Management Accounting List of Attempted Questions and Answers Multiple Choice Multiple Answer Question The components of the

selling and distribution cost budget are : Correct Answer Distribution expenses , Publicity expenditure , Salary o f sales-office workers Select The Blank Question In India, where public undertakings operate along with the priva te sector undertakings, ________ enables a comparative assessment to be made of the two sectors. Correct Answer uniform costing Multiple Choice Single Answer Question Re-order quantity may be measured as : Correct Answer Maximum stock level - re-order level + (minimum usage X minimum re-order period) 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 i nformation available from financial statements , Works as a major drawback of fi nancial accounting Multiple Choice Multiple Answer Question The various areas in which uniform costing can be adopted are . . Correct Answer Valuation of inventories , Charging of depreciation , Ap portionment of overheads True/False Question Accounting is an art of recording, classifying & summarizing in a significant manner. Correct Answer True Select The Blank Question The ________ ledger carries the individual accounts, whereas the general ledger records the consolidated effect of the individual transactions. Correct Answer Control Match The Following Question Correct Answer Dismissal of employee Unavoidable cause of labour turnover Increased spoilage and defectives Replacement cost of labour turno ver Relationship between supervisor and worker Avoidable cause of labou r turnover Transport facilities to employees Preventive cost of labour turnov er Multiple Choice Single Answer Question Which of the following is a valid classification of the salary p aid to the foreman in charge of the packing department? Correct Answer Direct product cost Multiple Choice Multiple Answer Question Special aspects of co-partnership include: Correct Answer Workers are granted ownership rights , Indirect monetary remuneration , The morale of the workers is increased Select The Blank Question The handloom industry will have ________ fixed cost and high var iable cost. Correct Answer Low Select The Blank Question The sales forecast (quantity) should be compared with the ______ __ to find out whether it is possible for the firm to handle this level of sales .

Correct Answer Production capacity Multiple Choice Multiple Answer Question Pre-requisites of Uniform Costing are . . . Correct Answer Spirit of mutual trust , Free Exchange of ideas , No riv alry Multiple Choice Multiple Answer Question Causes for adverse material price variance are: Correct Answer Uneconomical size of purchase orders , Failure to avail discounts allowed by suppliers. , Excessive freight charges Multiple Choice Single Answer Question Cool-wind Ltd., manufactures fans, which at sold at Rs.400 pre p iece. The cost of sales is composed of 40% of direct material, 30% wages and 30% overheads. An increase in material price by 25% and in wage rate by 10% is expe cted in the forthcoming year; as a result of which the profit at current selling price may dwindle by 39% of present gross profit. With the above information, y ou are required to determine the future selling price, if the present rate of gr oss profit is to be maintained. Correct Answer Rs.452/Multiple Choice Single Answer Question The main object of establishing the maximum stock level for mate rial is : Correct Answer To ensure that inventory never exceeds this limit Select The Blank Question ________ authorises the production department to issue requistio n for materials. Correct Answer Bill of material Select The Blank Question An adjustment relating to outstanding expenses will ________ the net profit. Correct Answer Decrease Multiple Choice Single Answer Question XYZ & Co. has taken a loan of Rs.100,000/- @ 15% p.a.on 1st Octo ber, 2003. Interest is to be paid on half yearly basis. What treatment should be given in the books of accounts of XYZ & Co. as on 31st March, 2004? Correct Answer Interest account should be debited with Rs.7,520.55 and outstanding interest account should be credited with Rs.7,520.55 True/False Question Bank reconciliation statement is a systematic presentation of er rors made by the accountant. Correct Answer False True/False Question Accounting refers to the process of analyzing & interpreting the information already recorded in the books of accounts. Correct Answer True Multiple Choice Single Answer Question The pass book showed a credit balance of Rs.1,000/-. This balanc e was after considering the dividend of Rs.25/- collected by bank and Rs.5/- cha rged as collection expenses: these enteries are not made in the bank book. Find the balance as per bank book. Correct Answer Rs.1,020/Multiple Choice Single Answer Question Compute fixed overheads calendar variance when fixed overhead vo lume variance is Rs.250/- (Favourable); fixed overheads efficiency variance is R s.2,150/- (Adverse) and fixed overheads capacity variance is Rs.800/-(Favourable ). Correct Answer Rs.1,600/- (Favourable) Match The Following Question Correct Answer Accounting Process of analyzing & interpretation Audit Reviewing internal control system

Journal Book of original entry Ledger Maintain all types of accounts Select The Blank Question Token or disc method is a related to the system of ________. Correct Answer Time-keeping Multiple Choice Single Answer Question The cost of fixed asset is Rs. 1,00,000. Rs. 17,000 is charged a s depreciation. Calculate the rate of depreciation. Correct Answer 0.17 Select The Blank Question Crane expenses should be apportioned on the basis of ________. Correct Answer Number of hours crane worked in the department 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 Multiple Choice Multiple Answer Question You are using petrol as one of the raw materials. Daily you purc hase 1,000 litres of petrol at Rs.28.50 per ltire. 5% of it generally gets lost due to spillage and evaporation. On a particular hot and dry day, the issue of p etrol from 1,000 litres drum was as follows : To job X 200 litres; job Y 400 lit res and job Z 320 litres. After these issues the drum was empty. Calculate per l itre charge for use of petrol, quantum of loss and total quantum of petrol used for jobs X,Y and Z. Correct Answer Loss due to spillage and evaporation - 30 litres. , Rate of charge per litre of petrol - Rs.30/Select The Blank Question Depreciation is caused by use factor, obsolescence and ________. Correct Answer Time factor Multiple Choice Single Answer Question A good purchase system, for materials, prevents production holdups due to: Correct Answer Lack of material True/False Question Linking overhead to a cost unit is known as overhead absorption. Correct Answer True True/False Question Uniform costing system is a pre-requisite to an inter-firm compa rison of firms belonging to the different industries. Correct Answer False True/False Question Uniform costing system is defined as a system using common conce pts and standard accounting practices by different entities in different industr y to facilitate inter-firm comparison. Correct Answer True Multiple Choice Multiple Answer Question Features of real account are . . . Correct Answer Mainly deals with items which are having physical , Cons ists of some intangible assets , examples include - Lane, Building, Vehicles True/False Question A business is an activity carried out with the intention of earn ing the profit. Correct Answer True Multiple Choice Multiple Answer Question Select the correct statements. Ram's account .Dr. Rs.10,000 To Bank account Rs.10,000 Correct Answer Ram is a creditor , Rs.10,000/- has been paid to Ram , T he payment is made by cheque 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 pers onnel , High labour turnover Select The Blank Question ________account can be defined as the record of all the transact ions pertaining to a person, asset, liability income or expenditure which have t aken place in a specified period. Correct Answer Ledger Multiple Choice Single Answer Question The store-keeper should initiate action for the purchase of a ma terial, when it reaches its : Correct Answer Re-order level True/False Question Uniform Costing simplifies the work of wage boards of fixing min imum wages and fair wages. Correct Answer True True/False Question Maintenance Department is a service cost centre. Correct Answer True True/False Question Balance sheet indicates the financial status of the business at given period. Correct Answer True Select The Blank Question Profit = Contribution per unit X ________. Correct Answer Margin of safety (units) Multiple Choice Multiple Answer Question Identify the items which are correctly classified. Correct Answer Carriage inward - Factory overheads , Carriage outward Selling and distribution overheads , Sales research expenses -Selling and distr ibution overheads True/False Question Fixed overhead variances may be calculated either on the basis o f units of output or on the basis of standard hours. Correct Answer True True/False Question Profitability statement indicates the amount of assets & liabili ties. Correct Answer False Match The Following Question Correct Answer Accounting Process of analyzing & interpretation Balance-sheet Financial status Book-Keeping Books of Accounts Financial statement Profitability statement & Balance-sheet Profitability statement Indicates the amount of profit earned Match The Following Question Correct Answer Bad debts Amount not received from customer Bills Payable Amount payable to supplier Bills Receivable Amount received from the customer Cash Discount Accounted for in the books of Accounts Trade Discount Not accounted for in the books of Accounts True/False Question Real Accounts may also consist the accounts of some intangible a ssets like Goodwill Account Correct Answer True True/False Question The rate at which the depreciation is to be calculated are also specified in the Income Tax Act 1961.

Correct Answer True Multiple Choice Multiple Answer Question Cash and---------------are the two systems of accounting. Correct Answer Mercantile Multiple Choice Multiple Answer Question P/L A/C debit side includes Correct Answer salary , discount allowed , postage & telegram Multiple Choice Multiple Answer Question Trading a/c credit side includes Correct Answer sales , goods lost by fire , closing stock Multiple Choice Single Answer Question Amit sold Goods to Atul for Rs. 50,000 on cash & Rs. 50,000 on c redit basis & allowed 10% discount on on the spot transaction. Cash Account debi ted to Rs. _____________ Correct Answer 45000 Multiple Choice Single Answer Question A proprietor purchase goods worth Rs. 5500 & cash account credit ed to Rs. 5000 rectification of the suspense accounted debited to Rs Correct Answer 500 Multiple Choice Single Answer Question Amit purchase of Rs. 6710 had been posted to the debit of the cr editors A/C as 6170 rectifying the transaction the creditor A/C is to be debited amount to Rs Correct Answer 540 True/False Question A bill of Rs. 500 for old furniture sold to Raj, was entered in the sales day book Correct Answer False True/False Question Abnormal cost indicates that cost which is normally incurred at a certain level of output under normal circumstances. Correct Answer False Multiple Choice Single Answer Question This cost indicates increased or decreased cost due to the incre ased or decreased volume of operations. Correct Answer Differential cost True/False Question Indirect material cost assist the manufacturing process is an in tegral part of finish goods. Correct Answer False Multiple Choice Single Answer Question The prime cost is Rs. 10,00,000 the factory cost is Rs. 13,00,00 0, the total administration overheads are 14,00,000 and having selling overhead of Rs. 86000. What is the Total cost? Correct Answer 37,86,000 Multiple Choice Multiple Answer Question Indirect Expenses includes Correct Answer Rent , Telephone expenses , Insurance True/False Question Material cost is the first and probably the most important eleme nt of cost. Correct Answer True Multiple Choice Multiple Answer Question Under stocking may have following consequences Correct Answer Payment for idle time to workers , Production hold ups r esulting into disturbed delivery schedule , Eleventh hour purchase Multiple Choice Multiple Answer Question Goods received note or goods received report is prepared in foll owing copies Correct Answer One copy to Purchase department , One copy to Accounts d

epartment , One copy to Costing department Multiple Choice Multiple Answer Question Valuation of material uses the following methods Correct Answer FIFO and LIFO , Average price method , Market price Multiple Choice Single Answer Question Under Merrick Differential Piece rate System of wage payment up to 83% of efficiency following rate is offered. Correct Answer Normal Multiple Choice Single Answer Question Under the Emerson s Efficiency Bonus System at following efficienc y level no bonus is payable. Correct Answer Below 66.66% True/False Question If the organisation follows the policy of considering predetermi ned overhead absorption rates, it may face the problem of under or over absorpti on of overheads if the actual overheads to be absorbed o Correct Answer True True/False Question Fixed cost is the cost that varies in direct proportion with the level of activity or volume of operations. Correct Answer False Multiple Choice Multiple Answer Question Limitations of marginal costing are Correct Answer difficult for classification as fixed cost and variable cost. , does not provide any standard for the evaluation of performance. , it is useful technique only in the short run. Multiple Choice Multiple Answer Question Budgetory Control deals with Correct Answer Establishment of budgets , Comparison of budgeted result s with actuals , Computation of variance. True/False Question The analysis of overhead variances is different and the most com plex task. Correct Answer True True/False Question Standard costing and Marginal Costing are the best possible tool s available to the management for cost control Correct Answer False Multiple Choice Multiple Answer Question Current standards includes Correct Answer Expected standards , Normal standards , Ideal standards Multiple Choice Single Answer Question In case of industries where capital investment is very high, bud get should be prepared for a Correct Answer Longer period Select The Blank Question Financial Accounting protects the interest of outsiders . it con siders ________ transaction and it is a ________ requirement Correct Answer historical Correct Answer legal Select The Blank Question After material is received from the supplier, quantity actually received is compared with quantity ________-and ________-if any, are taken up wi th the supplier Correct Answer ordered Correct Answer variation Select The Blank Question Labour Turnover indicates ________ in labour force showing a hig hly increasing trend or highly ________ trend Correct Answer change

Correct Answer decreasing Select The Blank Question Under Gannt Task bonus system where the output is ________ payme nt is made as per minimum time rate, output is ________ payment is made as per t ime wages plus some increase in wage rates Correct Answer below standard Correct Answer at standard Select The Blank Question ________ and ________ are non monetary incentives Correct Answer Safety services Correct Answer education facility Select The Blank Question Semi ________ overheads are neither ________ nor variable in nat ure. Correct Answer fixed Correct Answer variable Select The Blank Question Fixed overheads normally arise as a result of policy and are lar gely ________ in nature at the ________ level of the management Correct Answer uncontrollable Correct Answer lower Select The Blank Question variable cost is the cost that tend to ________ in direct propor tion with ________ Correct Answer vary Correct Answer level of activity Select The Blank Question ________ and ________ are examples of semi- variable overheads. Correct Answer Maintenance cost Correct Answer electricity Select The Blank Question Rs.5000 paid as ________ to ________ should be debited to salary account Correct Answer Mahesh Correct Answer salary Select The Blank Question Over absorption of overheads may take place due to the reasons l ike ________ overheads being less than the ________ overheads Correct Answer actual Correct Answer estimated Select The Blank Question ________ Legal charges and ________ are the accounts which are s hown on the debit side of Profit & Loss Account Correct Answer Like office rent, Correct Answer Audit fees Select The Blank Question ________ of Trial Balance generally ensures ________ accuracy of the process of ledger posting . Correct Answer Talling Correct Answer arithmetical True/False Question While calculating the minimum level, normal lead time is not nec essary Correct Answer False True/False Question To Increase the existing production capacity, additional capital expenditure is required. Correct Answer True Multiple Choice Single Answer Question Labour cost indicates that labour cost which cannot be identifie

d with the individual cost centre and is incurred for those employees who are no t engaged in the manufacturing process but only assist i Correct Answer Remuneration Multiple Choice Single Answer Question During one week X makes 200 units. He receives wages for a guara nted 44hours per week at a rate of Rs. 1.50 per hour. Estimated time to produce one unit is 15 minutes. Time allowed is increased by 2 Correct Answer Rs. 83.60 Multiple Choice Multiple Answer Question Office & Administration overhead includes Correct Answer Salary , Rent & Taxes , Stationary & postage 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 ) Multiple Choice Single Answer Question Cost-sheet may be prepared separately for each Correct Answer Different Cost Centre Multiple Choice Single Answer Question The cost of asset is Rs. 1,10,000, Estimated scrap value 10,000, estimated life 10 yrs. Calculate the depreciation according to straight line met hod Correct Answer 10000 Select The Blank Question To ascertain the ________ of all the transactions recorded in th e ledger account, the account is required to be ________ Correct Answer Net effect Correct Answer Balanced Multiple Choice Multiple Answer Question In fixed overhead variance, the volume variance is further analy zed as Correct Answer Variance Efficiency Variance , Capacity Variance , Calen dar Variance Multiple Choice Single Answer Question For a unit, if opening stock of raw material is 10,000 units, cl osing stock of raw material is 5,000 units and consumption is 3,20,000 units, wh at will be the quantum of raw material to be purchased Correct Answer 3,15,000 Multiple Choice Single Answer Question Accounts is a Correct Answer Record of all transaction True/False Question Whatever is to be sold need not be produced. Correct Answer True True/False Question Patents and Trade Marks Account is a Real Account. Correct Answer True Multiple Choice Single Answer Question Budget is prepared in terms of Correct Answer Quantity and/or Money True/False Question Favorable variances need on investigation Correct Answer False Multiple Choice Multiple Answer Question Standard Costing may not be useful in Correct Answer Small concerns , Industries having non-standardized prod ucts , Contract jobs Multiple Choice Single Answer Question __________ Accounting becomes a source of information for Manage

ment Accounting. Correct Answer Financial Select The Blank Question The levels indicated on the Bin card enables the ________ depart ment to keep a watch on the balance and replace the material as soon as it reach ed at ________ level. Correct Answer Stores Correct Answer Re-order level Multiple Choice Single Answer Question Standard costs are the targets to be attained by the actual perf ormance. Correct Answer Minimum Multiple Choice Single Answer Question During one week X makes 200 units. He receives wages for a guara nted 44hours per week at a rate of Rs. 1.50 per hour. Estimated time to produce one unit is 15 minutes. Time allowed is increased by 2 Correct Answer Rs. 75 True/False Question Management Accounting aims at enabling the management to take th e decisions about the future. It may consider future data as well as non-financi al factors. Correct Answer True Multiple Choice Multiple Answer Question Limitations of Management Accounting includes------------------Correct Answer Its wide scope , Possibility of intuitive decision , Req uires elaborate organizational structure Multiple Choice Multiple Answer Question Business Entity Concept ______________. Correct Answer Business is separated from the owner. , The accounting p rocess carried out for the business , Separate legal entity Multiple Choice Multiple Answer Question Double Entry Accounting System__________________ Correct Answer Every business transactions have two elements , When bus iness receives something, it has to pay something , Every debit has a correspond ing credit True/False Question Sundry creditors transfer to asset side. Correct Answer False Multiple Choice Single Answer Question Purchase Goods of Rs. 7500 on 10% cash discount. The discount am ount is _______ Correct Answer 750 Multiple Choice Single Answer Question The cost of fixed asset is Rs. 1,00,000. Rs. 17,000 deducted as depreciation. Calculate the percentage Correct Answer 0.17 Multiple Choice Single Answer Question Goods distributed as free sample amounted to Rs. 10,000. Prepare Neonboard Rs. 5000. The total amount transfer to advertisement account is Rs.__ __ Correct Answer 15000 True/False Question A bank reconciliation statement is prepared on a particular date . Correct Answer True Multiple Choice Multiple Answer Question When bank balance as per bank book is considered then following to be added. Correct Answer cheques issued but not presented , direct deposit by cus tomer , wrong credits given by bank

True/False Question As soon as the suspense account balance is wiped out , it may be assumed that all mistakes have been corrected. Correct Answer False True/False Question Credit sale of Rs. 5000 to Bobby should be entered in the purcha se book. Correct Answer False Multiple Choice Single Answer Question This cost indicates historical cost which is incurred in past. Correct Answer Sunk cost Multiple Choice Multiple Answer Question Manufacturing process involves study of Correct Answer Designing the product , The quantity and quality , Mater ial used Multiple Choice Multiple Answer Question LAST IN FIRST OUT (LIFO) Correct Answer The price of the latest available lot is considered firs t , If that lot is exhausted, the price of the 10% prior to that is considered , Physical issue of the material may not be made out of the said lot Multiple Choice Multiple Answer Question The Bin card and stores ledges do not match due to the following reasons: Correct Answer Arithmetical errors in calculating , Non- posting a cert ain document , Posting a wrong Bin card True/False Question Flux method is important method of wage payment. Correct Answer False Multiple Choice Single Answer Question If production overheads to be absorbed are Rs. 50000/- and labou r hours worked are 100000 then the labour hour rate will be, Correct Answer Re. 0.50 per labour hour. True/False Question Fixed cost tends to vary with time rather than with level of act ivity. Correct Answer True True/False Question Flexible budget is an effective tool for evaluation of performan ce. Correct Answer True True/False Question Material Mix Variance occurs where only one raw material is requ ired Correct Answer False Multiple Choice Single Answer Question Calculate Efficiency Variance, If actual production is 22,000 un its, Standard production in actual hours is 21,000 units and Standard rate per u nit is Rs.1.5/-. Correct Answer Rs.1,500/-( Favorable ) Multiple Choice Single Answer Question Calculate Sales Price Variance, If actual price is Rs.5.40/- per unit, Standard price is Rs.5/- per unit and actual sales volume is 500 units. Correct Answer Rs.200/- ( Favorable ) Multiple Choice Single Answer Question Standard may not be necessarily useful for this purpose. Correct Answer Forecasting Multiple Choice Multiple Answer Question In Cash budget , Non operating cash inflow includes Correct Answer Receipt of loan/borrowings , Issue of shares , Sale of f ixed assets

Multiple Choice Multiple Answer Question In Cash budget , Non-Operating cash outflow includesVarious kind s of over heads Correct Answer Loan instalments , Taxes , Purchase of fixed assets. Multiple Choice Single Answer Question During a month opening stock is 5,000 kg, closing stock is 6,000 kg and production is 21,000 kg , what is the quantity of sales Correct Answer 20,000 kg Match The Following Question Correct Answer Carrying cost Cost of holding the inventory E.O.Q Economic Ordering Quantity Inventory control Maintain the inventory of any kind Ordering cost Associated with administrative efforts Total cost Ordering cost + carrying cost Select The Blank Question Generally accounts of the assets will have ________ balance and liabilities will have ________ balance Correct Answer debits Correct Answer credits Select The Blank Question Interest on overdraft charged by the bank is ________ to the pas s book and ________ to the cash book Correct Answer debited Correct Answer credited Select The Blank Question While selecting source of supply ________ epartment may call for the ________ from the prospective suppliers Correct Answer purchase Correct Answer quotation Select The Blank Question Administration overheads are ________ in nature and can be contr olled mainly at ________ level of the management Correct Answer fixed Correct Answer top Select The Blank Question Planning lays down the course of action to be taken in future. I n case budgetary control, it is in the form of the ________ and in case of _____ ___ costing, it is in the form of the standard cost Correct Answer budgets Correct Answer standard Select The Blank Question Fixed cost is the cost that tend to remain ________ irrespective of ________ Correct Answer constant Correct Answer level of activity Select The Blank Question The process of Allocation & apportionment can followed to decide the ________ of overheads to each budget center Correct Answer Allocation & apportionment Correct Answer Loading Select The Blank Question The ideal standards are generally ________ in nature and the var iances always shows ________ trends Correct Answer theoretical Correct Answer unfavorable Select The Blank Question Bin card is maintained by ________ department whereas ________ i s maintained by costing department. Correct Answer Stores

Correct Answer Store ledger Select The Blank Question Advance received from customers is ________ for the organisation . Correct Answer A liability Multiple Choice Multiple Answer Question The features of multiplicity of key factors are as follows : Correct Answer More than one key factors , Refers to a complex situatio n , Can be resolved by using linear programming technique Match The Following Question Correct Answer Assets All the properties owned by the business Drawing Withdrawn for personal use Journal Book of original entry Ledger Maintain all types of Accounts Liabilities All the amount owed by the business Select The Blank Question The ________ adjustment is necessary to relfect the cost for the use of fixed asset during the year. Correct Answer Depreciation Multiple Choice Multiple Answer Question Identify the budgets for which the production manager sould be h eld responsible : Correct Answer Production budget , Production overheads budget , Plant utilisation budget True/False Question Financial statements are basically in two forms i.e. profitabili ty statement and balance sheet. Correct Answer True Multiple Choice Multiple Answer Question The data for XYZ Ltd. is as follows : Fixed assets Rs.60,000/-; total cost Rs.105,000/-; working capital is equal to 25% of the sales value. The company expects 25% return on capital employed. Capital employed is equal to fi xed assets plus working capital. Select the correct answers: Correct Answer Sales Rs.128,000/- , Return on capital employed , Workin g capital Rs.32,000/Multiple Choice Single Answer Question Select the cost that indicates increased or decreased total cost due to the increased or decreased volume of operations. Correct Answer Differential cost Select The Blank Question If the owner brings in personal calculator for office use, _____ ___ account should be credited. Correct Answer Capital True/False Question The process of accounting split into three steams i.e. financial , cost, management accounting. Correct Answer True True/False Question Financial Accounting discloses the financial performance & finan cial statements of the business as a whole. Correct Answer True True/False Question Variable cost + Profit = Sales Correct 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 Match The Following

Question Correct Answer Advantageously applicable in similar industries Scope of uniform costing Avoids cut throat competition Advantage of uniform costing Spirit of mutual trust Requisite for uniform costing Treatment given to research and development costs Fields covered b y uniform costing Multiple Choice Single Answer Question A firm employs ten workers at an hourly rate of Rs.20/-. They wo rked for 40 hours each and completed the job for which standard time was 48 hour s for each worker. Calculate labour cost for the job under the Rowan Plan. Correct Answer Rs.9,333.33 Multiple Choice Multiple Answer Question Features of material usage variance are : Correct Answer Measures the difference between the quantity of material s actually used and that should have been used. , Considers standard price X act ual quantity , Considers standard price X standard quantity True/False Question Treating capital receipt as revenue income is an example of erro rs of commission. Correct Answer False Multiple Choice Single Answer Question Two competing companies Hero Ltd. and Zero Ltd. sell the same ty pe of product in the market. Their forecasted profit and loss accounts for the y ear ending December 2003 are as follows : Hero Ltd.: Sales Rs.500,000/-; Variabl e cost Rs.400,000/-; fixed costs Rs.50,000/-. Zero Ltd.:Sales Rs.500,000/-; Vari able cost Rs.300,000/-; fixed costs Rs.150,000/-. You are Correct Answer Hero Ltd. Multiple Choice Multiple Answer Question Features of Sunk cost are . . . Correct Answer Indicates historical cost , Not relevant in decision mak ing process , Incurred in past True/False Question For a manufacturing company, dividend received is a non-operatin g income. Correct Answer True Multiple Choice Multiple Answer Question Features of purchase requisition slip are : Correct Answer Raised when the stock of a raw material has fallen to th e re-order level. , Indicates the type, quantity and quality of material require d , The information about the price of material is excluded Multiple Choice Single Answer Question Judge the sentence in italics according to criteria given below : " It is difficult to adopt Uniform costing system when a product can be manufa ctured by employing more than one method because the cost of production will var y according to the method used." Correct Answer The assertion and the reason are both correct 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 Multiple Choice Multiple Answer Question Features of convention of consistency are . . . Correct Answer The accounting policies and procedures should be followe d consistently , Facilitates the comparison of financial statements , It facilit ates comparison of financial statements on period-to-period basis Select The Blank Question Uniform costing is not a separate method of ________. Correct Answer cost accounting True/False Question Suspense account is closed automatically after rectification of

all the errors. Correct Answer True True/False Question Manufacturing overheads represents all costs incurred in the fac tory including direct material cost and direct labour cost. Correct Answer False Select The Blank Question Generally all the liabilities will have ________balance. Correct Answer Credit 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 True/False Question Balance sheet indicates the expenditure & income from the busine ss. Correct Answer False Multiple Choice Single Answer Question Loan @ 12% p.a. of Rs.50,000/- was taken on 1st March, 2004. Fin d the interest expenditure on 31st March, 2004. Correct Answer Rs.500/Multiple Choice Multiple Answer Question Following are the examples of service cost centre Correct Answer Stores department , Transport department , Accounting de partment True/False Question The sum of indirect material cost, indirect labour cost and indi rect expenses is termed as Overheads. Correct Answer True True/False Question Error of commission refer to calculation errors, totaling errors , errors in carrying forward etc. Correct Answer True True/False Question Cheque received from a client on 28th September, 2004 must be en tered in the bank book only after it is credited in the pass book. Correct Answer False Select The Blank Question Copy of a firm's account in the bank's ledger is known as ______ __. Correct Answer Bank statement Select The Blank Question The column which refers to the page number of the ledger is know n as ________. Correct Answer Ledger folio True/False Question Management Accounting is the process of analysis and interpretat ion of financial data collected with help of financial accounting and cost accou nting Correct Answer True Multiple Choice Single Answer Question The direct material useage budget and direct material purchase b udget differ because of which of the following: Correct Answer A planned change in the level of material stock Select The Blank Question Loss is equal to fixed cost minus ________ Correct Answer Contribution Multiple Choice Multiple Answer Question The different purposes served by standard costing technique are

: Correct Answer Cost control , Cost awareness , Performance appraisal True/False Question Error of commission refer to a situation where a transaction is not recorded in the books of account. Correct Answer False Multiple Choice Multiple Answer Question A materials requisition form normally contains the following asp ects: Correct Answer Quantity requisitioned , Per unit material cost , Job nu mber Multiple Choice Single Answer Question If a predetermined overhead rate is not employed an the volume o f production is increased over the level planned, the cost per unit would be exp ected to : Correct Answer Decrease for fixed costs and remain unchanged for variab le costs Select The Blank Question The variance which measures the difference between what is paid for a given quantity of materials and what should have been paid for, is known a s ________ variance. Correct Answer Direct material cost Multiple Choice Single Answer Question It is said that adoption of uniform costing creates customer con fidence because . . . Correct Answer Prices are reliable True/False Question Deferred revenue expenditure written off account is a real accou nt. Correct Answer False Select The Blank Question In practical circumstances, the ________ are referred to as appl ication of funds. Correct Answer Assets True/False Question Balance sheet is considered to be a part of the financial statem ents. Correct Answer True Select The Blank Question The cost-volume-profit analysis basically highlights the effect of changes in sales volume on the profit of the company, in the ________. Correct Answer short run Multiple Choice Single Answer Question The following figures relate to a company manufacturing a varied range of products : Year 2003 Total sales Rs.22,23,000/- and total cost Rs.19,8 3,600/-. Year 2004 : Total sales Rs.24,51,000/- and Total cost Rs.21,43,200/-. A ssuming stability in prices, calculate the profit volume ratio Correct Answer 0.3 Multiple Choice Single Answer Question Calculate the machine hour rate. The amount of overhead pertaini ng to June, 2004 to be apportioned is Rs.170,010/-. The machine cannot work with out an operator. During the month June, 2004 the machine operator has been paid for 5,670 hours. Correct Answer Rs.29.98 Multiple Choice Multiple Answer Question While preparing sales budget the following factors must be consi dered : Correct Answer The number and types of products sold by the organisatio n , Whether the organisation's market share is increasing or decreasing? , Detai ls of seasonal fluctuations in sales

Multiple Choice Multiple Answer Question Techniques of management accounting include: Correct Answer Marginal costing , Budgetary control , Standard costing Multiple Choice Multiple Answer Question Which of the following aspects are mainly responsible for diffic ulty in application of Uniform costing system. Correct Answer Capital investment , Plant size , Location Select The Blank Question The expenses relating to maintenance and creation of demand for the product should be included in the ________budget Correct Answer Selling expenses Multiple Choice Multiple Answer Question Management Accounting is Correct Answer Designed particularly for internal use , Helpful in esti mating the future along with past period , Useful in furnishing the necessary in formation to the management True/False Question Malik started business by contributing cash Rs.50,000/- and his personal car worth Rs.25,000/-; thus his capital account should be credited with Rs.75,000/-. Correct Answer True Multiple Choice Single Answer Question Flood occurred on 18th March, 2004 and goods worth Rs.28,000/- w ere destroyed. The insurance company accepted on 28th March, 2004 the claim for Rs.10,000/- only. The claim amount was received on 2nd April, 2004. Find the imp act of this transaction on net profit for the year ending 31st March, 2004. Correct Answer The net profit will decrease by Rs.18,000/Multiple Choice Multiple Answer Question The selection of the supplier may depend upon the following aspe cts: Correct Answer Geographical location of the supplier , Price quoted by the supplier , Goodwill of the supplier True/False Question The labour cost which can be identified with the individual cost centre is known as the Direct Labour Cost. Correct Answer True Select The Blank Question If the firm is operating with zero margin of safety, decline of even a single unit in sales will result in ________. Correct Answer Loss Multiple Choice Multiple Answer Question When bank balance as per bank book is considered for preparing b ank reconciliation statement, then following items need to be added : Correct Answer Cheques issued but not presented , Direct deposit made b y customer , Wrong credits given by bank Multiple Choice Multiple Answer Question If you are required to enforce uniform costing system in your in dustry, how would you proceed ? Correct Answer Collecting data from all units of your industry , Ensuri ng that the data collected is complete and correct , Maintaining secrecy of the data collected Select The Blank Question The indirect material cost, indirect labour cost and indirect ex penses cost, collectively are termed as ________. Correct Answer Overhead True/False Question Under time rate system a worker is paid on the basis of producti on achieved by him in a given time. Correct Answer False Multiple Choice Multiple Answer

Question Labour efficiency variance Rs.1,000/- (favourable); labour mix v ariance Rs.260/- (adverse) and labour rate variance Rs.300/- (adverse). Compute labour cost variance and labour yield variance. Correct Answer Labour cost variance -Rs.700/- (Favourable) , Labour yie ld variance -Rs.1,260/- , Labour yield variance is favourable Select The Blank Question If the standard contribution is less than the actual contributio n, then ________ variance arises. Correct Answer Favourable Match The Following Question Correct Answer Budget Objective is performance evaluation Budget committee Analyses the performance of different budget cen tres Cash budget Assists in predicting shortage of cash Purchase budget Forecast of quantity and value of materials Multiple Choice Single Answer Question As a part of the data presented in support of a proposal to icnr ease the production of clock radios, the sales manager of Wittman Electronics re proted the total additional cost required for the proposed increased production level. The increase in total cost is known as : Correct Answer Incremental cost Multiple Choice Single Answer Question Benefits available from revenue expenditure are received in the : Correct Answer Same year True/False Question The variable costs are controllable at the lower lever. Correct Answer True Match The Following Question Correct Answer Cost Centre Facilitate the fixation of responsibility Cost Control Process of controlling costs of operations Differential Cost Increase or Decrease in cost Sunk Cost Historical Cost Multiple Choice Multiple Answer Question Financial Accounting is Correct Answer Designed to supply information to internal/ external use rs , Referred as 'Historical' form of accounting , Concerned with financial fact ors Select The Blank Question If the total manufacturing overhead of a tiles producing factory amounted to Rs.15 lakhs and the overhead rate was Rs.5/- per sq.ft, then the pr oduction for the period can be stated as ________ sq.ft. tiles. Correct Answer 300000 Select The Blank Question The system which provides an opportunity to the small units to t ake advantage of the research work taken by the large scale units of the same in dustry is known as ________ system. Correct Answer Uniform costing Multiple Choice Multiple Answer Question The net profit before certain adjustments was Rs.95,040/-. After giving due effects to the adjustments, the revised net profit (after considerin g the adjustments) is Rs.78,560/-. Select the adjustments which might brought th is change. Correct Answer Accrued commission income of-Rs.32,960/- was not entered in the books , Rent for the month of March was payable and yet to be recorded R s.19,280/- , Repairs expenditure to the extent of Rs.30,160/- was wrongly transf erred to Machinery account Select The Blank

Question If the customer is not likely to pay the amount receivable from him, this amount should to be treated as ________. Correct Answer Bad debts Multiple Choice Single Answer Question Creditors as on 31st March, 2004 amount to Rs.15,225/-. Provisio n for discount from creditors is to made @ 5%. Find the impact of this provision on the net profit. Correct Answer The net profit will increase by Rs.761.25 True/False Question Under the Rowan plan bonus is a fixed percentage. Correct Answer False Select The Blank Question Margin of safety indicates ________ of operations. Correct Answer Profitability Multiple Choice Single Answer Question XYZ Ltd. has sufficient idle capacity. It has received an enquir y for the supply of 300 units (packed in better box at an additional cost of Rs. 20/- per box). The variable cost of manufacturing the product is Rs.150/-. The c ompany expects a profit of Rs.6,000/- from this wholesale offer. What minimum pr ice should it quote for this deal? Correct Answer Rs.190/True/False Question Period cost is the cost assigned to the products. Correct Answer False Select The Blank Question In calculation of total sales margin variance, the ________cost of sales is deducted from the actual sales revenue. Correct Answer Standard True/False Question The sales mix variance highlights the fact that the actual mix o f sales has been in the same ratio as budgeted. Correct Answer False Match The Following Question Correct Answer In tangible assets Patents, Trade marks Nominal A/C Debit all the expenses, Credit all the incomes Personal A/C Debit the receiver, Credit the giver Real A/C Debit what comes in, Credit what goes out Tangible assets Building, Machinery Multiple Choice Multiple Answer Question Accounting period Concept________________ Correct Answer Longer life-span on business is divided into shorter seg ments , Each one being in the form of accounting period , Selection of accountin g period may depend on various factors Multiple Choice Multiple Answer Question Depreciation Correct Answer Amount charged on Fixed Assets. True/False Question Purchased computers of Rs. 50,000 come under the heading of fixe d asset Correct Answer True True/False Question Amount with drawn for personal purpose drawing A/C to be debited . Correct Answer True Multiple Choice Multiple Answer Question Profit & Loss A/C credit side has Correct Answer Gross profit , Commission received , Interested received Multiple Choice Multiple Answer

Question When bank balance as per pass book is considered then following to be deducted. Correct Answer cheques issued but not presented , direct deposit by cus tomer , wrong credits given by bank Multiple Choice Single Answer Question Rs. 2500 paid for the purchase of radio set for personal use of proprietor debited to general expenses account for rectifying the error, which A /C to be debited Correct Answer Drawing A/C Multiple Choice Single Answer Question Discount received from the Creditors has been entered in the Cre ditors A/C but discount amount has not been credited, for rectifying such error which account to be debited. Correct Answer Suspense A/C True/False Question Total of purchase register for the month of March is taken 50,00 0 instead of 55,000. Posting to individual A/C of supplier total to correct amou nt is 55,000 but purchase account is debited by Rs. 50,0 Correct Answer True True/False Question There is reverse relationship between the ordering cost and carr ying cost Correct Answer True Multiple Choice Multiple Answer Question Store ledger Correct Answer Record of all receipts and issue transactions , Financia l expressions of all transactions , Maintenance of Store ledges provides a secon d check Multiple Choice Multiple Answer Question Following points are taking into consideration for evaluation of receipts Correct Answer The Price , The trade discount is to be deducted , Other amounts such as sales tax, excise duty, octroi duty Multiple Choice Multiple Answer Question In EOQ, to express carrying cost as a percentage of the unit cos t of purchases this is used in the formula----------Correct Answer i Multiple Choice Single Answer Question Under the differential time rate method of wage payment between 90% to 100% of efficiency following rate is offered. Correct Answer Rs. 1.40 per hour True/False Question Where overheads chargeable to the department are Rs. 5000/- , di rect labour hours worked are 24000 then labour hour rate is Re. 0.2083 labour ho ur. Correct Answer True Multiple Choice Multiple Answer Question The selection of the base on which overheads should be apportion ed depend on the following principles. Correct Answer service or use basis , survey basis , ability to pay bas is True/False Question The Budget key factor may be in the form of sales, raw material, labour etc. Correct Answer True Multiple Choice Single Answer Question For a material, if standard quantity is 500 kg and standard pric e is Rs.6/- per kg. Find out the Material Cost variance if actual quantity is 40 0 kg and actual price is Rs.6/- per kg. Correct Answer Rs.600/-( favorable )

Multiple Choice Single Answer Question Find out Labour Efficiency Variance, if Standard Rate is Rs.1.50 /- per hour, Standard hours are 12,000 and Actual hours are 12,600. Correct Answer Rs.900/- ( Adverse ) Multiple Choice Single Answer Question Calculate Labour Mix Variance, If revised standard hours are 16, 500/-, Standard rate is Rs.3/- and Actual hours are 13, 500. Correct Answer Rs.9,000/- ( favourable ) Multiple Choice Single Answer Question Calendar Variance arises only if there is abnormal increase or d ecrease in Correct Answer Actual number of working days Multiple Choice Multiple Answer Question The following factors affects the budgeted advertisement cost Correct Answer Percentage of profits , Availability of funds , Competit ors policy Match The Following Question Correct Answer Daily Time sheets Time spent by worker on job is recorded Hand Written method Attendance register Time Recording Clock Method Ticket number & clock card allotted to w orker Token or Disc Method Token number & identification number allotted to worker Weekly Time sheets Record of time for all the jobs during the week is made Select The Blank Question Accounting to the matching principles of accounting, the _______ _ incurred during an accounting period are required to be match with ________ du ring that period Correct Answer cost Correct Answer revenues Select The Blank Question Management Accounting has a very ________ scope and it requires ________ organizational structure Correct Answer wide Correct Answer elaborate Select The Blank Question Along with financial accounting, ________ and ________ are the o ther streams of accounting Correct Answer Cost Accounting Correct Answer Management Accounting Select The Blank Question The cost accountancy is defined as the application of costing pr inciples,methods and techniques to the ________, art and practice of ________ as certainment of the profitability and the presenta Correct Answer science Correct Answer cost control Select The Blank Question Preventive costs of labour turnover refers to all the costs whic h may be incurred by the organisation to keep workers happy and ________ them fr om ________ the job Correct Answer discourage Correct Answer leaving Select The Blank Question Replacement costs of labour turnover are ________ and ________ Correct Answer training Correct Answer breakages of machine Select The Blank Question Break even point is a situation of no ________ no ________

Correct Answer profit Correct Answer loss Multiple Choice Multiple Answer Question Uncontrollable variances are Correct Answer Strike , Change in customers demand , Devaluation of cur rency True/False Question Indirect labour cost indicates that labour cost which cannot be identified with the individual cost centre. Correct Answer True True/False Question There is no need to open a suspense account if the trial balance does not agree. Correct Answer False Select The Blank Question Bank reconciliation statement is the statement prepared to expla in the ________ as to why the bank balance as per ________ and bank balance as p er bank book does not match Correct Answer reasons Correct Answer pass book Multiple Choice Single Answer Question Old furniture sold for Rs. 5400 has been entered as Rs 4500 in t he cash book, for rectifying the same Suspense A/C credited to Rs Correct Answer 900 Multiple Choice Multiple Answer Question Material Price Variance may occur due to Correct Answer Change in price of material , Failure to take discounts , Weak purchase organization Select The Blank Question In financial statements P& L Accounts relates to a specific dura tion whereas ________ is for a given point of time Correct Answer P& L Accounts Correct Answer Balance sheet Multiple Choice Single Answer Question Goods return by Pande worth Rs. 2000 should have appeared on the credit side of Pande s account for rectifying the same. Following account to be c redited Correct Answer Suspense A/C Select The Blank Question Bin Card is not an ________ record but only a ________ record. Correct Answer Accounting Correct Answer Quantitative Multiple Choice Single Answer Question Salary given in trial balance Rs. 5000/-, still 2000/- is to be paid . The outstanding salary is debited to Profit &Loss A/C. The second effect is -Correct Answer Transfer to balance sheet liability side True/False Question Debit the receiver & credit the giver is a rule of Real a/c. Correct Answer False Multiple Choice Single Answer Question If at 50% capacity, total factory overheads are Rs.10,000/- (out of which 60% are fixed and 40 % are variable) then what will the amount of tota l factory overheads at 60% capacity Correct Answer Rs.10,800/Match The Following Question Correct Answer Advance Not related in current year Application Increase in Assets Drawing Amount of personal use

Outstanding Amount still payable in current year Prepaid Amount paid for next year Multiple Choice Multiple Answer Question These are the features of fixed overheads Correct Answer total cost remains the same , per unit cost may vary , n ot dependent on volume of output Multiple Choice Single Answer Question __________ Accounting is primarily protects the interest of the outsiders dealing with the organization various capacities like investors, suppl iers, customers etc. Correct Answer Financial True/False Question Head of the Department should sign the purchase requisition. Correct Answer True Multiple Choice Multiple Answer Question FIFO method Correct Answer The price of the earliest available lot is considered fi rst , If the lot is exhausted, the price of the next available lot is considered , It is used for issue of material True/False Question The situation of over absorption arises if the overheads absorbe d are less than the actual overheads. Correct Answer False Multiple Choice Single Answer Question If production overheads to be absorbed are Rs. 20000/- and machi ne hours worked are 5000 then the machine hour rate will be, Correct Answer Re. 4 per machine hour. True/False Question Due to errors of principle the arithmetical accuracy of the tria l balance get affected. Correct Answer False Multiple Choice Multiple Answer Question These are the methods of measuring labour turnover. Correct Answer Replacement Method , Separation Method , Flux Method Multiple Choice Multiple Answer Question From the following data, workout the EOQ annual demand. 5000 uni ts, ordering cost Rs. 60 per unit, price per unit Rs. 100, inventory carrying co st15% on average inventory Correct Answer 300 Match The Following Question Correct Answer Depreciation Assets Discount allowed Debtors Discount received Suppliers Interest on capital Borrowed capital Outstanding expenses Liabilities True/False Question canteen facility to workers, health and safety services are exam ples of monetary incentives. Correct Answer False Multiple Choice Single Answer Question This is the best example of element wise classification of cost. Correct Answer material Multiple Choice Single Answer Question This is the process of recording attendance time of the workers. Correct Answer Time keeping Multiple Choice Multiple Answer Question Wage rate standards takes into consideration the following facto rs Correct Answer The system of wage payments , System for bonus payment ,

Grades of workers required Select The Blank Question Standard Costing system facilitates ________ and ________ for ea ch individual or department Correct Answer Delegation of authority Correct Answer Fixation of responsibility True/False Question If actual cost is more than the standard cost then it is called favorable variance. Correct Answer False True/False Question The aggregate of indirect material cost, indirect labour cost an d indirect expenses is termed as factory cost. Correct Answer False Select The Blank Question Fixed cost is the cost that tend to remain ________ irrespective of ________ Correct Answer constant True/False Question Cost Accounting restrict itself with historical transactions Correct Answer False True/False Question A very wide scope of Management Accounting is the limitation by itself. Correct Answer True Multiple Choice Single Answer Question Journal is popularly known as 'Book of . . . Correct Answer Original Entry True/False Question In a Balance-Sheet right hand side is referred as assets side an d left hand side is referred as liabilities. Correct Answer True Multiple Choice Multiple Answer Question Locate the steps involved in rectifying the errors in the books of accounts Correct Answer Find the wrong entry passed , Find the correct entry to be passed , Find the entry that will resolve the mistake in the books Multiple Choice Single Answer Question The cost that indicates historical cost, which is incurred in pa st, is known as Correct Answer Sunk cost Multiple Choice Single Answer Question Presentation of information to enable managerial decision making ' is one of the objects of which of the following Correct Answer Cost Accounting Multiple Choice Multiple Answer Question The objects of cost accountancy are . . Correct Answer To ascertain cost and profitability , Cost Control , Pre sentation of Information Multiple Choice Multiple Answer Question Examples of indirect material are Correct Answer Consumable stores , Glue used in book binding , Nails us ed in packing boxes Select The Blank Question The principle of ________ is followed while preparing the financ ial statements. Correct Answer Going concern Select The Blank Question The process of attributing proportions of items of costs amongst const centres is called ________.

Correct Answer Cost apportionment Match The Following Question Correct Answer Abnormal overheads Normality wise classification Administration overheads Function wise classification Fixed overheads Variability wise classification Indirect Material Element wise classification Select The Blank Question In India the gas industry and electricity industry, and ________ industry are examples of industries using the uniform costing system. Correct Answer fertilizer True/False Question New companies can adopt Uniform costing system as a ready-made s ystem. Correct Answer True Multiple Choice Multiple Answer Question Ram and Laxman are partners of Kush & Bros. As on 1st April, 200 3 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 accou nt. 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 Select The Blank Question Non-trading income is disclosed on the credit side of ________ a ccount. Correct Answer Profit and loss Select The Blank Question In the adjustment entry passed for closing stock, the ________ a ccount should be credited. Correct Answer Trading Select The Blank Question Goods returned to the suppliers from whom it was ________d is re corded in thePurchasereturn register. Correct Answer Purchase Multiple Choice Single Answer Question An advertisement contract was made with an artist which stated t hat the remuneration will be 12% of net sales. On an average the monthly sales w ere Rs.36,000/-, however the average rate of sales return was 5% of that month's sale. Find the expenditure on account of advertisement. Correct Answer Rs.49,248/Multiple Choice Single Answer Question Goods kept in the godown were destroyed by fire on 18th June, 20 04. The cost of such goods was Rs.18,950/-. The goods were not insured. Find the amont which should be debited to the profitability statement. Correct Answer Rs.18,950/True/False Question Generally speaking income represents wealth increase and busines s success; higher the income, lower will be the success of a business. Correct Answer False Multiple Choice Single Answer Question While preparing the bank reconciliation statement as on 31st Mar ch, 2004 you find the following discrepancy : 'a cheque of Rs.3,700/- received a nd deposited in bank on 27th March, 2004 was entered credited in the pass book o n 3rd April, 2004.' In this background, which of the following statement holds t rue as on 31st March, 2004? Correct Answer Balance as per pass book < Balance as per bank book Select The Blank Question The stores department is a ________ department.

Correct Answer Service Select The Blank Question The ________ is responsible for material losses while in storage . Correct Answer Store-keeper Select The Blank Question The ________ is a perpetual inventory record. Correct Answer Bin card Multiple Choice Single Answer Question A written request sent to a supplier for specified goods at an a greed upon price is often called as : Correct Answer Purchase order Multiple Choice Single Answer Question Selecting an appropriate method of valuation of inventory is imp ortant because : Correct Answer It influences the figure of gross profit True/False Question Re-order level for materials is determined considering maximum c onsumption and maximum delivery period. Correct Answer True True/False Question Control on purchase of material is exercised by the storekeeper. Correct Answer False Multiple Choice Multiple Answer Question The disadvantages of time rate system are : Correct Answer Ignores the efficiency of workers , Higher labour cost , Lack of motivation to increase productivity True/False Question The best way to reduce labour cost is to recruit cheap labour. Correct Answer False True/False Question Under some circumstances, it may be advisable to sell at prices equal to or below the marginal cost ignoring fixed cost. Correct Answer True Match The Following Question Correct Answer Decrease in selling price will lead to Decrease in contribution Decrease in variable cost will lead to Increase in profit volume ratio Increase in contribution will lead to Increase in profits Increase in fixed cost will lead to Increase in break even point Select The Blank Question Economical use of labour, materials and facilities can achieved with the help of ________. Correct Answer Budgetary control Multiple Choice Multiple Answer Question Select the advantages of standard cost system. Correct Answer Provides reliable basis for budgeting , Facilitates dele gation of authority , Promotes economy and efficiency Multiple Choice Single Answer Question Which variance is used to analyse the effect of change in the qu antity of output from a given mix of inputs? Correct Answer Materials yield variance True/False Question Depreciation can be defined as a permanent, continuous and gradu al reduction in the book value of a fixed asset. Correct Answer True 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

Match The Following Question Correct Answer Compensating Error Wrong classification Error of commission Wrong Posting Error of Omission Transaction is totally omitted Error of Principle Trial Balance does not get affected Select The Blank Question The difference between sales and cost of sales is termed as ____ ____. Correct Answer Net Profit Select The Blank Question ________ Accounting assists the management in establishing the p lans to attain the economic objectives and take proper decisions for the attainm ent of its objectives. Correct Answer Management Multiple Choice Multiple Answer Question The objectives of cost accounting are : Correct Answer Cost control , Ascertain ment of cost of each product , Assist in managerial decision-making Multiple Choice Single Answer Question The capacity utilised to installed capacity ratio is 80% for the company. The capacity utilisation ratio in respect of a machine for a particula r month is 90%. The available working hours in a month are 200 hours. The break of idle time is as follows : Waiting for job - 5hours, breakdown - 4 hours and w aiting for tools - 3 hours. Calculate the idle time cost when the hourly fixed c ost of running the machine is Rs.8/-. Correct Answer Rs.96/True/False Question Semi variable expenses fluctuate in direct proportion to volume. Correct Answer False True/False Question GAIL having monopoly in the CNG (Compressed Natural Gas) market can implement the Uniform costing system. Correct Answer False Multiple Choice Multiple Answer Question From the following, select intangible assets: Correct Answer Goodwill , Patents , Trade Marks Multiple Choice Multiple Answer Question Items credited to Profit & Loss Account are Correct Answer Gross profit , Commission received , Interested received Multiple Choice Single Answer Question Judge the given statement according to the given criteria. Goods being real account, when goods are lost by fire, the goods account should be de bited because the goods are not going out of the factory. Correct Answer The statement is correct but the reason is incorrect Multiple Choice Single Answer Question The credit side of the sales book was overcast by Rs.2,000/-. As a result of this rectification, what of the given impacts is likely to happen? Correct Answer The liability side of the balance sheet will increase by Rs.2,000/True/False Question It is said that the income statement represents wealth increase /decrease for the organisation. Correct Answer True True/False Question All personal expenses of the owner should be debited to the orga nisation's profit and loss account. Correct Answer False True/False

Question Depreciation on assets is credited to the trading account. Correct Answer False Match The Following Question Correct Answer Deferred revenue expenditure Real account Deferred revenue expenditure written off Nominal account Drawings Proprietor's account Loan Personal account Select The Blank Question If the bank pays off the credit card bill, as per the standing i nstructions, the overdraft as per bank book will be ________ the overdraft as pe r pass book. Correct Answer Lesser than Multiple Choice Single Answer Question A cheque of Rs.400/- received and deposited into bank on 26th Se ptember, was credited in the pass book but was omitted to be entered in the bank book: this error will result in : Correct Answer Difference in the balance as per bank book and as per pa ss book Multiple Choice Multiple Answer Question Inventory holding cost comprises of : Correct Answer Cost of insurance , Rent of store house , Salary of stor e keeper Select The Blank Question If the ordering cost ________s, then the economic order quantity will Increase. Correct Answer Increase Multiple Choice Single Answer Question P Ltd. produces a product having a monthly demand of 4,000 units . For every one unit of finished product one unit of a component X is required a t purchase price of Rs.20/-. The ordering cost is Rs.120/- per order and the hol ding cost is 10% per annum. If the company places each order for 2,000 units due to financial constraints, what is the extra annual cost? Correct Answer Rs.80/True/False Question An entry in the stores ledger is required for transfer of materi al from one job to another in the same department. Correct Answer False Multiple Choice Multiple Answer Question The causes of idle time can be analysed as Correct Answer Administrative causes , Productive causes , Economic cau ses Select The Blank Question The method which deals with ownership rights being given to work ers is known as ________ method of remuneration. Correct Answer Co-partnership Multiple Choice Single Answer Question Which of the following is the most efficient use of the clock ca rd? Correct Answer To facilitate payment for time spend on the work premise s Multiple Choice Single Answer Question A firm of boiler-house engineers provides engineering services t o large number of factories having boiler houses. The firm charges on the basis of number of hours its engineers have worked for the client. Each engineer works for eight hours on each working day. Each engineer enjoys Saturday and Sunday a s holiday. In addition he is granted a total of 21 more paid holidays in a year. An engineer's annual remuneration comprises (for the year Correct Answer Rs.182.29 Multiple Choice Multiple Answer

Question Marginal costing is useful in the following areas : Correct Answer Plant shut down decisions , Make or buy decisions , Prof it planning Select The Blank Question Cost volume profit analysis focuses attention on the ________ ef fect of a particular course of action. Correct Answer short run Multiple Choice Single Answer Question ABC Ltd. has a proposal of utilising a cheaper raw material whic h will increase the contribution from Rs.100/- per unit to Rs.125/- per unit. Ho wever, the use of cheaper raw material may result in decrease in sales by 10% (t o 450 units only). Find the impact of using the cheaper raw material on the amou nt of contribution ( net increase or decrease in contribution). Correct Answer Increase in contribution Rs.6,250/Multiple Choice Multiple Answer Question Which of the following budgets may be termed as a long term budg et? Correct Answer Capital expenditure budget , Research and Development ex penditure budget , Budget of a transportation company Select The Blank Question A ________ can be defined as a part of the orgainsation for whic h separate budget can be prepared and implemented. Correct Answer Budget centre Multiple Choice Single Answer Question The finance manager is responsible for which of the following bu dget? Correct Answer Cash budget True/False Question The role of the budget committee may be taken as an advisory rol e to the Chief Executive. Correct Answer True True/False Question While preparing the labour cost budget, factors such as overtime working or night shift working may be ignored. Correct Answer False Multiple Choice Single Answer Question The variance which measures the deviation of the rate actually p aid to labour as from the standard hourly rate is known as: Correct Answer Labour rate variance True/False Question The actual hours taken by the labour are compared with the stand ard hours allowed for output to find out the labour yield variance. Correct Answer True Multiple Choice Single Answer Question From the following data, determine the net profit if sales are 2 0% above the break even point. Selling price Rs.20/- per unit, variable cost Rs. 15/- per unit and fixed overheads Rs.20,000/Correct Answer Rs.4,000/Multiple Choice Single Answer Question As on 30th September, 2004 the cost of closing stock was Rs.84,6 96/- and its market price as on the same day was Rs.66,584/-. Which value of clo sing stock should be considered in the final statement of accounts for the year ended on 30th September, 2004? Correct Answer Rs.66,584/Match The Following Question Correct Answer Contribution - Fixed cost Profit Fixed cost + Variable cost Total cost Total cost - Fixed cost Variable cost Total cost + Profit Sales

Multiple Choice Multiple Answer Question Marginal costing technique is useful in taking decisions relatin g to which of the following courses of action? Correct Answer Decision to drop a product line , Decision to accept a s pecial offer at price lower than the normal selling price , Decision regarding t emporary shut-downs True/False Question Profit and loss account indicates the profit earned as on a part icular date. Correct Answer False Select The Blank Question The balance of the suspense account will ________ after all the errors are Correct Answer become zero Multiple Choice Single Answer Question A' started business with cash Rs. 5,000/-, building Rs. 5,000/-, furniture Rs. 2,000/-. What is the total amount of capital? Correct Answer Rs. 12,000 True/False Question The ideal budget period for a company engaged in generation and distribution of electricity is one year. Correct Answer False Select The Blank Question Income Tax Act, recognise only one method of depreciation namely ________. Correct Answer Written down value method Multiple Choice Single Answer Question The present unit cost data for a product is as follows: selling price Rs.15/-, variable costs Rs.8/-. If selling prices are reduced by 10% and v ariable costs are increased by 12.5%. Which of the following is the amended cont ribution to sales ratio? Correct Answer 0.333 Select The Blank Question The document which lays down the cost accounting plans and proce dures to be followed by the constituent units is known as ________. Correct Answer uniform cost manual Multiple Choice Multiple Answer Question Select the items which may be classified as selling and distribu tion overheads. Correct Answer Delivery van expenses , Rent of finished goods warehouse , Sales research expenses True/False Question The purchase account should be debited when an order is placed w ith the supplier of material. Correct Answer False Multiple Choice Single Answer Question Loss on account of goods lost due to earthquake should be debite d to which account? Correct Answer Profit and loss account True/False Question Factory overheads consist of all overhead costs incurred from th e stage of procurement of material till the production of finished goods. Correct Answer True Multiple Choice Single Answer Question The use of contribution per unti of limiting factor as the basis for ranking products to be produced and sold is aimed at which of the following ? Correct Answer Maximisation of short-term profit Multiple Choice Multiple Answer Question Identify the variable expenses.

Correct Answer Repairs of plant when it is undertaken by an outside age ncy , Carriage inward by hired carriers , Wages paid to casual workers Select The Blank Question Profit volume ratio is also known as ________. Correct Answer Contribution to sales ratio True/False Question If the physical stock is less than the stock as per the stores l edger, such shortage should be treated as an issue of material. Correct Answer True Multiple Choice Single Answer Question Which of the following is a correct definition of the key factor ? Correct Answer The factor which limits the activites of the undertaking True/False Question Marginal costing is a technique of cost control. Correct Answer True Multiple Choice Single Answer Question The process of recording the costs in a formal and systematic ma nner with the intention of preparing statistical data there from a ascertain the cost, is known as . . . Correct Answer Cost accounting Select The Blank Question A ________ inventory turnover period indicates efficient utilisa tion of material. Correct Answer Low True/False Question Provision for discount on debtors account should be credited to the Profit and Loss Account. Correct Answer False Multiple Choice Single Answer Question Insurance premium of Rs.18,000/- was paid on 15th January, 2004. The policy period is one year from the date of payment of insurance. On 31st Ma rch, 2004 what amount should be debited to the Profit and Loss account as expend iture on account of insurance premium? Correct Answer Rs.3,750/Multiple Choice Multiple Answer Question The factors which influence the selection of the method for abso rption of overheads are: Correct Answer Type of industry , Nature of products , Manufacturing pr ocess Multiple Choice Multiple Answer Question Select the transactions which can be entered in the Journal prop er. Correct Answer Opening entries , Closing entries , Rectification entrie s True/False Question The problem of multiple key factors can be solved with the help of techniques like linear programming, operations research, etc. Correct Answer True Multiple Choice Single Answer Question Out of debtors totaling to Rs.58,750/-, Rs.5,000/- were expected to be bad. What should be the amount of debtors that must be disclosed in the b alance sheet? Correct Answer Rs.53,750/Select The Blank Question Dividend received on amount invested in shares is an example of ________. Correct Answer Non-operating income Select The Blank Question ________ variance represents the over or under utilisation of pl

and and machinery. Correct Answer Capacity Multiple Choice Multiple Answer Question Which of the following transactions should be excluded while pre paring a cost sheet ? Correct Answer Interest on loan , Bad debts , Expenses on criminal law suit 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% True/False Question Absorption costing is more suitable for decision making than mar ginal costing Correct Answer False Multiple Choice Multiple Answer Question Features of Taylor's differential piece rate system are as follo ws : Correct Answer Minima clerical work is involved in calculating the wage s , Helps in building up an efficient labour force , Strong incentive to efficie nt and ambitious workers. Select The Blank Question While preparing trial balance, the balance as per ________ book is considered as bank balance. Correct Answer Bank Multiple Choice Multiple Answer Question State the features of these transactions : (i) Commission paid R s.250/- was posted twice to Commission account (ii) Rs.5,000/- representing good s 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 Multiple Choice Multiple Answer Question Select the steps to be followed while preparing bank reconciliat ion statement. Correct Answer Compare the transactions in the bank book and the pass b ook , Check the totals and the balancing of both the books , Confirm that the op ening balances of both the books are tallying True/False Question Bank charges debited in the pass book represent clerical mistake on the part of the bank employees. Correct Answer False Multiple Choice Single Answer Question A dividend warrant of Rs.2,076/- was paid direct to the bank and nothing appeared in the cash book. This is an example of : Correct Answer Direct deposit into the bank Select The Blank Question ________ Accounting is the process of analysis and interpretatio n of financial data collected with help of financial accounting & cost accountin g Correct Answer Management Match The Following Question Correct Answer Cash Discount Accounted for in the books of Accounts Real A/C Debit what comes in, Credit what goes out Rs.1 Personal A/C Debit the receiver, Credit the giver Trade Discount Not accounted for in the books of Accounts Multiple Choice Single Answer Question The wages paid to a trainee who constructs wooden mould for conc rete laying on a building contract should be defined as :

Correct Answer Direct labour cost True/False Question Depreciation, interest and property tax continue even when the o perations are discontinued. Correct Answer True 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 whol e , To compare efficiency of each unit against industry's overall performance , To compile reliable cost data for inter-firm comparison of costs Select The Blank Question If it is given that the office expenses account includes Rs.10,0 00/- for purchase of computer-table, the net profit will ________, after the nec essary adjustment is done. Correct Answer Increase Select The Blank Question The final result disclosed by trading account is the ________pro fit earned by the organization. Correct Answer Gross Multiple Choice Single Answer Question The half-yearly sales of product X are as follows : 1st half -30 ,000 units; 2nd half - 37,500 units. The production pattern of the company is ba sed on 80% of the sales of the current six months and 20% of the budgeted sales of the next six months. Calcu Correct Answer 1st half -31,500 units; 2nd half - 30,000 units True/False Question Any amount of profit earned in the past which is not distributed to the owner, belongs to the creditors. Correct Answer False Multiple Choice Multiple Answer Question Features of convention of materiality are . . . Correct Answer transactions having material impact on profitability sho uld be considered , Insignificant transactions will be ignored Multiple Choice Single Answer Question Unearned commission of Rs.5,000/- needs to be recorded in the bo oks of accounts. Find its correct impact. Correct Answer The asset side of the balance sheet will increase by Rs. 5,000/True/False Question Overhead absorption is an exercise by which overhead is properly spread over production for the period. Correct Answer True True/False Question Price based on Uniform Costing may be taken to be reliable and r epresentative of the whole industry. Correct Answer True Multiple Choice Multiple Answer Question Select the appropriate rectification entries for the following t ransactions (i) Rs.200/- received in respect of a bad debt previously written of f was credited to Debtors account. (ii) Paid Rs.6,000/- to a Mr. Rao, clerk, as salary in lieu of notice. This amount was debited to his personal account (iii) Interest @ 5% p.a. on a loan of Rs.5,000/- was debited to general expenses accou nt. Correct Answer Debtors A/c ..........Dr. Rs.200/- to bad debts recovere d A/c Rs.200/- , Rs.6,000/- to Rao's A/c Rs.6,000/- , Rs.250/- to General Expens es A/c Rs.250/Multiple Choice Multiple Answer Question Locate the error and its features in the following Correct Answer Compensating errors , Trial balance will not be affected , Trial balance will be affected

True/False Question The purchase budget is a forecast of the value of fixed assets r equiring replacements in the budget period. Correct Answer False Multiple Choice Multiple Answer Question If the sales forecast is less than the past sales but the top ma nagement insists upon a certain amount of additional profits, then following ste ps can be taken to achieve the target profit Correct Answer Increase the selling price , Reduce cost of sales , Incr ease the selling efforts Select The Blank Question The selection of ________ may depend upon the various factors li ke characteristics of the business organisation, tax considerations, statutory r equirements etc. Correct Answer Accounting period Select The Blank Question The various contents of a uniform cost manual are organisation, cost accounting system and ________. Correct Answer presentation of information True/False Question In marginal costing, decisions are guided by profit rather than contribution margin. Correct Answer False Multiple Choice Single Answer Question The following data relates to the month of October : Actual vari able overheads Rs.60,000/-; budgeted variable overheads Rs.80,000/-; actual outp ut 900 units; budgeted output 1,000 units; standard time for one unit - 2 hours. Calculate variable overhead efficiency variance. Correct Answer Rs.4,000/- (Favourable) Select The Blank Question In order to rectify the totaling mistake, wherein the sales retu rn ledger was undercast by Rs.2,000/-, the suspense account should be ________ w ith Rs.2,000/Correct Answer credited Match The Following Question Correct Answer Daily Time sheets Time spent by worker on job is recorded Time booking department Jobwise booking of time. Time Keeping Department Recording of workers time Time Recording Clock Method Ticket number & clock card allotted to w orker 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 Multiple Choice Single Answer Question Urgent action for replenishment of material stock must be taken once the inventory reaches its : Correct Answer Danger level Multiple Choice Multiple Answer Question The principal functions of the cost accounting department are : Correct Answer Classifying labour cost according to jobs, processes, et c. , Preparation of different reports based on direct, indirect labour cost, etc . , To focus on areas where labour cost may be reduced. True/False Question Match Correct Answer True Select The Blank Question The treatment of ________ time in cost accounting depends upon t

he distinction between normal and abnormal time. Correct Answer Idle Multiple Choice Multiple Answer Question Items debited to Profit & Loss Account are Correct Answer Salary , Discount allowed , Postage & telegram Select The Blank Question Budgeted profit and loss account and budgeted balance sheet are also known as ________. Correct Answer Master budget Multiple Choice Single Answer Question Which system can assist in fixing a common selling price for the industry as a whole on the basis of cost of production of all units belonging t o that industry ? Correct Answer Uniform costing Multiple Choice Single Answer Question A lathe machine was purhcased on 31st March, 2004 for Rs.65,000/ -, however it was installed only on 5th April, 2004. The depreciation is charged @ 15% p.a.. Find the amount of depreciation charge for the said lathe machine f or the year ended 31st March, 2004. Correct Answer Nil True/False Question Differential cost analysis is incorporated in the cost books. Correct Answer False True/False Question The process of recording attendance time of the workers is known as time booking. Correct Answer False True/False Question The phrase 'By Balance c/d.' written on the credit side of the r ent account, indicates credit balance for this account. Correct Answer False Multiple Choice Single Answer Question If the quantity of material purchased and quantity used are diff erent, then which quantity should be used to compute the material price variance ? Correct Answer Quantity of material purchased Multiple Choice Multiple Answer Question Uniform costing system can be successfully implemented in any in dustry only when : Correct Answer Information is freely supplied by all the units , Well o rganised sector is ready to share the technological improvements , Information f urnished by the units is complete and correct Select The Blank Question Factory light, telephone expenses are examples of ________ expen ses. Correct Answer Indirect Select The Blank Question For successful implementation of uniform costing system, it is v ery essential to devise ________, containing recommended cost accounting plan an d procedures. Correct Answer cost manual Select The Blank Question The combination in which different products are sold by a compan y is known as ________. Correct Answer Sales mix Multiple Choice Single Answer Question Which of the following is usually prepared daily by employees fo r each job worked on? Correct Answer Job card True/False

Question Profit = Profit volume ratio X Margin of safety Correct Answer True Multiple Choice Multiple Answer Question The management of Horngreen Ltd. is deciding whether to continue working at loss or to temporarily shut down the factory. State the qualitative aspects that must be considered before arriving at a decision. Correct Answer Loss of trained personnel , Loss of regular customers , Expenditure required to restart the factory True/False Question Indirect material cost is an integral part of finished goods. Correct Answer False Multiple Choice Single Answer Question It is difficult to apply Uniform costing system for an industry which has labour intensive companies as well as capital intensive companies, bec ause : Correct Answer The cost structure is different Multiple Choice Single Answer Question Rs.2,650/- were paid to ABC Ltd. for maintenance of machine; whi ch account should be debited for this transaction? Correct Answer Maintenance of machine account True/False Question Margin of safety = Contribution / Profit volume ratio Correct Answer False Multiple Choice Multiple Answer Question The key factor determines the : Correct Answer Level of activity , Capacity utilization , Level of sale s Select The Blank Question Discount received from the creditor has been entered in the cred itor's account but discount has not been credited; what type of error is this __ ______ Correct Answer Omission of posting an amount in the ledger 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 Select The Blank Question Interest on capital is an allowable expenditure for parntership firms, as per the provisions of the ________ . Correct Answer Income Tax Act, 1961 Multiple Choice Single Answer Question Mixers Ltd. is engaged in producing a standard mix using 60kg of chemical X and 40 kg of chemical Y. The standard loss of production is 30%. The standard price of X is Rs.5/- per kg.and of Y Rs.10/- per kg. The actual mix an d yield were as follows : X - 80 kg @ Rs.4.50 per kg; Y - 70 kg @ Rs.8/- per kg. Actual yield - 115 kg.Compute material yield variance. Correct Answer Rs.100/- (Favourable) Multiple Choice Multiple Answer Question Select the examples of functional budgets: Correct Answer Sales budget , Production budget , Research and developm ent budget Multiple Choice Single Answer Question Sita and Gita are partners of SGL & Co. As on 1st August, 2003 S ita's capital stood as Rs.10,000/- and Gita's capital as Rs.18,000/-. If interes t on capital is to be provided @ 10% p.a., what should be the treatment of this interest in the profitability statement, assuming there were no additions to cap ital during this period? Correct Answer Profit and loss account should be debited with Rs.1,866. 67 Multiple Choice Single Answer

Question KDL Ltd. charges depreciation @ 20% on written down value method . The net book value of its machinery on 1st January, 2003 was Rs.125,000/-. Wha t will be the net book value of its machinery on year end, i.e.31st December, 20 03, assuming there were no additions or disposals during the year? Correct Answer Rs.100,000/True/False Question Standard costing is always accompanied by a system of budgeting but budgetary control may be operated in business where standard costing is impr acticable. Correct Answer True Select The Blank Question An amount of Rs.200/- is received from P and is credited to Q. T he rectification entry would affect ________ Correct Answer P's A/c and Q's A/c Multiple Choice Multiple Answer Question Select the items which may be classified as administration overh eads. Correct Answer Depreciation on office furniture , Director's remunerati on , Telephone expenses True/False Question Budgetary control system provides a basis for establishment of t he incentive systems. Correct Answer True True/False Question A fixed budget is useful only when the actual level of activity corresponds to the budgeted level of activity. Correct Answer True Select The Blank Question A low margin of safety indicates ________ fixed overheads. Correct Answer higher Select The Blank Question Category A items, as per ABC analysis, represent ________ % of t he total number of items in inventory. Correct Answer less than 10 Multiple Choice Single Answer Question The gross profit transferred from the trading account is Rs.98,9 99/-. The expenses debited to the profit and loss account are salary Rs.12,000/; advertisement expenses Rs.18,000/-; printing and stationery Rs.5,500/- and man aging director's incentive Rs.28,000/-. It was noted that no entry was made for salary of one month which was due but not yet paid. Find the net profit of the c ompany. Correct Answer Rs.34,408.09 True/False Question Credit balances in all the Personal & Real accounts appear on as set side. Correct Answer False Select The Blank Question A complete list of all material required, with quantities, for a particular job is given in the ________. Correct Answer Bill of material Select The Blank Question The term ________ indicates expenditure incurred on or attributa ble to a given thing. Correct Answer Cost Multiple Choice Single Answer Question The budget manual must contain statement regarding: Correct Answer Objectives of the orgainsation Multiple Choice Single Answer Question Annual subscription paid by bank to the Chamber of Commerce on 3 1/03/04, as per the standing instructions, and advise sent thereafter, may lead

to: Correct Answer Balance as per bank book > Balance as per pass book Select The Blank Question Entry for dishonour of cheque appears only in the pass book, thi s entry should be ________ in the bank book. Correct Answer Passed Select The Blank Question Since the pass book and the bank book record the ________ transa ctions, the bank balance as per these books should be equal. Correct Answer Same True/False Question A pre-determined factory overhead rate holds up product costing. Correct Answer False Multiple Choice Multiple Answer Question These are the replacement costs of labour turnover. Correct Answer Inefficiency of new workers , Cost of selection and plac ement , Increased spoilage and defectives Multiple Choice Single Answer Question Rent of Rs.7,500/- for the month of April was received in March. Which account should be credited in the books of accounts for making an entry f or receipt of the said amount? Correct Answer Rent received in advance account True/False Question Bank reconciliation statement can be prepared on weekly basis. Correct Answer True Multiple Choice Single Answer Question Amit sold Goods to Atul for Rs. 50,000/- on cash & Rs. 50,000/on credit basis. Amit allowed 10% discount for on the spot transaction. What is the amount that should be debited to the cash account? Correct Answer Rs.45,000/Multiple Choice Multiple Answer Question Financial Accounting ______________ Correct Answer Designed to supply information for internal/ external us es. , Deals with the transaction during specific period. , It is compulsory Multiple Choice Multiple Answer Question Cost Accounting ______________. Correct Answer Concerned with specific activities. , Classified accordi ng to their nature. , It deals with both i.e. past & present. Multiple Choice Multiple Answer Question Features of double entry accounting system are . . . Correct Answer Every business transaction has two elements , When busin ess receives something, it has to pay something , Every debit has a correspondin g credit True/False Question Penalty paid for delay in payment to creditors represents uncont rollable cost. Correct Answer False Multiple Choice Multiple Answer Question Features of a cost sheet are as follows Correct Answer Indicates the total cost of production during a given pe riod , Indicates the unit cost of production during a given period , Helps the m anagement in fixing the selling price to be quoted for the Select The Blank Question Depreciation charged on office furniture on straight line basis is an example of ________. Correct Answer Administration overheads 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.

Multiple Choice Multiple Answer Question Purchased goods worth Rs.6,450/- on 10th March, 2004. However th e goods were delivered directly to the plant situated at Nagar and hence this tr ansaction was not recorded in the purchase book, which is maintained at the corp orate office. Analyse the impact of this transaction. Correct Answer The gross profit will increase by Rs.6,450/Select The Blank Question If Rs.15,000/- has been paid to Kargil Relief Fund as the owner' s personal contribution, ________ account should be debited in the books of acco unts of the business. Correct Answer Drawings Multiple Choice Single Answer Question Included in the trial balance is the sales promotion suspense ac count with a debit balance of Rs.6,300/-. It is given that this balance should b e written off. Calculate its impact on profit of the company. Correct Answer The net profit will decrease by Rs.6,300/True/False Question While passing the journal entry, it is of utmost importance to e nsure that the total of amount debited is equal to the total of the amount credi ted. Correct Answer True True/False Question The bin card and stores ledger, being independent records, compa rison of these two records should be avoided. Correct Answer False Multiple Choice Single Answer Question The cost of idle time incurred by employees that is considered n ormal for the production process should be charged to : Correct Answer Factory overheads True/False Question The cost of abnormal time may be recovered by inflating the hour ly labour rate. Correct Answer True Select The Blank Question Contribution represents pool of resources available for meeting all costs other than ________. Correct Answer Variable costs Multiple Choice Single Answer Question ABC Ltd. is planning to sell 200,000 units of product B. The fix ed costs are Rs.400,000/- and the variable costs are 60% of the selling price. I n order to realize a profit of Rs.100,000/-, the selling price per unit would ha ve to be : Correct Answer Rs.6.25 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 pr oduction 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 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 inp ut cannot be predicted , Varying levels of production activity Select The Blank Question The budget that represents the funds investment for expansion, d iversification, etc. is known as ________. Correct Answer Capital expenditure budget True/False Question Purchased goods by paying Rs.35,000/-: In this case, the cash ac

count should be debited. Correct Answer True Select The Blank Question Under the AB________ analysis, nuts and bolts used as material w ill be classified as category C. Correct Answer C Multiple Choice Single Answer Question Which of the following is a more descriptive term for the type o f cost accounting often called "direct costing"? Correct Answer Variable costing Multiple Choice Multiple Answer Question The advantages of Halsey plan are : Correct Answer Bonus goes on increasing with increase in time saved. , Provides more incentive to speed up production , Guaranteed time rate payment is made Select The Blank Question Marginal costing is also known as ________. Correct Answer Variable costing True/False Question Category C items, as per the ABC analysis, usually refers to ind irect material. Correct Answer True Multiple Choice Single Answer Question Net book value of loose tools as on 1st April, 2003 was Rs.45,00 0/-. As on 31st March, 2004 the management felt that the real worth of these loo se tools is only Rs.30,000/-. What can be done to achieve the desired reduction in the net book value of loose tools? Correct Answer By providing depreciation to the extent of Rs.15,000/True/False Question All costs are controllable. Correct Answer False Multiple Choice Single Answer Question Which of the following cost is also termed as Prime Cost ? Correct Answer Direct cost Select The Blank Question Purchase of national saving certificates by the company from its profits, should be debited to ________ account. Correct Answer Investments Select The Blank Question The difference between sales and prime cost is known as ________ . Correct Answer Gross Profit Multiple Choice Single Answer Question The opening balance of cash account is Rs. 25,000/-, cash receiv ed from debtors Rs. 30,000/-, sold goods on cash basis amounting to Rs. 50,000/, paid to creditors Rs. 20,000/-, purchase furniture Rs. 5000/-. What is the clo sing balance of the cash account? Correct Answer Rs. 80,000 Multiple Choice Single Answer Question Opening stock valued at Rs.7,400/-; Purchases Rs.24,700/-; Wages Rs.5,400/-; Sales Rs.48,600/-; Closing stock Rs.7,000/-. Calculate Gross Profit ? Correct Answer Rs.18,100/Select The Blank Question Under-recovery of overheads implies that the profit will be_____ ___ to the extent of total under-recovered overheads. Correct Answer Increased Match The Following Question Correct Answer Administration budget Salary of CEO

Cash budget Interest on loan Materials budget Carriage inwards Selling and distribution budget Cost of demand creation Multiple Choice Single Answer Question Quantify the increase in profit on account of following errors : (a) Repairs of furniture amounting to Rs.2,000/- were debited to furniture acco unt. Furniture is depreciated @10% p.a. (b) Interest received on bank deposits w as credited to dividend received account, Rs.1,550/- (c) A television purchased for the managing director's office for Rs.45,000/- was debited to Interior decor ation expenses. Correct Answer Rs.43,200/True/False Question Under ABC analysis, category A represents items with high volume s. Correct Answer False Multiple Choice Single Answer Question An order for goods worth Rs.18,000/- was placed on 25th March, 2 004. The goods were received on 1st April, 2004. Calculate the impact of this tr ansaction on the final statements of accounts for the year ended 31st March, 200 4. Correct Answer The net profit will not be affected Multiple Choice Multiple Answer Question Which of the formulae can be used to calculate profit volume rat io : Correct Answer Change in contribution / Change in sales , 1 - (Change i n variable cost / Change in sales) , (Fixed cost + Profit) / Sales True/False Question Marginal costing rewards sales whereas absorption costing reward s production. Correct Answer True Multiple Choice Multiple Answer Question Following errors affect the trial balance Correct Answer Wrong totaling of subsidiary books , Posting on the wron g side of an account , Omission of posting an account in the ledger Multiple Choice Single Answer Question Sold goods to Amitabh worth Rs. 15,000/- against 15% trade disco unt. In this case with what amount should the sales account be credited? Correct Answer Rs. 12,750 Select The Blank Question Furniture account will always have a ________ balance. Correct Answer Debit Multiple Choice Multiple Answer Question Accounting is the art where transactions are Correct Answer Summarized , Classified , Recorded Select The Blank Question The ________ variance is the difference between the actual varia ble overhead incurred and the standard variable overhead charged to production. Correct Answer Total variable overhead True/False Question Standard costs are used for external reporting. Correct Answer False Multiple Choice Single Answer Question Mr. Oak, materials manager, spends 40% time in the factory and t he remaining in office. If his annual salary is Rs.500,000/-, what amount should be charged as office overheads ? Correct Answer Rs.300,000/Multiple Choice Multiple Answer Question The factors to be considered while preparing the direct material s budget are : Correct Answer Adequacy of material storing space , Availability of fun

ds , Material in stores but reserved for specific purposes Match The Following Question Correct Answer Balance Sheet Land & Building Manufacturing account Work in Progress Profit and loss account Commission received Trading account Closing stock of finished goods True/False Question Bank reconciliation statement must be prepared before the prepar ation of profit and loss account and balance sheet. Correct Answer True Multiple Choice Single Answer Question Find the budget which is inadequate as a cost control technique : Correct Answer Fixed budget True/False Question Predetermined rate of absorption of overheads helps in quick pre paration of cost estimates and quoting prices. Correct 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/Select The Blank Question ________ is an example of intangible asset. Correct Answer Goodwill True/False Question Goods sent to the customers on approval basis should be treated as sales. Correct Answer False 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 limi ting factor , Priority is given to fulfill the market demand of the product whic h gives maximum contribution per labour hour. True/False Question According to Reducing Balance Method, the depreciation is provid ed at a predetermined percentage on the balance of cost of asset after deduction of the depreciation previously charged. Correct Answer True 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 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 Multiple Choice Single Answer Question The wages paid to maintenance department workers who do repair w ork principally for production departments but also on the vehicles in the distr ibuiton department shoud be charged as: Correct 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 Select The Blank

Question Measurement of ________ gives an idea of the degree of mobility of labour. Correct Answer Labour turnover Multiple Choice Single Answer Question Net profit for the year before charging commission to the manage r, 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 Match The Following Question Correct Answer Factory overheads Repair for factory building Non operating income Profit on sale of investment Selling and distribution overheads Advertisement expenses Total cost Cost of finished goods Multiple Choice Single Answer Question A company wishes to earn a 15% profit margin on selling price wh en 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 Multiple Choice Multiple Answer Question Contents of Uniform Cost Manual are Correct Answer Organization , Cost Accounting system , Presentation of information Multiple Choice Multiple Answer Question The process of accounting has three streams of accounting --------------,--------and ----------------------. Correct Answer Financial Accounting , Cost Accounting , Management Acco unting True/False Question Long term loan borrowed from financial institution comes under t he heading of long term liabilities. Correct Answer True Multiple Choice Single Answer Question Judge the statement according to the criteria given : ' The acco unting 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 t o concept of matching expenses with the revenues, this expenditure should be rec orded in the books of accounts in January, Correct Answer The statement and its reason are both incorrect Multiple Choice Single Answer Question The installation and operation of ___________ accounting require s a very elaborate organizational structure and large number of rules & regulati ons Correct Answer Management True/False Question Credit note is an intimation send to person dealing with the bus iness that his account being debited for the purpose indicated therein. Correct Answer False True/False Question Primary distribution is effected on the basis of service rendere d to the service departments by the production departments. Correct Answer False Multiple Choice Multiple Answer Question Marginal costing is found to be unsuccessful in the following si tuations :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 wher e employee costs are very large and almost fixed in nature

True/False Question Debit Note is an intimation sent to person dealing with the busi ness that his account is being credited for the purpose indicated therein. Correct Answer False Multiple Choice Multiple Answer Question Labour efficiency variance arises due to: Correct Answer Inefficient supervisor , Poor working conditions , Use o f sub-standard quality of material 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 Multiple Choice Multiple Answer Question The organization chart shows the following aspects : Correct Answer Functional responsibility of different functional manage rs , Delegation of authority to various managers , Inter-functional relationship s of these managers True/False Question Danger level for inventory of materials means the safety stock o f inventory. Correct Answer False 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 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 prod uction cycle , The incorrect choice of purchase order quantity , Failure to cont rol 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 con trolling activities 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 Multiple Choice Single Answer Question Which document facilitates estimating material cost of a particu lar job, before completion of that job? Correct Answer Bill of material 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 Multiple Choice Multiple Answer Question Features of convention of conservation are :Correct Answer Applicable to valuation of current assets , Anticipates all future losses and expenses , Ignores all future incomes and profits, unless they are actually realized True/False Question Amortization of goodwill should be considered while preparing ca sh budget. Correct Answer False Select The Blank Question Generally, all real accounts will have a ________ balance. Correct Answer Debit

Select The Blank Question Angle formed by the intersection of total cost line and sales li ne is called angle of ________. Correct Answer Incidence Multiple Choice Multiple Answer Question Labour turnover means :Correct Answer Influx and exit of employees , Quantitative measurement of instability of working force , Rate of change in the average working force Multiple Choice Multiple Answer Question Essentials for effective implementation of budgetary control sys tem are :Correct Answer Commitment of top management , Clearly defined objective s , Continuous budget education Select The Blank Question ________ authorizes the production department to issue requisiti on for materials. Correct Answer Bill of material Select The Blank Question A written order sent to inform the purchasing department of a ne ed for materials is called a ________. Correct Answer Purchase requisition note Multiple Choice Multiple Answer Question Features of convention of materiality are :Correct Answer Transactions having material impact on profitability sho uld be considered , Insignificant transactions will be ignored Multiple Choice Multiple Answer Question Actual costs determined on the basis of costing records maintain ed have following limitations :Correct Answer No practical utility from control point of view , No pra ctical utility for price fixation , Expensive Multiple Choice Multiple Answer Question Select the accounts to be disclosed on the assets side of the Ba lance sheet :Correct Answer Furniture , Loan to Bank of U.S.A. , Land & building Multiple Choice Multiple Answer Question Management Accounting is :Correct Answer Designed particularly for internal use , Helpful in esti mating the future along with past period , Useful in furnishing the necessary in formation to the management Multiple Choice Single Answer Question Creditors as on 31st March, 2004 amount to Rs.15,225/-. Provisio n for discount from creditors is to be made @ 5%. Find the impact of this provis ion on the net profit. Correct Answer The net profit will increase by Rs.761.25 True/False Question Time rate system is suitable for workers of the maintenance depa rtment. Correct Answer True Multiple Choice Single Answer Question The overheads apportioned to three production departments A, B a nd C and two service departments P and Q are Rs.75,000/-; Rs.100,000/-; Rs.80,00 0/-; Rs.60,000/- and Rs.40,000/- respectively. Overheads of department P are sha red by A, B, C and Q in the ratio of 4 : 3 : 2 : 1 and that of department Q are shared by A, B, C and P in the ratio of 3 : 3 : 2 : 2. Ascertain the total overh eads of each production department. Correct Answer A -Rs.116,836/-; B -Rs.134,889/- and C -Rs.103,265/True/False Question Credit balance in interest account indicates income for the orga nization. Correct Answer True

True/False Question All personal expenses of the owner should be debited to the orga nization's profit and loss account. Correct Answer False Multiple Choice Single Answer Question Basic objective of Uniform Costing is :Correct Answer Comparison Multiple Choice Single Answer Question The integrated form of all functional budgets is known as :Correct Answer Master budget Multiple Choice Single Answer Question The capital expenditure budget is important because it involves :Correct Answer Huge cash outflow True/False Question If excess of cash is estimated in the cash budget, it may be pos sible to utilize it to give bonus to the employees. Correct Answer False Multiple Choice Single Answer Question Which of the following is most likely to be an allocated product ion overhead cost to the finishing cost centre? Correct Answer Salary of the finishing center's manager True/False Question In differential cost analysis, decisions are taken by comparing the incremental revenue with differential costs. Correct Answer True Match The Following Question Correct Answer Labour hour method of absorption of overheads Not affected by output r elated remuneration schemes Percentage of direct labour cost methods of absorption of overheads Useful when ratio of skilled and unskilled labour remains constant Percentage of direct material cost methods of absorption of overheads Useful when prices of materials are fairly stable Percentage of prime cost methods of absorption of overheads Useful w hen there are no wide fluctuations in processing Multiple Choice Single Answer Question In considering a special order situation that will enable a comp any to make use of presently idle capacity, which of the following costs would b e irrelevant? Correct Answer Depreciation Select The Blank Question The ________ is of immense help in guiding the companies to oper ate their accounts on uniform basis. Correct Answer Uniform cost manual Select The Blank Question As per the provisions of Section 209 of ________, all the compan y form of organization is legally required to follow the mercantile or accrual s ystem of accounting. Correct Answer The Companies Act, 1956 Multiple Choice Multiple Answer Question The disadvantages of supplementary overhead rates are:Correct Answer It can be determined only after the end of the accountin g period , Defeats the basic concept of normal cost , Involves lot of clerical a ctivity Select The Blank Question The system which combines the benefits of time rate and piece ra te system by providing a minimum time rate payment along with incentives is know n as ________ system. Correct Answer Gantt task bonus

Multiple Choice Single Answer Question Currently Beta Ltd. is earning a contribution of Rs.80/- per uni t and the variable cost is Rs.180/- per unit. Its fixed costs are Rs.200,000/-. Its existing sales are 5,000 units. The company has a proposal that the sales st aff may be paid a commission of 10% of sales instead of fixed salaries totaling Rs.80,000/-. This action is expected to increase the sales by 10%. Compute the a mount of profit assuming the proposal is accepted? Correct Answer Rs.177,000/Select The Blank Question Dividend received on amount invested in shares is an example of ________. Correct Answer non-operating income Multiple Choice Multiple Answer Question Essentials for effective implementation of budgetary control sys tem are Correct Answer Commitment of top management , Clearly defined objective s , Continous budget education Match The Following Question Correct Answer Dividend paid Profit and loss appropriation account Freight inwards Manufacturing account Freight outwards Profit and loss account Sales Trading account Select The Blank Question Large angle of incidence indicates ________ amount of profits. Correct Answer higher Multiple Choice Single Answer Question Relevant costs in decision making are : Correct Answer Those costs which will arise as a result of the proposed action Select The Blank Question ________is the summary of all the balances in all the accounts l isted in ledger account of an organization at any given point of time. Correct Answer Trial Balance Multiple Choice Multiple Answer Question Overhead capacity variance is the outcome of: Correct Answer Shortage of labour , Enforced idle time, e.g.power break downs , Customer demand being more or less than anticipated Multiple Choice Single Answer Question Basic objective of Uniform Costing is . . . Correct Answer comparison Select The Blank Question Re-order level should be higher than ________ but lesser than ma ximum stock level. Correct Answer Minimum level Select The Blank Question Goods returned by Pawan worth Rs.1,000/- is debited to Pawan's A ccount. In order to rectify the mistake, which account should be debited ? _____ ___ Correct Answer Suspense account Select The Blank Question Interest receivable is a________ for the organisation. Correct Answer Current sset Multiple Choice Single Answer Question Interest on bank loan, was paid till the quarter ending 30th Sep tember, 2003, Rs.36,000/-. Find the amount to be debited to the profit and loss account for the year ending on 31st March, 2004, assuming the loan is not yet re paid as on this date. Correct Answer Rs.72,000/Multiple Choice Single Answer

Question The features of the Halsey Plan are: Correct Answer The benefit of time saved is divided equally between the employer and employee True/False Question The sum of indirect material cost, indirect labour cost and indi rect expenses is termed as factory cost. Correct Answer False Multiple Choice Single Answer Question Determine re-order level from the following : Maximum daily cons umption - 200 units; maximum delivery period - 12 days; average daily consumptio n - 150 units and average delivery period - 8 days. Correct Answer 2,400 units Select The Blank Question An error of partial omission can be rectified by either debiting or crediting the ________ account, as the case maybe. Correct Answer suspense Multiple Choice Single Answer Question With the help of the given information, find actual fixed overhe ads for actual output. Fixed overheads volume variance -Rs.75,000/- (Favourable) ; fixed overheads efficiency variance -Rs.95,000/- (Favourable); fixed overheads calendar variance Rs.20,000/- (Adverse); fixed voerheads expenditure variance R s.100,000/- (Adverse) and standard fixed overheads for actual output -Rs.575,000 /-. Correct Answer Rs.600,000/Multiple Choice Multiple Answer Question Which of the following information is included in the goods rece ived note? Correct Answer Date of receipt of material , Quantity received , Descri ption of goods Multiple Choice Multiple Answer Question The operating profit as per cost statement may differ from the p rofit as per Profit and Loss Account due to existence of Correct Answer Depreciation on plant and machinery , Interest on loans taken from other , Interest on loans granted to others Multiple Choice Single Answer Question Fixed deposit bearing interest @ 5.50%, for Rs.10,000/- was kept with Bank of India on 1st June, 2003, for a period of one year. The type of the fixed deposit is cumulative, i.e. interest shall be received only on maturity. What treatment should be given in the books of accounts on 31st March, 2004, the year ending date? Correct Answer An entry for Rs.458.34, debiting interest accrued but no t due account should be passed Multiple Choice Multiple Answer Question The advantages of written communication are Correct Answer Accuracy , Can be recorded , Brevity Multiple Choice Multiple Answer Question Business letters can be useful in different ways like Correct Answer Legal evidence , Permanent information , Recovering dues Multiple Choice Multiple Answer Question Essential parts of business letters would be Correct Answer Head address , Date , Outward number Multiple Choice Multiple Answer Question The Head address includes Correct Answer Tel no. , Name of organization Multiple Choice Multiple Answer Question The body of the letter may be divided into Correct Answer Opening Para , Main communication , Closing paragraph Multiple Choice Multiple Answer Question Examples of salutations would be

Correct Answer Dear sir , Respected Sir Multiple Choice Multiple Answer Question The matter in the memorandum may include Correct Answer Procedures , Rules , Instructions True/False Question People external to the organization do not have any access to th e costing records. Correct Answer True Multiple Choice Multiple Answer Question Features of Financial Accounting includes----------------Correct Answer It is a legal requirement , It protects the interest of outsiders , It considers historical transactions True/False Question A cheque received from a customer but not deposited into bank mu st be recorded in the cash book. Correct Answer True Multiple Choice Single Answer Question The periodical total of sales book was cash short by Rs. 5000 fo r rectifying the same, which A/C to be debited Correct Answer Suspense A/C True/False Question Due to compensating errors the arithmetical accuracy of the tria l balance get affected. Correct Answer False Match The Following Question Correct Answer Factory Cost Repair for factory building Non-operating Expense Dividend on shares Non-operating Income Profit on sale of shares Selling & Distribution Advertisement Total Cost Cost of finished goods Multiple Choice Multiple Answer Question Non Operating Expenses includes Correct Answer Loss on sale of asset , Goodwill , Only a, b True/False Question Perpectual inventory system includes continuous verification of physical stock at regular intervals. Correct Answer True Multiple Choice Single Answer Question Under the differential time rate method of wage payment up to 80 % of efficiency following rate is offered. Correct Answer Rs. 1.00 per hour True/False Question Per unit cost of variable overheads may reduce as the volume of output increases but the total overheads remain constant. Correct Answer False True/False Question Machine hour rate is calculated as (amount of overheads to be ab sorbed)/(labour hours required for production) Correct Answer False Multiple Choice Single Answer Question This is an example of semi variable overheads. Correct Answer electricity Multiple Choice Multiple Answer Question wise classification of overheads takes the form of Correct Answer indirect material , indirect labour , indirect expenses True/False Question To take make or buy decision under the marginal costing , if pur chase price of the product is less than its variable cost it is advisable to go for manufacturing proposition.

Correct Answer False True/False Question Budget is prepared for a fixed period of time. Correct Answer True True/False Question Depreciation does not involve cash out flow Correct Answer True Multiple Choice Multiple Answer Question Basic three steps in Standard Costing are Correct Answer Setting standards , Comparing actuals with standards , M easurement of variance Multiple Choice Single Answer Question Calculate Labour Rate Variance, If actual rate per hour is Rs.3. 50/- , Standard rate is Rs.3/- per unit and actual hours are 13, 500. Correct Answer Rs.6750/- ( Adverse ) Multiple Choice Multiple Answer Question Following factors will have to be considered before preparing Pr oduction Budget in terms of quantity Correct Answer Production capacity , Co-ordination with Sales forecast , Management Policy Match The Following Question Correct Answer Danger level Below minimum level Fixation of inventory level Initiating proper action for movement of material Maximum level The level above which actual stock should not exceed Minimum level The level below which actual stock should not reduce Re-order level To take the step for procurement of further lots of mate rial Select The Blank Question If ________ is not provided, the asset may appear in the Balance Sheet at an ________ amount Correct Answer depreciation Correct Answer overstated Select The Blank Question Expenditure like general lighting are apportioned considering __ ______ as a base and expenditure like depreciation are apportioned considering _ _______ as a base. Correct Answer number of light points Correct Answer value of assets Select The Blank Question Under absorption of overheads may take place due to the reasons like ________ overheads being more than the ________ overheads Correct Answer actual Correct Answer estimated Select The Blank Question A key factor is defined as the factor which, at a particular poi nt of time or over a period will ________ the volume of ________ Correct Answer limit Correct Answer output True/False Question Overhead absorption rate will be different at different capacity levels. Correct Answer True Select The Blank Question Factory cost of a product is Rs.335,000/-, if the selling overhe ads are charged @25% of factory cost, then the amount of selling overheads shoul d be Rs.________/Correct Answer 83750 Select The Blank

Question Creche expenses may be appropriately approtioned on the basis of ________. Correct Answer Number of female workers Multiple Choice Single Answer Question Opening stock of Rs.1,80,000/-, purchases Rs.8,00,000/-, freight inward Rs.35,000/-, closing stock Rs.2,00,000/-, direct wages Rs.2,35,000/-. Ca lculate the prime cost. Correct Answer Rs.10,50,000/Select The Blank Question Indirect Cost is termed as ________. Correct Answer Overhead Multiple Choice Single Answer Question A group of 10 men and 20 women workers were expected to produce 400 units of a product in an 8 hour day. The standard hourly rate was fixed at R s.25/- and Rs.15/-, respectively.Actually, a group of 15 men and 10 women worker s was deployed and paid for 8 hours a day at an hourly rate of Rs.22/- and Rs.18 /-, respectively. Two hours were wasted for the entire group due to power failur e and only 300 units were produced. Calculate labour rate variance. Correct Answer Rs.120/- (Favourable) True/False Question A grinding machine is an example of impersonal cost centre Correct Answer True Multiple Choice Single Answer Question Uniform costing system is useful in the following areas Correct Answer Classification of cost accounts True/False Question Interim dividend paid by the company should be debited to the pr ofit and loss appropriation account. Correct Answer True Multiple Choice Multiple Answer Question The production budget may be prepared in terms of : Correct Answer Units produced , Production cost , Material cost, labour cost and overheads 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 ite m should be produced if it can be sold for more than its: Correct Answer Variable costs True/False Question Receipts and payments method of cash budget is useful for prepar ing long term estimates. Correct Answer False Select The Blank Question In case of seasonal industry, the budget period may be taken as ________. Correct Answer One season True/False Question Lack of efficient control on various aspects related to raw-mate rial increases the material cost component of the finished product. Correct Answer True True/False Question Due to compensating errors the arithmetical accuracy of the tria l balance is affected. Correct Answer False Multiple Choice Single Answer Question Material price variance for a job is Rs.800/- (Favourable). Actu al quantity of material used is 100 kg whereasthe standard quantity of material is 120% of actual quantity. Actual price paid for the material is 80% of the sta ndard price. Calculate material cost variance. Correct Answer Rs.1,600/- (Favourable)

Select The Blank Question The process of recording the business transactions in a defined set of records is referred to as ________. Correct Answer Balance sheet Select The Blank Question The ________ books are preferred when the volume of transactions is very large. Correct Answer Subsidiary Multiple Choice Multiple Answer Question Limitations of Management Accounting includes------------------Correct Answer Its wide scope , Possibility of intuitive decision , Req uires elaborate organizational structure Multiple Choice Multiple Answer Question Business Entity Concept ______________. Correct Answer Business is separated from the owner. , The accounting p rocess carried out for the business , Separate legal entity Multiple Choice Multiple Answer Question Double Entry Accounting System__________________ Correct Answer Every business transactions have two elements , When bus iness receives something, it has to pay something , Every debit has a correspond ing credit Multiple Choice Single Answer Question Goods distributed as free sample amounted to Rs. 10,000. Prepare Neonboard Rs. 5000. The total amount transfer to advertisement account is Rs.__ __ Correct Answer 15000 Multiple Choice Multiple Answer Question When bank balance as per bank book is considered then following to be added. Correct Answer cheques issued but not presented , direct deposit by cus tomer , wrong credits given by bank Multiple Choice Multiple Answer Question Manufacturing process involves study of Correct Answer Designing the product , The quantity and quality , Mater ial used Multiple Choice Multiple Answer Question LAST IN FIRST OUT (LIFO) Correct Answer The price of the latest available lot is considered firs t , If that lot is exhausted, the price of the 10% prior to that is considered , Physical issue of the material may not be made out of the said lot Multiple Choice Multiple Answer Question The Bin card and stores ledges do not match due to the following reasons: Correct Answer Arithmetical errors in calculating , Non- posting a cert ain document , Posting a wrong Bin card Multiple Choice Multiple Answer Question The causes of idle time can be analysed as Correct Answer Administrative causes , Productive causes , economic cau ses Multiple Choice Multiple Answer Question Limitations of marginal costing are Correct Answer difficult for classification as fixed cost and variable cost. , does not provide any standard for the evaluation of performance. , it is useful technique only in the short run. Multiple Choice Multiple Answer Question In fixed overhead variance, the volume variance is further analy zed as Correct Answer Variance Efficiency Variance , Capacity Variance , Calen dar Variance Multiple Choice Single Answer

Question Standard may not be necessarily useful for this purpose. Correct Answer Forecasting Multiple Choice Multiple Answer Question In Cash budget , Non operating cash inflow includes Correct Answer Receipt of loan/borrowings , Issue of shares , Sale of f ixed assets Multiple Choice Multiple Answer Question In Cash budget , Non-Operating cash outflow includesVarious kind s of over heads Correct Answer Loan instalments , Taxes , Purchase of fixed assets. Multiple Choice Single Answer Question During a month opening stock is 5,000 kg, closing stock is 6,000 kg and production is 21,000 kg , what is the quantity of sales Correct Answer 20,000 kg Multiple Choice Multiple Answer Question The features of multiplicity of key factors are as follows : Correct Answer More than one key factors , Refers to a complex situatio n , Can be resolved by using linear programming technique Multiple Choice Multiple Answer Question Identify the budgets for which the production manager sould be h eld responsible : Correct Answer Production budget , Production overheads budget , Plant utilisation budget Multiple Choice Multiple Answer Question Features of material usage variance are : Correct Answer Measures the difference between the quantity of material s actually used and that should have been used. , Considers standard price X act ual quantity , Considers standard price X standard quantity 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 pers onnel , High labour turnover Multiple Choice Single Answer Question Two competing companies Hero Ltd. and Zero Ltd. sell the same ty pe of product in the market. Their forecasted profit and loss accounts for the y ear ending December 2003 are as follows : Hero Ltd.: Sales Rs.500,000/-; Variabl e cost Rs.400,000/-; fixed costs Rs.50,000/-. Zero Ltd.:Sales Rs.500,000/-; Vari able cost Rs.300,000/-; fixed costs Rs.150,000/-. You are Correct Answer Hero Ltd. Multiple Choice Multiple Answer Question Features of Sunk cost are . . . Correct Answer Indicates historical cost , Not relevant in decision mak ing process , Incurred in past Multiple Choice Multiple Answer Question Features of purchase requisition slip are : Correct Answer Raised when the stock of a raw material has fallen to th e re-order level. , Indicates the type, quantity and quality of material require d , The information about the price of material is excluded Multiple Choice Multiple Answer Question Features of convention of consistency are . . . Correct Answer The accounting policies and procedures should be followe d consistently , Facilitates the comparison of financial statements , It facilit ates comparison of financial statements on period-to-period basis Multiple Choice Multiple Answer Question Following are the examples of service cost centre Correct Answer Stores department , Transport department , Accounting de partment Multiple Choice Multiple Answer Question Pre-requisites of Uniform Costing are . . . Correct Answer Spirit of mutual trust , Free Exchange of ideas , No riv

alry Multiple Choice Multiple Answer Question You are using petrol as one of the raw materials. Daily you purc hase 1,000 litres of petrol at Rs.28.50 per ltire. 5% of it generally gets lost due to spillage and evaporation. On a particular hot and dry day, the issue of p etrol from 1,000 litres drum was as follows : To job X 200 litres; job Y 400 lit res and job Z 320 litres. After these issues the drum was empty. Calculate per l itre charge for use of petrol, quantum of loss and total quantum of petrol used for jobs X,Y and Z. Correct Answer Loss due to spillage and evaporation - 30 litres. , Rate of charge per litre of petrol - Rs.30/True/False Question Amortisation of goodwill should be considered while preparing ca sh budget. Correct Answer False Multiple Choice Multiple Answer Question The objects of cost accountancy are . . Correct Answer To ascertain cost and profitability , Cost Control , Pre sentation of Information Multiple Choice Multiple Answer Question Management Accounting is Correct Answer Designed particularly for internal use , Helpful in esti mating the future along with past period , Useful in furnishing the necessary in formation to the management Multiple Choice Multiple Answer Question The causes of idle time can be analysed as Correct Answer Administrative causes , Productive causes , Economic cau ses Multiple Choice Multiple Answer Question The components of the selling and distribution cost budget are : Correct Answer Distribution expenses , Publicity expenditure , Salary o f sales-office workers Multiple Choice Multiple Answer Question Locate the error and its features in the following Correct Answer Compensating errors , Trial balance will not be affected , Trial balance will be affected Multiple Choice Multiple Answer Question Business Entity Concept Correct Answer Business is separated from the owner. , The accounting p rocess carried out for the business , Separate legal entity Multiple Choice Single Answer Question Standard Costs are used as tool for Correct Answer Cost Control True/False Question The danger level fixed below maximum level Correct Answer False Multiple Choice Multiple Answer Question Following example comes under service cost centre Correct Answer Store department , Internal Transport department , Accou nting/Costing department Multiple Choice Single Answer Question The material physically received is compared with material order ed as per the this order Correct Answer Purchase Order Match The Following Question Correct Answer Diemer system Halsey system & Gantt System Differential Time rate Different hourly rates are fixed for different l evels of efficiency Payment by Result Workers are paid according to the production ach

ieved by him Straight Piece rate system The rate of payment is fixed per piece Time rate System Worker is paid on the basis of time attended by him Multiple Choice Multiple Answer Question When bank balance as per pass book is considered then following to be added. Correct Answer cheques deposited but not cleared , Interest debited by bank , bank charges debited by bank True/False Question (No. of unit * Rate of depreciation per unit ) this formula is u sed for written down value method. Correct Answer False Multiple Choice Single Answer Question Sold Goods of Amitabh worth Rs. 15,000 against 15% Trade discoun t. The Goods worth appear on account ___________. Correct Answer 12750 Multiple Choice Multiple Answer Question Cash and ____________ are the two systems of accounting. Correct Answer Mercantile Multiple Choice Single Answer Question This cost indicates increased or decreased cost due to the incre ased or decreased volume of operations. Correct Answer Differential Cost Match The Following Question Correct Answer fixed cost profit contribution Fixed cost + variable cost Total cost sales- variable cost contribution Total cost fixed cost variable cost Total cost + profit Sales 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 c ut throat competition , Weaker units can take advantage of settled systems of be tter managed units Multiple Choice Single Answer Question Margin of safety are the sales beyond Correct Answer break even point Multiple Choice Multiple Answer Question Indirect Labour Cost Correct Answer Wages paid to storekeeper , Salary of works manager , Wa ges paid to gatekeeper Select The Blank Question The difference between sales and factory/ works cost is termed a s ________ the difference between sales and ________ ermed as net profit Correct Answer gross profit Correct Answer cost of sales Multiple Choice Single Answer Question Labour cost is the cost of __________ paid to employees of the o rganization. Correct Answer Remuneration Multiple Choice Single Answer Question For a material, if standard quantity is 400 kg and standard pric e is Rs.3.75/- per kg. Find out the Material Usage variance if actual quantity i s 500 kg and actual price is Rs.3.60/- per kg. Correct Answer Rs.375/-( Adverse ) Multiple Choice Multiple Answer Question Labour Efficiency Standards are decided by considering following factors

Correct Answer l Runs

Records of past performance , Time & Motion Study , Tria

Select The Blank Question A budget manual is a document setting out the ________ of the pe rsons and ________ required for the budget control. Correct Answer Responsibilities Correct Answer Forms and procedures Multiple Choice Single Answer Question Selling price per tonne is Rs. 69.50 , variable cost per tonne i s Rs. 35.50 and fixed cost is Rs. 18,02000. Find out the BEP in units, Correct Answer 53000 True/False Question The difference between standard cost and actual cost is termed a s Variance. Correct Answer True True/False Question Wage payment system should be properly tied up with quality cont rol procedures to ensure that the workers are paid only for good and quality pro duction. Correct Answer True Multiple Choice Multiple Answer Question In Cash budget Operating cash inflow includes Correct Answer Cash Sales , Collection from Debtors , Interest/Dividend received True/False Question If the product is labour intensive, more stress may be necessary on inventory control procedure. Correct Answer False True/False Question A good wage payment system will not punish the workers for the m atters beyond the control of the workers. Correct Answer True True/False Question Fixed assets do not give the returns during the same period duri ng which they are paid for Correct Answer True Multiple Choice Single Answer Question The material issued to production department may be returned bac k to the stores because material issued in excess requirement and Correct Answer Material issued is defective Multiple Choice Multiple Answer Question Following are called the element of Cost Correct Answer Material , Labour , Expenses Select The Blank Question ________ of Trial Balance generally ensures ________ accuracy of the process of ledger posting. Correct Answer Talling Correct Answer arithmetical Multiple Choice Multiple Answer Question Convention of Materiality __________________ Correct Answer Only those transactions will be considered which have ma terial impact on profitability , Insignificant transaction will be ignored , The cost of non-used should not be considered as the item of cost Select The Blank Question Under the repeated distribution method the overheads of ________ department are distributed to other departments on agreed ________ Correct Answer service Correct Answer percentage True/False Question Under time rate system a worker is paid on the basis of producti

on achieved by him. Correct Answer False Multiple Choice Multiple Answer Question Cost Accountancy is a science, art and practice of a cost Accoun tant. Correct Answer Science indicates the possession and the application of relevant systematic knowledge. , Art indicates the skill and ability. , Practice indicates continuous effects on the part of cost accountant. True/False Question Financial Accounting primarily protects the interests of the out siders dealing with organization in various capacities. Correct Answer True Multiple Choice Multiple Answer Question Money Measurement Concept__________________ Correct Answer Only those transactions and facts expressed in terms of money , This Concept imposes severe restrictions on the kind of information avai lable from financial statements , Due to several restrictions it becomes drawbac k of financial accounting Multiple Choice Multiple Answer Question P/L A/C debit side includes Correct Answer salary , discount allowed , postage & telegram Multiple Choice Multiple Answer Question Profit & Loss A/C credit side has Correct Answer Gross profit , Commission received , Interested received Multiple Choice Single Answer Question A started business with cash 5000, building 5000, furniture 2000 , having depreciation of 10% on building. The total amount of capital comes to R s. __________ Correct Answer 11500 Multiple Choice Multiple Answer Question Following errors do not affect the trial balance Correct Answer Error of Principle , Error of Omission , Error of Commis sion Match The Following Question Correct Answer Compensating Error Wrong classification Difference in trial balance Transferred to suspense account Error of commission Wrong Posting Error of Omission The transaction is totally omitted Error of Principle Trial Balance does not get affected True/False Question A contractor s bill for the extension of premises amounting to Rs. 2750 has been debited to building repair account Correct Answer False Match The Following Question Correct Answer Controllable Cost Increase or Decrease in cost Differential Cost Historical Cost Opportunity Cost Cost can be controlled Sunk Cost Cannot be controlled Uncontrollable Cost Return or yield True/False Question Dividend received is a Non-operating Income. Correct Answer True Multiple Choice Single Answer Question Company having opening stock of Rs. 1,80,000 purchase Rs. 8,00,0 00. Freight Inward Rs, 35000 & closing stock Rs. 2,00,000, having direct wages R s. 2,35,000. What will be prime cost. Correct Answer 10,50,000 Multiple Choice Single Answer

Question A Co. having factory cost of Rs. 13,10,800. The administrative o verheads are salaries 40,000, rent & rates 6400, Traveling expenses 12,400, Depr eciation 2400, Directors fees 24,000, General Charges 2 Correct Answer 14,59,200 Multiple Choice Multiple Answer Question Factory overheads are termed as Correct Answer Production overheads , Works overheads , Manufacturing o verheads Multiple Choice Multiple Answer Question Selling and distribution overheads includes Correct Answer Indirect Material such as packing material, samples etc. , , Indirect labour like salaries to sales personnel manager , Indirect expenses like warehouse charges, advertisement Multiple Choice Multiple Answer Question The aims of perpetual inventory system are as follows Correct Answer Maintaining Bin cards , Maintaining store ledger , Conti nuous verification of physical stock Multiple Choice Multiple Answer Question These are the preventive costs of labour turnover. Correct Answer cost of maintaining good relations with the workers , Co st of medical services , cost of welfare facilities Multiple Choice Multiple Answer Question These are the features of variable overheads Correct Answer vary directly in proportion to volume of output. , per u nit cost remains the same , total overheads may increase or decrease as per volu me of output. Multiple Choice Single Answer Question The cost that varies in direct proportion with the level of acti vity is called Correct Answer variable cost True/False Question The ultimate incorporation of all functional budgets takes the f orm of budgeted Profit & Loss Account and Balance Sheet. Correct Answer True Multiple Choice Single Answer Question Calendar Variance arises only if there is abnormal increase or d ecrease in Correct Answer Actual number of working days Multiple Choice Single Answer Question If during a month anticipated sales are 5,000 kg, opening stock is 1,000 kg and closing stock is 500 kg then what will be the quantity of produc tion Correct Answer 4,500 kg Select The Blank Question Variable costs are the controllable costs at the ________ level of the management whereas fixed costs can be controlled only on the ________ lev el of the management Correct Answer Lower Correct Answer Top Select The Blank Question ________ Legal charges and ________ are the accounts which are s hown on the debit side of Profit & Loss Account Correct Answer Like office rent Correct Answer Audit fees Select The Blank Question If the profit volume ratio is 25%, then the variable cost is equ al to ________ of sales value. Correct Answer 0.75 Multiple Choice Multiple Answer Question Direct Cost includes

Correct Answer Direct material , Direct labour , Direct expenses Multiple Choice Single Answer Question Which of the following costs is most likely to have a cost behav iour pattern described as ..a fixed cost upto an activity level of 1,000 units, with a variable cost there after which decreases from 10 paise to 8 paise per un it at 2,000 units? Correct Answer Wages payment which is fixed for a minimum output quanti ty after which a bonus per unit is paid which reduces when activity level exceed s 1,000 units Select The Blank Question In case of defective material being returned by the stores depar tment to the vendor, such material should be valued at the________. Correct Answer Purchase Price True/False Question Piece rate system is suitable when quality of goods produced is of extreme importance. Correct Answer False True/False Question A firm earns profit when contribution is equal to fixed costs un der variable costing. Correct Answer False Multiple Choice Single Answer Question Standard time required for a job is 10 hours, i.e.10 X 60 = 600 'Bs'. The worker has actually completed the job in 6 hours, i.e.6 X 60 = 360 'Bs '. Time wage rate is Rs.20/- per hour. Bonus is shared between the worker and th e foreman in the ratio of 3:1. Calculate total earning of the worker as per Bede aux Point System. Correct Answer Rs.180/Select The Blank Question Contribution represents pool of resources available for meeting all costs other than ________. Correct Answer Variable Costs Multiple Choice Multiple Answer Question Locate the steps involved in rectifying the errors in the books of accounts Correct Answer Find the wrong entry passed , Find the correct entry to be passed , Find the entry that will resolve the mistake in the books Multiple Choice Single Answer Question Judge the following narrative according to the criteria given : There are many organizations whose sales fluctuate with fluctuations in the weat her, viz. ice-cream, sweaters, etc. Correct Answer The statement and the reason are both incorrect Select The Blank Question Overheads chargeable to a product, using direct labour cost basi s, may be calculated by multiplying percentage of direct labour cost and _______ _. Correct Answer Direct labour cost of the product Multiple Choice Multiple Answer Question Causes for adverse material price variance are: Correct Answer Uneconomical size of purchase orders , Failure to avail discounts allowed by suppliers. , Excessive freight charges 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 whol e , To compare efficiency of each unit against industry's overall performance , To compile reliable cost data for inter-firm comparison of costs Multiple Choice Single Answer Question 200 units of material were purchased from X @ Rs.5/- per unit an d 300 units were purchased from Y @ Rs.6/- per unit. The organisation follows FI FO system of pricing of issues and the above purchases have been recorded in sto

res ledger. 120 units have already been issued. 60 units received from X are def ective and are therefore returned. Find the value of the material returned to X. Correct Answer Rs.300/Multiple Choice Multiple Answer Question These are the methods of measuring labour turnover. Correct Answer Replacement Method , Separation Method , Flux Method True/False Question According to the standard costing principles, only adverse varia nce must be further investigated. Correct Answer False Select The Blank Question Education facility to workers and their children, pension, super annuation fund are examples of ________ incentives. Correct Answer Non-monetary Multiple Choice Single Answer Question Mr. Oak, materials manager, spends 40% time in the factory and t he remaining in office. If his annual salary is Rs.500,000/-, what amount should be charged as office overheads? Correct Answer Rs.300,000/Multiple Choice Single Answer Question Find the balance as per pass book. Bank Book - 10/10/04 - Paid r ent Rs.10,000/-; 15/10/04 - Received cheque from debtor, Mr. X, for Rs.15,000/-; 20/10/04 - Issued cheque of Rs.25,000/- to Rahul Construction Co.; 25/10/04 - I ssued cheque for Rs.5,000/- to XYZ Ltd. and balance as on 01/10/04 - Rs.55,000/. Pass Book : 5/11/04 debited Rs.25,000/- being cheque of Rahul Construction Co. ; 6/11/04 debited Rs.5,000/- being cheque of XYZ Ltd. and 9/12/04 credited Rs.15 ,000/- being cheque of Mr. X. Correct Answer Rs.70,000/Select The Blank Question The document which lays down the cost accounting plans and proce dures to be followed by the constituent units is known as ________. Correct Answer Uniform cost manual Multiple Choice Multiple Answer Question From the following, select intangible assets:Correct Answer Goodwill , Patents , Trade Marks Select The Blank Question ________ is the summary of all the balances in all the accounts listed in ledger account of an organization at any given point of time. Correct Answer Trial Balance Multiple Choice Single Answer Question Going concern concept is also known as :Correct Answer Continuity concept True/False Question An item of cost that is direct for one business organization may be indirect for another business organization. Correct Answer True Multiple Choice Single Answer Question Which system provides an opportunity to companies to adopt the o ne best method of cost accounting system known to the industry? Correct Answer Uniform costing Multiple Choice Single Answer Question Mixers Ltd. is engaged in producing a standard mix using 60kg of chemical X and 40 kg of chemical Y. The standard loss of production is 30%. The standard price of X is Rs.5/- per kg. and of Y Rs.10/- per kg. The actual mix a nd yield were as follows : X - 80 kg @ Rs.4.50 per kg; Y - 70 kg @ Rs.8/- per kg . Actual yield - 115 kg. Compute material yield variance. Correct Answer Rs.100/- (Favourable) Match The Following Question Correct Answer Compensating Error Wrong classification

Error of Principle Trial Balance does not get affected Error of Omission Transaction is totally omitted Error of commission Wrong Posting Multiple Choice Multiple Answer Question Pre-requisites of Uniform Costing are :Correct Answer Spirit of mutual trust , Free Exchange of ideas , No riv alry Multiple Choice Multiple Answer Question The net profit before certain adjustments was Rs.95,040/-. After giving due effects to the adjustments, the revised net profit (after considerin g the adjustments) is Rs.78,560/-. Select the adjustments which might have broug ht this change. Correct Answer Accrued commission income of Rs.32,960/- was not entered in the books , Rent for the month of March was payable and yet to be recorded R s.19,280/- , Repairs expenditure to the extent of Rs.30,160/- was wrongly transf erred to Machinery account Multiple Choice Single Answer Question A dividend warrant of Rs.2,076/- was paid direct to the bank and nothing appeared in the cash book. This is an example of :Correct Answer Direct deposit into the bank 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 opera ting income of 10% of sales? Correct Answer Rs.200,000/Match The Following Question Correct Answer Purchase budget Forecast of quantity and value of materials Budget committee Analyses the performance of different budget cen tres Cash budget Assists in predicting shortage of cash Budget Objective is performance evaluation True/False Question Time-keeping facilitates the preparation of payroll. Correct Answer True Select The Blank Question A worker is paid a monthly salary of Rs.500/- along with a bonus of 50 paise per unit completed, this type of labour cost may be classified as _ _______ cost. Correct Answer Semi-variable Select The Blank Question Accounts representing expenses will have ________ balance. Correct Answer Debit Multiple Choice Single Answer Question The bank book shows an overdraft of Rs.117/- as on 31st December , 2003. It is found that the pass book is debited with Rs.11/- representing a di shonored cheque, originally received from Mr.A. The fact of dishonor was not rec orded in the bank book. Find the balance as per pass book. Correct Answer Rs.128/- (overdraft) Select The Blank Question A low margin of safety indicates ________ fixed overheads. Correct Answer Higher Multiple Choice Single Answer Question The details regarding a food product manufactured by ABC Co. for the last one week are as follows : Standard cost (for one unit) : direct materi al -10 units @ Rs.1.50; direct wages - 5 hours @ Rs.8/-; production overheads -5 hours @ Rs.10/-. Actual (for whole activity) : direct materials -Rs.6,435/-; di rect wages -Rs.16,324/-. Analysis of variances : direct materials price variance -Rs.585/- (Adverse); direct material usage variance -Rs.375/- (Favourable); dir

ect wages rate variance -Rs.636/- (Favourable); direct wages efficiency variance -Rs.360/- (Adverse); production overheads expenditure variance -Rs.400/- (Favou rable) and production overheads volume variance -Rs.750/- (Favourable). You are required to calculate the amount of production overheads incurred. Correct Answer Rs.19,600/True/False Question The amount of profit which is retained by the organization is tr ansferred to 'Reserves and Surplus' in the balance sheet. Correct Answer True Multiple Choice Single Answer Question Cash budget is extremely useful since it:Correct Answer Gives information about estimated cash inflows and outfl ows Multiple Choice Multiple Answer Question The objects of cost accountancy are :Correct Answer To ascertain cost and profitability , Cost Control , Pre sentation of Information Select The Blank Question Uniform costing is not a separate method of ________. Correct Answer Cost accounting True/False Question If the storage cost of inventory increases, then the economic or der quantity also increases. Correct Answer False Multiple Choice Multiple Answer Question The organization chart shows the following aspects :Correct Answer Functional responsibility of different functional manage rs , Delegation of authority to various managers , Inter-functional relationship s of these managers Multiple Choice Single Answer Question Find the budget which is inadequate as a cost control technique :Correct Answer Fixed budget Multiple Choice Multiple Answer Question The key factor determines the :Correct Answer Level of activity , Capacity utilization , Level of sale s Multiple Choice Multiple Answer Question Cost control procedure deals with :Correct Answer Establishment of plans , Comparison of actual and planed performance , Computation of variance Multiple Choice Multiple Answer Question State the features of these transactions : (i) Commission paid R s.250/- was posted twice to Commission account (ii) Rs.5,000/- representing good s 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 Multiple Choice Multiple Answer Question S Ltd. operates a system of standard costing in respect of one o f its products which is manufactured within a single cost centre. For one unit o f product the standard material input is 20 litres at a standard price of Rs.2/per litre. The standard wage rate is Rs.6/- per hour and 5 hours are allowed to produce one unit. Fixed production overhead is absorbed at the rate of 100% of direct wages cost. During the month just ended the following occurred : acutal p rice paid for materials purchased Rs.1.95 per litre; total direct wages cost was Rs.156,000/- and fixed production overheads was Rs.158,000/-. Direct material p rice variance-Rs.8,000/- (Fabourable); direct material usage variance -Rs.5,000/ - (Adverse); direct labour rate variance -Rs.5,760/-(Adverse); direct labour eff iciency variance -Rs.2,760/- (Favourable) and fixed produciton overheads expendi

ture variance -Rs.8,000/-(Adverse). Calculate budgeted output in units for the m onth, actual hours worked and number of litres purchased during the month. Correct Answer Budgeted output - 5,000 units , Actual hours worked - 24 ,040 hours , Litres purchased - 160,000 litres Multiple Choice Multiple Answer Question Which of the following transactions should be excluded while pre paring a cost sheet? Correct Answer Interest on loan , Bad debts , Expenses on criminal law suit Select The Blank Question Baum Differential Plan is a combination of Taylor's differential piece rate system and Halsey system and is also known as ________. Correct Answer Milwankee plan Multiple Choice Multiple Answer Question Features of double entry accounting system are :Correct Answer Every business transaction has two elements , When busin ess receives something, it has to pay something , Every debit has a correspondin g credit Multiple Choice Multiple Answer Question Features of convention of conservation are . . . Correct Answer Anticipates all future losses and expenses , Ignores all future incomes and profits, unless they are actually realised , Applicable to v aluation of current assets 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 wr ong 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/Multiple Choice Multiple Answer Question From the following select the examples of errors of commission Correct Answer Sales recorded in the sales register as Rs.2,020/- inste ad of Rs.2,200/- , Received cash from Sham, credited to Ram's account , Paid tra nsport charges, credited to transport charges account Select The Blank Question Purchase day book for the month of April was under cast by Rs.10 00/- which account should be credited ? ________ Correct Answer Suspense Account Select The Blank Question Revenues are more than the differential costs, then the proposed project should be ________ Correct Answer accepted Multiple Choice Single Answer Question Cost of fringe benefits provided to a factory worker should be c harged to: Correct Answer Factory overheads True/False Question Indirect material indicates that material which can be identifie d with the individual cost centre Correct Answer False Select The Blank Question The process of recording the business transactions in a defined set of records is referred to as ________. Correct Answer Balance Sheet Multiple Choice Multiple Answer Question Identify the fixed expenses from the following. Correct Answer Rent and taxes of the factory , Wages paid to indirect w orkers like cleaners, helpers,etc. , Salary paid to factory supervisor Multiple Choice Multiple Answer Question The disadvantages of supplementary overhead rates are:

Correct Answer It can be determined only after the end of the accountin g period , Defeats the basic concept of normal cost , Involves lot of clerical a ctivity Multiple Choice Single Answer Question Judge the sentence in italics according to criteria given below: " It is difficult to adopt Uniform costing system when a product can be manufac tured by employing more than one method because the cost of production will vary according to the method used." Correct Answer The assertion and the reason are both correct 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 whol e , To compare efficiency of each unit against industry's overall performance , To compile reliable cost data for inter-firm comparison of costs Select The Blank Question The system which provides an opportunity to the small units to t ake advantage of the research work taken by the large scale units of the same in dustry is known as ________ system. Correct Answer Uniform Costing Match The Following Question Correct Answer Advantageously applicable in similar industries Scope of uniform costing Avoids cut throat competition Advantage of uniform costing Spirit of mutual trust Requisite for uniform costing Treatment given to research and development costs Fields covered b y uniform costing Multiple Choice Multiple Answer Question In practical circumstances, control ledgers may be maintained fo r the following categories: Correct Answer Sundry debtors , Sundry creditors , Advance to Staff Multiple Choice Single Answer Question Annual maintenance of Rs.28,000/- was paid on 15th June, 2003 fo r a period of one year therefrom. Find the amount of prepaid maitenance expendit ure for the year ended 31st March. Correct Answer Rs.5,833/True/False Question The amount of profit which is retained by the organisation is tr ansferred to 'Reserves and Surplus' in the balance sheet. Correct Answer True Match The Following Question Correct Answer Deferred revenue expenditure Real account Deferred revenue expenditure written off Nominal account Drawings Proprietor's account Loan Personal account True/False Question While preparing bank reconciliation statement for the month of S eptember 2004, one should consider the balance as per bank book as on 1st Septem ber, 2004 and the balance as per pass book as on 30th September, 2004. Correct Answer False 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 employees' efficiency Multiple Choice Multiple Answer Question These are the preventive costs of labour turnover. Correct Answer Cost of maintaining good relations with the workers, Cos t of medical services, Cost of welfare facilities Multiple Choice Single Answer

Question Hourly wage rate is Rs.25/- and the time allowed for a job is 15 hours. Harry completed the job in 12 hours. Calculate the effective hourly earn ings for Harry under Halsey Plan. Correct Answer Rs.28.12 Multiple Choice Multiple Answer Question Marginal costing is found to be unsuccessful in the following si tuations: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 wher e employee costs are very large and almost fixed in nature Select The Blank Question Graphically, fixed cost line will be ________ the 'x-axis'. Correct Answer Parallel to Multiple Choice Multiple Answer Question If the sales forecast is less than the past sales but the top ma nagement insists upon a certain amount of additional profits, then following ste ps can be taken to achieve the target profit Correct Answer Increase the selling price , Reduce cost of sales , Incr ease the selling efforts Select The Blank Question Preparation of direct material ________ budget is the responsibi lity of the Purchase manager. Correct Answer Purchase Multiple Choice Single Answer Question The integrated form of all functional budgets is known as: Correct Answer Master budget Multiple Choice Multiple Answer Question For the given transaction find the wrong entry that has been pas sed in the books of accounts, the correct entry that should have been passed and the rectification entry required to rectify the mistake. "On 1st September, 200 4 the total of the previous month's wages was debited to 'Manufacturing Wages Ac count". During the previous month, a new machine was installed, and the firm's o wn employees had spent time thereon; the previous month's wages for all such emp loyees amounted to Correct Answer Machinery A/c. . . Dr. Rs.14,100/- To Manufacturing Wage s A/c Rs.14,100/- , Machinery A/c . . . Dr. Rs.14,100/- To Cash A/c Rs.14,100/, Rs.14,100/- To Cash A/c Rs.14,100/Multiple Choice Multiple Answer Question Management accounting is concerned with the following activities : Correct Answer Decision making , Safeguarding assets , Planning and con trolling activities Multiple Choice Single Answer Question The overheads of a machine shop X should be apportioned using wh ich of the following basis? Correct Answer Machine hours Multiple Choice Single Answer Question Which system involves adoption of same costing principles, pract ices and procedures by the individual firms of an industry? Correct Answer Uniform costing Multiple Choice Multiple Answer Question If you are required to enforce uniform costing system in your in dustry, how would you proceed? Correct Answer Collecting data from all units of your industry, Ensurin g that the data collected is complete and correct, Maintaining secrecy of the da ta collected Multiple Choice Multiple Answer Question Which of the following aspects are mainly responsible for diffic ulty in application of Uniform costing system.

Correct Answer Capital investment , Plant size , Location Multiple Choice Single Answer Question If the proprietor has taken away goods worth Rs.5,500/- for pers onal use, find its impact on the proprietor's account in the organisatin. Correct Answer The capital will decrease by Rs.5,500/Multiple Choice Single Answer Question Accrued income indicates: Correct Answer Current year's income not received in the current year True/False Question The actual loss incurred by a company, due to fire, is the exten t of difference between the cost of goods destroyed and the amount of claim sett led by the insurance company. Correct Answer True Match The Following Question Correct Answer Dividend paid Profit and loss appropriation account Freight inwards Manufacturing account Freight outwards Profit and loss account Sales Trading account Select The Blank Question The process of finding the reasons for the difference in the bal ance as per bank book and pass book is known as ________. Correct Answer Reconciliation Multiple Choice Single Answer Question Which of the following transactions fall within the definition o f the 'standing instruction' Correct Answer Club membership subscription Multiple Choice Multiple Answer Question The selection of the supplier may depend upon the following aspe cts: Correct Answer Geographical location of the supplier , Price quoted by the supplier , Goodwill of the supplier Multiple Choice Single Answer Question Calculate inventory turnover ratio from the following: Maximum s tock -7,000 units; minimum stock - 3,000 units and quantity of material issued d uring the year - 150,000 units. Correct Answer 30 Multiple Choice Single Answer Question Re-order quantity may be measured as: Correct Answer Maximum stock level - re-order level + (minimum usage X minimum re-order period) Multiple Choice Multiple Answer Question Labour turnover means: Correct Answer Influx and exit of employees , Quantitative measurement of instability of working force , Rate of change in the average working force Multiple Choice Multiple Answer Question Select the non-monetary incentives Correct Answer Health and safety services , Canteen facility , Loans at reduced rate of interest True/False Question Under the accelerating premium system incentive increases at a f ast rate with the decrease in output. Correct Answer False Multiple Choice Multiple Answer Question Select the correct formulae for calculating break even point. Correct Answer Fixed cost / (Selling price per unit - Variable cost per unit), [Fixed cost / Marginal contribution] X Sales, [Fixed cost / (Fixed cost + Net Profit)] X Sales Multiple Choice Multiple Answer Question Merits of break even point analysis are as follows:

Correct Answer Useful diagnostic tool. , Used for analysing the risk im plication of alternative actions. , Used to graphically represent complicated da ta. Multiple Choice Multiple Answer Question Identify the budgets for which the production manager sould be h eld responsible: Correct Answer Production budget , Production overheads budget , Plant utilisation budget Multiple Choice Single Answer Question The composition of selling costs is given below : 1 salaries 4% of sales, travelling expenses 1.5% of sales, and sales office 2% of sales. Find the amount of selling overheads if the sales are Rs.120,000/-. Correct Answer Rs.9,000/Multiple Choice Single Answer Question Production costs of a factory for the year 2003-04 are as follow s: direct labour cost Rs.100,000/-; direct material cost Rs.150,000/-; productio n overheads (fixed) Rs.50,000/- and production overheads (variable) Rs.80,000/-. The production manager projec Correct Answer Rs.426,800/True/False Question It is very easy to measure the portion of increased sales which is due to expenditure incurred for advertisement of the product Correct Answer False Match The Following Question Correct Answer Non-Operating income Issue of shares Operating income Cash Sales Plan for surplus/shortage of cash Cash Budget Plan of investment in fixed assets Capital Expenditure Budget Multiple Choice Multiple Answer Question Overhead capacity variance is the outcome of: Correct Answer Shortage of labour , Enforced idle time, e.g.power break downs , Customer demand being more or less than anticipated Select The Blank Question The systematic process of identifying and reporting variance is known as ________. Correct Answer Variance analysis Select The Blank Question In the scheme of cost-________-profit analysis, an attempt is ma de to measure the variations of cost with volume. Correct Answer volume True/False Question A cash payment of Rs. 1,000/- for travelling expenses has been e ntered in the books but not debited to travelling A/c. The trial balance will no t agree. Correct Answer True Multiple Choice Single Answer Question Purchases included an amount of Rs. 25,450/- representing purcha se of computer. The rate of depreciation is 10% for computers. Calculate the net effect of this transaction on the profitability statement. Correct Answer Net profit will increase by Rs. 22,905/Multiple Choice Single Answer Question Ram is the owner of Dashrath & Sons. He is entitled to annual sa lary of Rs. 8,000/-. Find its impact on profit of the entriprise. Correct Answer The net profit will decrease by Rs. 8,000/True/False Question Fundamentally, changes in price and changes in sales volume give rise to sales variances. Correct Answer True Multiple Choice Multiple Answer

Question The factors that influence determination of budget period are: Correct Answer Type of budget, viz. Sales or capital expenditure budget , General economic conditions, Trade cycle of business Multiple Choice Single Answer Question XYZ Ltd. is selling 50,000 units of a product at Rs.40/- per uni t. Variable cost is Rs.25/- per unit and fixed cost is Rs.200,000/-. The produce r can increase sales volume by 20% by reducing the price by 10%. Do you recommen d reduction in price? What will be profit if this action is undertaken? Correct Answer No: Revised profit Rs.460,000/Multiple Choice Multiple Answer Question Subsidiary books include: Correct Answer Cash Book, Purchase Register, Sales Register