LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Match The Following Question Correct Answer Your Answer Accounting Process of analyzing & interpretation Process of analyzing & interpretation Profitability statement Indicates the amount of profit earned Indicates the amount of profit earned Balance-sheet Financial status Financial status Book-Keeping Books of Accounts Books of Accounts Financial statement Profitability statement & Balance-sheet Profitability statement & Balance-sheet Multiple Choice Single Answer Question Salary paid to employee amounted Rs. 10,000, transferred to Trading A/C is an example of_______ Correct Answer Error of Commission Your Answer Error of Commission Multiple Choice Single Answer Question Labour cost indicates that labour cost which cannot be identified with the individual cost centre and is incurred for those employees who are not engaged in the manufacturing process but only assist i Correct Answer Remuneration Your Answer Indirect True/False Question To take make or buy decision under the marginal costing , if purchase price of the product is less than its variable cost it is advisable to go for manufacturing proposition. Correct Answer False Your Answer False Select The Blank Question Over absorption of overheads may take place due to the reasons like ________ overheads being less than the ________ overheads Correct Answer actual Your Answer estimated Correct Answer estimated Your Answer actual

True/False Question Income received in advance transfer to current liabilities Correct Answer True Your Answer True Select The Blank Question Bank reconciliation statement is the statement prepared to explain the ________ as to why the bank balance as per ________ and bank balance as per bank book does not match Correct Answer reasons Your Answer reasons Correct Answer pass book Your Answer pass book Select The Blank Question Fixed cost is the cost that tend to remain ________ irrespective of ________ Correct Answer constant Your Answer constant Correct Answer level of activity Your Answer level of activity True/False Question A business is an activity carried out with the intention of earning the profit. Correct Answer True Your Answer True Multiple Choice Single Answer Question If wages for the month of January, February and March are Rs.4,000, Rs.4,400 and Rs.4,600 respectively and if delay in payment of wages is month , payment of wages for the month of February is Correct Answer 4,200 Your Answer 4,000 Select The Blank Question Management Accounting has a very ________ scope and it requires ________ organizational structure Correct Answer wide Your Answer wide Correct Answer elaborate

Your Answer elaborate True/False Question Accounting is an art of recording, classifying & summarizing in a significant manner. Correct Answer True Your Answer True Multiple Choice Single Answer Question For a unit, if opening stock of raw material is 10,000 units, closing stock of raw material is 5,000 units and consumption is 3,20,000 units, what will be the quantum of raw material to be purchased Correct Answer 3,15,000 Your Answer 3,15,000 Multiple Choice Multiple Answer Question Important advantages of Uniform Costing can be said to be Correct Answer It is a useful tool for management control , It avoids cut throat competition , Weaker units can take advantage of settled systems of better managed units Your Answer It is a useful tool for management control , It avoids cut throat competition , Weaker units can take advantage of settled systems of better managed units Multiple Choice Multiple Answer Question P/L A/C debit side includes Correct Answer salary , discount allowed , postage & telegram Your Answer postage & telegram , salary , discount allowed Multiple Choice Multiple Answer Question Actual costs may be affected due to inefficient functioning such as Correct Answer Abnormal expenses , In efficient use of labour , In efficient use of material Your Answer Abnormal expenses , In efficient use of labour , In efficient use of material Multiple Choice Single Answer Question Calculate Labour Efficiency Variance, If actual rate per hour is Rs.3.50/- , Standard rate is Rs.3/- per unit and standard hours are 15,000 and Actual hours are 13, 500. Correct Answer Rs.4500/- ( Favorable )

Your Answer Rs.4500/- ( Favorable ) Multiple Choice Multiple Answer Question Sales quantity may be forecasted after taking into consideration various factors such as Correct Answer Analysis of past trends , Market research , Reports by salesmen Your Answer Analysis of past trends , Market research , Reports by salesmen True/False Question For taking make or buy decision marginal costing technique provide useful assistance. Correct Answer True Your Answer True True/False Question Profitability statement indicates the amount of assets & liabilities. Correct Answer False Your Answer False Multiple Choice Single Answer Question It is an appropriate basis of apportionment of depreciation expenditure Correct Answer value of assets Your Answer value of assets True/False Question The variable costs are controllable at the lower level. Correct Answer True Your Answer True True/False Question Balance sheet indicates the expenditure & income from the business. Correct Answer False Your Answer False Match The Following Question Correct Answer Your Answer Journal Book of original entry Book of original entry Ledger Maintain all types of Accounts Maintain all types of Accounts Assets All the properties owned by the business All the properties owned by the business Liabilities All the amount owed by the business All the amount owed by the business

Drawing Withdrawn for personal use Withdrawn for personal use Select The Blank Question A budget manual is a document setting out the ________ of the persons and ________ required for the budget control. Correct Answer Responsibilities Your Answer Responsibilities Correct Answer Forms and procedures Your Answer Forms and procedures True/False Question Credit balances in all the Personal & Real accounts appear on asset side. Correct Answer False Your Answer True True/False Question The process of accounting split into three steams i.e. financial, cost, management accounting. Correct Answer True Your Answer True Multiple Choice Single Answer Question Omission of posting an amount in the ledger Correct Answer Error of Omission Your Answer Error of Omission True/False Question Non-operating / financial expenses are added while calculating net profit. Correct Answer False Your Answer True True/False Question Balance sheet indicates the financial status of the business at given period. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question A Budget Manual may contain the following particulars Correct Answer Duties and responsibilities of various executives , Functions and duties of Budget Officer , Scope of the Budget and area to be covered Your Answer Duties and responsibilities of various executives , Functions and duties

of Budget Officer , Scope of the Budget and area to be covered Select The Blank Question Semi ________ overheads are neither ________ nor variable in nature. Correct Answer fixed Your Answer variable Correct Answer variable Your Answer fixed True/False Question Due to errors of principle the arithmetical accuracy of the trial balance does not get affected. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Direct Cost includes Correct Answer Direct material , Direct labour , Direct expenses Your Answer Direct material , Direct labour , Direct expenses Select The Blank Question Financial Accounting protects the interest of outsiders . it considers ________ transaction and it is a ________ requirement Correct Answer historical Your Answer historical Correct Answer legal Your Answer legal True/False Question Bin Card is having all the information of item received and issued. Correct Answer False Your Answer True Select The Blank Question Budgetary Control is useful for ________-and ________-as a powerful tool in the hands of management Correct Answer Cost control Your Answer Cost control Correct Answer Maximization of profits Your Answer Maximization of profits

True/False Question Accounting refers to the process of analyzing & interpreting the information already recorded in the books of accounts. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question The material Requisition note contains Correct Answer Number and date , Department demanding the material , Signature of the authority approving the demand Your Answer Number and date , Department demanding the material , Signature of the authority approving the demand Multiple Choice Multiple Answer Question Following error affect the trial balance Correct Answer Wrong totaling of subsidiary books , Posting on the wrong side of an account , Omission of posting an account in the ledger Your Answer Wrong totaling of subsidiary books , Posting on the wrong side of an account , Omission of posting an account in the ledger Select The Blank Question Fixed overheads normally arise as a result of policy and are largely ________ in nature at the ________ level of the management Correct Answer uncontrollable Your Answer controllable Correct Answer lower Your Answer top True/False Question Budget is prepared for a fixed period of time. Correct Answer True Your Answer True Multiple Choice Single Answer Question Sold Goods of Amitabh worth Rs. 15,000 against 15% Trade discount. The Goods worth appear on account ___________ Correct Answer 12750 Your Answer 12750 Multiple Choice Single Answer Question This is not the non monetary incentive.

Correct Answer Co-partnership Your Answer Co-partnership Multiple Choice Multiple Answer Question P/L A/C debit side includes Correct Answer salary , discount allowed , postage & telegram Your Answer salary , discount allowed , postage & telegram Select The Blank Question Along with financial accounting, ________ and ________ are the other streams of accounting Correct Answer Cost Accounting Your Answer Cost Accounting Correct Answer Management Accounting Your Answer Management Accounting True/False Question A very wide scope of Management Accounting is the limitation by itself. Correct Answer True Your Answer True at 6:44 AM 1 comments Links to this post Labels: Management Accounting Wednesday, March 12, 2008

Management Accounting - 2
True/False Question Credit balances in all the Personal & Real accounts appear on asset side. Correct Answer False Your Answer False Multiple Choice Multiple Answer Question Contents of Uniform Cost Manual are Correct Answer Organization , Cost Accounting system , Presentation of information

Your Answer Organization , Cost Accounting system , Presentation of information Multiple Choice Multiple Answer Question Uniform Costing Methods may be advantageously applied to . . . Correct Answer Single organization having number of branches. , Number of companies in same industry , Similar Industries such as cotton, jute etc. Your Answer Single organization having number of branches. , Number of companies in same industry , Similar Industries such as cotton, jute etc. True/False Question 1) Financial statements are basically in two forms i.e. profitability statement and balance sheet. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question The process of accounting has three streams of accounting ---------------,--------and ----------------------. Correct Answer Financial Accounting , Cost Accounting , Management Accounting Your Answer Financial Accounting , Cost Accounting , Management Accounting True/False Question Long term loan borrowed from financial institution comes under the heading of long term liabilities. Correct Answer True Your Answer True Match The Following

Question Correct Answer Your Answer Book-Keeping Books of Accounts Books of Accounts Financial statement Profitability statement & Balance-sheet Profitability statement & Balance-sheet Accounting Process of analyzing & interpretation Process of analyzing & interpretation Profitability statement Indicates the amount of profit earned Indicates the amount of profit earned Balance-sheet Financial status Financial status Multiple Choice Single Answer Question Judge the statement according to the criteria given : ' The accounting period for XYZ Ltd. ends on 31st December, 2003. It is noted that office rent for the month of December, 2003 is paid on 15th January, 2004. "According to concept of matching expenses with the revenues, this expenditure should be recorded in the books of accounts in January, Correct Answer The statement and its reason are both incorrect Your Answer The statement is correct but its reason is incorrect Multiple Choice Multiple Answer Question Features of money measurement concept are . . . Correct Answer Only those transactions and facts are included expressed in terms of money are considered , Imposes severe restrictions on the kind of information available from financial statements , Works as a major drawback of financial accounting Your Answer Only those transactions and facts are included expressed in terms of money are considered , Imposes severe restrictions on the kind of information available from

financial statements , Works as a major drawback of financial accounting Multiple Choice Single Answer Question The installation and operation of ___________ accounting requires a very elaborate organizational structure and large number of rules & regulations Correct Answer Management Your Answer Management Select The Blank Question ________account can be defined as the record of all the transactions pertaining to a person, asset, liability income or expenditure which have taken place in a specified period. Correct Answer Ledger Your Answer Trading Match The Following Question Correct Answer Your Answer Sunk Cost Historical Cost Historical Cost Cost Centre Facilitate the fixation of responsibility Facilitate the fixation of responsibility Cost Control Process of controlling costs of operations Process of controlling costs of operations Differential Cost Increase or Decrease in cost Increase or Decrease in cost Multiple Choice Multiple Answer Question Which of the following transactions should be excluded while preparing a cost sheet ?

Correct Answer Interest on loan , Bad debts , Expenses on criminal law suit Your Answer Sale of scrap material , Interest on loan , Bad debts True/False Question In a Balance-Sheet right hand side is referred as assets side and left hand side is referred as liabilities. Correct Answer True Your Answer True True/False Question Credit note is an intimation send to person dealing with the business that his account being debited for the purpose indicated therein. Correct Answer False Your Answer False True/False Question Primary distribution is effected on the basis of service rendered to the service departments by the production departments. Correct Answer False Your Answer True Multiple Choice Multiple Answer Question Marginal costing is found to be unsuccessful in the following situations :Correct Answer Impossible to distinguish costs into fixed and variable component. , With respect to capital intensive industries where fixed costs are very large and hence cannot be ignored , With respect to service industries where employee costs are very large and almost fixed in nature Your Answer

Impossible to distinguish costs into fixed and variable component. , With respect to capital intensive industries where fixed costs are very large and hence cannot be ignored , With respect to service industries where employee costs are very large and almost fixed in nature True/False Question Debit Note is an intimation sent to person dealing with the business that his account is being credited for the purpose indicated therein. Correct Answer False Your Answer True Multiple Choice Multiple Answer Question Labour efficiency variance arises due to: Correct Answer Inefficient supervisor , Poor working conditions , Use of sub-standard quality of material Your Answer Inefficient supervisor , Poor working conditions , Use of sub-standard quality of material True/False Question Financial Accounting discloses the financial performance & financial statements of the business as a whole. Correct Answer True Your Answer True True/False Question Balance sheet indicates the expenditure & income from the business. Correct Answer False Your Answer True

Select The Blank Question The indirect material cost, indirect labour cost and indirect expenses cost, collectively are termed as ________. Correct Answer Overhead Your Answer Overhead Select The Blank Question A person in charge of a ________ may be held responsible for its proper functioning and cost control. Correct Answer Cost centre Your Answer Cost centre Multiple Choice Multiple Answer Question The organization chart shows the following aspects : Correct Answer Functional responsibility of different functional managers , Delegation of authority to various managers , Inter-functional relationships of these managers Your Answer Functional responsibility of different functional managers , Delegation of authority to various managers , Inter-functional relationships of these managers True/False Question Uniform costing system is a pre-requisite to an inter-firm comparison of firms belonging to the different industries. Correct Answer False Your Answer False True/False Question P&L statement which is a period statement & relates to a certain period tells about results of operations.

Correct Answer True Your Answer False Select The Blank Question Depreciation charged on office furniture on straight line basis is an example of ________. Correct Answer Administration overheads Your Answer Administration overheads True/False Question Under time rate system a worker is paid on the basis of production achieved by him in a given time. Correct Answer False Your Answer False Select The Blank Question Information as to the cost and profit / loss associated with the firm's operations is provided to the ________ by Management accounting. Correct Answer Management Your Answer Management True/False Question Danger level for inventory of materials means the safety stock of inventory. Correct Answer False Your Answer True True/False

Question The role of the budget committee may be taken as an advisory role to the Chief Executive. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question The main advantages of profit sharing are : Correct Answer Employees try to increase productivity , Incentives are shared by all the employees , Augments emplyees' efficiency Your Answer Employees try to increase productivity , Incentives are shared by all the employees , Augments emplyees' efficiency Select The Blank Question ________ Accounting assists the management in establishing the plans to attain the economic objectives and take proper decisions for the attainment of its objectives. Correct Answer Management Your Answer Management Multiple Choice Multiple Answer Question Which of the following is likely to be a contributory factor to the incidence of excess expenditure on material cost? Correct Answer The level of control of the used of material in the production cycle , The incorrect choice of purchase order quantity , Failure to control the issue of materials from stores Your Answer An increase in the maximum material inventory level , The incorrect choice of purchase order quantity , Failure to control the issue of materials from stores Multiple Choice Multiple Answer Question

Management accounting is concerned with the following activities : Correct Answer Decision making , Safeguarding assets , Planning and controlling activities Your Answer Decision making , Safeguarding assets , Planning and controlling activities Multiple Choice Multiple Answer Question Features of double entry accounting system are . . . Correct Answer Every business transaction has two elements , When business receives something, it has to pay something , Every debit has a corresponding credit Your Answer Every business transaction has two elements , When business receives something, it has to pay something , Every debit has a corresponding credit Select The Blank Question Under Differential Time Rate method payment is made at Rs. 1.40 per hour when the level of efficiency is between________. Correct Answer 90% to 100% Your Answer 90% to 100% True/False Question Maintenance Department is a service cost centre. Correct Answer True Your Answer True True/False Question The process of accounting split into three steams i.e. financial, cost, management accounting. Correct Answer True Your Answer True

Select The Blank Question The difference between sales and cost of sales is termed as ________. Correct Answer Net Profit Your Answer Net Profit Select The Blank Question The final result disclosed by trading account is the ________profit earned by the organization. Correct Answer Gross Your Answer Gross Multiple Choice Multiple Answer Question Select the accounts to be disclosed on the liability side of the Balance sheet. Correct Answer Loan , Outstanding expenses , Creditors Your Answer Loan , Outstanding expenses , Creditors True/False Question Penalty paid for delay in payment to creditors represents uncontrollable cost. Correct Answer False Your Answer False Multiple Choice Single Answer Question Which document facilitates estimating material cost of a particular job, before completion of that job? Correct Answer Bill of material Your Answer

Material requisition note Multiple Choice Single Answer Question Purchases returns of Rs.18,000/- were wrongly transferred to the sales returns account. Calculate its impact on net profit. Correct Answer The net profit will not be affected Your Answer The net profit will not be affected Multiple Choice Single Answer Question It is said that adoption of uniform costing creates customer confidence because . . . Correct Answer Prices are reliable Your Answer Prices are reliable Multiple Choice Single Answer Question An order for goods worth Rs.18,000/- was placed on 25th March, 2004. The goods were received on 1st April, 2004. Calculate the impact of this transaction on the final statements of accounts for the year ended 31st March, 2004. Correct Answer The net profit will not be affected Your Answer The net profit will not be affected at 6:35 AM 2 comments Links to this post Labels: Management Accounting

Management Accounting - 1
Select The Blank Question Furniture account will always have a ________ balance. Correct Answer Debit Your Answer Nil

Multiple Choice Multiple Answer Question Accounting is the art where transactions are Correct Answer Summarized , Classified , Recorded Your Answer Summarized , Classified , Recorded True/False Question The phrase 'By Balance c/d.' written on the credit side of the rent account, indicates credit balance for this account. Correct Answer False Your Answer False Select The Blank Question The ________ variance is the difference between the actual variable overhead incurred and the standard variable overhead charged to production. Correct Answer Total variable overhead Your Answer Total variable overhead True/False Question Accounting refers to the process of analyzing & interpreting the information already recorded in the books of accounts. Correct Answer True Your Answer True Select The Blank Question The selection of ________ may depend upon the various factors like characteristics of the business organisation, tax considerations, statutory requirements etc. Correct Answer

Accounting period Your Answer Accounting period True/False Question Standard costs are used for external reporting. Correct Answer False Your Answer False True/False Question It is said that the income statement represents wealth increase /decrease for the organisation. Correct Answer True Your Answer False Multiple Choice Single Answer Question Mr. Oak, materials manager, spends 40% time in the factory and the remaining in office. If his annual salary is Rs.500,000/-, what amount should be charged as office overheads ? Correct Answer Rs.300,000/Your Answer Rs.200,000/Multiple Choice Multiple Answer Question The factors to be considered while preparing the direct materials budget are : Correct Answer Adequacy of material storing space , Availability of funds , Material in stores but reserved for specific purposes Your Answer Adequacy of material storing space , Availability of funds , Material in stores but reserved for specific purposes

Multiple Choice Multiple Answer Question In which of the following situations, the flexible budget should be preferred? Correct Answer Sales are too difficult to predict , Supply level of input cannot be predicted , Varying levels of production activity Your Answer Sales are too difficult to predict , Supply level of input cannot be predicted , Varying levels of production activity Multiple Choice Multiple Answer Question Techniques of management accounting include: Correct Answer Marginal costing , Budgetary control , Standard costing Your Answer Marginal costing , Cost control , Budgetary control , Standard costing Match The Following Question Correct Answer Your Answer Profit and loss account Commission received Dividend paid Manufacturing account Work in Progress Land & Building Balance Sheet Land & Building Closing stock of finished goods Trading account Closing stock of finished goods Work in Progress True/False Question While preparing the labour cost budget, factors such as overtime working or night shift working may be ignored. Correct Answer False

Your Answer False Multiple Choice Multiple Answer Question If the sales forecast is less than the past sales but the top management insists upon a certain amount of additional profits, then following steps can be taken to achieve the target profit Correct Answer Increase the selling price , Reduce cost of sales , Increase the selling efforts Your Answer Increase the selling price , Increase the sales volume , Increase the selling efforts Multiple Choice Multiple Answer Question From the following, select intangible assets: Correct Answer Goodwill , Patents , Trade Marks Your Answer Patents , Trade Marks , Investments True/False Question Bank reconciliation statement must be prepared before the preparation of profit and loss account and balance sheet. Correct Answer True Your Answer False Multiple Choice Single Answer Question Find the budget which is inadequate as a cost control technique : Correct Answer Fixed budget Your Answer Fixed budget True/False Question Predetermined rate of absorption of overheads helps in quick preparation of cost

estimates and quoting prices. Correct Answer True Your Answer True Multiple Choice Single Answer Question Net sales Rs,7,50,000/-, opening stock Rs.1,14,375/-, purchases Rs.483,375/- and closing stock Rs.1,47,750/-. Calculate the Gross Profit. Correct Answer Rs.3,00,000/Your Answer Rs.3,00,000/Select The Blank Question ________ is an example of intangible asset. Correct Answer Goodwill Your Answer Land True/False Question Accounting is an art of recording, classifying & summarizing in a significant manner. Correct Answer True Your Answer True True/False Question Goods sent to the customers on approval basis should be treated as sales. Correct Answer False Your Answer False Multiple Choice Multiple Answer Question

Features of Sunk cost are . . . Correct Answer Indicates historical cost , Not relevant in decision making process , Incurred in past Your Answer Indicates historical cost , Incurred in past , Relevant in decision making process True/False Question Profitability statement indicates the amount of assets & liabilities. Correct Answer False Your Answer True True/False Question A business is an activity carried out with the intention of earning the profit. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Identify the steps involved in selecting the optimum product mix, when the limiting factor is number of labour hours and sales demand. Correct Answer For each product find the contribution per unit and per labour hour , Award ranks to each of the products based on contribution per limiting factor , Priority is given to fulfill the market demand of the product which gives maximum contribution per labour hour. Your Answer For each product find the contribution per unit and per labour hour , Award ranks to each of the products based on contribution per limiting factor , Priority is given to fulfill the market demand of the product which gives maximum contribution per labour hour. Multiple Choice Multiple Answer Question Techniques of management accounting include: Correct Answer

Marginal costing , Budgetary control , Standard costing Your Answer Marginal costing , Cost control , Budgetary control True/False Question The ideal budget period for a company engaged in generation and distribution of electricity is one year. Correct Answer False Your Answer False Select The Blank Question The ________ adjustment is necessary to relfect the cost for the use of fixed asset during the year. Correct Answer Depreciation Your Answer Depreciation True/False Question According to Reducing Balance Method, the depreciation is provided at a predetermined percentage on the balance of cost of asset after deduction of the depreciation previously charged. Correct Answer True Your Answer True Select The Blank Question Crane expenses should be apportioned on the basis of ________. Correct Answer Number of hours crane worked in the department Your Answer Number of hours crane worked in the department Multiple Choice Multiple Answer

Question Essentials for effective implementation of budgetary control system are Correct Answer Commitment of top management , Clearly defined objectives , Continous budget education Your Answer Commitment of top management , Clearly defined objectives , Continous budget education Multiple Choice Single Answer Question Commission payable to General Manager is 10 % of the net profits. If the net profit before charging commission is Rs.29,200/-, then what will be the amount of his net profit after commission? Correct Answer Rs.26,545.45 Your Answer Rs.29,200/Select The Blank Question A forecast is mere estimate of what is likely to happen, but ________ is the action plan to be followed. Correct Answer Budget Your Answer Budget True/False Question A very wide scope of Management Accounting is the limitation by itself. Correct Answer True Your Answer True Select The Blank Question The combination in which different products are sold by a company is known as ________. Correct Answer

Sales mix Your Answer Sales mix Multiple Choice Single Answer Question The reporting method used in the costing system should be based on the principle of Correct Answer Management by exception Your Answer Management by objectives True/False Question Balance sheet indicates the financial status of the business at given period. Correct Answer True Your Answer True Multiple Choice Single Answer Question The wages paid to maintenance department workers who do repair work principally for production departments but also on the vehicles in the distribuiton department shoud be charged as: Correct Answer Service costs Your Answer Service costs Multiple Choice Single Answer Question M/s Vivek Enterprises has paid rent relating to the residence of Mr. Vivek, proprietor of Vivek Enterprises. This payment should be treated as Correct Answer Drawings Your Answer Capital Select The Blank Question

Measurement of ________ gives an idea of the degree of mobility of labour. Correct Answer Labour turnover Your Answer Labour turnover Multiple Choice Single Answer Question Net profit for the year before charging commission to the manager, is Rs.111,775/-. The manager of the company is entitled to commission @ 8% on net profits after charging commission. Find the amount of commission due to the manager. Correct Answer Rs.8,279.63 Your Answer Rs.8,942/Match The Following Question Correct Answer Your Answer Total cost Cost of finished goods Cost of finished goods Non operating income Profit on sale of investment Profit on sale of investment Selling and distribution overheads Advertisement expenses Advertisement expenses Factory overheads Repair for factory building Repair for factory building True/False Question Control on purchase of material is exercised by the storekeeper. Correct Answer False Your Answer True

Multiple Choice Single Answer Question A company wishes to earn a 15% profit margin on selling price when quoting for a job. Which of the following is the profit margin of cost which will achieve the required profit margin ? Correct Answer 0.1765 Your Answer 0.15 Select The Blank Question Economical use of labour, materials and facilities can achieved with the help of ________. Correct Answer Budgetary control Your Answer Cost control LIST OF ATTEMPTED QUESTIONS AND ANSWERS Select The Blank Question Furniture account will always have a ________ balance. Correct Answer Debit Your Answer Nil Multiple Choice Multiple Answer Question Accounting is the art where transactions are Correct Answer Summarized , Classified , Recorded Your Answer Summarized , Classified , Recorded True/False Question The phrase 'By Balance c/d.' written on the credit side of the rent account, indicates credit balance for this account. Correct Answer False Your Answer False Select The Blank Question The ________ variance is the difference between the actual variable overhead incurred and the standard variable overhead charged to production. Correct Answer Total variable overhead Your Answer Total variable overhead

True/False Question Accounting refers to the process of analyzing & interpreting the information already recorded in the books of accounts. Correct Answer True Your Answer True Select The Blank Question The selection of ________ may depend upon the various factors like characteristics of the business organisation, tax considerations, statutory requirements etc. Correct Answer Accounting period Your Answer Accounting period True/False Question Standard costs are used for external reporting. Correct Answer False Your Answer False True/False Question It is said that the income statement represents wealth increase /decrease for the organisation. Correct Answer True Your Answer False Multiple Choice Single Answer Question Mr. Oak, materials manager, spends 40% time in the factory and the remaining in office. If his annual salary is Rs.500,000/-, what amount should be charged as office overheads ? Correct Answer Rs.300,000/Your Answer Rs.200,000/Multiple Choice Multiple Answer Question The factors to be considered while preparing the direct materials budget are : Correct Answer Adequacy of material storing space , Availability of funds , Material in stores but reserved for specific purposes Your Answer Adequacy of material storing space , Availability of funds , Material in stores but reserved for specific purposes Multiple Choice Multiple Answer Question In which of the following situations, the flexible budget should be preferred? Correct Answer Sales are too difficult to predict , Supply level of input cannot be predicted , Varying levels of production activity Your Answer Sales are too difficult to predict , Supply level of input cannot be predicted , Varying levels of production activity

Multiple Choice Multiple Answer Question Techniques of management accounting include: Correct Answer Marginal costing , Budgetary control , Standard costing Your Answer Marginal costing , Cost control , Budgetary control , Standard costing Match The Following Question Correct Answer Your Answer Profit and loss account Commission received Dividend paid Manufacturing account Work in Progress Land & Building Balance Sheet Land & Building Closing stock of finished goods Trading account Closing stock of finished goods Work in Progress

True/False Question While preparing the labour cost budget, factors such as overtime working or night shift working may be ignored. Correct Answer False Your Answer False Multiple Choice Multiple Answer Question If the sales forecast is less than the past sales but the top management insists upon a certain amount of additional profits, then following steps can be taken to achieve the target profit Correct Answer Increase the selling price , Reduce cost of sales , Increase the selling efforts Your Answer Increase the selling price , Increase the sales volume , Increase the selling efforts Multiple Choice Multiple Answer Question From the following, select intangible assets: Correct Answer Goodwill , Patents , Trade Marks Your Answer Patents , Trade Marks , Investments True/False Question Bank reconciliation statement must be prepared before the preparation of profit and loss account and balance sheet. Correct Answer True Your Answer False Multiple Choice Single Answer Question Find the budget which is inadequate as a cost control technique :

Correct Answer Fixed budget Your Answer Fixed budget True/False Question Predetermined rate of absorption of overheads helps in quick preparation of cost estimates and quoting prices. Correct Answer True Your Answer True Multiple Choice Single Answer Question Net sales Rs,7,50,000/-, opening stock Rs.1,14,375/-, purchases Rs.483,375/- and closing stock Rs.1,47,750/-. Calculate the Gross Profit. Correct Answer Rs.3,00,000/Your Answer Rs.3,00,000/Select The Blank Question ________ is an example of intangible asset. Correct Answer Goodwill Your Answer Land True/False Question Accounting is an art of recording, classifying & summarizing in a significant manner. Correct Answer True Your Answer True True/False Question Goods sent to the customers on approval basis should be treated as sales. Correct Answer False Your Answer False Multiple Choice Multiple Answer Question Features of Sunk cost are . . . Correct Answer Indicates historical cost , Not relevant in decision making process , Incurred in past Your Answer Indicates historical cost , Incurred in past , Relevant in decision making process True/False Question Profitability statement indicates the amount of assets & liabilities. Correct Answer False Your Answer True True/False Question A business is an activity carried out with the intention of earning the profit.

Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Identify the steps involved in selecting the optimum product mix, when the limiting factor is number of labour hours and sales demand. Correct Answer For each product find the contribution per unit and per labour hour , Award ranks to each of the products based on contribution per limiting factor , Priority is given to fulfill the market demand of the product which gives maximum contribution per labour hour. Your Answer For each product find the contribution per unit and per labour hour , Award ranks to each of the products based on contribution per limiting factor , Priority is given to fulfill the market demand of the product which gives maximum contribution per labour hour. Multiple Choice Multiple Answer Question Techniques of management accounting include: Correct Answer Marginal costing , Budgetary control , Standard costing Your Answer Marginal costing , Cost control , Budgetary control True/False Question The ideal budget period for a company engaged in generation and distribution of electricity is one year. Correct Answer False Your Answer False Select The Blank Question The ________ adjustment is necessary to relfect the cost for the use of fixed asset during the year. Correct Answer Depreciation Your Answer Depreciation True/False Question According to Reducing Balance Method, the depreciation is provided at a predetermined percentage on the balance of cost of asset after deduction of the depreciation previously charged. Correct Answer True Your Answer True Select The Blank Question Crane expenses should be apportioned on the basis of ________. Correct Answer Number of hours crane worked in the department Your Answer Number of hours crane worked in the department Multiple Choice Multiple Answer Question Essentials for effective implementation of budgetary control system are

Correct Answer Commitment of top management , Clearly defined objectives , Continous budget education Your Answer Commitment of top management , Clearly defined objectives , Continous budget education Multiple Choice Single Answer Question Commission payable to General Manager is 10 % of the net profits. If the net profit before charging commission is Rs.29,200/-, then what will be the amount of his net profit after commission? Correct Answer Rs.26,545.45 Your Answer Rs.29,200/Select The Blank Question A forecast is mere estimate of what is likely to happen, but ________ is the action plan to be followed. Correct Answer Budget Your Answer Budget True/False Question A very wide scope of Management Accounting is the limitation by itself. Correct Answer True Your Answer True Select The Blank Question The combination in which different products are sold by a company is known as ________. Correct Answer Sales mix Your Answer Sales mix Multiple Choice Single Answer Question The reporting method used in the costing system should be based on the principle of Correct Answer Management by exception Your Answer Management by objectives True/False Question Balance sheet indicates the financial status of the business at given period. Correct Answer True Your Answer True Multiple Choice Single Answer Question The wages paid to maintenance department workers who do repair work principally for production departments but also on the vehicles in the distribuiton department shoud be charged as: Correct Answer Service costs Your Answer Service costs

Multiple Choice Single Answer Question M/s Vivek Enterprises has paid rent relating to the residence of Mr. Vivek, proprietor of Vivek Enterprises. This payment should be treated as Correct Answer Drawings Your Answer Capital Select The Blank Question Measurement of ________ gives an idea of the degree of mobility of labour. Correct Answer Labour turnover Your Answer Labour turnover Multiple Choice Single Answer Question Net profit for the year before charging commission to the manager, is Rs.111,775/-. The manager of the company is entitled to commission @ 8% on net profits after charging commission. Find the amount of commission due to the manager. Correct Answer Rs.8,279.63 Your Answer Rs.8,942/Match The Following Question Correct Answer Your Answer Total cost Cost of finished goods Cost of finished goods Non operating income Profit on sale of investment Profit on sale of investment Selling and distribution overheads Advertisement expenses Advertisement expenses Factory overheads Repair for factory building Repair for factory building

True/False Question Control on purchase of material is exercised by the storekeeper. Correct Answer False Your Answer True Multiple Choice Single Answer Question A company wishes to earn a 15% profit margin on selling price when quoting for a job. Which of the following is the profit margin of cost which will achieve the required profit margin ? Correct Answer 0.1765 Your Answer 0.15

Select The Blank Question Economical use of labour, materials and facilities can achieved with the help of ________. Correct Answer Budgetary control Your Answer Cost control

Multiple Choice Multiple Answer Question The management of Horngreen Ltd. is deciding whether to continue working at loss or to temporarily shut down the factory. State the qualitative aspects that must be considered before arriving at a decision. Correct Answer Loss of trained personnel , Loss of regular customers , Expenditure required to restart the factory Your Answer Expenditure required to restart the factory Multiple Choice Single Answer Question The purchase budget for October is Rs.12,500/- and November is Rs.15,000/-. If the materials are purchased for cash the supplier is offering a rebate of 5%. If the materials are purchased on credit of 30 days, no rebate is offered. The company purchase Correct Answer October- NIL, November- Rs.26,750/Your Answer October- Rs.14,250/-, November- Rs.11,875/True/False Question Maintenance Department is a service cost centre. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Ram and Laxman are partners of Kush & Bros. As on 1st April, 2003 Ram's capital is Rs.50,000/- and Laxman's capital is Rs.80,000/-. If interest on capital is to be provided @ 10% p.a., what will be amount of capital of each of the partners as on 31st March, 2004, assuming there were no additions during this period? Also, state the treatment of this item in the Profit and loss account. Correct Answer Ram's capital Rs.55,000/- , Laxman's capital Rs.88,000/- , Interest on capital should be debited to the Profit and loss account Your Answer Laxman's capital Rs.88,000/- , Interest on capital should be debited to the Profit and loss account Multiple Choice Single Answer Question Rs.2,650/- were paid to ABC Ltd. for maintenance of machine; which account should be debited for this transaction?

Correct Answer Maintenance of machine account Your Answer ABC Ltd.'s Account Match The Following Question Correct Answer Your Answer Advantageously applicable in similar industries Scope of uniform costing Fields covered by uniform costing Spirit of mutual trust Requisite for uniform costing Disadvantage of uniform costing Avoids cut throat competition Advantage of uniform costing Requisite for uniform costing Treatment given to research and development costs Fields covered by uniform costing Advantage of uniform costing

Select The Blank Question Under the AB________ analysis, nuts and bolts used as material will be classified as category C. Correct Answer C Your Answer C Select The Blank Question If overhead absorbed i.e. overheads charged to units during the period is more than the overhead incurred, it is said that the overheads are ________. Correct Answer Over-absorbed Your Answer True and fair Multiple Choice Multiple Answer Question Identify the causes due to which the cost of labour may be high: Correct Answer Excess staffing , Lack of experienced and efficient personnel , High labour turnover Your Answer Lack of experienced and efficient personnel , High labour turnover , No idle time Multiple Choice Multiple Answer Question Identify the fixed expenses from the following. Correct Answer Rent and taxes of the factory , Wages paid to indirect workers like cleaners, helpers,etc. , Salary paid to factory supervisor

Your Answer Rent and taxes of the factory , Wages paid to indirect workers like cleaners, helpers,etc. , Salary paid to factory supervisor Multiple Choice Multiple Answer Question From the following, select intangible assets: Correct Answer Goodwill , Patents , Trade Marks Your Answer Goodwill , Patents , Trade Marks True/False Question According to Reducing Balance Method, the depreciation is provided at a predetermined percentage on the balance of cost of asset after deduction of the depreciation previously charged. Correct Answer True Your Answer False Select The Blank Question Average stock = ________ + (Order size / 2) Correct Answer Safety stock Your Answer Reorder level True/False Question High time wages means necessarily high cost of production. Correct Answer False Your Answer True Multiple Choice Single Answer Question The integrated form of all functional budgets is known as : Correct Answer Master budget Your Answer Master budget Select The Blank Question Marginal costing is also known as ________. Correct Answer Variable costing Your Answer Indirect costing Multiple Choice Single Answer Question Purchased 200 shares of Bharat Forge Ltd. for Rs.850/- per share, which account should be debited? Correct Answer Investment account - Rs.170,000/Your Answer Investment account - Rs.170,000/-

Multiple Choice Single Answer Question For a bought out material item the following are the relevant data : Ordering cost Rs.512/- per order; holding cost is 40%; cost per item Rs.100/- and annual demand 1,000 units. The Purchase manager places 5 orders of equal quantity in one year, in order to avail the discount of 5% on the cost of the item. Work out the total cost to the organisation due to his ordering policy for this item. Correct Answer Rs.101,360/Your Answer Rs.101,360/True/False Question Due to compensating errors the arithmetical accuracy of the trial balance is affected. Correct Answer False Your Answer False Multiple Choice Single Answer Question From the given information compute the total cost variance. Material cost variance -Rs.4,400/- (Favourable); labour cost variance -Rs.450/- (Adverse); fixed overhead cost variance -Rs.22,000/- (Adverse); variable overhead cost variance -Rs.6,000/- (adverse). Correct Answer Rs.24,050/- (Adverse) Your Answer Rs.32,850/- (Favourable) Multiple Choice Single Answer Question Advance tax account should appear in which of the final statement of accounts. Correct Answer Asset side of the balance sheet Your Answer Debit side of the profit and loss account Match The Following Question Correct Answer Your Answer Operating income Cash Sales Cash Sales Non-Operating income Issue of shares Issue of shares Plan of investment in fixed assets Capital Expenditure Budget Cash Budget Plan for surplus/shortage of cash Cash Budget Capital Expenditure Budget

Select The Blank Question Furniture account will always have a ________ balance. Correct Answer Debit Your Answer Inflated Select The Blank Question Payment by ________ method lowers the cost of production through their impact on fixed costs. Correct Answer Results Your Answer Cash Multiple Choice Multiple Answer Question The objects of cost accountancy are . . Correct Answer To ascertain cost and profitability , Cost Control , Presentation of Information Your Answer To ascertain cost and profitability , Cost Control , To portray the financial status Multiple Choice Multiple Answer Question Select the various methods adopted for treatment of under or over absorbed overheads Correct Answer Use of supplementary rates , Carrying over the amount to remaining period , Writing off to the Costing Profit and Loss Account Your Answer Use of supplementary rates , Carrying over the amount to remaining period , Writing off to the Costing Profit and Loss Account True/False Question Absorption costing is more suitable for decision making than marginal costing Correct Answer False Your Answer True Select The Blank Question A low margin of safety indicates ________ fixed overheads. Correct Answer higher Your Answer higher Multiple Choice Single Answer Question Which of the following operations would normally be carried out first when preparing a master budget? Correct Answer Determining the budget period

Your Answer Identifying the principal budget factor True/False Question Period cost is the cost assigned to the products. Correct Answer False Your Answer True Select The Blank Question Profit = Contribution per unit X ________. Correct Answer Margin of safety (units) Your Answer Sales (units) Multiple Choice Multiple Answer Question Which of the following aspects are mainly responsible for difficulty in application of Uniform costing system. Correct Answer Capital investment , Plant size , Location Your Answer Capital investment , Plant size , Loans taken Select The Blank Question As per the provisions of Section 209 of ________, all the company form of organisation is legally required to follow the mercantile or accrual system of accounting. Correct Answer The Companies Act, 1956 Your Answer The Companies Act, 1956 Multiple Choice Single Answer Question ABC Ltd. produces 10,000 units at 100% capacity utilization and its cost structure is as follows : Fixed cost Rs.50,000/-; variable costs Rs.30,000/- and semivariable costs Rs.40,000/- (40% var Correct Answer Rs.13.85 Your Answer Rs.11.85 Select The Blank Question Loss of uninsured goods by fire was debited incorrectly to United India Assurance Company's account instead of debiting it to ________ account. Correct Answer Goods lost by fire Your Answer Goods lost by fire Multiple Choice Multiple Answer Question Management Accounting is Correct Answer Designed particularly for internal use , Helpful in estimating the

future along with past period , Useful in furnishing the necessary information to the management Your Answer Helpful in estimating the future along with past period , Useful in furnishing the necessary information to the management , A legal requirement. Multiple Choice Multiple Answer Question The disadvantages of supplementary overhead rates are: Correct Answer It can be determined only after the end of the accounting period , Defeats the basic concept of normal cost , Involves lot of clerical activity Your Answer Defeats the basic concept of normal cost , Involves lot of clerical activity , It can be determined only in the beginning of the accounting period True/False Question GAIL having monopoly in the CNG (Compressed Natural Gas) market can implement the Uniform costing system. Correct Answer False Your Answer True True/False Question One of the main objection to the contribution approach of costing is that it ignores fixed cost. Correct Answer True Your Answer False Multiple Choice Multiple Answer Question Pre-requisites of Uniform Costing are . . . Correct Answer Spirit of mutual trust , Free Exchange of ideas , No rivalry Your Answer Spirit of mutual trust , Free Exchange of ideas , Tendency of withholding information Select The Blank Question Uniform costing is not a separate method of ________. Correct Answer cost accounting Your Answer costing Multiple Choice Single Answer Question Tom company has sales of Rs.200,000/- with variable expenses of Rs.150,000/-, fixed expenses of Rs.60,000/-, and an operating loss of Rs.10,000/-. By how much would Tom have to increase its sales in order to achieve an operating income of 10% of sales? Correct Answer Rs.200,000/-

Your Answer Rs.251,000/True/False Question An entry in the stores ledger is required for transfer of material from one job to another in the same department. Correct Answer False Your Answer False Multiple Choice Multiple Answer Question For the month of November, a firm has budgeted sales of 20,000 units of X at a price of Rs.10/- and sale of 30,000 untis of Y at a price of Rs.6/- per unit. Actual sale during the month was 35,000 units of X at Rs.9/- per unit and 25,000 units of Y at Rs.8/- per unit. Calculate sales volume variance, sales mix variance and sales quantity variance. Correct Answer Sales volume variance -Rs.120,000/- (Favourable) , Sales mix variance -Rs.44,000/- (Favourable) , Sales Quantity variance-Rs.76,000/(Favourable) Your Answer Sales volume variance -Rs.120,000/- (Favourable) , Sales mix variance -Rs.44,000/- (Favourable) , Sales Quantity variance-Rs.76,000/- (Favourable) True/False Question The purpose of the profit and loss account is to bring togethre information which relates to gross profit and the expenses for running the business. Correct Answer True Your Answer True Multiple Choice Single Answer Question A firm has purchased a plant to manufacture a new product, the cost data for which is given below : Estimated annual sales 24,000 units. Estimated costs : Materials Rs.4/- per unit; labour Re.0.60 per unit; overheads Rs.24,000/- per year; administrative expenses Rs.28,800/- per year and selling expenses are 15% of sales; Calculate the selling price per unit if profit per unit is Rs.1.02. Correct Answer Rs.9.20/Your Answer Rs.7.74/Multiple Choice Single Answer Question A company wishes to earn a 15% profit margin on selling price when quoting for a job. Which of the following is the profit margin of cost which will achieve the required profit margin ? Correct Answer 0.1765 Your Answer 0.15

at 4:03 AM 0 comments Links to this post Labels: Management Accounting (Set III)

Management Accounting - 8
LIST OF ATTEMPTED QUESTIONS AND ANSWERS True/False Question Purchased goods by paying Rs.35,000/-: In this case, the cash account should be debited. Correct Answer True Your Answer False True/False Question The rates at which the depreciation is to be calculated are specified in the Income Tax Act 1961 and The Companies Act, 1956. Correct Answer True Your Answer True Select The Blank Question The various contents of a uniform cost manual are organisation, cost accounting system and ________. Correct Answer presentation of information Your Answer organisation structure True/False Question It is said that marginal costs are used primarily in guiding decisions that are yet to be made. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Select the examples of functional budgets: Correct Answer Sales budget , Production budget , Research and development budget Your Answer Sales budget , Production budget , Capital expenditure budget Multiple Choice Single Answer Question A business's telephone bill should nromally be classified into which one of the following categories?

Correct Answer Semi-variable cost Your Answer Variable cost Match The Following Question Correct Answer Your Answer Closed the account with State Bank of India Henceforth, there shall be no difference in overdraft balances Henceforth, there shall be no difference in overdraft balances Debit side of bank book is overcast Overdraft as per bank book < Overdraft as per pass book Overdraft as per bank book = Balanceas per pass book Interest on debentures directly credited by bank Overdraft as per bank book > Overdraft as per pass book Overdraft as per bank book = Overdraft as per pass book Received sanction for a loan of Rs.10 lakhs Overdraft as per bank book = Overdraft as per pass book Overdraft as per bank book < Overdraft as per pass book

Multiple Choice Single Answer Question The total production cost for making 20,000 units was Rs.21,000/- and the total production cost for making 50,000 units was Rs.34,000/-. Once production exceeds 25,000 units, additional fixed costs of Rs.4,000/- are incurred. The full production cost per unit of making 30,000 units is: Correct Answer Re.0.98 Your Answer Re.0.68 Select The Blank Question The process of finding the reasons for the difference in the balance as per bank book and pass book is known as ________. Correct Answer Reconciliation Your Answer Reconciliation Multiple Choice Multiple Answer Question State the features of these transactions : (i) Commission paid Rs.250/- was posted twice to Commission account (ii) Rs.5,000/- representing goods sold to A, was posted to the credit to commission received account (iii) Sold machine for Rs.8000/-, was credited to Sales account. Correct Answer The debit side of the trial balance will be in excess by Rs.250/- , Involves an error of principle , Involves an error of commission

Your Answer The debit side of the trial balance will be in excess by Rs.250/- , Involves an error of principle , Involves an error of commission Multiple Choice Single Answer Question It is difficult to apply Uniform costing system for an industry which has labour intensive companies as well as capital intensive companies, because : Correct Answer The cost structure is different Your Answer The cost structure is different Multiple Choice Single Answer Question Balance sheet is statement of Correct Answer All Assets and Properties Your Answer All Assets and Properties Select The Blank Question The closing stocks should ________ the cost of the goods which sent on approval basis. Correct Answer Be increased by Your Answer Not get affected by True/False Question Under the Rowan plan bonus is a fixed percentage. Correct Answer False Your Answer True True/False Question Idle time variance is always favourable. Correct Answer False Your Answer False Multiple Choice Multiple Answer Question Select the items which may be classified as selling and distribution overheads. Correct Answer Delivery van expenses , Rent of finished goods warehouse , Sales research expenses Your Answer Delivery van expenses , Rent of finished goods warehouse , Rent of raw material godown Select The Blank Question Information as to the cost and profit / loss associated with the firm's operations is provided to the ________ by Management accounting.

Correct Answer Management Your Answer Cost Multiple Choice Single Answer Question Compute actual total cost based on the data given below: Total standard cost (standard material cost + standard labour cost) -Rs.19,633.33; labour rate variance-Rs.900/- (adverse); material price variance -Rs.90/- (Favourable); material yield variance -Rs.700/- (Favourable); labour yield variance -Rs.333.33 (Favourable). Correct Answer Rs.19,410/Your Answer Rs.17,610/Multiple Choice Single Answer Question The standard production for a particular work order is 20 units per day and piece rate wages is 60 paise per unit. Cost of material is 30 paise per unit. It is proposed to charge factory overheads equal to 100% of labour cost. Indicate the factory overhead per unit. Correct Answer Rs.1.50/Your Answer Rs.1.30/Multiple Choice Multiple Answer Question The suspense account has a debit balance of Rs.40,000/-. Select the transactions which are capable of nullifying this balance. Correct Answer Conveyance expenses of Rs.25,000/- were posted on the wrong side of the account. , Purchased computer worth Rs.28,000/- was recorded in the ledger as , The total of the purchase book was cast short by Rs.44,000/Your Answer Free samples worth Rs.40,000/- distributed during the year were credited to sales account , Conveyance expenses of Rs.25,000/- were posted on the wrong side of the account. , Purchased computer worth Rs.28,000/- was recorded in the ledger as Multiple Choice Single Answer Question Panna Ltd. temporarily has excess production capacity. The idle plant facilties can be used to manufacture a low-margin item. The low-margin item should be produced if it can be sold for more than its: Correct Answer Variable costs Your Answer Variable costs Select The Blank Question Contribution represents pool of resources available for meeting all costs other than ________.

Correct Answer Variable costs Your Answer Variable costs Select The Blank Question Goods returned to the suppliers from whom it was ________d is recorded in thePurchasereturn register. Correct Answer Purchase Your Answer Purchase Multiple Choice Multiple Answer Question From the available information calculate sales value variance and budgeted sales quantity of X.Actual sales of X -500 units; budgeted price per unit -Rs.12/-; actual price per unit-Rs.15/- and sales volume variance -Rs.1,200/- (Favourable). Correct Answer Budgeted sales - 400 units , Sales value variance -Rs.2,700/- , The sales value variance is favourable Your Answer The sales value variance is adverse True/False Question Depreciation, interest and property tax continue even when the operations are discontinued. Correct Answer True Your Answer True Select The Blank Question The balance of the suspense account will ________ after all the errors are Correct Answer become zero Your Answer become zero Multiple Choice Multiple Answer Question Management accounting is concerned with the following activities : Correct Answer Decision making , Safeguarding assets , Planning and controlling activities Your Answer Decision making , Planning and controlling activities True/False Question It is said that the income statement represents wealth increase /decrease for the organisation. Correct Answer True Your Answer False Select The Blank

Question The difference between sales and prime cost is known as ________. Correct Answer Gross Profit Your Answer Gross Profit Multiple Choice Multiple Answer Question In which of the following situations, the flexible budget should be preferred? Correct Answer Sales are too difficult to predict , Supply level of input cannot be predicted , Varying levels of production activity Your Answer Sales are too difficult to predict , Supply level of input cannot be predicted , Varying levels of production activity Multiple Choice Single Answer Question Debtors as on 31st March, 2004 stood as Rs.75,400/-. Out of this amount, Rs.15,884/- is receivable from ABC & Co. Also, Rs.21,555/- included in the creditors, indicates amount due to ABC & Co. Total creditors as on 31st March, 2004 = Rs.88,466/-. Find the amount of debtors and creditors that should be disclosed in the balance sheet as on 31st March, 2004. Correct Answer Debtors - Rs.59,516/-; Creditors - Rs.66,911/Your Answer Debtors - Rs.53,845/-; Creditors - Rs.72,582/Match The Following Question Correct Answer Your Answer Sunk Cost Historical Cost Historical Cost Cost Centre Facilitate the fixation of responsibility Facilitate the fixation of responsibility Cost Control Process of controlling costs of operations Process of controlling costs of operations Differential Cost Increase or Decrease in cost Increase or Decrease in cost

Select The Blank Question Cost volume profit analysis focuses attention on the ________ effect of a particular course of action. Correct Answer short run Your Answer short and long run

Multiple Choice Multiple Answer Question The balance as per bank book as on 30th June, 2004 is Rs.10,298/- while the balance as per pass book as on the same date is Rs.10,123.60. Select the transactions representing the reasons for this difference. Correct Answer Interest credited by bank, not entered in the bank book, Rs.125.60 , Cheques dishonoured not entered in the bank book Rs.200/- , Debit side of the cash book is overcast by Rs.100/Your Answer Interest credited by bank, not entered in the bank book, Rs.125.60 Multiple Choice Single Answer Question Uniform costing system is useful in the following areas Correct Answer Classification of cost accounts Your Answer Preparing financial statements True/False Question Revenue expenditure indicates the amount of funds spent during a certain period with the intention to receive the returns in future. Correct Answer False Your Answer True True/False Question Price based on Uniform Costing may be taken to be reliable and representative of the whole industry. Correct Answer True Your Answer True True/False Question Cheque received from a client on 28th September, 2004 must be entered in the bank book only after it is credited in the pass book. Correct Answer False Your Answer False Multiple Choice Multiple Answer Question The objectives of Uniform costing system are as follows : Correct Answer To fix a common selling price for the industry as a whole , To compare efficiency of each unit against industry's overall performance , To compile reliable cost data for inter-firm comparison of costs Your Answer To fix a common selling price for the industry as a whole , To compare efficiency of each unit against industry's overall performance , To compile reliable cost data for inter-firm comparison of costs

Multiple Choice Multiple Answer Question Purchased goods worth Rs.6,450/- on 10th March, 2004. However the goods were delivered directly to the plant situated at Nagar and hence this transaction was not recorded in the purchase book, which is maintained at the corporate office. Analyse the impact of this transaction. Correct Answer The gross profit will increase by Rs.6,450/Your Answer The purhases will increase by Rs.6,450/- , The closing stock will increase by Rs.6,450/- , The gross profit will increase by Rs.6,450/Select The Blank Question Carriage charges paid for a new machine purchased if debited to carriage account would affect the ________ Correct Answer Machinery A/c and carriage A/c Your Answer Carriage A/c Multiple Choice Multiple Answer Question Different types of tenders are : Correct Answer Singly tender , Open tender , Global tender Your Answer Multiple tender , Open tender , Global tender Multiple Choice Single Answer Question Purchased 200 shares of Bharat Forge Ltd. for Rs.850/- per share, which account should be debited? Correct Answer Investment account - Rs.170,000/Your Answer Investment account - Rs.170,000/Multiple Choice Single Answer Question Basic objective of Uniform Costing is . . . Correct Answer comparison Your Answer To control cost Multiple Choice Multiple Answer Question Select the entries which need to be rectified Correct Answer Purchase A/c ......... Dr. to Damodar's A/c (Being furniture purchased from Damodar) , Gopal's A/c ........... Dr. to cash A/c (Being entry for payment of railway freight for goods purchased) , Cash A/c ............Dr. to Suresh's A/c (Being cash received from Suresh for goods sold to him for) Your Answer Gopal's A/c ........... Dr. to cash A/c (Being entry for payment of railway freight for goods purchased) Multiple Choice Single Answer

Question A new computer worth Rs.35,000 was purchased on 18th June, 2003. The company has 10 such computers costing Rs.20,000/- each. The depreciation is charged @ 18% p.a. Find the depreciation on computers to be charged for the year. Correct Answer Rs.40,953.70 Your Answer Rs.36,000/Select The Blank Question The varinace that attempts to ascertain the effect of change in sales volume on the difference between actual and budgeted contribution is known as ________ variance. Correct Answer Sales margin volume Your Answer Sales margin yield at 4:01 AM 0 comments Links to this post Labels: Management Accounting (Set III) Wednesday, June 3, 2009

Management Accounting - 7
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LIST OF ATTEMPTED QUESTIONS AND ANSWERS

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

Multiple Choice Multiple Answer Question information Your Answer Organization , Cost Accounting system , Presentation of information Contents of Uniform Cost Manual are Organization , Cost Accounting system , Presentation of Correct Answer

Multiple Choice Multiple Answer Question Uniform Costing Methods may be advantageously applied to . . . Single organization having number of branches. , Number of Correct Answer Your Answer

companies in same industry , Similar Industries such as cotton, jute etc. Single organization having number of branches. , Number of companies in same industry , Similar Industries such as cotton, jute etc.

True/False Question 1) Financial statements are basically in two forms i.e. profitability True statement and balance sheet. Correct Answer Your Answer True

Multiple Choice Multiple Answer Question The process of accounting has three streams of accounting Financial Accounting , Cost Accounting , Management ---------------,--------and ----------------------. Correct Answer Accounting Your Answer Financial Accounting , Cost Accounting , Management Accounting

True/False Question Long term loan borrowed from financial institution comes under the True heading of long term liabilities. Correct Answer Your Answer True

Match The Following Question Book-Keeping Correct Answer Your Answer Books of Accounts Books of Accounts

Financial statement & Balance-sheet Accounting interpretation

Profitability statement & Balance-sheet Profitability statement

Process of analyzing & interpretation

Process of analyzing &

Profitability statement Indicates the amount of profit earned of profit earned Balance-sheet Financial status Financial status

Indicates the amount

Multiple Choice Single Answer Question Judge the statement according to the criteria given : ' The accounting period for XYZ Ltd. ends on 31st December, 2003. It is noted that office rent for the month of December, 2003 is paid on 15th January, 2004. "According to concept of matching expenses with the revenues, this expenditure should be recorded in the books of accounts in January, Correct Answer Your Answer The statement and its reason are both incorrect The statement is correct but its reason is incorrect

Multiple Choice Multiple Answer Question Features of money measurement concept are . . . Only those transactions and facts are included expressed in Correct Answer

terms of money are considered , Imposes severe restrictions on the kind of information available from financial statements , Works as a major drawback of financial accounting Your Answer Only those transactions and facts are included expressed in terms of money are considered , Imposes severe restrictions on the kind of information available from financial statements , Works as a major drawback of financial accounting

Multiple Choice Single Answer Question The installation and operation of ___________ accounting requires a Management very elaborate organizational structure and large number of rules & regulations Correct Answer Your Answer Management

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

Your Answer

Trading

Match The Following Question Sunk Cost Cost Centre responsibility Cost Control Process of controlling costs of operations Process of controlling Correct Answer Your Answer Historical Cost Historical Cost Facilitate the fixation of responsibility Facilitate the fixation of

costs of operations Differential Cost Increase or Decrease in cost Increase or Decrease in cost

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

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

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

True/False Question Primary distribution is effected on the basis of service rendered to the

service departments by the production departments. Correct Answer Your Answer True False

Multiple Choice Multiple Answer Question situations :Correct Answer Impossible to distinguish costs into fixed and variable component. , With respect to capital intensive industries where fixed costs are very large and hence cannot be ignored , With respect to service industries where employee costs are very large and almost fixed in nature Your Answer Impossible to distinguish costs into fixed and variable component. , With respect to capital intensive industries where fixed costs are very large and hence cannot be ignored , With respect to service industries where employee costs are very large and almost fixed in nature Marginal costing is found to be unsuccessful in the following

True/False Question Debit Note is an intimation sent to person dealing with the business False that his account is being credited for the purpose indicated therein. Correct Answer Your Answer True

Multiple Choice Multiple Answer Question Labour efficiency variance arises due to: Inefficient supervisor , Poor working conditions , Use of subCorrect Answer Your Answer

standard quality of material Inefficient supervisor , Poor working conditions , Use of sub-standard quality of material

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

True/False

Question Your Answer

Balance sheet indicates the expenditure & income from the business. False True

Correct Answer

Select The Blank Question The indirect material cost, indirect labour cost and indirect expenses Overhead cost, collectively are termed as ________. Correct Answer Your Answer Overhead

Select The Blank Question A person in charge of a ________ may be held responsible for its Cost centre proper functioning and cost control. Correct Answer Your Answer Cost centre

Multiple Choice Multiple Answer Question The organization chart shows the following aspects : Functional responsibility of different functional managers , Correct Answer managers Your Answer Functional responsibility of different functional managers , Delegation of authority to various managers , Inter-functional relationships of these managers

Delegation of authority to various managers , Inter-functional relationships of these

True/False Question Uniform costing system is a pre-requisite to an inter-firm comparison False of firms belonging to the different industries. Correct Answer Your Answer False

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

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

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

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

True/False Question inventory. Correct Answer Your Answer True False Danger level for inventory of materials means the safety stock of

True/False Question The role of the budget committee may be taken as an advisory role to True the Chief Executive. Correct Answer Your Answer True

Multiple Choice Multiple Answer Question The main advantages of profit sharing are : Employees try to increase productivity , Incentives are shared Correct Answer Your Answer

by all the employees , Augments emplyees' efficiency Employees try to increase productivity , Incentives are shared by all

the employees , Augments emplyees' efficiency

Select The Blank Question ________ Accounting assists the management in establishing the plans to attain the economic objectives and take proper decisions for the attainment of its objectives. Correct Answer Your Answer Management Management

Multiple Choice Multiple Answer Question Which of the following is likely to be a contributory factor to the The level of control of the used of material in the production incidence of excess expenditure on material cost? Correct Answer cycle , The incorrect choice of purchase order quantity , Failure to control the issue of materials from stores Your Answer stores An increase in the maximum material inventory level , The incorrect choice of purchase order quantity , Failure to control the issue of materials from

Multiple Choice Multiple Answer Question Management accounting is concerned with the following activities : Decision making , Safeguarding assets , Planning and Correct Answer controlling activities Your Answer activities Decision making , Safeguarding assets , Planning and controlling

Multiple Choice Multiple Answer Question Features of double entry accounting system are . . . Every business transaction has two elements , When business Correct Answer Your Answer

receives something, it has to pay something , Every debit has a corresponding credit Every business transaction has two elements , When business receives something, it has to pay something , Every debit has a corresponding credit

Select The Blank Question Under Differential Time Rate method payment is made at Rs. 1.40 per hour when the level of efficiency is between________.

Correct Answer Your Answer

90% to 100%

90% to 100%

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

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

Select The Blank Question Your Answer The difference between sales and cost of sales is termed as ________. Net Profit Net Profit Correct Answer

Select The Blank Question The final result disclosed by trading account is the ________profit Gross earned by the organization. Correct Answer Your Answer Gross

Multiple Choice Multiple Answer Question sheet. Correct Answer Your Answer Loan , Outstanding expenses , Creditors Loan , Outstanding expenses , Creditors Select the accounts to be disclosed on the liability side of the Balance

True/False Question Penalty paid for delay in payment to creditors represents False uncontrollable cost. Correct Answer

Your Answer

False

Multiple Choice Single Answer Question Which document facilitates estimating material cost of a particular job, Bill of material before completion of that job? Correct Answer Your Answer Material requisition note

Multiple Choice Single Answer Question Purchases returns of Rs.18,000/- were wrongly transferred to the The net profit will not be affected sales returns account. Calculate its impact on net profit. Correct Answer Your Answer The net profit will not be affected

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

Multiple Choice Single Answer Question An order for goods worth Rs.18,000/- was placed on 25th March, 2004. The goods were received on 1st April, 2004. Calculate the impact of this transaction on the final statements of accounts for the year ended 31st March, 2004. Correct Answer Your Answer The net profit will not be affected The net profit will not be affected

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Multiple Choice Multiple Answer Question The objects of cost accountancy are :Correct Answer Your Answer To ascertain cost and profitability , Cost Control , Presentation of Information To ascertain cost and profitability , Cost Control , Presentation of Information

Multiple Choice Multiple Answer Question Management accounting is concerned with the following activities :Correct Answer Your Answer Decision making , Safeguarding assets , Planning and controlling activities Decision making , Planning and controlling activities

Multiple Choice Multiple Answer Question Features of material usage variance are :Correct Answer Your Answer Measures the difference between the quantity of materials actually used and that should have been used. , Considers standard price X actual quantity , Considers standard price X standard quantity Measures the difference between the quantity of materials actually used and that should have been used. , Considers standard price X actual quantity , Considers standard price X standard quantity

True/False Question Under the accelerating premium system incentive increases at a fast rate with the decrease in output. Correct False Answer Your False Answer True/False Question If the physical stock is less than the stock as per the stores ledger, such shortage should be treated as an issue of material. Correct True Answer Your False Answer Multiple Choice Single Answer Question An analysis of the time card of a worker on a machine shows that of the total 48 hours, he worked 45 hours (including 4 hours overtime) on production and that 3 hours was idle due to machine break-down. The rate of the worker is rupees ten per hour : but overtime is paid at 50 per cent extra. You are required to calculate the earnings of the worker.

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Multiple Choice Multiple Answer Question Essentials for effective implementation of budgetary control system are Correct Commitment of top management , Clearly defined objectives , Answer Continous budget education Your Commitment of top management , Clearly defined objectives , Answer Continous budget education Multiple Choice Multiple Answer Question Features of convention of consistency are . . . Correct Answer Your Answer The accounting policies and procedures should be followed consistently , Facilitates the comparison of financial statements , It facilitates comparison of financial statements on period-to-period basis The accounting policies and procedures should be followed consistently , It facilitates comparison of financial statements on period-to-period basis

True/False Question The bin card and stores ledger, being independent records, comparison of these two records should be avoided. Correct False Answer Your False Answer Match The Following Question Correct Your Answer Answer Dividend Profit and Profit and paid loss loss account appropriation account Freight Manufacturing Manufacturing inwards account account Sales Trading Capital account account Freight Profit and Trading outwards loss account account Select The Blank Question Large angle of incidence indicates ________ amount of profits. Correct Answer Your Answer higher same

True/False Question Error of commission refer to a situation where a transaction is not

True/False Question

Correct Answer Your Answer True/False Question

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

Correct Answer Your Answer True/False Question

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

Correct Answer Your Answer True/False Question

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

Accounting is an art of recording, classifying & summarizing in a

Correct Answer Your Answer True/False Question

significant manner. True True

Correct Answer Your Answer True/False Question

Financial accounting may deal with the ascertainment of cost & calculation of profitability of the individual product. False False

Correct Answer Your Answer

The reports generated by financial accounting are meant for the use by management for effective decisions. True True