All of these

c) Indirect labour
d) Direct labour

a) Cost
b)Financial
37
c) Management
d) All

d) None of these
a) Fixed asset
b) Current asset
c) Fictitious asset
d) Wasting asset
c) Cost accounting
d) Real Accounting

c) Both (a) & (b)
d) None of these
a) Debtors account
c) Sales account
37
b) net purchases
d)sales


c) Goods account
d) Purchase account
a) Cash account
b) Mahesh Account
c) Sales account
d) Purchase account

b) Rent account
c)Cash account
d) Expense account

a) Discount account
37
c) Sales account
d) Cash account

Stock = …………………
a) Sales, Purchases


a) Historical
b) Forward looking
c) Analytical
d) Social


c) Labour unrest

a) Only to workers

37

a) Fixed cost
b) Variable cost
b) Cost centre
c) Cost object
d) Cost estimation

a) Prime cost
b) Factory overhead
c) Selling overhead
d) Office overhead
a) Opportunity cost
b) Sunk Cost
c) Incremental cost
d) Decremental cost
accounting concept

a) Loan
b) Unsecured Loan
c) Secured Loan
b) Advertising
c) Depreciation
d) Carriage
37
a) Practicability
b) Subjectivity

d) All the above
pursuance to:



b) Sales account
c) Purchase account

c) (a) &(b) above
37
b) Trading account
sheet
a) Investment
c) Provision
d) Lease Holds

c) P & L a/c
in……………….

a) Remains fixed
37

c) Journal
d) Both a and b

48. Cash Purchases:
a) Increases assets
c) Decreases assets


a) Machinery
b) Building
c) Cash
d) Creditor


37

b) Matching Concept
c) Consistency

a) Building
b) Bank Balance
c) Plant Patents
d) Goodwill
b) Matching Concept
c) Cost Concept
d) Cost Concept
a) Current assets
c) Fixed asset
d) Fixed liability

b) A liability
37
d) Both a and b
e) Both a and c
a) Debtors
b) Investors
c) Creditors
d) Shareholders
a) Dual concept
b) Divider concept
c) Entity concept
d) Landlord concept
a) Nominal capital
b) Paid up capital
c) Issues capital
d) None of these

37
d) None of these
d) All of these

a) Projected data
c) Historic data


and Science
b) Art
c) Science
d) Art or Science

a) Original
b) Duplicate
c) Personal
d) Nominal

b) Rules of Real
c) Rules of Nominal
d) All of these
b) Cash a/c
37
c) Short term loan
d) creditors
a)Discount
b) Depreciation
c)Reduction

d) None of these
a) Long term loan
b) Short term loan
c) Owner’s fund
d) All of these

a) Current asset
d) None of these
a) Cost
b) Net profit
c) Gross profit
d) Selling price
a) Management only
b) Government only
c) Investor only
d) All of these
a) Accrual concept
37
b) Cost concept
a) Provisions
a) Separate entity
b) Going concern
c) Consistency
d) Time period

c) Entity Concept

a) Income Statement
c) Balance Sheet
a) Loan from Mr.Y

b) loan to Mr.y
c) Both (a) (b)
d) None of these

37
a) (ii) (iii)(i)
b) (iii)(iv)(ii)
c) (i)(iii)(iv)
d) (i)(iv)

a) Accrual concept
b) Cost concept
a) Separate entity
b) Going concern
c) Consistency
d) Time period



a) Trading a/c
b) Balancesheet
d) Trial balance.
37
Sole proprietorship
b. Corporation
c. Partnership
d. All of them
a) Fiscal year
b) Calendar year
d) Accrual period

a) Personal a/c
b) Impersonal a/c
c) Real a/c
d) Nominal a/c


d) Matching concept
37
b) Corporation
c) Partnership
d) All of them
recognized when
a) Cash is received
following?
a) Accrual concept
b) Matching concept

a) Fiscal year
b) Calendar year
d) Accrual period
accounting concept?
b) Materiality
c) Prudence
d) Matching concept
a) Concrete
b) Complete
37
c) Immaterial
d) Material
following?
d) Duality Concept
accounting books
d) None of These
d) All of the above
a) Rs 70,000
b) Rs 80,000
c) Rs 90,000
d) Rs 1,00,000

a) Revenue Profit
b) Capital Profit
c) Loss
d) None of these
a) Profit
37
b) Assets
c) Company
d) Books of A/c
a) Depreciation
b) Wages
c) Salary
d) Stationary

a) Assets
b) Liabilities
c) Capital
d) All of these
a) Benefits & Costs

b) Revenues & Costs
a) Patents
b) Trade Marks
c) Copyright
d) Land



37
d) None of these

a) Practicability
b) Subjectivity
d) None of these

d) None of these
pursuant of

d) None of these

37
d) None of these
a) Cash a/c
b) Capital a/c
c) Drawing a/c
d) Bank a/c

b) Salaries a/c
c) Cash a/c
d) Bank a/c
a) Customer a/c
b) Sales return a/c
c) Goods a/c
a) Cash a/c
b) Mahesh a/c
c) Sales a/c
d) Sales return a/c
a) Land lord a/c

b) Rent a/c
c) Cash a/c
d) Tenant a/c
a) Discount a/c
b) Customer a/c
c) Sales a/c
d) None of these
a) Debtors Accounts
b) Bad debts a/c
c) Sales a/c
37
d) None of these

accounting concept
d) None of these
d) None of these


d) None of these

c) Not disclosed
d) None of these
a) Single aspect
b) Dual aspect
c) Triple aspect
d) None of these
statements
37
d) None of these
d) None of these
d) None of these.
a) Cash concept
b) Accrual concept
c) Matching concept
d) On-going concept
a) Real a/c
b) Personal a/c
c) Nominal a/c
d) None of these
a) Real a/c
b) Personal a/c
c) Nominal a/c
d) None of these
a) Real a/c
b) Personal a/c
c) Nominal a/c
d) None of these
a) Journal
37
b) Ledger
c) Trial balance
d) None of these

b) Ledger
c) Trial balance
d) None of these

a) Compound Journal
b) Ledger
c) Trial balance
d) None of these
ledger is called as
a) Ledger
b) Posting
c) Forward journal
d) None of these
Land
b) Machine
c) Cash
d) Owner Equity
Cash
b) Debtor
c) Owner’s equity
d) None of these

37
Land Rs.1,000,000
Machinery Rs.20,000
Cash Rs.10,000
Debt Rs.0
Owner’s equity ?

a) Rs.1020000
b) Rs.1010000
c) Rs.1030000

a) 600,000
b) 1,400,000
c) 2,000,000
d) None of these

Land Rs.1, 500,000
Cash Rs.20, 000
Loan Rs.500, 000
Creditors?
a) Rs.200, 000
b) Rs.700, 000
c) Rs.800, 000
d) Rs1, 100,000
Land ?
Vehicles Rs.600,000
Cash Rs.30,000
Loan 5,00,000
37
Creditors Rs.50,000
e) 1,000,000
f) 1,550,000
g) 800,000
h) None of these

c) Cash = Assets
a) Only (a)
b) Both (a) (b)
c) All (a)(b)(c)(d)
d) None of these
a) Net Loss
b) Net income
c) Dividend


a) Accounts payable
c) Sales
d) Cash
Cash Rs.100
37
Bank Loan Rs.1,000
a) Rs.200
b) Rs.1900
c) Rs.1200
d) Rs.1700
informed reader

b. Sales

d.None of theses
b. Currency
c. Money orders
37
correct?
ledger.
true?


37
account credited.
assets
b. Investments

d. None of these

Planning
b) Decision making
c) Control
d) All of these
37
users.
departments.

d. All of these

a. Variable cost
c. Direct cost


37

c) Owners

a) Market values

a) Asset
b) Liability
c) Accounts
c) recorded facts
a) Management
b) Creditors
c) Bankers
d) All of the above
37
a) Sundry creditors
b) Acceptances
a) Actual figures
b) Budgeted figures
c) Standard figures
a) 1910
b) 1939
c) 1950
d) 1960

a) Compulsory
b) Optional
c) Obligation
a) Trading account
c) Balance sheet
d) All of the above
a) Fixed asset
b) Investment
37
c) Current asset
d) Owners equity
a) Financial
b) Economic
c) Non financial
d) None of these
a) sales
b) Share capital
d) Unsecured loan


.
a) Balance Sheet

a) M. S. Gosav
b) Wheldon
c) LucoPacioli
d) R. N. Carter

Analytical
b) Clerical
37
c) Executive
d) Non- executive

Cash basis
b) Accrual basis
c) Mercantile basis

c) Both

Capital
b) Revenue
c) Direct
d) Non- cash
37
a) Nominal account
b) Real Account


Balance sheet
b) Trial Balance
c) Ledger
d) Journal
a) cash account
b) capital account
c) drawings account

Account of Suresh
b) Salaries account
c) Cash account
b) Overhead
e. Variable cost
37
g. Direct cost

d. All of these
g. Indirect labour
h. Direct labour
labour
b) Direct materials

classified as
a) A prime cost

expense
b) Direct materials
d) Immaterial items
37
Direct labour
b) Direct materials
d) Advertising

b) Direct Wages
c) Direct Expenses
d) Prime Cost

a) Work on cost
b) Work Cost
d) Direct Cost

a) Prime Cost
b) Factory Overhead
c) Selling overhead
d) Office overhead
Total Cost
b) Office Cost
c) Cost of sales
d) Selling overhead


(d) future costs
37
(a) Rs. 1,80,000
(b) Rs. 2,00,000
(c) Rs. 1,70,000
(d) Rs. 2,10,000
37
…………………
a. Shareholders
b. Creditors
c. Managers

information?
a. Creditor
c. Controller
d. Treasurer
a. Service entities
d. All of these



c. Indirect labour
d. Direct labour

a. Cost
b. Financial
c. Management
d. All

d. None of these
a. Fixed asset
b. Current asset
c. Fictitious asset
d. Wasting asset
c. Cost accounting
d. Real Accounting
10


c. Both (a) & (b)
d. None of these

a. Debtors account
c. Sales account

a. opening stock
b. net purchases
d. sales

c. Goods account
d. Purchase account

a. Cash account
b. Mahesh Account
c. Sales account
d. Purchase account


b. Rent account
c. Cash account
d. Expense account

a. Discount account
c. Sales account
d. Cash account
Stock = …………………
a. Sales, Purchases
a. Historical
b. Forward looking
c. Analytical
d. Social

c. Labour unrest
a. Only to workers



a. Fixed cost
b. Variable cost

a. Cost unit
b. Cost Centre
c. Cost object
d. Cost estimation

a. Prime cost
b. Factory overhead
c. Selling overhead
d. Office overhead
a. Opportunity cost
b. Sunk Cost
c. Incremental cost
d. Decremental cost


a. Loan
b. Unsecured Loan
c. Secured Loan

b. Advertising
c. Depreciation
d. Carriage
a. Practicability
b. Subjectivity
d. All the above
b. Sales account
c. Purchase account
c. (a) &(b) above

b. Trading account

a. Investment
c. Provision
d. Lease Holds
c. P & L a/c

a. Remains fixed


c. Journal
d. Both a and b

a. Increases assets
c. Decreases assets

a. Machinery
b. Building
c. Cash
d. Creditor


is

b. Matching Concept
c. Consistency
a. Building
b. Bank Balance
c. Plant Patents
d. Goodwill
b. Matching Concept
c. Cost Concept
d. Cost Concept
a. Current assets
c. Fixed asset
d. Fixed liability

b. A liability


d. Both a and b
e. Both a and c
a. Debtors
b. Investors
c. Creditors
d. Shareholders
a. Dual concept
b. Divider concept
c. Entity concept
d. Landlord concept
a. Nominal capital
b. Paid up capital
c. Issues capital
d. None of these
of operation
d. None of these
d. All of these


a. Projected data
c. Historic data


a. Art and Science
b. Art
c. Science
d. Art or Science
a. Original
b. Duplicate
c. Personal
d. Nominal

b. Rules of Real
c. Rules of Nominal
d. All of these
Balance?
b. Cash a/c
c. Short term loan
d. creditors
factor is
a. Discount
b. Depreciation
c. Reduction



d. None of these

a. Long term loan
b. Short term loan
c. Owner’s fund
d. All of these

a. Current asset
d. None of these

a. Cost
b. Net profit
c. Gross profit
d. Selling price

a. Management only
b. Government only
c. Investor only
d. All of these


a. Accrual concept
b. Cost concept

head:
a. Provisions
a. Separate entity
b. Going concern
c. Consistency
d. Time period

c. Entity Concept

a. Income Statement
c. Balance Sheet
a. Loan from Mr.Y
b. loan to Mr.y
c. Both (a) (b)
d. None of these

a. Accrual concept
b. Cost concept


e. Accrual concept
f. Cost concept

head:
e. Provisions
e. Separate entity
f. Going concern
g. Consistency
h. Time period

g. Entity Concept

e. Income Statement
g. Balance Sheet
e. Loan from Mr.Y
f. loan to Mr.y
g. Both (a) (b)
h. None of these

e. Accrual concept
f. Cost concept

a. Separate entity
b. Going concern
c. Consistency
d. Time period



a. Trading a/c
b. Balance sheet
d. Trial balance.

businesses?
b. Corporation
c. Partnership
d. All of them
a. Fiscal year
b. Calendar year
d. Accrual period


a. Personal a/c
b. Impersonal a/c
c. Real a/c
d. Nominal a/c


concept?
concepts?
d. Matching concept
b. Corporation
c. Partnership
d. All of them
a. Cash is received

of the following?
a. Accrual concept
b. Matching concept

a. Fiscal year
b. Calendar year
d. Accrual period
b. Materiality
c. Prudence
d. Matching concept
information
a. Concrete
b. Complete
c. Immaterial
d. Material
d. Duality Concept

d. None of These
d. All of the above
a. Rs 70,000
b. Rs 80,000
c. Rs 90,000
d. Rs 1,00,000

a. Revenue Profit
b. Capital Profit
c. Loss
d. None of these

a. Profit
b. Assets
c. Company
d. Books of A/c


a. Depreciation
b. Wages
c. Salary
d. Stationary

a. Assets
b. Liabilities
c. Capital
d. All of these

a. Benefits & Costs
b. Revenues & Costs

a. Patents
b. Trade Marks
c. Copyright
d. Land



performing
d. None of these


recorded data
in.
d. None of these

d. None of these
to
a. Cash a/c
b. Capital a/c
c. Drawing a/c
d. Bank a/c
b. Salaries a/c
c. Cash a/c
d. Bank a/c

a. Customer a/c
b. Sales return a/c
c. Goods a/c


a. Cash a/c
b. Mahesh a/c
c. Sales a/c
d. Sales return a/c

a. Land lord a/c
b. Rent a/c
c. Cash a/c
d. Tenant a/c

b. Prolonged delays
d. All of the above

a. Discount a/c
b. Customer a/c
c. Sales a/c
d. None of these

d. None of these
c. Not disclosed
d. None of these


a. Single aspect
b. Dual aspect
c. Triple aspect
d. None of these
d. None of these

d. None of these
a. Cash concept
b. Accrual concept
c. Matching concept
d. On-going concept

a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these
a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these

a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these

record
a. Journal
b. Ledger
c. Trial balance
d. None of these
accounts is called
a. Compound Journal
b. Ledger
c. Trial balance
d. None of these

a. Compound Journal
b. Ledger
c. Trial balance
d. None of these
a. Ledger
b. Posting
c. Forward journal
d. None of these
a. Land
b. Machine
c. Cash
d. Owner Equity

liability
a. Cash
b. Debtor
c. Owner’s equity
d. None of these


Land Rs.1,000,000
Owner’s equity ?
a. Rs.1020000
b. Rs.1010000
c. Rs.1030000
a. 600,000
b. 1,400,000
c. 2,000,000
d. None of these
Land Rs.1, 500,000
Cash Rs.20, 000
Creditors?
a. Rs.200, 000
b. Rs.700, 000
c. Rs.800, 000
d. Rs1, 100,000


Creditors Rs.50,000
a. 1,000,000
b. 1,550,000
c. 800,000
d. None of these

c) Cash = Assets
a. Only (a)
b. Both (a) (b)
c. All (a)(b)(c)(d)
d. d) None of these
a. Net Loss
b. Net income
c. Dividend


a. Accounts payable
c. Sales
d. Cash

Cash Rs.100

a. Rs.200
b. Rs.1900
c. Rs.1200
d. Rs.1700
statements.
a. Goodwill
b. Sales
reporting?
decisions.
prospective
d. None of theses
following items?
b. Currency
c. Money orders


journal.
the general ledger.
statement is true?
affected accounts.

balance?
balance.
balance.
account.
trial balance.


sheet?
a. Current assets
b. Investments

d. None of these


facilitate?
a. Planning
b. Decision making
c. Control
d. All of these



d. All of these

overhead.
a. Variable cost
c. Direct cost



c. Owners
a. Market values



a. Asset
b. Liability
c. Accounts
c. recorded facts
a. Management
b. Creditors
c. Bankers
d. All of the above
a. Sundry creditors
b. Acceptances
a. Actual figures
b. Budgeted figures
c. Standard figures
a. 1910
b. 1939
c. 1950
d. 1960


a. Trading account
c. Balance sheet
d. All of the above
a. Fixed asset
b. Investment
c. Current asset
d. Owners equity
a. sales
b. Share capital
d. Unsecured loan
.
a. Balance Sheet

a. M. S. Gosav
b. Wheldon
c. Luco Pacioli
d. R. N. Carter
a. Financial terms
c. Both
b. Definite period

d. Six months
d. Sales activities
a. Management
b. Share holders
c. Creditors
d. Employees
d. All
c. Both
d. None
a. Marginal costing
b. Ratio analysis
c. Standard costing
b. Issue of shares
d. All of these
c. Both
a. Bonus shares
b. Rights shares
d. None
remuneration based
on…

c. Both
d. None

a. Can
b. Cannot
c. Sometimes
d. Inadequate data
cooperation of…
a. Shareholders
b. Management
c. Creditors
d. None
a. Unnecessary
c. Necessary
d. Inadequate data
c. Both
a. Money
b. Quantity
c. Both
d. None
d. All of these


d. All of the above
operations is
known as budget.
a. Operational
b. Financial
c. Functional
objectives of
efficiency.
a. Budgetary
b. Inventory
c. Capability
with
budgetary control.
a. Centralizing
b. De-centralizing
c. Planning
the
a. Cost centre
b. Budget centre
c. Cost Unit
the routine
________ .
a. Budget Policy
b. Budget Book
c. Budget Manual
term
a. Functions
b. Control
c. Time

budget and
________ budget.
a. variable
b. Semi-variable
c. Constant
a. Fixed
b. Semi-variable
c. Flexible
budgets.
a. Period
b. Controls
c. Functions
a. Flexible
b. Cash
c. Fixed
changes
a. Fixed
b. Flexible
c. Sales
realistic and
a. realistic
b. non-realistic
c. Predictable
goods to be
business.
a. Sales
b. Cash
c. Purchase
cash
a. purchase
b. cash
c. sales


a. Finance
b. Stores
c. Purchase
b. Sales budget
c. Cost budget
make
400 units of Z
are 50.
a. 112%, 140%, 140%
b. 140%, 112%, 140%
c. 140%, 140%, 112%
b. Current budget
c. Long-term budget
a. True
b. False

a. Key factor
b. Abnormal factor
c. Linking factor
budget in
b. Master budget
100
Actual hours
worked) * 100


BBudgeted hours)
* 100
A-ii, B-iii, C-i
b. A-i, B-ii, C-iii
c. A-iii, B-i, C-ii
Rs 20
variable)
cost per unit
a. Rs 1,01,000
b. Rs 126.25
c. Rs 122
d. Rs 1,22,000
a. True
b. False
quarter,
40,000)
the total
a. Rs 1,12,000
b. 1,12,000 units
d. All
c. Both
d. None


c. Both

COMMERCE DEPARTMENT

(MCQs)
With Answers
Prepared By
Mangesh Takpire
A. Concepts
Page - 1
A. Investment
D. Deficit
transactions.
A. Cash
D. Methods
entities.
D. All of the above
Page - 2
following concept?

D. Capital

partner
partner
Page - 3
capital deficiency
A. Limited
A. New
basis.
B. Profit sharing
C. partners assets
A. Company
A. Simple A. Loss
Page - 4
A. Loss
B. Profit
C. 70000
D. 10000
A. Opening capital
B. Closing capital
A. 10,000 C. Loss
C. 20000
D. 35000
A. Loss and drawing
D. None of them
profit or loss.
A. Cash system
D. Loss 20,000
entry system-
D. None of these.
Page - 5
represent-
A. Trader
D. Capital.
D. Income Statement

A. 1st April, 2017
D. China
A. 3
A. Duration B. 4
B. Destination C. 5
C. Dividend D. 6
D. Development
Page - 6
B. Intention B. 3
C. Integrated C. 4
D. Intra D. 5
A. CGST A. 0.28
B. SGST B. 0.2
D. IGST D. 0.18
GST?
A. Tax Cascading
D. Wealth Tax
applicable when
collected is
dealer B. SGST
D. IGST
Page - 7
Answer Keys
Best of Luck !!!
Page - 8
COMMERCE DEPARTMENT

(MCQs)
With Answers
Prepared By
Mangesh Takpire
A. Concepts
Page - 1
A. Investment
D. Deficit
transactions.
A. Cash
D. Methods
entities.
D. All of the above
Page - 2
following concept?

D. Capital

partner
partner
Page - 3
capital deficiency
A. Limited
A. New
basis.
B. Profit sharing
C. partners assets
A. Company
A. Simple A. Loss
Page - 4
A. Loss
B. Profit
C. 70000
D. 10000
A. Opening capital
B. Closing capital
A. 10,000 C. Loss
C. 20000
D. 35000
A. Loss and drawing
D. None of them
profit or loss.
A. Cash system
D. Loss 20,000
entry system-
D. None of these.
Page - 5
represent-
A. Trader
D. Capital.
D. Income Statement

A. 1st April, 2017
D. China
A. 3
A. Duration B. 4
B. Destination C. 5
C. Dividend D. 6
D. Development
Page - 6
B. Intention B. 3
C. Integrated C. 4
D. Intra D. 5
A. CGST A. 0.28
B. SGST B. 0.2
D. IGST D. 0.18
GST?
A. Tax Cascading
D. Wealth Tax
applicable when
collected is
dealer B. SGST
D. IGST
Page - 7
Answer Keys
Best of Luck !!!
Page - 8
SPPU All Course MCQ

BSC /MSC /BCA/ BCOM


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…………………
a. Shareholders
b. Creditors
c. Managers

information?
a. Creditor
c. Controller
d. Treasurer
a. Service entities
d. All of these



c. Indirect labour
d. Direct labour

a. Cost
b. Financial
c. Management
d. All

d. None of these
a. Fixed asset
b. Current asset
c. Fictitious asset
d. Wasting asset
c. Cost accounting
d. Real Accounting
10


c. Both (a) & (b)
d. None of these

a. Debtors account
c. Sales account

a. opening stock
b. net purchases
d. sales

c. Goods account
d. Purchase account

a. Cash account
b. Mahesh Account
c. Sales account
d. Purchase account


b. Rent account
c. Cash account
d. Expense account

a. Discount account
c. Sales account
d. Cash account
Stock = …………………
a. Sales, Purchases
a. Historical
b. Forward looking
c. Analytical
d. Social

c. Labour unrest
a. Only to workers



a. Fixed cost
b. Variable cost

a. Cost unit
b. Cost Centre
c. Cost object
d. Cost estimation

a. Prime cost
b. Factory overhead
c. Selling overhead
d. Office overhead
a. Opportunity cost
b. Sunk Cost
c. Incremental cost
d. Decremental cost


a. Loan
b. Unsecured Loan
c. Secured Loan

b. Advertising
c. Depreciation
d. Carriage
a. Practicability
b. Subjectivity
d. All the above
b. Sales account
c. Purchase account
c. (a) &(b) above

b. Trading account

a. Investment
c. Provision
d. Lease Holds
c. P & L a/c

a. Remains fixed


c. Journal
d. Both a and b

a. Increases assets
c. Decreases assets

a. Machinery
b. Building
c. Cash
d. Creditor


is

b. Matching Concept
c. Consistency
a. Building
b. Bank Balance
c. Plant Patents
d. Goodwill
b. Matching Concept
c. Cost Concept
d. Cost Concept
a. Current assets
c. Fixed asset
d. Fixed liability

b. A liability


d. Both a and b
e. Both a and c
a. Debtors
b. Investors
c. Creditors
d. Shareholders
a. Dual concept
b. Divider concept
c. Entity concept
d. Landlord concept
a. Nominal capital
b. Paid up capital
c. Issues capital
d. None of these
of operation
d. None of these
d. All of these


a. Projected data
c. Historic data


a. Art and Science
b. Art
c. Science
d. Art or Science
a. Original
b. Duplicate
c. Personal
d. Nominal

b. Rules of Real
c. Rules of Nominal
d. All of these
Balance?
b. Cash a/c
c. Short term loan
d. creditors
factor is
a. Discount
b. Depreciation
c. Reduction



d. None of these

a. Long term loan
b. Short term loan
c. Owner’s fund
d. All of these

a. Current asset
d. None of these

a. Cost
b. Net profit
c. Gross profit
d. Selling price

a. Management only
b. Government only
c. Investor only
d. All of these


a. Accrual concept
b. Cost concept

head:
a. Provisions
a. Separate entity
b. Going concern
c. Consistency
d. Time period

c. Entity Concept

a. Income Statement
c. Balance Sheet
a. Loan from Mr.Y
b. loan to Mr.y
c. Both (a) (b)
d. None of these

a. Accrual concept
b. Cost concept


e. Accrual concept
f. Cost concept

head:
e. Provisions
e. Separate entity
f. Going concern
g. Consistency
h. Time period

g. Entity Concept

e. Income Statement
g. Balance Sheet
e. Loan from Mr.Y
f. loan to Mr.y
g. Both (a) (b)
h. None of these

e. Accrual concept
f. Cost concept

a. Separate entity
b. Going concern
c. Consistency
d. Time period



a. Trading a/c
b. Balance sheet
d. Trial balance.

businesses?
b. Corporation
c. Partnership
d. All of them
a. Fiscal year
b. Calendar year
d. Accrual period


a. Personal a/c
b. Impersonal a/c
c. Real a/c
d. Nominal a/c


concept?
concepts?
d. Matching concept
b. Corporation
c. Partnership
d. All of them
a. Cash is received

of the following?
a. Accrual concept
b. Matching concept

a. Fiscal year
b. Calendar year
d. Accrual period
b. Materiality
c. Prudence
d. Matching concept
information
a. Concrete
b. Complete
c. Immaterial
d. Material
d. Duality Concept

d. None of These
d. All of the above
a. Rs 70,000
b. Rs 80,000
c. Rs 90,000
d. Rs 1,00,000

a. Revenue Profit
b. Capital Profit
c. Loss
d. None of these

a. Profit
b. Assets
c. Company
d. Books of A/c


a. Depreciation
b. Wages
c. Salary
d. Stationary

a. Assets
b. Liabilities
c. Capital
d. All of these

a. Benefits & Costs
b. Revenues & Costs

a. Patents
b. Trade Marks
c. Copyright
d. Land



performing
d. None of these


recorded data
in.
d. None of these

d. None of these
to
a. Cash a/c
b. Capital a/c
c. Drawing a/c
d. Bank a/c
b. Salaries a/c
c. Cash a/c
d. Bank a/c

a. Customer a/c
b. Sales return a/c
c. Goods a/c


a. Cash a/c
b. Mahesh a/c
c. Sales a/c
d. Sales return a/c

a. Land lord a/c
b. Rent a/c
c. Cash a/c
d. Tenant a/c

b. Prolonged delays
d. All of the above

a. Discount a/c
b. Customer a/c
c. Sales a/c
d. None of these

d. None of these
c. Not disclosed
d. None of these


a. Single aspect
b. Dual aspect
c. Triple aspect
d. None of these
d. None of these

d. None of these
a. Cash concept
b. Accrual concept
c. Matching concept
d. On-going concept

a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these
a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these

a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these

record
a. Journal
b. Ledger
c. Trial balance
d. None of these
accounts is called
a. Compound Journal
b. Ledger
c. Trial balance
d. None of these

a. Compound Journal
b. Ledger
c. Trial balance
d. None of these
a. Ledger
b. Posting
c. Forward journal
d. None of these
a. Land
b. Machine
c. Cash
d. Owner Equity

liability
a. Cash
b. Debtor
c. Owner’s equity
d. None of these


Land Rs.1,000,000
Owner’s equity ?
a. Rs.1020000
b. Rs.1010000
c. Rs.1030000
a. 600,000
b. 1,400,000
c. 2,000,000
d. None of these
Land Rs.1, 500,000
Cash Rs.20, 000
Creditors?
a. Rs.200, 000
b. Rs.700, 000
c. Rs.800, 000
d. Rs1, 100,000


Creditors Rs.50,000
a. 1,000,000
b. 1,550,000
c. 800,000
d. None of these

c) Cash = Assets
a. Only (a)
b. Both (a) (b)
c. All (a)(b)(c)(d)
d. d) None of these
a. Net Loss
b. Net income
c. Dividend


a. Accounts payable
c. Sales
d. Cash

Cash Rs.100

a. Rs.200
b. Rs.1900
c. Rs.1200
d. Rs.1700
statements.
a. Goodwill
b. Sales
reporting?
decisions.
prospective
d. None of theses
following items?
b. Currency
c. Money orders


journal.
the general ledger.
statement is true?
affected accounts.

balance?
balance.
balance.
account.
trial balance.


sheet?
a. Current assets
b. Investments

d. None of these


facilitate?
a. Planning
b. Decision making
c. Control
d. All of these



d. All of these

overhead.
a. Variable cost
c. Direct cost



c. Owners
a. Market values



a. Asset
b. Liability
c. Accounts
c. recorded facts
a. Management
b. Creditors
c. Bankers
d. All of the above
a. Sundry creditors
b. Acceptances
a. Actual figures
b. Budgeted figures
c. Standard figures
a. 1910
b. 1939
c. 1950
d. 1960


a. Trading account
c. Balance sheet
d. All of the above
a. Fixed asset
b. Investment
c. Current asset
d. Owners equity
a. sales
b. Share capital
d. Unsecured loan
.
a. Balance Sheet

a. M. S. Gosav
b. Wheldon
c. Luco Pacioli
d. R. N. Carter
a. Financial terms
c. Both
b. Definite period

d. Six months
d. Sales activities
a. Management
b. Share holders
c. Creditors
d. Employees
d. All
c. Both
d. None
a. Marginal costing
b. Ratio analysis
c. Standard costing
b. Issue of shares
d. All of these
c. Both
a. Bonus shares
b. Rights shares
d. None
remuneration based
on…

c. Both
d. None

a. Can
b. Cannot
c. Sometimes
d. Inadequate data
cooperation of…
a. Shareholders
b. Management
c. Creditors
d. None
a. Unnecessary
c. Necessary
d. Inadequate data
c. Both
a. Money
b. Quantity
c. Both
d. None
d. All of these


d. All of the above
operations is
known as budget.
a. Operational
b. Financial
c. Functional
objectives of
efficiency.
a. Budgetary
b. Inventory
c. Capability
with
budgetary control.
a. Centralizing
b. De-centralizing
c. Planning
the
a. Cost centre
b. Budget centre
c. Cost Unit
the routine
________ .
a. Budget Policy
b. Budget Book
c. Budget Manual
term
a. Functions
b. Control
c. Time

budget and
________ budget.
a. variable
b. Semi-variable
c. Constant
a. Fixed
b. Semi-variable
c. Flexible
budgets.
a. Period
b. Controls
c. Functions
a. Flexible
b. Cash
c. Fixed
changes
a. Fixed
b. Flexible
c. Sales
realistic and
a. realistic
b. non-realistic
c. Predictable
goods to be
business.
a. Sales
b. Cash
c. Purchase
cash
a. purchase
b. cash
c. sales


a. Finance
b. Stores
c. Purchase
b. Sales budget
c. Cost budget
make
400 units of Z
are 50.
a. 112%, 140%, 140%
b. 140%, 112%, 140%
c. 140%, 140%, 112%
b. Current budget
c. Long-term budget
a. True
b. False

a. Key factor
b. Abnormal factor
c. Linking factor
budget in
b. Master budget
100
Actual hours
worked) * 100


BBudgeted hours)
* 100
A-ii, B-iii, C-i
b. A-i, B-ii, C-iii
c. A-iii, B-i, C-ii
Rs 20
variable)
cost per unit
a. Rs 1,01,000
b. Rs 126.25
c. Rs 122
d. Rs 1,22,000
a. True
b. False
quarter,
40,000)
the total
a. Rs 1,12,000
b. 1,12,000 units
d. All
c. Both
d. None


c. Both

QUESTION BANK
Consumer’s equilibrium and demand
Multiple choice questions : choose the correct answer
1. Worth a rupee to a consumer is called:

(a) marginal utility of money (b) total utility of money
(c) diminishing marginal utility of money (d) consumer’s equilibrium
2. A consumer attains equilibrium, in case of one commodity, when:
(a) MUx= Px (b) MUx>Px
(c) MUx<Px (d) MUx = 0
3. Consumer equilibrium in case of two commodities(say X and Y) is struck when:
(a) MUx/Px= MUm (b)MUx/Px>MUy/Py
(c) MUx/px = muy/py = MUm (d)MUx/Px<MUy/Py
4. A consumer reaches the point of equilibrium when;
(a) MRSxy>Px/Py (b)MRSxy<Px/Py
(c)MRSxy = Px/Py (d) none of these
5. A consumer will start buying less of good-X and more of Good-Y, when:
(a) MUx/Px = MUm (b) MUx/Px<MUy/Py
(c) MUy/Py = MUm (d)MUx/Px>MUy/Py
6. According to IC approach, at the point of equilibrium:
(a) slope of IC > slope of price line (b) slope of IC < slope of price line
(c) Slope of IC # slope of price line (d) slope of IC = slope of price line
7. when rupee worth of satisfaction is greater for Y than x, it implies that;

(a) MUx/Px = MUy/py (b) MUx/Px>MUy/Py
(c) MUx/Px<MUy/py (d)nonr of these
8. in the case of mux>muy/py;
(a) Consumer will shift some expenditure from x to y
(b) Consumer will shift some expenditure from y to x
(c) Consumer will spend less on both x and y
(d) Consumer will spend x and y
9. Additional utility derived from the consumption of an additional unit of a

commodity is called:
(a) Average utility (b) total utility
(c) Marginal utility (d) none of these
10 the slope indifference curve is equal to:
(a) One (b) marginal rate of substitution
(c) Marginal utility (d) none of these
11. Why is indifference curve convex to origin?
(a)Due to law of diminishing marginal utility
(b) Due to monotonic preferences
(c) Due to continuous decline of marginal rate of substitution
(d) Both a and b
12. it is the property of indifference curvethat no two IC can intersect each other.
The reason behind this is:
(a) Consumer preferences are monotonic

(b) Preferences are complete
(c) Same combination of two goods cannot give different level of satisfaction
(d) Diminishing marginal rate of substitution
13. Slope of budget line is:
(a)Px/Py (b)Py/Px
(c) MRS (d)Px.Py
14. Which of the following is not the property of indifference curve:
(a)Higher the indifference curves higher the level of satisfaction.
(b)Two indifference curves cannot intersect each other
(c)Indifference curve is concave to origin
(d)Indifference curve is downward sloping
15.An Indifference curve slope down towards right since more of one commodity
and less of another result in:
(a) Same satisfaction.
(b)Greater satisfaction.
(c)Maximum satisfaction.
(d)Decreasingexpenditure.
16. Hicks and Allen believed that utility:
(a) Cannot be measured
(b)Cannot be expressed
(c) Can be measured in cardinal numbers
(d) Can be measured in ordinal numbers

17.Below are given three alternative bundles of two goods-x and good-y:
Bundle 1 Bundle 2 Bundle 3
Combi X Y X Y X Y
nation
A 5 1 1 5 1 5
B 5 2 2 5 2 3
C 5 3 3 5 3 2
Which of these bundles can form an indifference curve?
(a) Bundle 1 (b) Bundle 2
(c) Bundle 3 (d) any of the above.
18. An indifference curve is related to:
(a)Consumer’s income (b) prices of goods X and Y
(c) Total utility from goods X and Y (d) choices and preferences of consumer
19. As we move down the indifference curve left to right, the slope of indifference
curve tends to:
(a) Unity (b) rise
(c) Zero (d) declines
20. A shift in budget line, when prices are constant, is due to:
(a) Change in demand (b) change in income
(c)Change in preferences (d) change in utility
21. Marginal rate of substitution of X for Y is calculated as:
(a)Px/Py (b)Py/Px
(c) Change in Y / change in X (d) change in X/ change in Y
22. A set of ICs drawn in a graph is called:
(a) Indifference curve (b)indifference map
(c)budget line (d) all of these
23. Inindifference map, higher IC indicates:
(a) Lower level of satisfaction (b) same level of satisfaction
(c)Higher level of satisfaction (d)eitherhigher orsame level of satisfaction
24. MRS is determined by:
(a) satisfaction level of the consumer (b) income of the consumer
(c) taste of the consumer (d) preferences theconsumer
25. At the point of equilibrium:
(a) MRS>Px/Py and IC is convex at the point of equilibrium
(b) MRS<Px/Py and IC is convex at the point of equilibrium
(c) MRS=Px/Py
(d) MRS>Px/Py and IC is convex at the point of equilibrium
26. In a situation when MRS>Px/Py, the consumer would react by:
(a) Diminishing the consumption of commodity-x
(b)Increasing the consumption of commodity-y
(c) Increasing the consumption of commodity-x
(d) None of these
27. Two indifference curves cannot cut each other because:
(a) They slope downwards.

(b) They are convex to origin
(c) They represent those combinations of two goods that give the same
satisfaction.
(d) Each indifference curve represents a different level of satisfaction
28. specific quantity to be purchased against a specific price of the commodity is

called:
(a) Demand (b) quantity demand
(c) Movement along demand curve (d) shift in demand
29. Thegraphic presentation of atable showing price and relationship[ for a

commodity in the market is called:
(a)Individual demand curve (b) producer’s demand curve
(c) Market demand curve (d) consumer’s demand curve
30. When at price of Rs. 5per unit of a commodity, A’s demand is for 11 units, B’s
demand is for 14 units and C’S demand is for 8 units, then market demand will be:
(a) 11 units (b) 14 units
(c) 17 units (d) 33 units
31 Downward slope of the demand curve shows:
(a) positive relationship between price and quantity demanded
(b) inverse relationship between price and quantity demanded
(c) no relationship between price and quantity demanded
(d) none of these
32. How are two goods (apple and orange) related when, as a result of rise in the
price of apples, demand for oranges increases?
(a) substitute goods (b) complementary goods
(c) normal goods (d) inferior goods
33. In case of normal goods, demand curve shows:
(a) a negative slope (b) a positive slope
(c) zero slope (d) none of these
34. Law of demand must fail in case of:
(a) normal good s (b) giffen goods
(c) inferior goods (d)none of these
35. Inferior goods are those whose income effect is:
(a) negative (b) positive
(c)zero (d) none of these
36. Which of the following pairs represents substitute goods?
(a) car and petrol (b) juice and cold drink
(c) bread and butter (d) all of these
37. In case of Giffen’s paradox, the slope of demand curve is:
(c) parallel to X-axis (d) parallel to Y-axis
38. As a result of rise in consumer’s income, demand curve for coarse

grain(inferior good):
(a) becomes a horizontal straight line (b) becomes a vertical straight line
(c) shifts to the right (d) shifts to the left
39. If two goods are complementary then rise in the price of one results in:
(a) rise in demand for the other (b) fall in demand for the other
(c) rise in demand for both (d) none of these
40.Demand curve is upward sloping for:
(a) normal goods (b) inferior goods
(c) giffen goods (d) none of these
41. Movement along the demand curve occurs due to change in:
(a) own price of the commodity
(b) determinants of demand, other than own price of the commodity
(c) both (a) and (b)
(d) none of these
42. An increase in the price of electricity will cause the demand for electric
appliances to:
(a) rise (b) fall
(c) remain the same (d) none of these
43. Shift in demand curve means:
(a)fall in demand due to rise in own price of the
(b) rise in demand due to fall in own price of the
(c) change in demand due to factors other than own price of the commodity
(d) none of these
44. A fall in income of the consumer (in case of normal goods) will cause:
(a) upward movement on the demand curve
(b) downward movement on the demand curve

(c) rightward shift of the demand curve
(d) leftward shift of the demand curve
45. Change in quantity demanded of a commodity due to change in its own price,
other things remaining constant, is called:
(a) cross price effect (b) price effect
(c) income effect (d) substitution effect
46. In case of contraction of demand, we move:
(a) from lower point to upper point on the same demand curve
(b) to right on the another demand curve
(c) from upper point to lower point on the same demand curve
(d) to left on the another demand curve
47. Increase in demand occurs due to:
(a) decrease in price of the complementary good
(b) increase in income of the consumer
(c) increase in price of the substitutes
(d) all of these
48. Assumptions of the law of demand refer to:
(a) constant own price of the commodity
(b) determinants of demand, other than own price of the commodity
(c) constant cost of production
(d) none of these
49. Law of demand is violated when:

(a) income effect is negative
(b) substitution effect is negative
(c) negative income effect is greater than substitution effect
(d) negative income effect is less than substitution effect
50. A fall in own price of the commodity leads to:
(a) increase In real income of the consumer
(b) decrease in real income of the consumer
(c) increase in purchasing power of the consumer
(d) both (a) and (c)
51. Substitution effect takes place when price of the commodity becomes:
(a) relatively cheaper (b) relatively dearer
(c) stable (d) both (a) and (b)
52. Different quantities purchased at different possible prices of a commodity is

called:
(a) demand schedule (b) quantity demanded
(c) demand function (d) individual demand
53. Diagrammatic presentation of demand schedule of an individual buyer of a

commodity in the market yields:
(a) market demand schedule (b) individual demand curve
(c) individual demand schedule (d) market demand curve
54. Goods are undemanded because these possess:
(a) utility (b) capacity

(c) needs (d) none of these
55. Complementary goods:
(a) complete the demand for each other (b) are substituted for each other
(c) are demanded together (d) both (a) and (c)
56. In case of normal goods, the relationship between income and quantity
demanded is:
(c) zero (d) infinite
57. In case of normal goods, the relationship between own price of the
commodity and its quantity demanded is:
(a) constant (b) inverse
(c) positive (d) none of these
58. An exception to the law of demand is:
(a) normal good (b) Giffen good
(c) article of distinction (d) both (b) and (c)
59. Distribution of income is a determinant of:
(a) individual demand function (b) market demand function
(c) both (a) and (c) (d) none of these
60. In case of giffen goods, demand curve is:
(a) upward sloping (b) downward sloping
(c) parallel to X-axis (d) parallel to Y-axis
61. When increase in the price of one good causes an increase in demand for the
other, the goods are:
(a) substitutes (b) complementary
(c) inferior (d) giffen
62. In case of inferior goods:
(a) income effect is negative (b) income effect of positive
(c) income effect is zero (d) none of these
63. Shift in demand curve occurs when demand for a commodity changes due to
change in:
(a) own price of commodity
(b) determination of demand, other than own price of the commodity
(c) both (a) and (c)
(d) none of these
64. Change in quantity demanded of a commodity due to change in real income of

the consumer caused by change in own price of the commodity is called:
(a) cross price effect (b) price effect
(c) income effect (d) substitution effect
65. When income of the consumer rises in case of a normal good:
(a) demand curve shifts to the left
(b) demand curve shifts to the right
(c) there is upward movement along the demand curve
(d) there is downward movement along the demand curve
66. An increase in the price of computer will cause the demand for internet
services to:
(a) rise (b) remain the same

(c) fall (d) none of these
Ans- 1.(A), 2.(A), 3.(C), 4.(C), 5(b), 6(d), 7(c), 8.(b), 9.(c), 10.(b), 11.(c), 12.(c),
13.(a), 14.(c), 15.(a), 16.(d), 17.(c), 18.(d), 19.(d), 20.(b), 21.(C), 22.(b), 23.(c),
24.(d), 25.(d), 26.(c), 27.(d), 28.(b), 29.(c), 30.(d), 31.(b) , 32.(a) , 33.(a) , 34.(b) ,
35.(a) , 36.(b) , 37.(b) , 38.(d) , 39.(b) , 40.(c) , 41.(a) , 42.(b) , 43.(c) , 44.(d) , 45.(b)
, 46.(a) , 47.(d) , 48.(b) , 49.(c) , 50.(d) , 51.(d), 52.(a) , 53.(b) , 54.(a) , 55.(d) , 56.(b)
, 57.(b) , 58.(d) , 59.(b) , 60.(a) , 61.(a) , 62.(a) , 63.(b) , 64.(c) , 65.(b) , 66.(c)
Q1. What do you mean by consumer equilibrium?
A Consumer equilibrium is a situation in which a person gets maximum

satisfaction
Q 2.What do you mean by utility?
A Want satisfying power of any commodity is known as consumer

equilibrium.
Q3. What is Total Utility?
A It is the sum total of utility derived from the consumption of all units
of a commodity.
Q4. What is Marginal Utility?
A it refers to additional utility on account of the consumption of an unit

of a commodity.
Q 5.What is Budget line?

A It refers to attainable combinations of sets of two commodity at given
prices of commodity and income of the consumer.
Q6. Define Indifference set :-
Indifference set is a set of two commodities which offers the consumer
same level of satisfaction, so that he is indifferent between
these combinations
Q7.Define Indifference Curve
Indifference Curve is the diagrammatic presentation of an indifference

set. it shows the set of two commodities that offers the consumer the
same level of satisfaction, so that he is indifferent between these
combinations
Q8.Define Indifference Map

Indifference Map refers to a set of indifference curve.
Q9Define Budget Line
It refers to the attainable combinations of a set of two goods at given

prices of goods and income of the consumer
Q10.What is the exception of utility approach

Utilitycan be cardinally measurable, i.e . can be expressed in exact
unit..
Utility is measurable in monetary term
Q11 .Define demand schedule

Demand schedule express the relations between different quantities of
the commodity demanded at different prices in form of a table.
12. How is Total utility derived from marginal utilities?
Total utility is derived by summing up the marginal utilities
13. What is Law of Diminishing Marginal Utility?
Law of diminishing marginal utility states that as more and more

standard units of a commodity are consumed continuously marginal
utility must decline
14. Under what situation total utility will be maximum?
When Marginal utility will be zero
15. State condition of consumer's equilibrium in respect of one good.
MUX = Px
16. Define Demand.

An economic principle that describes a consumer's desire and
willingness to pay a price for a specific good or service. Holding
all other factors constant, the price of a good or service increases
as its demand increases and vice versa.
17. What is meant by Marginal Rate of Substitution (MRS)
MRS is the amount of good 2 what consumer is willing to give up for

getting an extra unit of good 1.
18. Define consumer's bundle
Combination of the amount of two goods will be called as consumption

or consumer bundle
19. What is budget set
The set of bundles available to the consumer with his given income at
prevailing market price is called the budget set.
20.When will exception of law Demand happen

Exception to the law of demand happens when there is a direct
relationship between price and demand.thus rise in price leads to
rise in demand and fall in price leads to fall in demand
21. How is budget line defined?
Budget line is a line showing all different possible combinations of two

goods which a consumer can buy in given his budget and the price of
both goods.
22. Why does higher indifference curve give more satisfaction?
Higher difference curve shows a higher level of satisfactions. It shows

the various combinations of excess quantity of two goods than lower
indifference curve.
23. What is the impact of diminishing marginal rate of substitution on

indifference curve?
Indifference curve become convex towards the origin
24. What will be the impact on the equilibrium due to increase in

income in case of normal good?
Equilibrium will be shifted on a higher indifference curve.

25. How is market demand schedule derived with the help of individual
demand schedules?
By lateral summations of individual curves
26. Define normal good.
These are the goods, the demand for which increases as income of the
buyer rise. There in positive relation between income and demand of
these goods.
27. How does availability of substitute good affect the elasticity of

demand?
The demand of a good becomes elastic if its substitute good is available

in the market
28. Demand of good ‘X’ falls due to increase in the income of the
consumer what type of good ‘X’ is
Good ‘X’ is an inferior good.
29. What will be the impact on demand of the substitute good due to
increase in price of the good?
The demand of substitute good will increase
30. A rise in price of a good results in a decrease in expenditure on it. is

its demand elastic or inelastic?
Elastic
31. What is meant by market demand?
Market demand is the sum of total demand of all the consumers in the
market at a particular time and at a given price.
32. What cause an upward movement along a demand curve?
Increase in price while other factors are constant
33. If the number of consumers increase in which direction will the

demand curve shift?
Demand curve shifts inRightward Direction
34 If the slope of a demand curve is parallel to X-axis, what will be the

elasticity of demand?
Perfectly elastic
35. Why is elasticity of demand negative?
Due to inverse relation between price and demand.
36. Why is demand of water inelastic?
Because water is a necessity good.
37 . A straight line demand curve is given. What will be elasticity of

demand on the mid point of this curve.
Equal to unit
38. What happens to total expenditure on a commodity when its price

falls and its demand is price elastic?
Total expenditure will increase.
39 . Why does total utility increases at diminishing rate due to

continuous increase in units of a good Consumed?
As more and more units of commodity are consumed, marginal utility
derived from each successive unit tends to diminish so total utility
increases at diminishing rate up.
40. Due to decrease in price of pen why does the demand of ink
increase?
These are complimentary goods.
41. When does budget line shift leftwards?
When the income of consumer decreases.
42. Under what situation does the slope of changed budget line be
flatter?
When there is decrease in price of a good showing on X-axis is constant.
42. What change should lake place in price of the combination of two
goods so that the slope of budget line becomes steeper?
When there is increase in price of good showing on X-axis while price of

good showing on y-axis is constant.
43 . What will be the behaviour of total utility when marginal utility

curve lies below X-axis
Total utility start to decline
44. What are the AssumptionsLaw of demand?. State any two.

1. There should be no change in he income of the consumer.
2. Price of the related goods must remain constant

45. Meaning of law of demand
The law of demand states that other thing being equal or

constant, the demand for a commodity is inversely related to its
price. The price increases, the demand falls and vice-versa.
46. HowExceptions to the law of demand occur

1.Inferior goods
2. Expectations regarding the future prices
47. Define Elasticity of Demand
Elasticity of demand refers to the sensitiveness or responsiveness of

demand to changes in price. Price elasticity of demand is usually
referred to as elasticity of demand
48. Define Price Elasticity of Demand
It is the ratio of proportionate change in quantity demanded of a

commodity to a given proportionate change in its price
49 Explain the types of Elasticity of Demand
1. Perfectly elastic demand

2. Perfectly inelastic demand:
3. Relatively elastic demand
4. Relatively Inelastic demand:
5. Unitary elastic demand:
50.What are the Factors Influencing the Elasticity of Demand ?
1.Degree of necessity
2.Proportion of consumer’s income spent on the commodity
DEMAND
Q1. What is demand?
Ans: - Demand refers to the quantity of a commodity or service a consumer is

willing to buy at given price in a given period of time.
Q2. What is Demand Schedule?
Ans. Demand Schedule refers to the quantity of a commodity which is

demanded by the consumers at different prices.
Q3. What is an Individual Demand Schedule?
Ans. Individual Demand Schedule refers to the relationship between price and
quantity demanded of a commodity by an individual.
Price Rs. Quantity

1 10
2 8
3 6
4 4
5 2
Q4. What is Market Demand Schedule? Explain with table & diagram.
Ans. Market Demand Schedule is the sum of the individual demand schedule for
a commodity in the market at different prices of the commodity.
On the assumption that there are three buyers in the market, Market Demand
Schedule may be drawn as follows.
Price per Unit/ A B C Total
Firm
1 10 5 20 35
2 8 4 16 28
3 6 3 12 21
4 4 2 8 14
5 2 1 4 7
Market Demand Curve
A Market Demand Curve has been drawn on the basis of table. The Market
Demand Curve shows that, when price is Rs. 1 per Kg apple the total demand of
the market is 35kg, but when price is increased to Rs.5 total demand of apples
become7kg. This slope of this demand curve is negative, showing inverse
relationship between price of the commodity and its quantity demanded.
Q5.Define Normal Goods?
Ans.Normal good is a good,with the rise in income thedemand for normal goods
will rise because of rising purchasing power with increased income.
Income effect of normal goods is positive. Example: - Grain, Rice & wheat.
Q6. What are Giffen Goods?
Ans. Giffen goods are those inferior goods in case of which there is a positive
relationship between price and quantity demanded.
Q7.DefineInferior Goods.
Ans. Inferior good is a good whose demand decreases with rise in income and
increases with a fall in income of consumers. The Income Effect of Inferior Goods
is Negative. For Example- . Coarse Gram
Q8. Explain Law of Demand with the help of Example

Ans. Law of Demand states that if the Price of a commodity decreases then
consumer demand more of its quantity and if price increase than the consumer
demand less of its quantity, other things being constant.
Price Rs. Quantity

1 10
2 8
3 6
4 4
5 2
The table shows that when the price was Rs. 1, at that time the demand of the
commodity was 10, but when the price increase to re 5 the demand for the
commodity falls to 2 units.
Thus it is true with an increase in the price of the commodity demand decreases
and with a fall in the price demand increases.
Q9. What are the factors affecting the Demand of a commodity?
Ans.Factors affecting thedemand of a commodity are:-
Price of a commodity
Priceis an important determinant of Demand. Demand for a commodity rises

when it is offered at low price and it falls when the commodity is available at
higher price.
Income of the consumer
With the rise in income of the consumer his purchasing power increases. As a
result he can buy more of a commodity that he was not buying earlier due to
monetary constraint. Similarly a fall in income of the consumer will force him to
cut down his expenditure and he will demand less of a commodity.
Price of related goods
Related goods are of two types i.e. Substitute goods and complementary good.
Substitute Goods
Substitute goods are those which can be used in place of each other with equal
ease. Example - Pepsi Cola and Coca-Cola. Of the two given goods the demand will
be higher for the goods which have comparatively lower price and vice versa.
Complementary goods
Complementary Goodsare those goods which and are incomplete without each
other. It of each other.
Example - Car and Petrol
A fall in the price of one commodity leads to rise in the demand of its
complementary good. Example: - If the price of petrol falls then demand for car
will rise.
Taste and preferences
Tastes and Preferences of the consumers will also affect the demand of
thecommodity. A student will demand more of books and pens then utensils
because of his preference for the same.
Similarly old television sets were replaced by Plasma T.V.
Miscellaneous
Some other factors that affect the demand of commodity are-
Demand for SeasonalGoods- The consumer will demand woolen clothes in winter
only.
If GovernmentTax reducesRatethenitenhancesthe purchasing power of the

consumer and his demand for goods will also increase.
If the population of an area increases then their demand will also increase and
they will demand more consumer goods and vice versa.
Q10. How do changes in income affect demand for a commodity?
Ans.With the increase in income of the consumer his purchasing power increases,
he can spend more than what he was spending earlier. Income affects demand for
acommodity depends upon, whether a commodity
Normal Goods
The demand for normal goods rises with the increase in income of the consumer.
I.e. income effect is positive. If the income of the consumer decreases then the
demand for such goods also decreases.
Inferior Goods
For Inferior Goods Income,Effect is negative quality with the increase in income
and vice versa.
Essential/Necessities
The goods that are essential for human beings are called necessities. The demand
for such goods does not change with the increase or decrease in income.
Example- Life saving Drugs, Common Salt etc.
Q11. Why does Demand Curve for a commodity slope downwards to the right?
Ans. The Demand Curve for commodity slopes downwards to the right because of
thefollowing reason:.
Law of Diminishing Marginal Utility
The law states that with the consumption of an additional unit of a commodity,
the utility from each successive unit goes on diminishing.
Example- Utility form first chapati /Loaf of Br from second chapatti is lesser, from
the third still lesser, because a part of his hungeris satisfied from the first one and
the second in terms of satisfaction derived with each successive chapati
diminishes .This depictsthe Law of Diminishing Marginal Utility.
Income effect
A change in the quantity demanded as a result of change in real income caused by

change in price of the commodity is called Income effect. When the price of a
commodity falls, less has to be spent on the purchase of that commodity. From
that money a consumer can by more quantity of that good, thus the real income
of the consumer is increased. However increase in the price of the good
decreases the real income of the consumer. Therefore he will buy less of its
commodity from that income.
Substitution effect
It means that substitution of one commodity in place of the other commodity

when it becomes relatively cheaper Example=A rise in the price of coca-cola, in
relation to coca-cola. The consumer will maximize his satisfaction therefore he
will buy more of Pepsi than of coca cola.
Number of consumers
When the price of a commodity falls, consumers buys it at the reduced price,
therefore the number of consumers increases because the old ones also
consuming it in the same quantity or more than what they were consuming
before fall in the price of that commodity.
Different uses of the commodity
A commodity used is consumed more at a lower price but if its price goes up then
consumption get restricted to very essential use.
For example milk is used for many purposes e.g. Drinking, Making curd, paneer ,
tea etc. but if the price goes up the consumption of milk is restricted to say baby
food only.
Q12. How is demand of a commodity affected by change in the price of related

good? Explain with the help of a diagram.
Ans. Related goods may be of two types- Substitute goods Complementary
good.When the price of a substitute food falls (rises) it becomes relatively
cheaper (costlier), so it is substituted for the given commodity decreases
(increases), this result in rightward (leftward) shift in demand curve.
When the price of complementary good falls (rises) its quantity demanded rises
(falls). The demand for the given commodity increases (decreases) as
complementary good are used together. This will cause a rightward (leftward)
shift of demand curve of given commodity.
Diagrams showing the effect of Substitute Goods and Complementary Goods
Q13. What is meant by Cross Price Eeffects?
Ans. Cross Price Effect means how the demand for one particular product is
affected by a change in the price of another commodity. Cross price effects
originate from related goods:
(a) Substitute good- If the price of tea falls, the quantity demanded for coffee
would fall because people will use more of a tea than coffee.
(b) Complementary good- If the price of car falls down, then quantity
demanded for petrol would go up because people will purchase more car and
petrol.
Q14. Briefly explain the factors that shift
ANS- The following are the factors that shift
1. Change in Income
if the income of the consumer increases the demand for the normal product
increases similarly with the decrease in income the demand for the product
decreases and the demand curve shift to the left. Increase in income shift the
demand curve to the right.
2.Change in the of related goods
Substitute good- when the price of a substitute good falls (rires) then it becomes
relatively cheaper or costlier, so it is substituted for the given commodity and the
demand arrive shift to the right or (left)
Complementary good-as the price of a complementary good increases, the price

of the given product and its quantity demanded both decreases and the demand
curve shift to the left. With the decrease in the price of the complementary good,
the price of the given product and its quantity demanded both increase and the
the demand curve shift to the right.
Change in taste- A favourable change in the taste shift the demand curve to the
right as s result price as well as the total quantity demanded will increase similarly
an infavourable change in taste will shift the demined curve to the left and both
price and quantity will fall.
Q15. Distinguish between the following:

1. Contraction in Demand Decrease in Demand
This is caused by change in the This is caused by change in the
priceonly. determentsof demand other than price.
It results in upward movement It result in the left ward shift in
alongdemand curve when demand demandcurveWhen demand falls due
fallsdue to the rise in priceonly, it is to change in factorsother than price it is
calledcontraction in demand. called decrease indecrease.
2. Extension in Demand Increase in Demand

This is caused by changed in price only This is caused by change in the
factorsother than price of the
commodity.
It results in downward movement Itresults in the rightward shift in
alongthe demand curve.When demand demandcurve.When demand increases
increases due to fallsin price only, it is due to changesfactors other than
called extention indemand. price, it is calledincrease in demand.
3. Change in Quantity Demanded Change in Demand

a) Change in quantity demanded a) Change in demand is causedby
iscaused by change in the factors other than price of the the
price.ofcommodity. commodity.
b) Change in quantitydemandedis Change in demand is shift in demand
movement alongdemand curve. curve.
c) Example-Pricesugar falls from Rs. 16 c)Example: if price of rice is Rs.10 p/u,
per kg to Rs.12 peras a result quantity 20 gram rice is demanded. Even when
demanded ofsugar increases to 3kg price remains constant, consumer starts
from 2 kg demanding 30 gram of rice.
4. Substitute goods Complementary goods
1. Substitute goods may beused in Complementary goodare
place of each other usedtogether.
2. The price of substitute goodhas The price of one complementarygood
positive relationship withother has negativerelationshipwith another
substitute good complementary good.
Example- Car and Petrol Example- Tea & Coffee
Normal Goods Inferior Goods
1) Income effect is Positive. 1) Income effect is Negative

2) Demand increase with the 2) Demand increase with the
increase in income decrease in income
.
3)Demand curve of normal goods 3)Demand curve ofInferior Goods
slopes upward to the left slopes down rightwards.
Q16. Define Derived Demand.
Ans. Derived Demand is the demand that has been derived from the demand for
some other commodity it helps to produce. Demand for factors of production is
called derived demand because it is derived from demand of such goods, which
the factor helps to produce.
Example- Demand for Shoe is direct demand but the demand for Labour is
Derived Demand because it does not satisfy the consumer demand directly but it
arises due to demand for shoe.
Q 17. Determine how the following changes will affect the Market Demand Curve
for a Product:
a) A new Plant comes in Jharkhand. Many people who were previously

unemployed are now employed. How will this affect the White TV in the region?
Ans – An increase in income of households will result in the increase in demand

for TV sets. The demand curve for both TVs will shift rightward.
b) There are train and bus services between fare between New Delhi and Jaipur
comesdown for bus travel between the two cities?
Ans- Train and bus services are substitute to each other. If train fair comes down
the demand for bus travel willdecrease as a result there wouldbe left ward shift of
demand curve for the bus travel
Q 18.What is the importance of Elasticity of Demand?
Price Elasticity of Demand is a useful concept for the following reasons:
(a) Producer- A producer adopts a price discriminatory policy when elasticity of

demand from different consumers is different. Those consumers for whom
demand is inelasticcan be charged a higher price than those with more elastic
demand.
(b) Foreign Trade- The country in which a product has less elastic demand can
be charged a higher price than a country having a more elastic demand
(c) Government- Goods and services likecigarettes, have inelastic demand. The
Government taxes inelastic, so that the scale of such commodities does not fall
and burden of tax is borne by rich class.
(d) Factor Pricing- Factors having less elastic demand can charge higher prices
than those having more elastic demand. For Example A Pilot gets more salary as
compared to Doctors, since their demand is less elastic. The concept of elasticity
helps in explaining the relative shares to factors of production in the output.
Example 1 Price of a good falls from Rs. 100 to Rs. 80. As a result its demand rises
from 4000 units to 5000 units. Calculate Price Electricity of Demand by
Expenditure Method
Original expenditure = P x Q-
= 100 x 4000 = 4, 00,000 Expenditure after increase in Price = 80 x 5000
= 4,00,000
since the total expenditure is same even after the change in price, the elasticity of
demand is unity
Ed=1
Example 2
A consumer demands 1000 units of the price of Re 10 per unit. If the price of the
said commodity is increased to Rs.14,the demand for the product falls to 600.
Calculate Price Elasticity of Demand.
The ED for good x is known to be twice that of good X price of X falls by 5% while
that of good Y rises by 5%. What is the % age change in the quantities of X and Y?
Consumers’ Equilibrium
Q1. What is Consumers’ Equilibrium?

Ans. A consumer is in a state of equilibrium when he maximizes his satisfaction
by spending his given income on different goods and services.
Q2. DefineTotalUtility (TU)

AnsTotal.utilityisthetotalpsychologicalsatisfactionderivedbyconsumerfrom
consumption of all units of a particular commodity.
Q3. DefineMarginalUtility(MU)
AnsMarginal.Utiisadditionalityutilityderivedfromconsumptionofanadditional
unit of a commodity.
MU=TUn–TUn-1
Q4.HowisTotalUtilityisderivedbysummingupofmarginalutilities.
Ans. UtilityTotalsderivedbysummingupofMarginalUtilities.
Q5. What is utility?
Ans. Utilitymeanswantsatisfyingcapacityofcommodity.
Q6. What is Indifference set?
Ans. It is a set of combinations of two commodities which offer a consumer the

same level of satisfaction, So that he is indifferent between there combinations.
Q7. What is meant by Budget Line.?
Ans. It is a line showing different possible combinations of good 1 and good 2,

which consumer can buy, within the given income at the price of good 1 and good
2.
Q8. What is meant by Indifference Curve?
Ans. An indifference curve is a curve which represents all those combinations of

two good that gives equal satisfaction to the consumer.
Q9. What is meant by marginal rate of substitution?
Ans. Marginalrateofsubstitutionistheratewhichthe consumerIswillingtogive up

good 1 to get an additional unit of good 2 and be indifferent.
Q10. What is the assumptions of indifference curve?
Ans. Followingaretheassumptions:-
(i)Theconsumerbehavesrationallyto obtainmaximumsatisfaction from his

expenditure.
(ii)Theconsumerisabletoarrangeavailablecombination of goods as according to his

preference
(iii)Itisbasedon law of diminishing marginal utility.
Q.11. Write down the Properties of Indifference Curve?
Ans. FollowingaretheProperties.
(i) An indifference curve always slope downward from left to right.
(ii) Higher indifferencecurvesnoteshigherlevelofsatisfaction.
(iii) Indifference curvesare convex totheorigin.
(iv) Indifferencecurvescannotmeetorintersect.
Q 12.Explain Consumer’s Equilibrium in case of single commodity with the help of

a utility schedule.
Ans. Consumers Equilibrium means a situation when a consume buys that much
quantity of a commodity which gives him maximum satisfaction. How much
quantity of a commodity he should buy is explained with the help of a marginal
utility schedule.
MU TU
Units consumed (A) (A) (A)
1 14 14
2 12 26
3 10 36
4 8 44
Condition:-PxMUx =
Supposethe priceofAisRs5/.per-unit
MarginalUtility ofRs 1.-=2
ThenforeachunitofAhehastosacrifice10utility .Hewill compare the MUofeach

unitofAwith Utility hesacrifices .Hewillgo on bayingtillthemarginal utility of
Aisequal to the utilitythathesacrifices. Fromthetableitisclear,thathewillbuy three
units because at third unit, what he pays is just equal to what he gets. So the
consumer is in equilibrium.
conditionofequilibrium=MUofgood = price of good
Q.13 Explain Consumer’s Equilibrium with the help of indifference curve.
Ans.A consumer is said to be in equilibrium when he gets maximum satisfaction,

or at the combination at which budget line touches one of the indifference curves
would be the equilibrium point.
In givenfigurePistheequilibriumpointatwhichbudgetlineMtouchesthehighest
attainable indifference curve 1C, within consumer budget. Bundles on IC2 are not
affordable within budget whereas bundles on IC are certainly inferior to those on
IC1. Hence optimum bundle is located at point P where budget line is tangent to
the indifference curve IC1.
Q.14 Explain the relationship between TU & MU.

Ans(i)TotalUtilityincreasessolongasmarginal utility more thanzero.
(ii)Total Utility ismaximumwhenmarginalutility iszero.
(iii)Total Utility starts declining when marginal utility becomes negative.
Q.15Explain the law of diminishing marginal utility.
Ans.Law of Diminishing Marginal Utility
Thelawstates that asmoreandmoreunitofacommodityareconsumed; marginal

utilityderivedfrom each successive unit goesonfallingExample:. Ahungry –
manwant tochapatti . The firstchapattiwhichheeatswillgivehim
maximumutilitysay100unitsbecause it saves him from hunger. Second chapatti
will also fetch him utility but not as much as thefirstonebecausepartofhishungeris
satisfiedbyeatingthefirstchapatti, say 80unitsFor the samereasonletutility from
the thirdchapattibe50unitsandatlastit may be negative. In short as more and
more chapattis are consumed, marginal utility from them goes on diminishing
because intensity of wants for the chapatti decline.
Units Mu Tu
1 10 10
2 8 18
3 5 23
4 2 25
5 1 26
6 0 26
7 -3 23
Abovediagram shows thatmoreandmoreunit start consumedMUdeclines.
All Course MCQ


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BBA Semester-VI
_______.
(a) Variable cost
(b) Fixed cost
(c) Total cost
(a) Financial
(b) Spot
(c) Historical
(d) Administrative
(c) Flux Method
(b) Electricity
(a) Balance sheet
(c) General ledger
(b) Issue of shares
(a) Quantity
(b) Money
(a) Marginal cost
(b) Historical cost
(c) Standard cost
(a) Only in control
(a) Labour budget
(b) Cash budget
(d) Expenses budget
(a) Financial
(b) Cost
(a) 80,058 units
(b) 1,46,370 units
(c) 32,320 units
(d) 98,642 units
(a) Increases
(c) Decreases
(d) Constant
(a) Managers
(b) Budget officers
(c) Creditors
(a) Month wise
(b) Product wise
(c) Area wise
(a) R & D budget
(b) Master budget
(c) Sales budget
(a) Time
(b) Function
(c) Flexibility
(a) Limiting factor
(a) System
(b) Men
(d) None of these
(d) None of these
(d) None of these
(d) None of these
(a) Cost accounting
(d) None of these
(d) Auditor
(a) Expense centre
(b) Profit centre
(b) Expense centre
(c) Profit centre
concerned persons -
(b) To control cash
(a) Business centre
(b) Profit centre
organization.
(a) Feasible
(b) Necessary
(d) None of these
(c) Can’t say
(a) Can
(b) Cannot
(c) Sometimes
(d) Inadequate data
(a) Shareholders
(b) Management
(c) Creditors
(a) Master budget
(b) Flexible budget
(c) Cash budget
(d) Capital budget
making
decisions
operations
(a) Fixed Cost
(b) Variable Cost
(c) Total Cost
(d) Prime Cost
(a) Cash Budget
(c) Sales Budget
(d) Overhead Budget
(d) Future costs
(b) Shareholders
(c) The Government
(d) Bankers
of taxes owed.
Purchase Budget ?
ledger.
sales.
(a) Money
(b) Quantity
(d) None
(d) None
(b) Ratio analysis
(a) Management
(b) Share holders
(c) Creditors
(d) Employees
(a) Revenue
(b) Cost
(d) None
(b) Cost centre
(c) Profit centre
(d) Expense centre
(a) can not
(b) can
(c) may or may not
(d) must
(a) Material only
(b) Labour only
(c) Expenses only
(a) Master budget
(d) Flexible budget
(b) Master Budget
(d) Flexible Budget
the P/V ratio is -
(a) 20%
(b) 30%
(c) 25%
(d) 40%
(a) Simplicity
(b) Accountability
(c) Promptness
(d) Accuracy
(a) Routine
(b) Special
(c) Investigative
(d) External
(a) Routine
(b) Special
(c) External
(d) Control
(a) Share holders
(b) Government
(d) Creditors
(d) Shareholders
(b) Sales report
(c) Investigation

d. Cost accounting

decision making.
decisions.
operations.
income.

b. shareholders.
c. the government.
d. bankers.


96. Cost accounting
making.
system?
information system?
technology?
a. inventory.
b. capacity.
c. processing time.
d. none of these.
a. zero defects.
products?

and delivery.
a. planning.
b. control.
c. decision making.
d. both a and c.

internal users.
a. planning.
b. control.


d. all of the above

organization.
d. all of the above

goals.
No. No. No. No.
1 B 31 B 61 D 91 C
2 C 32 C 62 C 92 A
3 D 33 D 63 B 93 D
4 D 34 A 64 C 94 C
5 A 35 D 65 C 95 A
6 D 36 B 66 A 96 D
7 C 37 A 67 D 97 B
8 C 38 C 68 A 98 A
9 D 39 C 69 A 99 D
10 C 40 A 70 C 100 A
11 D 41 B 71 A 101 C
12 A 42 D 72 C 102 A
13 A 43 A 73 A 103 B
14 C 44 B 74 D 104 D
15 D 45 C 75 B 105 D
16 B 46 B 76 D 106 C
17 B 47 A 77 B 107 B
18 A 48 B 78 D 108 A
19 C 49 B 79 D 109 B
20 B 50 D 80 B 110 A
21 D 51 A 81 C 111 D
22 A 52 B 82 B 112 A
23 D 53 C 83 A 113 D
24 C 54 A 84 B 114 D
25 D 55 C 85 C 115 D
26 D 56 A 86 D 116 C
27 B 57 C 87 C
28 C 58 A 88 B
29 B 59 D 89 D
30 A 60 C 90 B
All Course MCQ


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Here
MCQs

a. Shareholders
b. Creditors
c. Managers

a. Creditor
c. Controller
d. Treasurer

a. Service entities
d. All of

c. Indirect labour
d. Direct labour

a. Cost
b. Financial
c. Management
d. All

d. None of these
a. Fixed asset
b. Current asset
c. Fictitious asset
d. Wasting asset
c. Cost accounting
d. Real Accounting

c. Both (a) & (b)
d. None of these

a. Debtors account
c. Sales account

a. opening stock
b. net purchases
d. sales

c. Goods account
d. Purchase account

a. Cash account
b. Mahesh Account
c. Sales account
d. Purchase account

b. Rent account
c. Cash account
d. Expense account

a. Discount account
c. Sales account
d. Cash account

Stock = …………………
a. Sales, Purchases


a. Historical
b. Forward looking
c. Analytical
d. Social


c. Labour unrest

a. Only to workers


a. Fixed cost
b. Variable cost

a. Cost unit
b. Cost centre
c. Cost object
d. Cost estimation

a. Prime cost
b. Factory overhead
c. Selling overhead
d. Office overhead
a. Opportunity cost
b. Sunk Cost
c. Incremental cost
d. Decremental cost

a. Loan
b. Unsecured Loan
c. Secured Loan
b. Advertising
c. Depreciation
d. Carriage
a. Practicability
b. Subjectivity

d. All the above
is in pursuance to:



b. Sales account
c. Purchase account

c. (a) &(b) above
b. Trading account
Balance sheet
a. Investment
c. Provision
d. Lease Holds

c. P & L a/c
in……………….

a. Remains fixed

c. Journal
d. Both a and b

48. Cash Purchases:

a. Increases assets
c. Decreases assets


a. Machinery
b. Building
c. Cash
d. Creditor


b. Matching Concept
c. Consistency

a. Building
b. Bank Balance
c. Plant Patents
d. Goodwill

b. Matching Concept
c. Cost Concept

d. Cost Concept

a. Current assets
c. Fixed asset
d. Fixed liability

b. A liability
d. Both a and b
e. Both a and c

a. Dual concept
b. Divider concept
c. Entity concept
d. Landlord concept

a. Nominal Capital
c. Issues capital
d. None of these
d. None of these
d. All of these

a. Projected data
c. Historic data


a. Art and Science
b. Art
c. Science
d. Art or Science

a. Original
b. Duplicate
c. Personal
d. Nominal

b. Rules of Real
c. Rules of Nominal
d. All of these
b. Cash a/c
c. Short term loan
d. creditors
a. Discount
b. Depreciation
c. Reduction


d. None of these

a. Long term loan
b. Short term loan
c. Owner’s fund
d. All of these

a. Current asset
d. None of these

a. Cost
b. Net profit
c. Gross profit
d. Selling price

a. Management only
b. Government only
c. Investor only
d. All of these

a. Provision
a. Provision
a. Separate entity
b. Going concern
c. Consistency
d. Time period
c. Entity Concept
OWNER'S EQUITY
a. Income Statement
c. Balance Sheet

a. Loan from Mr.Y
b. loan to Mr.y
c. Both (a) (b)
d. None of these
a. (ii) (iii)(i)
b. (iii)(iv)(ii)
d. (i)(iv)

a. Accrual concept
b. Cost concept
a. Separate entity
b. Going concern
c. Consistency
d. Time period


a. Trading a/c
b. Balance sheet
d. Trial balance.
b. Corporation
c. Partnership
d. All of them
a. Fiscal year
b. Calendar year
d. Accrual period

a. Personal a/c
b. Impersonal a/c
c. Real a/c
d. Nominal a/c


d. Matching concept
b. Corporation
c. Partnership
d. All of them
recognized when
a. Cash is received
following?
a. Accrual concept
b. Matching concept

a. Fiscal year
b. Calendar year
d. Accrual period
accounting concept?
b. Materiality
c. Prudence
d. Matching concept
a. Concrete
b. Complete
c. Immaterial
d. Material
following?
d. Duality Concept
b. The transactions which cannot be expressed in money, will not be recorded in
accounting books
d. None of These
d. All of the above
a. Rs 70,000
b. Rs 80,000
c. Rs 90,000
d. Rs 1,00,000

a. Revenue Profit
c. Loss
d. None of these

a. Profit
b. Assets
c. Company
d. Books of A/c

a. Depreciation
b. Wages
c. Salary
d. Stationary

a. Assets
b. Liabilities
c. Capital
d. All of these

a. Benefits & Costs
b. Revenues & Costs

a. Patents
b. Trade Marks
c. Copyright
d. Land



d. None of these


a. Practicability
b. Subjectivity
d. None of these
d. None of these
pursuant of
d. None of these

d. None of these
a. Cash a/c
b. Capital a/c
c. Drawing a/c
d. Bank a/c

b. Salaries a/c
c. Cash a/c
d. Bank a/c

a. Customer a/c
b. Sales return a/c
c. Goods a/c

a. Cash a/c
b. Mahesh a/c
c. Sales a/c
d. Sales return a/c

a. Land lord a/c
b. Rent a/c
c. Cash a/c
d. Tenant a/c

a. Discount a/c
b. Customer a/c
c. Sales a/c
d. None of these

a. Debtors Accounts
b. Bad debts a/c
c. Sales a/c
d. None of these

accounting concept
d. None of these
d. None of these
d. None of these
c. Not disclosed
d. None of these

a. Single aspect
b. Dual aspect
c. Triple aspect
d. None of these
Statements
d. None of these
d. None of these
d. None of these.
a. Cash concept
b. Accrual concept
c. Matching concept
d. On-going concept

a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these
a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these
a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None of these
a. Journal
b. Ledger
c. Trial balance
d. None of these
a. Compound Journal
b. Ledger
c. Trial balance
d. None of these

a. Compound Journal
b. Ledger
c. Trial balance
d. None of these
ledger is called as
a. Ledger
b. Posting
c. Forward journal
d. None of these
a. Land
b. Machine
c. Cash
d. Owner Equity
a. Cash
b. Debtor
c. Owner’s equity
d. None of these
a. Rs.1020000
b. Rs.1010000
c. Rs.1030000
a. 600,000
b. 1,400,000
c. 2,000,000
d. None of these
a. Rs.200, 000
b. Rs.700, 000
c. Rs.800, 000
d. Rs1, 100,000
a. 000,000
b. 1,550,000
c. 800,000
d. None of these
a. Only (a)
b. Both (a) (b)
c. All (a)(b)(c)(d)
d. None of these
a. Net Loss
b. Net income
c. Dividend


a. Accounts payable
c. Sales
d. Cash
liabilities?
a. Rs.200
b. Rs.1900
c. Rs.1200
d. Rs.1700
informed reader

a. Goodwill
b. Sales

d. None of theses
b. Currency
c. Money orders

correct?
ledger.
is true?

account credited.

a. Current assets
b. Investments

d. None of these


a. Planning
b. Decision making
c. Control
d. All of these
departments.

d. All of these
a. Variable cost
c. Direct cost



c. Owners

a. Market values


a. Asset
b. Liability
c. Accounts

c. recorded facts


a. Management
b. Creditors
c. Bankers
d. All of the above
a. Sundry creditors
b. Acceptances


a. Actual figures
b. Budgeted figures
c. Standard figures

a. 1910
b. 1939
c. 1950
d. 1960


a. Compulsory
b. Optional
c. Obligation

a. Trading account
c. Balance sheet
d. All of the above
a. Fixed asset
b. Investment
c. Current asset
d. Owners equity.

a. Financial
b. Economic
c. Non financial
d. None of these.
a. sales
b. Share capital
d. Unsecured loan


a. Balance Sheet

a. M. S. Gosav
b. Wheldon
c. LucoPacioli
d. R. N. Carter

a. Analytical
b. Clerical
c. Executive
d. Non- executive

a. Cash basis
b. Accrual basis
c. Mercantile basis
c. Both

a. Capital
b. Revenue
c. Direct
d. Non- cash

a) Nominal account
b) Real Account

a) Balance sheet
b) Trial Balance
c) Ledger
d) Journal
a. cash account
b. capital account
c. drawings account

b. Salaries account
c. Cash account
as:
b. Overhead
a. Variable cost
c. Direct cost

d. All of these
c. Indirect labour
d. Direct labour
a. Indirect labour
b. Direct materials

classified as
a. A prime cost

b. Direct materials
d. Immaterial items

a. Direct labour
b. Direct materials
d. Advertising

b. Direct Wages
c. Direct Expenses
d. Prime Cost

a. Work on cost
b. Work Cost
d. Direct Cost
a. Prime Cost
b. Factory Overhead
c. Selling overhead
d. Office overhead
a. Total Cost
b. Office Cost
c. Cost of sales
d. Selling overhead


d. future costs
a. Rs. 1,80,000
b. Rs. 2,00,000
c. Rs. 1,70,000
d. Rs. 2,10,000
Answers
1. (c) 2. (a) 3. (d) 4. (a) 5. (d) 6. (b) 7. (c) 8. (d) 9. (b) 10. (b)
11. (a) 12. (b) 13. (d) 14. (b) 15. (a) 16. (c) 17. (b) 18. (c) 19. (c) 20. (a)
21. (c) 22. (d) 23. (d) 24. (d) 25. (b) 26. (b) 27. (b) 28. (b) 29. (a) 30. (c)
31. (c) 32, (c) 33. (a) 34. (b) 35. (a) 36. (c) 37. (c) 38. (c) 39. (c) 40. (c)
41. (c) 42. (b) 43. (a) 44. (b) 45. (d) 46. (e) 47. (a) 48. (c) 49. (c) 50. (d)
51. (c) 52. (a) 53. (b) 54. (b) 55. (d) 56. (c) 57. (a) 58. (e) 59. (e) 60. (a)
61. (c) 62. (a) 63. (a) 64. (d) 65. (b) 66. (c) 67. (a) 68. (c) 69. (c) 70. (b)
71. (b) 72. (b) 73. (e) 74. (d) 75. (d) 76. (e) 77. (a) 78. (a) 79. (d) 80. (d)
81. (a) 82. (b) 83. (c) 84. (c) 85. (a) 86. (d) 87. (d) 88. (b) 89. (d) 90. (a)
91. (c) 92. (d) 93. (c) 94. (d) 95. (b) 96. (c) 97. (d) 98. (c) 99. (d) 100. (c)
101.(c) 102.(a) 103.(c) 104.(d) 105.(b) 106.(c) 107.(d) 108.(b) 109.(d) 110.(b)
111.(b) 112.(a) 113.(a) 114.(d) 115.(b) 116.(d) 117.(c) 118.(b) 119.(a) 120.(a)
121.(a) 122.(b) 123.(c) 124.(c) 125.(a) 126.(b) 127.(b) 128.(b) 129.(b) 130.(a)
131.(c) 132.(c) 133.(a) 134.(a) 135.(a) 136.(c) 137.(a) 138.(a) 139.(b) 140.(c)
141.(c) 142.(b) 143.(b) 144.(b) 145.(a) 146.(c) 147.(a) 148.(b) 149.(c) 150.(b)
151.(d) 152.(c) 153.(d) 154.(c) 155.(c) 156.(a) 157.(c) 158.(d) 159.(b) 160.(d)
161.(c) 162.(b) 163.(d) 164.(d) 165.(b) 166.(a) 167.(c) 168.(b) 169.(d) 170.(d)
171.(c) 172.(d) 173.(a) 174.() 175.(b) 176.(c) 177.(d) 178.(a) 179.(d) 180.(c)
181.(d) 182.(b) 183.(b) 184.(a) 185.(b) 186.(c) 187.(c) 188.(a) 189.(d) 190.(d)
191.(b) 192.(a) 193.(c) 194.(c) 195.(b) 196.(d) 197.(d) 198.(a) 199.(a) 200.(c)
201.(a) 202.(c) 203.(b) 204.(b) 205.(a) 206.(a) 207.(b) 208.(d) 209.(c) 210.(b)
211.(b) 212.(b) 213.(d) 214.(d) 215.(d) 216.(b) 217.(d) 218.(b) 219.(c) 220.(a)
221.(d) 222.(b) 223.(b) 224.(a) 225.(b) 226.(b) 227.(c)
All Course MCQ


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Here

A. tax compliance.
B. financial audit.
D. profit analysis.
ANSWER: C

A. each department.
C. each month.
D. each executive.
ANSWER: B

ANSWER: A
A. notional cost.
B. real cost.
C. normal cost.
D. variable cost.
ANSWER: A

B. contractors.
ANSWER: D
A. hospitals.
C. transport firms.
ANSWER: B

A. two ways.
B. three ways.
C. four ways.
D. several ways.
ANSWER: D

ANSWER: A

ANSWER: A
A. the same firm.
ANSWER: A
A. direct cost.
B. indirect cost.
C. sunk cost.
D. imputed cost.
ANSWER: A
A. imputed cost.
B. historical cost.
C. sunk cost.
D. shutdown cost
ANSWER: D

ANSWER: C

A. three types.
B. four types.
C. five types.
D. seven types.
ANSWER: A

A. major expenses.
D. sundry expenses.
ANSWER: B

A. office overhead.
ANSWER: D

A. prime cost.
B. factory cost.
D. production cost.
ANSWER: C

A. prime cost.
B. factory cost.
C. labour cost.
ANSWER: B
A. Factory cost.
C. Selling cost.
D. Labour cost.
ANSWER: B

A. prime cost.
B. works cost.
D. cost of sales.
ANSWER: C
21. Tender is an.

ANSWER: C

A. selling price.
D. value of stocks.
ANSWER: A

ANSWER: C

A. prime cost.
B. works cost.
C. cost of sales.
ANSWER: A

ANSWER: A

A. works on cost.
ANSWER: D

ANSWER: D

A. material cost.
B. labour cost.
C. prime cost.
D. direct expenses
ANSWER: A

A. material cost.
B. labour cost.
C. prime cost.
D. factory cost.
ANSWER: C

A. material cost.
B. labour cost.
C. prime cost.
D. factory cost.
ANSWER: C
A. turnover ratios
ANSWER: A
A. turnover ratios.
ANSWER: B

ANSWER: C

A. turnover ratio.
ANSWER: D

A. turnover ratio.
ANSWER: A
D. turnover ratio.
ANSWER: A

D. turnover ratio.
ANSWER: B

D. turnover ratio.
ANSWER: B

D. turnover ratio.
ANSWER: D
C. operating ratio.
ANSWER: A
ANSWER: C
ANSWER: D

A. fixed assets.
B. current assets.
ANSWER: C

A. fixed assets.
B. current assets.
ANSWER: B
ANSWER: C
is
B. pay out ratio
ANSWER: A
B. pay out ratio.
ANSWER: D
is .
ANSWER: A
.
ANSWER: B

ANSWER: D

A. activity ratios.
B. solvency ratios.
ANSWER: A

ANSWER: A
investment?
8
ANSWER: A
inventory is
ANSWER: A

A. net profit.
ANSWER: D

A. net profit.
ANSWER: D
ANSWER: B

ANSWER: B

ANSWER: C
9
ANSWER: C

D. long term funds.
ANSWER: A
known as .
A. fixed assets.
B. current assets.
D. wasting assets.
ANSWER: B
year are called _.
B. overdraft.
ANSWER: D
Affect .
A. profit.
B. funds.
C. working capital.
D. capital.
ANSWER: B
affect .
A. profit.
B. funds.
C. working capital.
D. capital.
ANSWER: B
ANSWER: A
ANSWER: B
ANSWER: B
ANSWER: A

ANSWER: D

ANSWER: C
the treatment of .
A. prime cost .
B. fixed overheads.
ANSWER: B

ANSWER: B

B. gross profit.
C. net profit.
D. net loss.
ANSWER: A

A. overhead costs .
B. prime cost.
C. variable cost.
D. fixed costs.
ANSWER: D

ANSWER: A

ANSWER: D


ANSWER: B

ANSWER: C

ANSWER: B

A. over production.
ANSWER: C

ANSWER: A

ANSWER: A

ANSWER: B
old B.E.P will be .
A. lower .
B. higher.
C. . unchanged .
D. indeterminate.
ANSWER: B
A. lower .
B. unchanged .
C. higher.
D. indeterminate.
ANSWER: B
A. 10,000.
B. 16,300.
C. 2,000.
D. 2,500.
ANSWER: D
in value .
A. Rs. 7,936.
B. Rs. 7,353.
C. Rs. 8,333.
D. Rs. 9,090.
ANSWER: B
A. Rs. 1,75,000.
B. Rs. 1,17,400.
C. Rs. 1.57,000.
D. Rs. 1,86,667.
ANSWER: A
A. 40% .
B. 80%
C. 15%
D. 30%.
ANSWER: A
A. Rs. 10,000.
B. b. Rs. l4,000 .
C. Rs. 12,000.
D. Rs. 8,000.
ANSWER: B
percentage is _.
A. 33.33%.
B. 66.67%
C. 37.5% .
D. 76.33%.
ANSWER: C
A. Rs. 50 .
B. Rs. 40.
C. Rs. 30 .
D. Rs. 55.
ANSWER: A
A. Rs. 50,000.
B. Rs. 40,000 .
C. Rs. 35,000 .
D. Rs. 45,000 .
ANSWER: B
A. Rs. 1,00,000.
B. Rs. 80,000.
C. Rs. 75,000.
D. . Rs. 60,000.
ANSWER: C
in percentage is .
A. 40% .
B. 60% .
C. 50% .
D. 45%.
ANSWER: C
A. 40% .
B. 60% .
C. 80% .
D. 85% .
ANSWER: B
product would be .
A. Rs.18.75 .
B. Rs.16 .
C. Rs. 15 .
D. Rs.20 .
ANSWER: A

B. real costing.
D. real costing .
ANSWER: A

A. fixed cost.
C. variable cost.
D. market price.
ANSWER: C

D. calculation .
ANSWER: C

A. budget.
B. direct cost.
C. unit cost.
D. cost sheet.
ANSWER: A
C. Master budget .
D. Flexible budget.
ANSWER: A
known as
B. Master budget.
C. Cash budget .
D. Purchase budget.
ANSWER: B

A. .Fixed budget.
B. Cash budget.
C. Sales budget
ANSWER: D
A. Capital budget.
B. Cash budget.
C. Master budget .
ANSWER: D

A. Master budget.
B. Cash budget.
D. Flexible budget.
ANSWER: C
.
A. Formula method.
ANSWER: B
A. Master budget.
B. Rolling budget.
ANSWER: B

ANSWER: D

A. Planning.
B. Organizing.
C. Budgeting.
D. Controlling.
ANSWER: C

A. Planning.
B. Organizing.
C. Budgeting.
D. Controlling.
ANSWER: C

A. Planning.
B. Organizing
C. Budgeting.
D. Control.
ANSWER: D
called .
A. Fixed budget.
B. Flexible budget.
C. Sales budget.
ANSWER: A

A. 1 year.
B. 1-3 years.
C. 1-5 years.
D. 5-10 years.
ANSWER: D
A. Fixed budget.
B. Flexible budget.
C. Sales budget.
ANSWER: D

B. Sales budget.
C. Fixed budget.
D. Flexible budget.
ANSWER: A

D. Material budget.
ANSWER: A

18
D. Material budget.
ANSWER: B

A. Fixed budget.
B. Sales budget.
D. Flexible budget.
ANSWER: C

ANSWER: A
factory is .
D. Master budget.
ANSWER: A
D. Master budget.
ANSWER: B
.
D. Master budget
ANSWER: C
19
ANSWER: D
ANSWER: A
ANSWER: A

ANSWER: A

ANSWER: B

A. Master budget.
B. Flexible budget.
D. Fixed budget.
ANSWER: C

A. At Best Control.
ANSWER: B

A. . Just In Time.
20
C. Job In Time.
ANSWER: A

ANSWER: A
134. FIFO is .
C. Fast In Fast Out
ANSWER: D

ANSWER: A

ANSWER: D
137. Scrap is .
ANSWER: A
B. material order.
ANSWER: A

ANSWER: A
ANSWER: B

A. Master budget.
B. Flexible budget.
D. Fixed budget.
ANSWER: C

B. Master budget.
C. Flexible budget.
D. Fixed budget.
ANSWER: A

B. Expected sales.
D. Expected loss.
ANSWER: A
A. expense.
B. sales.
C. purchase.
D. material.
ANSWER: B

A. expense.
B. sales.
C. purchase.
D. material.
ANSWER: B
A. Rs. 4,50,000.
B. Rs. 4,75,000.
C. Rs. 5,25,000.
D. Rs. 5, 50,000.
ANSWER: B
cast?
A. 20%.
B. 25%.
C. 33.33%.
D. 35%.
ANSWER: B

ANSWER: C

ANSWER: B

ANSWER: B
All Course MCQ


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Chapter 1 Basic Concepts of Accounting
1. ______________ is nothing but the right process of selecting an appropriate, logical, practical and
achievable option from the available alternatives.
(a) Business Decision (b) Planning (c) Organizing (d) Strategy
(a) Partner (b) Sole-trader (c) Executive (d) Manager
3. The relationship between persons who agree to carry on business in a common with a view to private
gain.
4. A ______________ is a form of business organization in which the funds of large number of investors
are managed by a few persons for the purpose of earning profits.
(a) Marketing (b) Profit Earning Capacity (c) Accounting (d) Selling
(a) To calculate net profit or net loss of the business. (b) To know the financial condition of the firm. (c)
To provide information to the management for important managerial decisions. (d) All of the above
Accounting
8. Accounting ______________ are the Rules of Action or the Methods and Procedures of Accounting
commonly adopted while recording Business transactions.
9. According to ______________ concept, assets purchased are generally recorded in accounting books at
the cost at which they are purchase(d)
(a) Business Entity Concept (b) Going Concern Concept (c) Money Measurement Concept (d) Cost
Concept
10. According to ______________ concept, revenue is recognized only when the sale is performed.
(a) Business Entity Concept (b) Going Concern Concept (c) Money Measurement Concept (d)
Realization Concept
11. Accounting ______________ are the traditions, usage andcustoms which are in used since long.
(a) Convention of Consistency (b) Convention of Disclosure (c) Convention of Conservatism (d)
Convention of Realization
(a) Non-Cash Entry System (b) Cash System (c) Single Entry System (d) Double Entry System
(a) Cash Transaction (b) Credit Transaction (c) Financial Transaction (d) Ordinary Transaction
(a) two, two (b) one, one (c) one, two (d) two, one
19. A ______________ is an accounting entry that either increases an asset or expense account, or
20. A ______________ is an accounting entry that either increases a liability or equity account, or
decreases an asset or expense account.
(a) Entry (b) Recording (c) Monetary Transaction (d) Ledger
(a) Entry (b) Recording (c) Transaction (d) Ledger
28. ______________ is a summarized record of transactions related to one person, one asset, one head of
expense/loss and one head of income/gain.
(a) Journal (b) Ledger (c) Cash Book (d) Account
(a) Casting (b) Summarizing (c) Journalizing (d) Ledger Posting
30. ______________ are obligations or debts that the enterprise must pay in money or services at some
time in the future.
(a) Assets (b) Liabilities (c) Responsibilities (d) Salaries
31. ______________ are economic resources of an enterprise that can be usefully expressed in monetary
terms.
(a) Assets (b) Liabilities (c) Cash & Bank Balance (d) Funds
32. ______________ are commodities, purchased or manufactured for resale with a view to earn profit.
(a) Assets (b) Goods (c) Investments (d) Resources
33. ______________ are the amounts the business earns by selling its products or providing services to
customers.
(a) Assets (b) Goods (c) Investments (d) Revenues
(a) Assets (b) Expenses (c) Investments (d) Revenues

35. ______________ are persons and/or other entities who owe to an enterprise an amount for receiving
goods and services on credit.
(a) Debtors (b) Creditors (c) Shareholders (d) Suppliers
36. ______________ are persons and/or other entities that have to be paid by an enterprise an amount for
providing the enterprise goods and services on credit.
(a) Debtors (b) Creditors (c) Shareholders (d) Customers
37. ______________ is a list of the entire general ledger account names and balances; it is prepared to
prove the ledger.
(a) Journal (b) Ledger (c) Cash Book (d) Trial Balance
(a) Debit (b) Credit (c) Balance (d) Cash
39. ______________ deals with expenses related to or identified with products, which may only be a part
of the organization.
Accounting
Accounting
41. The primary objective of ______________ is to provide necessary information to the management in
the process of its planning, controlling, and performance evaluation, and decision-making.
Accounting
Accounting
Accounting
(a) Tally (b) Marg (c) Saral (d) SAP

(a) Accounting softwares save Time and Money. (b) No scope for mistakes and errors. (c) Provides
accurate and updated information as and when require(d) (d) All of the above
Accounting
(a) Two (b) Three (c) Four (d) Five
(a) Narration (b) Explanation (c) Brief information (d) Detail information
Chapter 2 Understanding of Financial Statements

1. ______________ shows the firm’s assets, liabilities, and stockholders’ equity as of the report date.
(a) Cash Flow (b) Funds Flow (c) Income Statement (d) Balance Sheet
2. ______________ shows the results of the firm’s operations and financial activities for the reporting
period.
(a) Trading and Profit & Loss Account (b) Expense Statement (c) Income Statement (d) Balance Sheet
3. ______________ includes explanations of various activities, additional details of some accounts, and
other items as mandated by the regulatory authorities, bodies from time to time.
(a) Trading and Profit & Loss Account (b) Expense Statement (c) Income Statement (d) Supplementary
Note
4. ______________ is a formal official record of the financial activities and position of a business,
person, or other entity.
(a) Financial Statement (b) Trading Account (c) Profit & Loss Account (d) Supplementary Note
5. ______________ provides the vital information related to the profitability, liquidity and solvency of
the business.
(a) Financial Statement (b) Trading Account (c) Profit & Loss Account (d) Cash Flow & Funds Flow
(a) Partnership Firm (b) Sole Trading Firm (c) Private Ltd. Company (d) Public Company
(a) Partnership Firm (b) Sole Proprietorship Firm (c) Private Ltd. Company (d) One Man Company
10. ______________ are nothing but the entries which are not included in the original Trial Balance.
(a) Journal Proper (b) Ledger (c) Adjustments (d) None of the above
(a) One Debit & One Credit (b) Debit (c) Credit (d) None of the above
(a) BRS (b) Balance Sheet (c) Trading A/c (d) Profit and Loss A/c
(a) Balance Sheet Asset Side (b) Profit and Loss A/c Credit Side (c) Trading A/c Debit Side (d) Trading
A/c Credit Side

(a) Balance Sheet Liability Side (b) Profit and Loss A/c Credit Side (c) Balance Sheet Asset Side (d)
(a) Sales (b) Purchases (c) Capital (d) Drawings
(a) Journal A/c (b) Balance Sheet (c) Trading A/c (d) Profit and Loss A/c
(a) Cash (b) Credit (c) Qualitative (d) Quantitative
(a) Accounting Concepts and Conventions (b) Accounting Concepts (c) Accounting Conventions (d)
None of the above
(a) 1st January (b) 1st April (c) 1st March (d) 1st June
(a) 31st January (b) 31st August (c) 31st March (d) 31st December
(a) Capital A/c (b) Balance Sheet Asset Side (c) Trading A/c (d) Profit and Loss A/c
(a) Added (b) Deducted (c) Not Added (d) Not deducted
32. In ______________ business, all incomes and losses are taxed on the individual’s personal income
tax return.
(a) Sole Proprietorship (b) Partnership (c) Cooperative (d) Departmental
(a) Added in respective asset (b) Added in respective liability (c) Added in respective expense (d) Added
in respective income
(a) Deducted from respective asset (b) Added in respective liability (c) Deducted from respective
expense (d) Added in respective income
(a) Income (b) Expense (c) Liability (d) Asset
(a) Sales (b) Purchases (c) Creditors (d) Debtors
(a) Depreciation (b) Discount (c) Purchases (d) Creditors
(a) Income (b) Expense (c) Asset (d) Liability
(a) Profit and Loss A/c Debit Side (b) Profit and Loss A/c Credit Side (c) Balance Sheet Liability Side (d)
Balance Sheet Asset Side
(a) Stock (b) Investment (c) Cash (d) Goodwill
(a) Land (b) Building (c) Machinery (d) Debtors
(a) Capital (b) Loan (c) Bills Payable (d) Creditors
(a) Trading A/c (b) Income A/c (c) Capital A/c (d) Asset A/c
1. ______________ provides a specialized technique, which provides prompt and accurate information
regarding the cost of producing and selling an article.
(a) Cost Accounting (b) Financial Accounting (c) Management Accounting (d) Cost & Financial
Accounting
2. The amount of expenditure incurred on, or attributable to a given thing is called as ______________.
(a) Cost (b) Price (c) Expense (d) Fixed Cost
(a) Costing (b) Accounting (c) Financing (d) Management Accounting
(a) Total Cost (b) Factory Cost (c) Prime Cost (d) Main Cost
(a) Chargeable Expenses (b) Factory Expenses (c) Works Expenses (d) General Expenses
(a) Direct Expenses (b) Factory Expenses (c) General Expenses (d) Indirect Expenses
(a) Total Cost (b) Total Expense (c) Overheads (d) Factory Overheads
(a) Total Cost (b) Cost of Production (c) Works Cost (d) Factory Overheads
(a) Total Cost (b) Cost of Production (c) Works Cost (d) Factory Cost
(a) Total Cost (b) Fixed Overheads (c) Variable Overheads (d) Semi-variable Overheads
(a) Total Cost (b) Direct Cost (c) Works Cost (d) Period Cost
(a) Fixed Cost (b) Controllable Cost (c) Non-controllable Cost (d) Period Cost
(a) Fixed Cost (b) Avoidable Cost (c) Non-controllable Cost (d) Normal Cost
(a) Fixed Cost (b) Unavoidable Cost (c) Abnormal Cost (d) Normal Cost
(a) Fixed Cost (b) Direct Cost (c) Capital Cost (d) Normal Cost
(a) Predetermined Cost (b) Direct Cost (c) Capital Cost (d) Fixed Cost
(a) Predetermined Cost (b) Direct Cost (c) Marginal Cost (d) Fixed Cost
(a) Predetermined Cost (b) Direct Cost (c) Unavoidable Cost (d) Standard Cost
(a) Differential Cost (b) Semi-variable Cost (c) Variable Cost (d) Standard Cost
(a) Differential Cost (b) Programmed Cost (c) Normal Cost (d) Fixed Cost
(a) Standard Cost (b) Programmed Cost (c) Normal Cost (d) Imaginary Cost
(a) Committed Cost (b) Programmed Cost (c) General Cost (d) Imaginary Cost
25. A Location, person, or item of equipment (or a group of these) for which costs may be ascertained and
used for the purpose of control is called as ______________.
(a) Cost Unit (b) Cost Centre (c) Cost Department (d) Cost Division
(a) Cost Sheet (b) Cost Account (c) Cost Report (d) Cost Classification
(a) Historical Cost Sheet (b) Cost Account (c) Cost Report (d) Estimated Cost Sheet
(a) Fixed Overheads (b) Direct Cost (c) Factory Overheads (d) Administration Overheads
(a) Factory Cost (b) Prime Cost (c) Cost of Production (d) Works Cost
(a) Factory Cost (b) Prime Cost (c) Fixed Wages (d) Productive Wages
(a) Units of Production (b) Units of Services (c) Both a and b (d) None of the above
(a) Factory Cost (b) Prime Cost (c) Conversion Cost (d) Productive Cost
(a) One (b) Two (c) Three (d) Four
39. The Expenditure which has been incurred in an accounting period but it is applicable further periods
also is ______________.
(a) Revenue Cost (b) Differential Cost (c) Differed Revenue Cost (d) Variable Cost
40. The estimate of expenditure for different business operations for a specific period is ______________.
(a) Budgeted Cost (b) Differential Cost (c) Differed Revenue Cost (d) Variable Cost

______________.
(a) Incremental Cost (b) Differential Cost (c) Opportunity Cost (d) Future Cost
42. The value of benefit sacrificed in favour of an alternative course of action is ______________ cost.
(a) Incremental (b) Fixed (c) Opportunity (d) Future
______________ in Prime Cost.
(a) Cost of Direct Expenses (b) Cost of Direct Overheads (c) Cost of Direct Labour (d) Cost of Direct
Material
(a) Cost of Sales (b) Fixed Cost (c) Cost of Production (d) Cost of Goods Sold
(a) Cost of Sales (b) Cost of Production (c) Cost of Goods Sold (d) None of the above
(a) Added (b) Deducted (c) Not Considered (d) None of the above
50. ______________ is the process of ascertaining costs whereas ______________ is the process of
recording various costs in a systematic manner, in order to prepare statistical date to ascertain cost.
(a) Costing, Cost Accounting (b) Cost Accounting, Costing (c) Costing and Allocation Cost (d) Costing
and Absorption of Cost
Chapter 4 Cost Control

(a) Inventory Carrying Cost (b) Order Placing Cost (c) Buying Cost (d) Fixed Cost
(a) Inventory Carrying Cost (b) Variable Cost (c) Buying Cost (d) Fixed Cost
(a) Minimize (b) Control (c) Maintain (d) Avoid
(a) EOQ (b) JIT (c) ABC (d) HML
5. Calculate EOQ if Cost of material per unit ` 40, Annual requirement 1600 units, Cost of placing and
receiving one purchase order ` 50, Annual carrying cost of inventory is 10% of inventory value.
(a) 200 Units (b) 175 Units (c) 225 Units (d) 250 Units
______________.
9. A level below which the stock should never be allowed to fall under emergency circumstances is
______________.
10. A strategy for inventory management in which raw materials and components are delivered from the
vendor or supplier immediately before they are needed in the manufacturing process is ______________.
(a) Scientific Purchasing (b) Immediate Buying (c) JIT (d) None of the above
(a) LIFO (b) FIFO (c) Simple Average (d) All of the above
(a) Latest in First Out (b) Last in First Out (c) Largest in First Out (d) Lowest in First Out
(a) Maximum Consumption × Maximum Reorder Period (b) Reorder Level − (Normal Consumption
× Normal Reorder Period) (c) Reorder Level + Reorder Quantity − (Minimum Consumption × Minimum
Normal Reorder Period) (c) Reorder Level + Reorder Quantity − (Minimum Consumption ×
Minimum Reorder Period) (d) Average Usage × Maximum Reorder Period for Emergency Purchases
(a) Normal and Abnormal (b) Avoidable and Unavoidable (c) Controllable and Non-controllable (d)
Fixed and Variable
(a) Wastage (b) Scarp (c) Spoilage or Defectives (d) All of the above
(a) Fixed Cost Control (b) Debtors Control (c) Inventory Control (d) Creditors Control
(a) To protect materials from losses and damages (b) To avoid over and under-stocking of materials (c)
To minimize the storage costs of materials (d) All of the above
21. Wages which can be indentified with and allocated to cost centers and cost units is ______________.
(a) Direct Labour Cost (b) Indirect Labour Cost (c) Fixed Labour Cost (d) Variable Labour Cost
22. ______________ is defined as the rate of change of labour force in an organization during a specified
period.
(a) Labour Turnover (b) Labour Rate (c) Labour Cost (d) Employee Change Rate
(a) Personal Causes (b) Avoidable Causes (c) Unavoidable Causes (d) All of the above
24. ______________ includes all those costs which are incurred to keep the workers satisfied, so that they
are prevented from leaving the organization.
(a) Direct Labour Cost (b) Preventive Cost (c) Maintenance Cost (d) Variable Labour Cost
(a) Separation Method (b) Replacement Method (c) Flux Method (d) All of the above
28. ______________ study is concerned with determining the proper method for performing the job so
that there is no wastage in movement.
29. ______________ study is concerned with the determination of standard time required by a person of
average ability to perform a jo(b)
(a) Assessment of Manpower Requirement (b) Time and Motion Study (c) Control over Idle Time and
Overtime (d) All of the above
(a) Personnel and Payroll Department (b) Time Keeping Department (c) Engineering and Work Study
Department (d) All of the above
(a) Direct Labour Cost (b) Preventive Cost (c) Maintenance Cost (d) Replacement Cost
(a) Attendance Register Method (b) Token or Disc Method (c) Time Recording Clocks & Dial Time
Records (d) All of the above
(a) Daily Time Sheet (b) Weekly Time Sheet (c) Job Cards or Job Tickets (d) All of the above
35. ______________ refers to the estimation of standard time, i.e., the time allowed for completing one
piece of job using the given metho(d)
(a) Work Measurement (b) Time Measurement (c) Period Measurement (d) None of the above
36. ______________ costs are the operating costs of a business enterprise which cannot be traced to a
particular unit of output.
(a) Material (b) Labour (c) Overhead (d) Foxed & Variable
of Overhead
of Overhead
39. ______________ means, the allotment to two or more departments or cost centers of proportions of
common items of cost on estimated basis of benefit received.
(a) Departmentalization (b) Centralization (c) Decentralization (d) Classification
(a) Primary Distribution of Overhead (b) Secondary Distribution of Overhead (c) Simultaneous Equation
Method of Overhead (d) All of the above
42. The overhead, which can be easily identified with a particular department that is charged only to the
specific department, is called ______________.
(a) Collection (b) Allocation (c) Apportionment (d) Classification
(a) Value of Plant (b) Ratio of Plant (c) Quantity of Production (d) None of the above
(a) No. of Workers (b) Days Spend by Workers (c) Time Spent by Workers (d) None of the above
(a) Horse Power (b) KWH (c) No. of Machine Hours (d) All of the above
(a) Value of Materials (b) No. of Stores Requisitions (c) Weight or Value of Materials (d) All of the
above
of Overhead
Chapter 5 Decision-making Tools

(a) Variable Costing (b) Standard Costing (c) Material Costing (d) Job Costing
(a) Marginal Costing (b) Standard Costing (c) Material Costing (d) Job Costing

(a) Contribution to Sales Ratio (b) Contribution Margin Ratio (c) Variable Profit Ratio (d) All of the
above
(a) CVP (b) ABC (c) JIT (d) HML
(a) Centre Point (b) BEP (c) Starting Point (d) Ending Point
(a) P/V Ratio (b) BEP (c) MOS (d) Contribution
9. ______________ is an angle where sales line intersects total cost line which indicates profit earning
capacity over the BEP.
(a) Angle of Incidence (b) Contribution (c) Margin of Safety (d) Gross Margin
(a) 20% (b) 30% (c) 33.33% (d) 1/3
(a) 70% (b) 80% (c) ¾ (d) ½
(a) ` 4,16,667 (b) ` 3,83,333 (c) ` 3,75,000 (d) ` 4,10,000
(a) ` 1,00,000 (b) ` 6,00,000 (c) ` 3,75,000 (d) ` 4,10,000
(a) ` 40,000 (b) ` 10,000 (c) ` 25,000 (d) ` 30,000
(a) ` 4,00,000 (b) `2,00,000 (c) ` 2,50,000 (d) `3,00,000

(a) ` 2,40,000 (b) ` 80,000 (c) ` 2,70,000 (d) ` 2,00,000
(a) Contribution = Sales – Variable Cost (b) Contribution = Fixed Cost + Profit or – Loss (c) Contribution
= Sales × P/ V Ratio (d) All of the above
(a) P/ V Ratio = [Contribution/Sales ] × 100 (b) P/ V Ratio = [Change in Profit/Change in Sales ] × 100
(c) P/ V Ratio = [Sales−Variable Cost/Sales] × 100 (d) All of the above
(a) Technique (b) Method (c) System (d) Convention
20. Under absorption and over absorption of overheads problems are not arisen under ______________.
(a) Marginal Costing (b) Standard Costing (c) Job Costing (d) Budgetary Control
(a) Pre-determined (b) Pre-decided (c) Pre-planned (d) None of the above
(a) Standard Costing (b) Marginal Costing (c) Budgetary Control (d) None of the above
23. ______________ means difference between standard cost and actual cost. (a) Balance Cost (b)
Variance (c) Marginal Cost (d) Variable Cost
24. ______________ helps management to understand the present costs and then to control the future
costs.
(a) ABC Analysis (b) Variance Analysis (c) Marginal Analysis (d) Budget Analysis
a) One (b) Two (c) Three (d) Four
26. If Standard Cost ` 80 and Actual Cost ` 70, then what is the amount of Material Cost Variance?
(a) 10 (b) –10 (c) 150 (d) 20
Material Price Variance?
(a) 10 (b) –10 (c) 150 (d) 20

Material Usage Variance?
(a) 10 (b) –10 (c) 50 (d) 0
the amount of Labour Cost Variance?
(a) 600 (b) –600 (c) 500 (d) 400
the amount of Labour Rate Variance?
(a) 750 (b) –750 (c) 600 (d) 400
31. If Standard Rate ` 1.50 & Standard Hours 1600, Actual Rate `2 & Actual Hours 1500, then what is the
amount of Labour Efficiency Variance?
(a) 150 (b) –150 (c) 300 (d) 200
(a) MCV = MPV + MUV (b) MCV = MPV – MUV (c) MCV = MPV × MUV (d) None of the above
(a) LCV = LRV + LEV (b) LCV = LRV – LEV (c) LCV = LRV × LEV (d) None of the above
(a) Standard Cost and Actual Cost (b) Fixed Cost and Variable Cost (c) Normal Cost and Abnormal
Cost (d) None of the above
(a) Establishments of standards are difficult in practice. (b) Standards are requires to revise continuously.
(c) Inaccurate, unreliable and outdated standards do more harm than benefit (d) All of the above
36. ______________ is a concrete precise picture of the total operation of an enterprise in monetary
terms.
(a) Budget (b) Plan (c) Strategy (d) Goal
(a) Budgetary Control (b) Scientific Planning (c) Standard Costing (d) Marginal Costing
38. Pre- requisitions for effective implementation of Budgetary Control system is/are ______________.
(a) Deciding budget centres & budget period (b) Preparation of a budget manual (c) Determination of
budget key factor (d) All of the above
39. ______________ is the budget in which adjustment is possible according to change in business
conditions.
(a) Flexible Budget (b) Fixed Budget (c) Sales Budget (d) Cash Budget
40. When forecasts about budget shows greater revenue to be received or generated than the expenses to
be incurred during budgeted period that is known as ______________.
(a) Surplus Budget (b) Best Budget (c) Favourable Budget (d) Non-favourable Budget
41. ______________ budget highlights that the expenditures to be incurred in budget period will be
greater than the revenues to be received during the same period.
(a) Surplus Budget (b) Deficit Budget (c) Favourable Budget (d) Non-favourable Budget
42. The establishment of budgets relating the responsibilities of executives to the requirements of a policy
and the continuous comparison of actual with budgeted results, either to secure by individual action the
objective of that policy or to provide basis for its revision is called as ______________.
(a) Budget (b) Budgeting (c) Budgetary Control (d) None of the above
43. A ______________ is a powerful tool available to the management for the purpose of maximizing
profits.
(a) Budget (b) Decrease in selling price (c) Standard Norm (d) Increase in selling price
(a) Static Budget (b) Standard Budget (c) Master Budget (d) Flexible Budget
(a) No Profit No Loss (b) Less Profit (c) Expected Profit (d) None of the above
(a) Cost Budget (b) Labour Budget (c) Employee Budget (d) None of the above
(a) Cash (b) Credit (c) all financial (d) None of the above
(a) Fixed (b) One Month (c) One Year (d) None of the above
(a) Production Budget (b) Material Budget (c) Cost Budget (d) None of the above

(a) Fixed Budget (b) Capital Expenditure Budget (c) Cash Budget (d) Purchase Budget
All Course MCQ


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Accounting & Management Control
1. At what price is the stock valued under conventional method?

(A) At cost price (B) At cost price or market price
whichever is higher
(C) At market price (D) At cost price or market price
whichever is lower
2. Prepaid insurance account is ______

(A) An expenses (B) A revenue
(C) An asset (D) A liability
3. Which of the following is not depreciable asset?

(A) Plant and Machinery (B) Land and Building
(C) Stock (D) Furniture
4. Amay paid Rs. 4,500 to Rohan for goods purchased. In this transaction, while passing
entry in the books of Rohan, which account should be Debited?
(A) Amay’s account (B) Rohan’s account
(C) Cash account (D) Goods account
5. Accounting is the language of ________

(A) Business (B) Books of accounts
(C) Accountant (D) Banks
6. Which of the following is not included under Accounting Concepts?

(A) Money Measurement Concept (B) Business Entity concept
(C) Continuity Concept (D) Profitability Concept
7. The equation of Capital account is

(A) Capital=Liabilities-Assets (B) Capital= Assets + Liabilities
(C) Capital = Assets – Liabilities (D) Capital=Assets
216
(A) Depreciation (B) Wages
(C) Salary (D) Stationary
9. Profit from sale of assets is example of _____

(A) Revenue Profit (B) Capital Profit
(C) Loss (D) Short term profit
10. The term current assets does not include_____

(A) Debtors (B) Bills Receivable
(C) Stock (D) Goodwill
11. The term fixed assets does not include______

(A) Plant (B) Furniture
(C) Prepaid expenses (D) Land and Building
12. Amount receivable by a company against credit sales are usually called_____
(A) Sundry Debtors (B) Bills Receivable
(C) Creditors (D) Bills Payable
13. Which of the following is not an example of Intangible Assets?

(A) Patents (B) Copyright
(C) Trade Marks (D) Land
14. Accounting rules, procedures and methods should be observed alike and should not be
changed from year to year. This is called accounting convention of _____
(A) Consistency (B) Full disclosure
(C) Conservatism (D) Going Concern
15. The entity concept of accounting is applicable to ______

(A) Sole Proprietary concern (B) Partnership Concern
(C) Joint Stock Company (D) All of the aforesaid
217
16. Net working capital is equal to ______
(A) Value of all assets (B) Value of all current assets
(C) Owners + Creditor capital (D) Difference between current assets
and current liabilities
17. The Double Entry System of accounting originated in ______

(A) America (B) Russia
(C) Italy (D) England
18. Which of the following is a personal account?

(A) Investment (B) Commission
(C) Outstanding salary (D) Share premium
19. Only personal and real accounts are shown in ______

(A) Trial balance (B) Balance Sheet
(C) Profit and Loss Account (D) Trading Account
20. The installation expenses for a new machinery will be debited to _____
(A) Installation expenses account (B) Cash account
(C) Machine account (D) Profit and Loss account
21. Closing Stock appearing in the Trial Balance is shown in _____

(A) The Balance sheet only (B) Trading account only
(C) Both trading account and balance (D) Profit and loss account only
sheet
22. Which of the following transactions is of the capital nature?

(A) Purchase of a truck (B) Replacement of old tyres
(C) Cost of repairing of truck (D) Rent of truck
23. This is a costing method applicable to those industries where the activity consists of
continuous or repetitive processes and the products are identical and cannot be
segregated.
(A) Specific Order Costing (B) Operation Costing
(C) Operating Costing (D) Composite or Multiple Costing
218
24. From the following option which one is the example of indirect material
(A) All material or components (B) Primary packing material (e.g.,
specifically purchased, produced carton, wrapping, cardboard,
or requisitioned from stores boxes etc.)
(C) Purchased or partly produced (D) Consumable stores, oil and waste,
components printing and stationery material
25. From the following example identify the Direct expenses

(A) Hire of some special machinery (B) Rent
required for a particular contract
(C) Lighting (D) Insurance charges
26. From which statement we get fund from operation

(A) Preparation of a schedule showing (B) Preparation of Adjusted Profit and
change in working capital Loss
(C) Reconstruction of all non-fund (D) Preparation of a statement of
accounts sources and application of funds
27. What are the component of cash flow statement

(A) Operating Activities (B) Investing Activities
(C) Financing Activities (D) Operation Activities
28. An decrease in any current liability in the current year in comparison to the previous
year results in a __________.
(A) decrease in the working capital (B) increase in the working capital
(C) No Change (D) Increase in the asset
29. The current operations of the business is the most important single source of funds and
in the long run they constitute the largest source of funds.
(A) Sale of fixed assets such as land, (B) Issue of share capital
building, plant, long-term
investment, etc.
(C) Funds from operation (D) Borrowing long-term loans such
as debentures, mortgage, long-
term deposits, etc.
219
30. Cash flow is the ___________.
(A) income statement (B) balance sheet
(C) movement of money into and out (D) changes in the existing financial
of your company position of a business caused by
in-flow and out-flow of resources
owing to receipts and payments
31. The assets which are converted into cash without loss within a short period of time say,
1 year is known as__________.
(A) Quick Assets (B) Absolute Liquid Assets
(C) Current Assets (D) Long term Assets
32. From the following option which one is not a quick asset
(A) Cash in hand (B) Bills receivable

(C) Stock of raw materials, work-in- (D) Short-term investment, i.e., readily
process and finished goods realisable investments
33. Problem 1. The following is the Balance Sheet of Seven Star Company Ltd. on 31st
March., 2015.
Equity share capital 10,00,000 Land and Building 7,00,000
Profit and loss a/c 1,50,000 Plant and Machinery 17,50,000
General reserve 3,00,000 Stock 10,00,000
Bank over draft 20,00,000 Sundry debtors 5,00,000
Sundry creditors 5,00,000 Bills receivable 50,000
Bills payable 2,50,000 Cash at Bank 2,00,000
42,00,000 42,00,000
Compute Current Asset, as per data based on Problem 1
(A) 15,50,000 (B) 17,50,000
(C) 12,00,000 (D) 12,50,000
220
March., 2015.
42,00,000 42,00,000
Compute Current liabilities: as per data based on Problem 1
(A) 25,50,000 (B) 22,50,000
(C) 07,50,000 (D) 27,50,000
March., 2015.
42,00,000 42,00,000
Compute Current ratio: as per data based on Problem 1
(A) 0.777 (B) 0.686
(C) 0.636 (D) 0.607
March., 2015.
42,00,000 42,00,000
Compute Quick ratio: as per data based on Problem 1
(A) 0.890 (B) 1.0
(C) 0.750 (D) 1.25
221
March., 2015.
42,00,000 42,00,000
Compute Absolute liquid ratio as per data based on Problem 1
(A) 0.16 (B) 0.36
(C) 0.26 (D) 1.06
38. Given data compute operating ratio Opening stock 2,50,000 Sales is 1800000
Purchases 10,50,000 Administrative expenses 2,30,000 Gross profit b/d 6,50,000
Selling and distribution expenses 1,00,000 Other income 50,000 Expenses of financing
20,000 Net profit 3,50,000
(A) 76.66% (B) 82.2%
(C) 81.2% (D) 75.55%
39. The ratio of ( External Equities / Internal Equities) is __________.

(A) Proprietory Ratio (B) Fixed Assets Ratio
(C) Debtors turn over ratio (D) Debt-equity Ratio
40. Steps Involved in the Preparation of Fund Flow Statement

I) Preparation of a schedule showing change in working capital
II) Reconstruction of all non-fund accounts
III) Preparation of Adjusted Profit and Loss
IV) Preparation of a statement of sources and application of funds
(A) I ,II, III and IV (B) II, I, III, IV
(C) I,III, II and IV (D) I, III, IV
41. From the following particulars extracted from the books of Ravi Enterprises for the
period ending 31st Mar, 2014. Find out the amount of profit. If Number of units
produced = 750 units, Variable cost for the period = Rs. 2 per unit, Fixed cost for the
period = Rs. 800, Selling price per unit = Rs. 4.
(A) 200 (B) 1500
(C) 700 (D) 900
222
42. Linear semi-variable cost is calculated using cost = a +bx then what is bx
(A) Semi variable (B) Variable cost
(C) Standard cost (D) Fixed cost
43. A line parallel to X-axis (horizontal line) is to be drawn to represent the cost in break
even chart represents _____
(A) Vertical Line (B) Horizontal Line
(C) Fixed Cost Line (D) Total Cost Line
44. Problem 2. From the following data

Selling price per unit Rs. 10.00
Trade discount 5%
Direct material cost per unit Rs. 3.00
Direct labour cost per unit Rs. 2.00
Fixed overhead Rs.10,000
Variable overhead 100% of direct labour cost.
From the given data of Problem 2 calculate the BEP in units
(A) 3333 (B) 2500
(C) 4500 (D) 4000

Trade discount 5%
If sales are 10% above the break even-volume, determine the net profit based on data
as in Problem 2.
(A) 41800 (B) 1000
(C) 11000 (D) 1500
223
Trade discount 5%
If sales are 15% above the break even-volume, determine the net profit based on data
as in Problem 2.
(A) 32200 (B) 1000
(C) 11500 (D) 1500
47. Materials 8.00, Conversion Cost variable 6.00, Dealers Margin 2.00, Selling Price
20.00, Fixed Cost 2,50,000, Present Sales 80,000 units, Capacity Utilization 60%. In
order to increase sales price was reduced by 5%. Calculate sales in unit to maintain
present level of profit.
(A) 1,06,111 (B) 87804.87
(C) 1,16,111 (D) 87804
48. Materials 8.00, Conversion Cost variable 6.00, Dealers Margin 2.00, Selling Price
20.00, Fixed Cost 2,50,000, Present Sales 80,000 units, Capacity Utilization 60%.
Calculate profit.
(A) 1,10,000 (B) 2,90,000
(C) 1,01,000 (D) 1,90,000
49. ___________is a technique where the objectives of performance are jointly determined
by subordinates and their superiors. The progress towards these objectives is
periodically reviewed and the rewards are allocated on the basis of performance.
(A) Management by objectives (B) Budget preparation
(C) Cost variability (D) Measurement of performance
50. Managers of selling profit centers should be given freedom to sell their goods in the
external market, while managers of buying profit centers should be allowed to buy
their goods from the external market.
(A) Details of market prices (B) Good atmosphere
(C) Availability of information (D) Freedom to source
224
51. A __________ is an estimate of what is likely to happen under anticipated conditions
during a specified period of time.
(A) Budget (B) Forecast
(C) Strategic planning (D) planning tool
52. In most organizations the people, who prepare budget proposals tend to budget
revenues lower and expenses higher than their best estimates of these amounts. It is the
difference between the budget amount and best estimate. It is the duty of the superior
to discover and eliminate it.
(A) Negotiation (B) Review and approval
(C) Slack (D) Budgetary Control
53. The examples ie number of students graduating from high school, the number of miles
of road completed, the number of timely arrivals of planes at airports, etc represent
(A) results measures (B) process measures
(C) social indicators (D) means-oriented
54. Although life expectancy indicates the effectiveness of a country’s healthcare system,
it is also affected by the standard of living and the dietary and smoking habits of
people, and other external causes is example of
(A) results measures (B) process measures
(C) social indicators (D) means-oriented
55. ______________ processes are formed as a result of interaction between people. The
process helps in the development of new goals and objectives.
(A) Formal Control Process (B) Informal Control Process
(C) Formal planning process (D) Formal reporting process
56. Businesses with high market share in high growth industries pursue a ________
mission.
(A) Build (B) Hold
(C) Harvest (D) Divest
225
57. In case of Key Variable which one is not true
(A) A key variable is a significant (B) A small change in a key variable
indicator of business activity, will have a significant impact on
whose sudden and unpredictable the performance of the
change warrants immediate action organization
by management
(C) Some examples of key variables (D) Key variable does not differ from
are profitability, market position, business to business
productivity and employee attitude
58. A device that determines the significance of what is actually happening by comparing
it with some standard or expectation of what should happen is
(A) Detector (B) Assessor
(C) Sensor (D) Effectors
59. An _________ which prompts a furnace to emit heat or activates an air

conditioner which also shuts off these appliances when the temperature reaches the
standard levels.
(A) Detector (B) Assessor
(C) Sensor (D) Effectors
60. The main objective is proper distribution of revenue between profit centers. If two or
more profit centers are jointly responsible for product development and marketing,
then the resulting profit has to be shared between the profit centers.
(A) Responsibility Center (B) Budget Control
(C) Transfer Price (D) Key Variables
226
1. D
2. C
3. C
4. C
5. A
6. D
7. C
8. A
9. B
10. D
11. C
12. A
13. D
14. A
15. D
16. D
17. C
18. C
19. B
20. C
21. C
22. A
23. B
24. D
25. A
26. B
27. D
227
28. B
29. C
30. C
31. A
32. C
33. B
34. D
35. C
36. B
37. C
38. B
39. D
40. C
41. C
42. B
43. C
44. D
45. B
46. D
47. C
48. A
49. A
50. D
51. B
52. B
53. A
54. C
228
55. B
56. B
57. D
58. B
59. D
60. C
229
All Course MCQ


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Here
a) Shareholders
b) Creditors
c) Managers
a) Creditor
c) Controller
d) Treasurer
a) Service entities
d) All of these

c) Indirect labour
d) Direct labour

a) Cost
b)Financial
37
c) Management
d) All

d) None of these
a) Fixed asset
b) Current asset
c) Fictitious asset
d) Wasting asset
c) Cost accounting
d) Real Accounting

c) Both (a) & (b)
d) None of these
a) Debtors account
c) Sales account
37
b) net purchases
d)sales


c) Goods account
d) Purchase account
a) Cash account
b) Mahesh Account
c) Sales account
d) Purchase account

b) Rent account
c)Cash account
d) Expense account

a) Discount account
37
c) Sales account
d) Cash account

Stock = …………………
a) Sales, Purchases


a) Historical
b) Forward looking
c) Analytical
d) Social


c) Labour unrest

a) Only to workers

37

a) Fixed cost
b) Variable cost
b) Cost centre
c) Cost object
d) Cost estimation

a) Prime cost
b) Factory overhead
c) Selling overhead
d) Office overhead
a) Opportunity cost
b) Sunk Cost
c) Incremental cost
d) Decremental cost
accounting concept

a) Loan
b) Unsecured Loan
c) Secured Loan
b) Advertising
c) Depreciation
d) Carriage
37
a) Practicability
b) Subjectivity

d) All the above
pursuance to:



b) Sales account
c) Purchase account

c) (a) &(b) above
37
b) Trading account
sheet
a) Investment
c) Provision
d) Lease Holds

c) P & L a/c
in……………….

a) Remains fixed
37

c) Journal
d) Both a and b

48. Cash Purchases:
a) Increases assets
c) Decreases assets


a) Machinery
b) Building
c) Cash
d) Creditor


37

b) Matching Concept
c) Consistency

a) Building
b) Bank Balance
c) Plant Patents
d) Goodwill
b) Matching Concept
c) Cost Concept
d) Cost Concept
a) Current assets
c) Fixed asset
d) Fixed liability

b) A liability
37
d) Both a and b
e) Both a and c
a) Debtors
b) Investors
c) Creditors
d) Shareholders
a) Dual concept
b) Divider concept
c) Entity concept
d) Landlord concept
a) Nominal capital
b) Paid up capital
c) Issues capital
d) None of these

37
d) None of these
d) All of these

a) Projected data
c) Historic data


and Science
b) Art
c) Science
d) Art or Science

a) Original
b) Duplicate
c) Personal
d) Nominal

b) Rules of Real
c) Rules of Nominal
d) All of these
b) Cash a/c
37
c) Short term loan
d) creditors
a)Discount
b) Depreciation
c)Reduction

d) None of these
a) Long term loan
b) Short term loan
c) Owner’s fund
d) All of these

a) Current asset
d) None of these
a) Cost
b) Net profit
c) Gross profit
d) Selling price
a) Management only
b) Government only
c) Investor only
d) All of these
a) Accrual concept
37
b) Cost concept
a) Provisions
a) Separate entity
b) Going concern
c) Consistency
d) Time period

c) Entity Concept

a) Income Statement
c) Balance Sheet
a) Loan from Mr.Y

b) loan to Mr.y
c) Both (a) (b)
d) None of these

37
a) (ii) (iii)(i)
b) (iii)(iv)(ii)
c) (i)(iii)(iv)
d) (i)(iv)

a) Accrual concept
b) Cost concept
a) Separate entity
b) Going concern
c) Consistency
d) Time period



a) Trading a/c
b) Balancesheet
d) Trial balance.
37
Sole proprietorship
b. Corporation
c. Partnership
d. All of them
a) Fiscal year
b) Calendar year
d) Accrual period

a) Personal a/c
b) Impersonal a/c
c) Real a/c
d) Nominal a/c


d) Matching concept
37
b) Corporation
c) Partnership
d) All of them
recognized when
a) Cash is received
following?
a) Accrual concept
b) Matching concept

a) Fiscal year
b) Calendar year
d) Accrual period
accounting concept?
b) Materiality
c) Prudence
d) Matching concept
a) Concrete
b) Complete
37
c) Immaterial
d) Material
following?
d) Duality Concept
accounting books
d) None of These
d) All of the above
a) Rs 70,000
b) Rs 80,000
c) Rs 90,000
d) Rs 1,00,000

a) Revenue Profit
b) Capital Profit
c) Loss
d) None of these
a) Profit
37
b) Assets
c) Company
d) Books of A/c
a) Depreciation
b) Wages
c) Salary
d) Stationary

a) Assets
b) Liabilities
c) Capital
d) All of these
a) Benefits & Costs

b) Revenues & Costs
a) Patents
b) Trade Marks
c) Copyright
d) Land



37
d) None of these

a) Practicability
b) Subjectivity
d) None of these

d) None of these
pursuant of

d) None of these

37
d) None of these
a) Cash a/c
b) Capital a/c
c) Drawing a/c
d) Bank a/c

b) Salaries a/c
c) Cash a/c
d) Bank a/c
a) Customer a/c
b) Sales return a/c
c) Goods a/c
a) Cash a/c
b) Mahesh a/c
c) Sales a/c
d) Sales return a/c
a) Land lord a/c

b) Rent a/c
c) Cash a/c
d) Tenant a/c
a) Discount a/c
b) Customer a/c
c) Sales a/c
d) None of these
a) Debtors Accounts
b) Bad debts a/c
c) Sales a/c
37
d) None of these

accounting concept
d) None of these
d) None of these


d) None of these

c) Not disclosed
d) None of these
a) Single aspect
b) Dual aspect
c) Triple aspect
d) None of these
statements
37
d) None of these
d) None of these
d) None of these.
a) Cash concept
b) Accrual concept
c) Matching concept
d) On-going concept
a) Real a/c
b) Personal a/c
c) Nominal a/c
d) None of these
a) Real a/c
b) Personal a/c
c) Nominal a/c
d) None of these
a) Real a/c
b) Personal a/c
c) Nominal a/c
d) None of these
a) Journal
37
b) Ledger
c) Trial balance
d) None of these

b) Ledger
c) Trial balance
d) None of these

a) Compound Journal
b) Ledger
c) Trial balance
d) None of these
ledger is called as
a) Ledger
b) Posting
c) Forward journal
d) None of these
Land
b) Machine
c) Cash
d) Owner Equity
Cash
b) Debtor
c) Owner’s equity
d) None of these

37
Land Rs.1,000,000
Machinery Rs.20,000
Cash Rs.10,000
Debt Rs.0
Owner’s equity ?

a) Rs.1020000
b) Rs.1010000
c) Rs.1030000

a) 600,000
b) 1,400,000
c) 2,000,000
d) None of these

Land Rs.1, 500,000
Cash Rs.20, 000
Loan Rs.500, 000
Creditors?
a) Rs.200, 000
b) Rs.700, 000
c) Rs.800, 000
d) Rs1, 100,000
Land ?
Vehicles Rs.600,000
Cash Rs.30,000
Loan 5,00,000
37
Creditors Rs.50,000
e) 1,000,000
f) 1,550,000
g) 800,000
h) None of these

c) Cash = Assets
a) Only (a)
b) Both (a) (b)
c) All (a)(b)(c)(d)
d) None of these
a) Net Loss
b) Net income
c) Dividend


a) Accounts payable
c) Sales
d) Cash
Cash Rs.100
37
Bank Loan Rs.1,000
a) Rs.200
b) Rs.1900
c) Rs.1200
d) Rs.1700
informed reader

b. Sales

d.None of theses
b. Currency
c. Money orders
37
correct?
ledger.
true?


37
account credited.
assets
b. Investments

d. None of these

Planning
b) Decision making
c) Control
d) All of these
37
users.
departments.

d. All of these

a. Variable cost
c. Direct cost


37

c) Owners

a) Market values

a) Asset
b) Liability
c) Accounts
c) recorded facts
a) Management
b) Creditors
c) Bankers
d) All of the above
37
a) Sundry creditors
b) Acceptances
a) Actual figures
b) Budgeted figures
c) Standard figures
a) 1910
b) 1939
c) 1950
d) 1960

a) Compulsory
b) Optional
c) Obligation
a) Trading account
c) Balance sheet
d) All of the above
a) Fixed asset
b) Investment
37
c) Current asset
d) Owners equity
a) Financial
b) Economic
c) Non financial
d) None of these
a) sales
b) Share capital
d) Unsecured loan


.
a) Balance Sheet

a) M. S. Gosav
b) Wheldon
c) LucoPacioli
d) R. N. Carter

Analytical
b) Clerical
37
c) Executive
d) Non- executive

Cash basis
b) Accrual basis
c) Mercantile basis

c) Both

Capital
b) Revenue
c) Direct
d) Non- cash
37
a) Nominal account
b) Real Account


Balance sheet
b) Trial Balance
c) Ledger
d) Journal
a) cash account
b) capital account
c) drawings account

Account of Suresh
b) Salaries account
c) Cash account
b) Overhead
e. Variable cost
37
g. Direct cost

d. All of these
g. Indirect labour
h. Direct labour
labour
b) Direct materials

classified as
a) A prime cost

expense
b) Direct materials
d) Immaterial items
37
Direct labour
b) Direct materials
d) Advertising

b) Direct Wages
c) Direct Expenses
d) Prime Cost

a) Work on cost
b) Work Cost
d) Direct Cost

a) Prime Cost
b) Factory Overhead
c) Selling overhead
d) Office overhead
Total Cost
b) Office Cost
c) Cost of sales
d) Selling overhead


(d) future costs
37
(a) Rs. 1,80,000
(b) Rs. 2,00,000
(c) Rs. 1,70,000
(d) Rs. 2,10,000
37
All Course MCQ


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Here
Chapter 1
private gain.

performed.
monetary terms.
profit.
decision-making.

(a) Tally (b) Marg
(c) Saral (d) SAP
(a) Cash (b) Debit
(a) Cash (b) Debit
(a) Two (b) Three
(c) Four (d) Five
1. (a) 11. (a) 21. (a) 31. (a) 41. (b)

2. (b) 12. (d) 22. (b) 32. (b) 42. (d)
3. (a) 13. (a) 23. (c) 33. (d) 43. (b)
4. (c) 14. (d) 24. (a) 34. (b) 44. (a)
5. (c) 15. (a) 25. (c) 35. (a) 45. (d)
6. (d) 16. (b) 26. (a) 36. (b) 46. (a)
7. (c) 17. (c) 27. (b) 37. (d) 47. (c)
8. (a) 18. (a) 28. (d) 38. (c) 48. (b)
9. (d) 19. (a) 29. (a) 39. (d) 49. (d)
10. (d) 20. (b) 30. (b) 40. (a) 50. (a)
Chapter 2
date.
reporting period.
(a) Dual (b) Single
(a) Dual (b) Single
Balance.

(a) Cash (b) Credit

income tax return.


1. (d) 11. (a) 21. (d) 31. (a) 41. (d)

2. (a) 12. (d) 22. (c) 32. (a) 42. (a)
3. (d) 13. (b) 23. (a) 33. (c) 43. (d)
4. (a) 14. (a) 24. (b) 34. (c) 44. (a)
5. (a) 15. (d) 25. (c) 35. (c) 45. (c)
6. (b) 16. (a) 26. (b) 36. (d) 46. (d)
7. (b) 17. (d) 27. (a) 37. (b) 47. (d)
8. (b) 18. (d) 28. (c) 38. (c) 48. (d)
9. (a) 19. (d) 29. (d) 39. (d) 49. (a)
10. (c) 20. (d) 30. (b) 40. (c) 50. (c)
Chapter 3
Cost Accounting
______________.
(a) Cost (b) Price

(a) One (b) Two
(c) Three (d) Four

______________.
______________.
cost.
______________ in Prime Cost.
ascertain cost.
1. (a) 11. (a) 21. (a) 31. (c) 41. (a)

2. (a) 12. (d) 22. (b) 32. (d) 42. (c)
3. (a) 13. (d) 23. (d) 33. (c) 43. (b)
4. (d) 14. (b) 24. (a) 34. (c) 44. (d)
5. (a) 15. (d) 25. (b) 35. (c) 45. (a)
6. (c) 16. (c) 26. (a) 36. (a) 46. (d)
7. (a) 17. (c) 27. (a) 37. (c) 47. (d)
8. (d) 18. (a) 28. (c) 38. (d) 48. (b)
9. (c) 19. (c) 29. (d) 39. (c) 49. (b)
10. (c) 20. (c) 30. (b) 40. (a) 50. (a)
Chapter 4
Cost Control
(a) EOQ (b) JIT
(c) ABC (d) HML
inventory value.
______________.
is ______________.

(a) LIFO (b) FIFO
Period)
Period)
Period)
Period)

______________.
specified period.
(a) Time (b) Motion
(a) Time (b) Motion

1. (a) 11. (d) 21. (a) 31. (d) 41. (d)

2. (b) 12. (b) 22. (a) 32. (d) 42. (b)
3. (a) 13. (a) 23. (d) 33. (d) 43. (a)
4. (c) 14. (b) 24. (b) 34. (d) 44. (a)
5. (a) 15. (c) 25. (d) 35. (a) 45. (d)
6. (a) 16. (d) 26. (a) 36. (a) 46. (d)
7. (b) 17. (a) 27. (b) 37. (a) 47. (a)
8. (c) 18. (d) 28. (b) 38. (b) 48. (b)
9. (d) 19. (c) 29. (a) 39. (c) 49. (b)
10. (c) 20. (d) 30. (d) 40. (a) 50. (c)
Chapter 5
(a) CVP (b) ABC
(c) JIT (d) HML
(a) 20% (b) 30%
(c) 33.33% (d) 1/3
(a) 70% (b) 80%
(c) ¾ (d) ½
(a) ` 4,16,667 (b) ` 3,83,333
(c) ` 3,75,000 (d) ` 4,10,000
(a) ` 1,00,000 (b) ` 6,00,000
(c) ` 3,75,000 (d) ` 4,10,000
(a) ` 40,000 (b) ` 10,000
(c) ` 25,000 (d) ` 30,000
(a) ` 4,00,000 (b) `2,00,000
(c) ` 2,50,000 (d) `3,00,000
(a) ` 2,40,000 (b) ` 80,000
(c) ` 2,70,000 (d) ` 2,00,000
______________.
future costs.
(a) One (b) Two
(c) Three (d) Four
Variance?
(a) 10 (b) –10
(c) 150 (d) 20
(a) 10 (b) –10
(c) 150 (d) 20
(a) 10 (b) –10
(c) 50 (d) 0
(a) 600 (b) –600
(c) 500 (d) 400
(a) 750 (b) –750
(c) 600 (d) 400
(a) 150 (b) –150
(c) 300 (d) 200
monetary terms.
(a) Budget (b) Plan
______________.
______________.
maximizing profits.
(a) Cash (b) Credit
1. (a) 11. (c) 21. (a) 31. (a) 41. (b)

2. (a) 12. (a) 22. (a) 32. (a) 42. (c)
3. (a) 13. (b) 23. (b) 33. (a) 43. (a)
4. (a) 14. (a) 24. (b) 34. (a) 44. (a)
5. (b) 15. (b) 25. (d) 35. (d) 45. (a)
6. (d) 16. (a) 26. (a) 36. (a) 46. (b)
7. (d) 17. (d) 27. (a) 37. (a) 47. (c)
8. (c) 18. (d) 28. (d) 38. (d) 48. (a)
9. (a) 19. (a) 29. (b) 39. (a) 49. (b)
10. (b) 20. (a) 30. (b) 40. (a) 50. (b)

All Course MCQ


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Here
Chapter 1
private gain.

performed.
monetary terms.
profit.
decision-making.

(a) Tally (b) Marg
(c) Saral (d) SAP
(a) Cash (b) Debit
(a) Cash (b) Debit
(a) Two (b) Three
(c) Four (d) Five
1. (a) 11. (a) 21. (a) 31. (a) 41. (b)

2. (b) 12. (d) 22. (b) 32. (b) 42. (d)
3. (a) 13. (a) 23. (c) 33. (d) 43. (b)
4. (c) 14. (d) 24. (a) 34. (b) 44. (a)
5. (c) 15. (a) 25. (c) 35. (a) 45. (d)
6. (d) 16. (b) 26. (a) 36. (b) 46. (a)
7. (c) 17. (c) 27. (b) 37. (d) 47. (c)
8. (a) 18. (a) 28. (d) 38. (c) 48. (b)
9. (d) 19. (a) 29. (a) 39. (d) 49. (d)
10. (d) 20. (b) 30. (b) 40. (a) 50. (a)
Chapter 2
date.
reporting period.
(a) Dual (b) Single
(a) Dual (b) Single
Balance.

(a) Cash (b) Credit

income tax return.


1. (d) 11. (a) 21. (d) 31. (a) 41. (d)

2. (a) 12. (d) 22. (c) 32. (a) 42. (a)
3. (d) 13. (b) 23. (a) 33. (c) 43. (d)
4. (a) 14. (a) 24. (b) 34. (c) 44. (a)
5. (a) 15. (d) 25. (c) 35. (c) 45. (c)
6. (b) 16. (a) 26. (b) 36. (d) 46. (d)
7. (b) 17. (d) 27. (a) 37. (b) 47. (d)
8. (b) 18. (d) 28. (c) 38. (c) 48. (d)
9. (a) 19. (d) 29. (d) 39. (d) 49. (a)
10. (c) 20. (d) 30. (b) 40. (c) 50. (c)
Chapter 3
Cost Accounting
______________.
(a) Cost (b) Price

(a) One (b) Two
(c) Three (d) Four

______________.
______________.
cost.
______________ in Prime Cost.
ascertain cost.
1. (a) 11. (a) 21. (a) 31. (c) 41. (a)

2. (a) 12. (d) 22. (b) 32. (d) 42. (c)
3. (a) 13. (d) 23. (d) 33. (c) 43. (b)
4. (d) 14. (b) 24. (a) 34. (c) 44. (d)
5. (a) 15. (d) 25. (b) 35. (c) 45. (a)
6. (c) 16. (c) 26. (a) 36. (a) 46. (d)
7. (a) 17. (c) 27. (a) 37. (c) 47. (d)
8. (d) 18. (a) 28. (c) 38. (d) 48. (b)
9. (c) 19. (c) 29. (d) 39. (c) 49. (b)
10. (c) 20. (c) 30. (b) 40. (a) 50. (a)
Chapter 4
Cost Control
(a) EOQ (b) JIT
(c) ABC (d) HML
inventory value.
______________.
is ______________.

(a) LIFO (b) FIFO
Period)
Period)
Period)
Period)

______________.
specified period.
(a) Time (b) Motion
(a) Time (b) Motion

1. (a) 11. (d) 21. (a) 31. (d) 41. (d)

2. (b) 12. (b) 22. (a) 32. (d) 42. (b)
3. (a) 13. (a) 23. (d) 33. (d) 43. (a)
4. (c) 14. (b) 24. (b) 34. (d) 44. (a)
5. (a) 15. (c) 25. (d) 35. (a) 45. (d)
6. (a) 16. (d) 26. (a) 36. (a) 46. (d)
7. (b) 17. (a) 27. (b) 37. (a) 47. (a)
8. (c) 18. (d) 28. (b) 38. (b) 48. (b)
9. (d) 19. (c) 29. (a) 39. (c) 49. (b)
10. (c) 20. (d) 30. (d) 40. (a) 50. (c)
Chapter 5
(a) CVP (b) ABC
(c) JIT (d) HML
(a) 20% (b) 30%
(c) 33.33% (d) 1/3
(a) 70% (b) 80%
(c) ¾ (d) ½
(a) ` 4,16,667 (b) ` 3,83,333
(c) ` 3,75,000 (d) ` 4,10,000
(a) ` 1,00,000 (b) ` 6,00,000
(c) ` 3,75,000 (d) ` 4,10,000
(a) ` 40,000 (b) ` 10,000
(c) ` 25,000 (d) ` 30,000
(a) ` 4,00,000 (b) `2,00,000
(c) ` 2,50,000 (d) `3,00,000
(a) ` 2,40,000 (b) ` 80,000
(c) ` 2,70,000 (d) ` 2,00,000
______________.
future costs.
(a) One (b) Two
(c) Three (d) Four
Variance?
(a) 10 (b) –10
(c) 150 (d) 20
(a) 10 (b) –10
(c) 150 (d) 20
(a) 10 (b) –10
(c) 50 (d) 0
(a) 600 (b) –600
(c) 500 (d) 400
(a) 750 (b) –750
(c) 600 (d) 400
(a) 150 (b) –150
(c) 300 (d) 200
monetary terms.
(a) Budget (b) Plan
______________.
______________.
maximizing profits.
(a) Cash (b) Credit
1. (a) 11. (c) 21. (a) 31. (a) 41. (b)

2. (a) 12. (a) 22. (a) 32. (a) 42. (c)
3. (a) 13. (b) 23. (b) 33. (a) 43. (a)
4. (a) 14. (a) 24. (b) 34. (a) 44. (a)
5. (b) 15. (b) 25. (d) 35. (d) 45. (a)
6. (d) 16. (a) 26. (a) 36. (a) 46. (b)
7. (d) 17. (d) 27. (a) 37. (a) 47. (c)
8. (c) 18. (d) 28. (d) 38. (d) 48. (a)
9. (a) 19. (a) 29. (b) 39. (a) 49. (b)
10. (b) 20. (a) 30. (b) 40. (a) 50. (b)

All Course MCQ


Click to Here
Here

Chapter 1
private gain.

performed.
monetary terms.
profit.
decision-making.
(a) Tally (b) Marg
(c) Saral (d) SAP
(a) Cash (b) Debit
(a) Cash (b) Debit
(a) Two (b) Three
(c) Four (d) Five
1. (a) 11. (a) 21. (a) 31. (a) 41. (b)

2. (b) 12. (d) 22. (b) 32. (b) 42. (d)
3. (a) 13. (a) 23. (c) 33. (d) 43. (b)
4. (c) 14. (d) 24. (a) 34. (b) 44. (a)
5. (c) 15. (a) 25. (c) 35. (a) 45. (d)
6. (d) 16. (b) 26. (a) 36. (b) 46. (a)
7. (c) 17. (c) 27. (b) 37. (d) 47. (c)
8. (a) 18. (a) 28. (d) 38. (c) 48. (b)
9. (d) 19. (a) 29. (a) 39. (d) 49. (d)
10. (d) 20. (b) 30. (b) 40. (a) 50. (a)
Chapter 2
date.
reporting period.
(a) Dual (b) Single
(a) Dual (b) Single
Balance.
(a) Cash (b) Credit

income tax return.

1. (d) 11. (a) 21. (d) 31. (a) 41. (d)

2. (a) 12. (d) 22. (c) 32. (a) 42. (a)
3. (d) 13. (b) 23. (a) 33. (c) 43. (d)
4. (a) 14. (a) 24. (b) 34. (c) 44. (a)
5. (a) 15. (d) 25. (c) 35. (c) 45. (c)
6. (b) 16. (a) 26. (b) 36. (d) 46. (d)
7. (b) 17. (d) 27. (a) 37. (b) 47. (d)
8. (b) 18. (d) 28. (c) 38. (c) 48. (d)
9. (a) 19. (d) 29. (d) 39. (d) 49. (a)
10. (c) 20. (d) 30. (b) 40. (c) 50. (c)
Chapter 3
Cost Accounting
.
(a) Cost (b) Price

(a) One (b) Two
(c) Three (d) Four

periods also is .
.
.
cost.
in Prime Cost.
ascertain cost.
1. (a) 11. (a) 21. (a) 31. (c) 41. (a)

2. (a) 12. (d) 22. (b) 32. (d) 42. (c)
3. (a) 13. (d) 23. (d) 33. (c) 43. (b)
4. (d) 14. (b) 24. (a) 34. (c) 44. (d)
5. (a) 15. (d) 25. (b) 35. (c) 45. (a)
6. (c) 16. (c) 26. (a) 36. (a) 46. (d)
7. (a) 17. (c) 27. (a) 37. (c) 47. (d)
8. (d) 18. (a) 28. (c) 38. (d) 48. (b)
9. (c) 19. (c) 29. (d) 39. (c) 49. (c)
10. (c) 20. (c) 30. (b) 40. (a) 50. (a)
Chapter 4
(a) CVP (b) ABC
(c) JIT (d) HML
Ratio? (a) 20% (b) 30%
(c) 33.33% (d) 1/3
(a) 70% (b) 80%
(c) ¾ (d) ½
`? (a) ` 4,16,667 (b) ` 3,83,333
(c) ` 3,75,000 (d) ` 4,10,000
Contribution? (a) ` 1,00,000 (b) ` 6,00,000
(c) ` 3,75,000 (d) ` 4,10,000
Cost? (a) ` 40,000 (b) ` 10,000
(c) ` 25,000 (d) ` 30,000
Cost? (a) ` 4,00,000 (b) `2,00,000
(c) ` 2,50,000 (d) `3,00,000
Cost? (a) ` 2,40,000 (b) ` 80,000
(c) ` 2,70,000 (d) ` 2,00,000
.
future costs.
(a) One (b) Two
(c) Three (d) Four
Variance?
(a) 10 (b) –10
(c) 150 (d) 20
(a) 10 (b) –10
(c) 150 (d) 20
(a) 10 (b) –10
(c) 50 (d) 0
(a) 600 (b) –600
(c) 500 (d) 400
(a) 750 (b) –750
(c) 600 (d) 400
(a) 150 (b) –150
(c) 300 (d) 200

monetary terms.
(a) Budget (b) Plan
.
.
maximizing profits.
(a) Cash (b) Credit
1. (a) 11. (c) 21. (a) 31. (a) 41. (b)

2. (a) 12. (a) 22. (a) 32. (a) 42. (c)
3. (a) 13. (b) 23. (b) 33. (a) 43. (a)
4. (a) 14. (a) 24. (b) 34. (a) 44. (a)
5. (b) 15. (b) 25. (d) 35. (d) 45. (a)
6. (d) 16. (a) 26. (a) 36. (a) 46. (b)
7. (d) 17. (d) 27. (a) 37. (a) 47. (c)
8. (c) 18. (d) 28. (d) 38. (d) 48. (a)
9. (a) 19. (a) 29. (b) 39. (a) 49. (b)
10. (b) 20. (a) 30. (b) 40. (a) 50. (b)
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MCQs

101 – MANAGERIAL ACCOUNTING

1. Managerial accounting information is generally prepared for …………………

2. Which of the following is not an internal user of management information?

3. Management accounting is applicable to

c. Non profit entities

4. Creating Provision against fluctuation in the price of investment is an example of which

b. Convention of full disclosure

material into finished goods is classified as

6. Double entry system is used in which type of accounting

7. Management accounting concentrates on_____________

a. Opening books of account+

b. Preparation of financial statements

c. Control of business activities

Become valueless when the yield is over?

regarding the detail information is

10. The primary objective of management accounting is

a. Prepare final a/c

b. Provide management complete and true information

c. Both (a) & (b)

11. Bad debt amount should be credited to

b. Bad debts account

12. Identify which is wrong rule

a. the Nominal account- debit all expenses & losses

b. Real account- credit what comes in

c. Nominal account- credit all incomes & gains

d. Personal account- debit the receiver

Which part of formula is wrong?

14. Return of goods by a customer should be debited to___________

15. Sales made to Mahesh for cash should be debited to________________

16. Rent paid to landlord should be credited to

17. Cash discount allowed to a debtor should be credited to

18. Opening stock + …………………+ Direct Expenses (Carriage on Raw material)-Closing

b. Sales, Sales return

c. Purchases, Cost of goods produced

d. Purchases, Cost of goods sold

19. Financial accounting is concerned with –

a. Recording of business expenses and revenue

b. Recording of costs of products and services

d. None of the above

20. The nature of financial accounting is:

21. The main object of cost accounting is:

a. To record day to day transactions of the business

b. To reveal managerial efficiency

c. To ascertain true cost of products and services

d. To determine tender price

22. Cost accounting emerged mainly on account of:

b. Competition in the market

d. Limitations of financial accounting

23. Advantages of cost accounting accrue :

d. To management, workers, consumers and government

24. Cost accounting is applied to :

a. Public undertakings only

b. Large business enterprise only

c. Small business concerns only

d. Manufacturing and service concern

25. Marginal costing is concerned with:

c. Semi variable cost

d. None of the above

26. ………………..is a person or item for which cost may be ascertained.

27. Salary paid to factory manager is an item of:

altered by any decision in the future.

30. If loan have been guaranteed by managers and directors is called as