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Management Accounting Consolidated

This document contains a list of attempted questions and answers related to management accounting. There are over 100 questions on various topics presented in different formats including multiple choice single answer, multiple choice multiple answer, true/false, select the blank, and match the following. The questions cover topics such as inventory control, total cost, assets, liabilities, accounting, ledgers, and more. For each question, the corresponding correct answer(s) is provided.

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Praveen Nair

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Available Formats

Download as XLS, PDF, TXT or read online on Scribd

0% found this document useful (0 votes)

212 views330 pages

Management Accounting Consolidated

Uploaded by

Praveen Nair

We take content rights seriously. If you suspect this is your content, claim it here.

Available Formats

Download as XLS, PDF, TXT or read online on Scribd

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Management Accounting

List of Attempted Questions and Answers

Multiple Choice Multiple Answer

Question
Correct Answer
Select The Blank

Question

Correct Answer
Multiple Choice Single Answer
Question

Correct Answer

Multiple Choice Multiple Answer

Question

Correct Answer

Multiple Choice Multiple Answer

Question

Correct Answer

True/False

Question

Correct Answer
Select The Blank

Question

Correct Answer
Match The Following
Question
Dismissal of employee
Increased spoilage and defectives
Relationship between supervisor and worker
Transport facilities to employees
Multiple Choice Single Answer

Question

  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer

Select The Blank

Question
Correct Answer
Select The Blank

Question

  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
Multiple Choice Multiple Answer
  Question

Correct Answer

Multiple Choice Single Answer

Question

  Correct Answer
Multiple Choice Single Answer
  Question
  Correct Answer
Select The Blank

Question

  Correct Answer
Select The Blank
  Question
  Correct Answer
Multiple Choice Single Answer

Question

Correct Answer

True/False

Question

Correct Answer
True/False
Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
Match The Following
  Question
Accounting
Audit
Journal
Ledger
Select The Blank
  Question
  Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
Select The Blank
  Question
  Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Multiple Answer

Question

Correct Answer

Select The Blank

  Question
  Correct Answer
Multiple Choice Single Answer
  Question
  Correct Answer
True/False
  Question
  Correct Answer
True/False

Question

Correct Answer
True/False

Question

Correct Answer
Multiple Choice Multiple Answer
Question

Correct Answer

True/False
Question
Correct Answer
Multiple Choice Multiple Answer

Question

Correct Answer

Multiple Choice Multiple Answer

Question

Correct Answer

Select The Blank

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
True/False

Question

  Correct Answer
True/False
  Question
  Correct Answer
True/False
  Question
  Correct Answer
Select The Blank
  Question
  Correct Answer
Multiple Choice Multiple Answer
  Question

Correct Answer

True/False

Question

  Correct Answer
True/False
  Question
  Correct Answer
Match The Following
  Question
Accounting
Balance-sheet
Book-Keeping
Financial statement
Profitability statement
Match The Following
  Question
Bad debts
Bills Payable
Bills Receivable
Cash Discount
Trade Discount
True/False

Question

Correct Answer
True/False

Question

  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
True/False
  Question
  Correct Answer
True/False

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
True/False

Question

Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
True/False
  Question
  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer

Multiple Choice Multiple Answer

Question

Correct Answer

Multiple Choice Multiple Answer

Question
Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
True/False

Question

Correct Answer
True/False

Question

Correct Answer
Multiple Choice Multiple Answer
Question

Correct Answer

Multiple Choice Multiple Answer

Question

Correct Answer

True/False
Question
Correct Answer
True/False

Question

  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
Multiple Choice Single Answer
  Question

Correct Answer
Select The Blank

Question

Correct Answer
Correct Answer
Select The Blank

Question

Correct Answer
Correct Answer
Select The Blank

Question

Correct Answer
Correct Answer
Select The Blank

Question

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

Question

Correct Answer
Correct Answer
Select The Blank

Question

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

Question

Correct Answer
Correct Answer
Select The Blank

Question

Correct Answer
Correct Answer
Select The Blank

Question

  Correct Answer
  Correct Answer
True/False
  Question
  Correct Answer
True/False

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
Multiple Choice Single Answer
  Question
  Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Select The Blank

Question

  Correct Answer
  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
Multiple Choice Single Answer
  Question
  Correct Answer
True/False
  Question
  Correct Answer
True/False
  Question
  Correct Answer
Multiple Choice Single Answer
  Question
  Correct Answer
True/False
  Question
  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Select The Blank

Question

  Correct Answer
  Correct Answer
Multiple Choice Single Answer
  Question
  Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
True/False

Question

Correct Answer
Multiple Choice Multiple Answer
Question

Correct Answer

Multiple Choice Multiple Answer

Question

Correct Answer

Multiple Choice Multiple Answer

Question

Correct Answer

True/False
Question
Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
True/False
  Question
  Correct Answer
Multiple Choice Multiple Answer
  Question

Correct Answer
True/False

Question

  Correct Answer
True/False
  Question
  Correct Answer
Multiple Choice Single Answer
  Question
  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
Multiple Choice Multiple Answer
  Question

Correct Answer

Multiple Choice Multiple Answer

Question

Correct Answer

True/False
Question
Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
True/False
  Question
  Correct Answer
True/False
  Question
  Correct Answer
True/False
  Question
  Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
Multiple Choice Single Answer
  Question
  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
Multiple Choice Multiple Answer

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Match The Following
Question
Carrying cost
E.O.Q
Inventory control
Ordering cost
Total cost
Select The Blank

Question

Correct Answer
Correct Answer
Select The Blank

Question

Correct Answer
Correct Answer
Select The Blank

Question

Correct Answer
Correct Answer
Select The Blank

Question

Correct Answer
Correct Answer
Select The Blank

Question

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

Question

Correct Answer
Correct Answer
Select The Blank

Question

Correct Answer
Correct Answer
Select The Blank

Question

  Correct Answer
  Correct Answer
Select The Blank
  Question
  Correct Answer
Multiple Choice Multiple Answer
  Question

Correct Answer

Match The Following

Question
Assets
Drawing
Journal
Ledger
Liabilities
Select The Blank

Question

Correct Answer
Multiple Choice Multiple Answer

Question

Correct Answer
True/False

Question

Correct Answer
Multiple Choice Multiple Answer

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Select The Blank

Question

Correct Answer
True/False

Question

Correct Answer
True/False

Question

  Correct Answer
True/False
  Question
  Correct Answer
True/False

Question

Correct Answer
Match The Following
Question
Advantageously applicable in similar
industries
Avoids cut throat competition
Spirit of mutual trust
Treatment given to research and
development costs
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Multiple Answer
Question

Correct Answer

True/False
Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Multiple Answer
Question

Correct Answer

True/False
  Question
  Correct Answer
Multiple Choice Multiple Answer
  Question

Correct Answer

Multiple Choice Single Answer

Question

Correct Answer
Select The Blank

Question

Correct Answer
Multiple Choice Multiple Answer
Question

Correct Answer

Select The Blank

  Question
  Correct Answer
True/False
  Question
  Correct Answer
True/False

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

Question

  Correct Answer
True/False
  Question
  Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
True/False

Question

Correct Answer
True/False

Question

Correct Answer
True/False

Question

  Correct Answer
Select The Blank
  Question
  Correct Answer
Select The Blank

Question

Correct Answer
True/False

Question

Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
Select The Blank
  Question
  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
True/False

Question

  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Select The Blank

Question

Correct Answer
Multiple Choice Single Answer

Question

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

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Single Answer
Question

Correct Answer
Multiple Choice Multiple Answer
Question

Correct Answer

Multiple Choice Multiple Answer

Question
Correct Answer
Multiple Choice Multiple Answer

Question

Correct Answer
Select The Blank

Question

Correct Answer
Multiple Choice Multiple Answer
Question

Correct Answer

True/False

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Multiple Answer
Question

Correct Answer

True/False

Question

Correct Answer
Select The Blank
Question

Correct Answer
Multiple Choice Multiple Answer

Question

Correct Answer

Multiple Choice Multiple Answer

Question

Correct Answer

Select The Blank

Question

Correct Answer
True/False

Question

Correct Answer
Multiple Choice Multiple Answer

Question

Correct Answer

Select The Blank

Question

Correct Answer
Match The Following
Question
Budget
Budget committee
Cash budget
Purchase budget
Multiple Choice Single Answer

Question

  Correct Answer
Multiple Choice Single Answer
  Question
  Correct Answer
True/False
  Question
  Correct Answer
Match The Following
  Question
Cost Centre
Cost Control
Differential Cost
Sunk Cost
Multiple Choice Multiple Answer
  Question

Correct Answer

Select The Blank

Question

Correct Answer
Select The Blank

Question

Correct Answer
Multiple Choice Multiple Answer

Question

Correct Answer

Select The Blank

Question

Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
True/False
  Question
  Correct Answer
Select The Blank
  Question
  Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
True/False
  Question
  Correct Answer
Select The Blank

Question

Correct Answer
True/False

Question

  Correct Answer
Match The Following
  Question
In tangible assets
Nominal A/C
Personal A/C
Real A/C
Tangible assets
Multiple Choice Multiple Answer
  Question

Correct Answer

Multiple Choice Multiple Answer

  Question
  Correct Answer
True/False
  Question
  Correct Answer
True/False
  Question
  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
Multiple Choice Multiple Answer

Question
Correct Answer

Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
True/False

Question

  Correct Answer
True/False
  Question
  Correct Answer
Multiple Choice Multiple Answer
  Question

Correct Answer

Multiple Choice Multiple Answer

Question

Correct Answer

Multiple Choice Multiple Answer

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
True/False

Question

Correct Answer
Multiple Choice Multiple Answer

Question

  Correct Answer
True/False
  Question
  Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
Multiple Choice Single Answer
  Question
  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
Match The Following
  Question
Daily Time sheets
Hand Written method
Time Recording Clock Method
Token or Disc Method
Weekly Time sheets
Select The Blank

Question

Correct Answer
Correct Answer
Select The Blank

Question

Correct Answer
Correct Answer
Select The Blank

Question

Correct Answer
Correct Answer
Select The Blank

  Question
  Correct Answer
  Correct Answer
Select The Blank

Question

  Correct Answer
  Correct Answer
Select The Blank
  Question
  Correct Answer
  Correct Answer
Select The Blank
  Question
  Correct Answer
  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
True/False

Question

  Correct Answer
True/False
  Question
  Correct Answer
Select The Blank

Question

Correct Answer
Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Multiple Answer
Question

Correct Answer

Select The Blank

Question

  Correct Answer
  Correct Answer
Multiple Choice Single Answer
  Question

  Correct Answer
Select The Blank
  Question
  Correct Answer
  Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
True/False
  Question
  Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
Match The Following
  Question
Advance
Application
Drawing
Outstanding
Prepaid
Multiple Choice Multiple Answer
  Question

Correct Answer

Multiple Choice Single Answer

Question

  Correct Answer
True/False
  Question
  Correct Answer
Multiple Choice Multiple Answer
  Question

Correct Answer

True/False

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
True/False

Question

  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
Multiple Choice Multiple Answer

Question

Correct Answer
Match The Following
Question
Depreciation
Discount allowed
Discount received
Interest on capital
Outstanding expenses
True/False

Question

  Correct Answer
Multiple Choice Single Answer
  Question
  Correct Answer
Multiple Choice Single Answer
  Question
  Correct Answer
Multiple Choice Multiple Answer
  Question

Correct Answer

Select The Blank

Question

  Correct Answer
  Correct Answer
True/False
  Question
  Correct Answer
True/False
  Question

  Correct Answer
Select The Blank
  Question
  Correct Answer
True/False
  Question
  Correct Answer
True/False
  Question
  Correct Answer
Multiple Choice Single Answer
  Question
  Correct Answer
True/False

Question

Correct Answer
Multiple Choice Multiple Answer
Question

Correct Answer

Multiple Choice Single Answer

Question
Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
Select The Blank
  Question
  Correct Answer
Select The Blank

Question

Correct Answer
Match The Following
Question
Abnormal overheads
Administration overheads
Fixed overheads
Indirect Material
Select The Blank

Question

  Correct Answer
True/False
  Question
  Correct Answer
Multiple Choice Multiple Answer

Question

Correct Answer

Select The Blank

Question
Correct Answer
Select The Blank

Question

Correct Answer
Select The Blank

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
True/False

Question

Correct Answer
Multiple Choice Single Answer
Question

  Correct Answer
Select The Blank
  Question
  Correct Answer
Select The Blank
  Question
  Correct Answer
Select The Blank
  Question
  Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
Multiple Choice Single Answer
  Question
  Correct Answer
True/False

Question

  Correct Answer
True/False
  Question
  Correct Answer
Multiple Choice Multiple Answer
  Question

Correct Answer

True/False
Question
Correct Answer
True/False

Question

Correct Answer
Match The Following
Question
Decrease in selling price will lead to
Decrease in variable cost will lead to
Increase in contribution will lead to
Increase in fixed cost will lead to
Select The Blank

Question

Correct Answer
Multiple Choice Multiple Answer
Question

Correct Answer

Multiple Choice Single Answer

Question

Correct Answer
True/False

Question

Correct Answer
Select The Blank

Question

  Correct Answer
Match The Following
  Question
Compensating Error
Error of commission
Error of Omission
Error of Principle
Select The Blank
  Question
  Correct Answer
Select The Blank

Question

Correct Answer
Multiple Choice Multiple Answer
Question

Correct Answer

Multiple Choice Single Answer

Question

  Correct Answer
True/False
  Question
  Correct Answer
True/False

Question

  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
True/False

Question

Correct Answer
True/False

Question

  Correct Answer
True/False
  Question
  Correct Answer
Match The Following
  Question
Deferred revenue expenditure
Deferred revenue expenditure written off
Drawings
Loan
Select The Blank

Question

Correct Answer
Multiple Choice Single Answer
Question

  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
Select The Blank
  Question
  Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
True/False

Question

  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
Select The Blank

Question

  Correct Answer
Multiple Choice Single Answer
  Question
  Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
Select The Blank

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Multiple Answer
Question

Correct Answer

Select The Blank

Question

  Correct Answer
Multiple Choice Single Answer
  Question
  Correct Answer
True/False

Question

Correct Answer
True/False

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
True/False

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Match The Following
Question
Contribution - Fixed cost
Fixed cost + Variable cost
Total cost - Fixed cost
Total cost + Profit
Multiple Choice Multiple Answer

Question

Correct Answer

True/False
  Question
  Correct Answer
Select The Blank
  Question
  Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
True/False

Question

  Correct Answer
Select The Blank
  Question
  Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Select The Blank

Question

Correct Answer
Multiple Choice Multiple Answer
Question

Correct Answer

True/False

Question

Correct Answer
Multiple Choice Single Answer
Question

Correct Answer
True/False

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Multiple Answer
Question

Correct Answer

Select The Blank

Question
Correct Answer
True/False

Question

  Correct Answer
Multiple Choice Single Answer
  Question
  Correct Answer
True/False
  Question
  Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
Select The Blank
  Question
  Correct Answer
True/False

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Multiple Answer

Question

  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
True/False

Question

Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
Select The Blank
  Question
  Correct Answer
Select The Blank

Question

Correct Answer
Multiple Choice Multiple Answer

Question

Correct Answer
Select The Blank

Question

  Correct Answer
True/False
  Question
  Correct Answer
Multiple Choice Multiple Answer
  Question

Correct Answer

Select The Blank

Question

Correct Answer
Multiple Choice Multiple Answer

Question
Correct Answer

Multiple Choice Multiple Answer

Question

Correct Answer

True/False

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Select The Blank

Question

Correct Answer
Match The Following
Question
Cash Discount
Real A/C
Rs.1 Personal A/C
Trade Discount
Multiple Choice Single Answer

Question

Correct Answer
True/False

Question

Correct Answer
Multiple Choice Multiple Answer
Question

Correct Answer

Select The Blank

Question

Correct Answer
Select The Blank

Question
Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
True/False

Question

Correct Answer
Multiple Choice Multiple Answer
Question

Correct Answer

Multiple Choice Single Answer

Question

Correct Answer
True/False

Question

Correct Answer
True/False

Question

Correct Answer
Multiple Choice Multiple Answer

Question

Correct Answer

Multiple Choice Multiple Answer

Question

Correct Answer

True/False

Question

Correct Answer
Multiple Choice Multiple Answer
Question

Correct Answer
Select The Blank

Question

Correct Answer
Select The Blank

Question

Correct Answer
True/False

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Select The Blank

Question

Correct Answer
Match The Following
Question
Daily Time sheets
Time booking department
Time Keeping Department
Time Recording Clock Method
Select The Blank

Question

Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer

True/False
Question
Correct Answer
Select The Blank

Question

  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
Select The Blank

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
True/False
  Question
  Correct Answer
True/False

Question

Correct Answer
True/False

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Multiple Answer

Question
Correct Answer

Select The Blank

Question
Correct Answer
Select The Blank

Question

Correct Answer
Select The Blank

Question

Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
True/False
  Question
  Correct Answer
Multiple Choice Multiple Answer

Question

Correct Answer

True/False
Question
Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
True/False
  Question
  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
Select The Blank
  Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Select The Blank

Question

Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
True/False

Question

Correct Answer
Select The Blank

Question

  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
True/False

Question

Correct Answer
True/False

Question

  Correct Answer
Select The Blank
  Question
  Correct Answer
Select The Blank

Question

Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
True/False
  Question
  Correct Answer
Select The Blank

Question

Correct Answer
Select The Blank

Question

  Correct Answer
Multiple Choice Single Answer
  Question
  Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Select The Blank

Question

Correct Answer
Select The Blank
Question

  Correct Answer
True/False
  Question
  Correct Answer
Multiple Choice Multiple Answer
  Question

Correct Answer

Multiple Choice Single Answer

Question

  Correct Answer
True/False
  Question
  Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Multiple Answer
Question

Correct Answer

Multiple Choice Multiple Answer

Question

Correct Answer

Multiple Choice Multiple Answer

Question

Correct Answer

True/False
  Question
  Correct Answer
Multiple Choice Multiple Answer
  Question

Correct Answer

Select The Blank

  Question
  Correct Answer
Multiple Choice Multiple Answer
  Question

Correct Answer

Multiple Choice Multiple Answer

Question

Correct Answer
Select The Blank

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
True/False

Question

Correct Answer
True/False

Question

Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
True/False
  Question
  Correct Answer
Select The Blank

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Single Answer
Question

Correct Answer
Multiple Choice Multiple Answer
Question

Correct Answer

Select The Blank

Question

Correct Answer
True/False

Question

Correct Answer
Select The Blank

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Multiple Answer
Question

Correct Answer

Select The Blank

  Question
  Correct Answer
True/False
  Question
  Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
True/False
  Question
  Correct Answer
Multiple Choice Single Answer
  Question
  Correct Answer
Select The Blank

Question

  Correct Answer
Select The Blank
  Question
  Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Select The Blank

Question

Correct Answer
Match The Following
Question
Administration budget
Cash budget
Materials budget
Selling and distribution budget
Multiple Choice Single Answer

Question

  Correct Answer
True/False
  Question
  Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer

True/False

Question

Correct Answer
Multiple Choice Multiple Answer
Question

Correct Answer

Multiple Choice Single Answer

Question

  Correct Answer
Select The Blank
  Question
  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
Select The Blank

Question

  Correct Answer
True/False
  Question
  Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Multiple Answer
Question

Correct Answer

Match The Following

Question
Balance Sheet
Manufacturing account
Profit and loss account
Trading account
True/False

Question

  Correct Answer
Multiple Choice Single Answer
  Question
  Correct Answer
True/False

Question

Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
Select The Blank
  Question
  Correct Answer
True/False
  Question
  Correct Answer
Multiple Choice Multiple Answer

Question

Correct Answer

True/False

Question

Correct Answer
Select The Blank

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Multiple Choice Single Answer

Question

  Correct Answer
Select The Blank
  Question
  Correct Answer
Multiple Choice Single Answer

Question

Correct Answer
Match The Following
Question
Factory overheads
Non operating income
Selling and distribution overheads
Total cost
Multiple Choice Single Answer

Question

  Correct Answer
Multiple Choice Multiple Answer
  Question
  Correct Answer
Multiple Choice Multiple Answer

Question

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Labour hour method of absorption of
overheads
Percentage of direct labour cost methods of
absorption of overheads
Percentage of direct material cost methods
of absorption of overheads
Percentage of prime cost methods of
absorption of overheads
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Factory Cost
Non-operating Expense
Non-operating Income
Selling & Distribution
Total Cost
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Danger level
Fixation of inventory level
Maximum level
Minimum level
Re-order level
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Diemer system
Differential Time rate
Payment by Result
Straight Piece rate system
Time rate System
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contribution – fixed cost
Fixed cost + variable cost
sales- variable cost
Total cost – fixed cost
Total cost + profit
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Compensating Error
Difference in trial balance
Error of commission
Error of Omission
Error of Principle
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Controllable Cost
Differential Cost
Opportunity Cost
Sunk Cost
Uncontrollable Cost
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Compensating Error
Error of Principle
Error of Omission
Error of commission
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Purchase budget
Budget committee
Cash budget
Budget
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Advantageously applicable in similar
industries
Avoids cut throat competition
Spirit of mutual trust
Treatment given to research and
development costs
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Deferred revenue expenditure
Deferred revenue expenditure written off
Drawings
Loan
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Dividend paid
Freight inwards
Freight outwards
Sales
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Non-Operating income
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Plan for surplus/shortage of cash
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Management Accounting
ist of Attempted Questions and Answers

The components of the selling and distribution cost budget are :

Distribution expenses , Publicity expenditure , Salary of sales-office
workers

In India, where public undertakings operate along with the private

sector undertakings, ________ enables a comparative assessment to
be made of the two sectors.
uniform costing

Re-order quantity may be measured as :

Maximum stock level - re-order level + (minimum usage X
minimum re-order period)

Features of money measurement concept are . . .

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

The various areas in which uniform costing can be adopted are . .

Valuation of inventories , Charging of depreciation , Apportionment
of overheads

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

significant manner.
True

The ________ ledger carries the individual accounts, whereas the

general ledger records the consolidated effect of the individual
transactions.
Control

Correct Answer
Unavoidable cause of labour turnover
Replacement cost of labour turnover
Avoidable cause of labour turnover
Preventive cost of labour turnover

Which of the following is a valid classification of the salary paid to

the foreman in charge of the packing department?
Direct product cost

Special aspects of co-partnership include:

Workers are granted ownership rights , Indirect monetary
remuneration , The morale of the workers is increased

The handloom industry will have ________ fixed cost and high
variable cost.
Low

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.
Production capacity

Pre-requisites of Uniform Costing are . . .

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

Causes for adverse material price variance are:

Uneconomical size of purchase orders , Failure to avail discounts
allowed by suppliers. , Excessive freight charges

Cool-wind Ltd., manufactures fans, which at sold at Rs.400 pre

piece. The cost of sales is composed of 40% of direct material, 30%
wages and 30% overheads. An increase in material price by 25%
and in wage rate by 10% is expected in the forthcoming year; as a
result of which the profit at current selling price may dwindle by
39% of present gross profit. With the above information, you are
required to determine the future selling price, if the present rate of
gross profit is to be maintained.
Rs.452/-

The main object of establishing the maximum stock level for

material is :
To ensure that inventory never exceeds this limit

________ authorises the production department to issue requistion

for materials.
Bill of material

An adjustment relating to outstanding expenses will ________ the

net profit.
Decrease

XYZ & Co. has taken a loan of Rs.100,000/- @ 15% p.a.on 1st
October, 2003. Interest is to be paid on half yearly basis. What
treatment should be given in the books of accounts of XYZ & Co. as
on 31st March, 2004?
Interest account should be debited with Rs.7,520.55 and
outstanding interest account should be credited with Rs.7,520.55

Bank reconciliation statement is a systematic presentation of errors

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

The pass book showed a credit balance of Rs.1,000/-. This balance

was after considering the dividend of Rs.25/- collected by bank and
Rs.5/- charged as collection expenses: these enteries are not made
in the bank book. Find the balance as per bank book.
Rs.1,020/-

Compute fixed overheads calendar variance when fixed overhead

volume variance is Rs.250/- (Favourable); fixed overheads
efficiency variance is Rs.2,150/- (Adverse) and fixed overheads
capacity variance is Rs.800/-(Favourable).
Rs.1,600/- (Favourable)

Correct Answer
Process of analyzing & interpretation
Reviewing internal control system
Book of original entry
Maintain all types of accounts

Token or disc method is a related to the system of ________.

Time-keeping

The cost of fixed asset is Rs. 1,00,000. Rs. 17,000 is charged as

depreciation. Calculate the rate of depreciation.
0.17

Crane expenses should be apportioned on the basis of ________.

Number of hours crane worked in the department

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?
Rs.26,545.45

You are using petrol as one of the raw materials. Daily you
purchase 1,000 litres of petrol at Rs.28.50 per ltire. 5% of it
generally gets lost due to spillage and evaporation. On a particular
hot and dry day, the issue of petrol from 1,000 litres drum was as
follows : To job X 200 litres; job Y 400 litres and job Z 320 litres.
After these issues the drum was empty. Calculate per litre charge
for use of petrol, quantum of loss and total quantum of petrol used
for jobs X,Y and Z.
Loss due to spillage and evaporation - 30 litres. , Rate of charge per
litre of petrol - Rs.30/-

Depreciation is caused by use factor, obsolescence and ________.

Time factor

A good purchase system, for materials, prevents production hold-

ups due to:
Lack of material

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

True

Uniform costing system is a pre-requisite to an inter-firm

comparison of firms belonging to the different industries.
False

Uniform costing system is defined as a system using common

concepts and standard accounting practices by different entities in
different industry to facilitate inter-firm comparison.
True

Features of real account are . . .

Mainly deals with items which are having physical , Consists of
some intangible assets , examples include - Lane, Building, Vehicles

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

the profit.
True

Select the correct statements. Ram's account…….Dr. Rs.10,000 To

Bank account Rs.10,000
Ram is a creditor , Rs.10,000/- has been paid to Ram , The payment
is made by cheque

Identify the causes due to which the cost of labour may be high:
Excess staffing , Lack of experienced and efficient personnel , High
labour turnover

________account can be defined as the record of all the transactions

pertaining to a person, asset, liability income or expenditure which
have taken place in a specified period.
Ledger

The store-keeper should initiate action for the purchase of a

material, when it reaches its :
Re-order level

Uniform Costing simplifies the work of wage boards of fixing

minimum wages and fair wages.
True
Maintenance Department is a service cost centre.
True

Balance sheet indicates the financial status of the business at given

period.
True

Profit = Contribution per unit X ________.

Margin of safety (units)

Identify the items which are correctly classified.

Carriage inward - Factory overheads , Carriage outward - Selling
and distribution overheads , Sales research expenses -Selling and
distribution overheads

Fixed overhead variances may be calculated either on the basis of

units of output or on the basis of standard hours.
True

Profitability statement indicates the amount of assets & liabilities.

False

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

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

Real Accounts may also consist the accounts of some intangible

assets like Goodwill Account
True

The rate at which the depreciation is to be calculated are also

specified in the Income Tax Act 1961.
True

Cash and---------------are the two systems of accounting.

Mercantile
P/L A/C debit side includes
salary , discount allowed , postage & telegram

Trading a/c credit side includes

sales , goods lost by fire , closing stock

Amit sold Goods to Atul for Rs. 50,000 on cash & Rs. 50,000 on
credit basis & allowed 10% discount on on the spot transaction.
Cash Account debited to Rs. _____________
45000

A proprietor purchase goods worth Rs. 5500 & cash account

credited to Rs. 5000 rectification of the suspense accounted
debited to Rs
500

Amit purchase of Rs. 6710 had been posted to the debit of the
creditors A/C as 6170 rectifying the transaction the creditor A/C is
to be debited amount to Rs
540

A bill of Rs. 500 for old furniture sold to Raj, was entered in the
sales day book
False

Abnormal cost indicates that cost which is normally incurred at a

certain level of output under normal circumstances.
False

This cost indicates increased or decreased cost due to the

increased or decreased volume of operations.
Differential cost

Indirect material cost assist the manufacturing process is an

integral part of finish goods.
False

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

Indirect Expenses includes

Rent , Telephone expenses , Insurance

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

Under stocking may have following consequences

Payment for idle time to workers , Production hold ups resulting
into disturbed delivery schedule , Eleventh hour purchase

Goods received note or goods received report is prepared in

following copies
One copy to Purchase department , One copy to Accounts
department , One copy to Costing department

Valuation of material uses the following methods

FIFO and LIFO , Average price method , Market price

Under Merrick Differential Piece rate System of wage payment up

to 83% of efficiency following rate is offered.
Normal

Under the Emerson’s Efficiency Bonus System at following

efficiency level no bonus is payable.
Below 66.66%

If the organisation follows the policy of considering predetermined

overhead absorption rates, it may face the problem of under or
over absorption of overheads if the actual overheads to be
absorbed o
True

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

Limitations of marginal costing are

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.

Budgetory Control deals with

Establishment of budgets , Comparison of budgeted results with
actuals , Computation of variance.

The analysis of overhead variances is different and the most

complex task.
True

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

Current standards includes

Expected standards , Normal standards , Ideal standards
In case of industries where capital investment is very high, budget
should be prepared for a
Longer period

Financial Accounting protects the interest of outsiders . it considers

________ transaction and it is a ________ requirement
historical
legal

After material is received from the supplier, quantity actually

received is compared with quantity ________-and ________-if any, are
taken up with the supplier
ordered
variation

Labour Turnover indicates ________ in labour force showing a highly

increasing trend or highly ________ trend
change
decreasing

Under Gannt Task bonus system where the output is ________

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

and are non monetary incentives

Safety services
education facility

Semi overheads are neither nor variable in nature.

fixed
variable

Fixed overheads normally arise as a result of policy and are largely

________ in nature at the ________ level of the management
uncontrollable
lower

variable cost is the cost that tend to ________ in direct proportion

with ________
vary
level of activity

and are examples of semi- variable overheads.

Maintenance cost
electricity
Rs.5000 paid as ________ to ________ should be debited to salary
account
Mahesh
salary

Over absorption of overheads may take place due to the reasons

like ________ overheads being less than the ________ overheads
actual
estimated

________ Legal charges and ________ are the accounts which are
shown on the debit side of Profit & Loss Account
Like office rent,
Audit fees

of Trial Balance generally ensures accuracy of the

process of ledger posting .
Talling
arithmetical

While calculating the minimum level, normal lead time is not

necessary
False

To Increase the existing production capacity, additional capital

expenditure is required.
True

Labour cost indicates that labour cost which cannot be identified

with the individual cost centre and is incurred for those employees
who are not engaged in the manufacturing process but only assist i
Remuneration

During one week X makes 200 units. He receives wages for a

guaranted 44hours per week at a rate of Rs. 1.50 per hour.
Estimated time to produce one unit is 15 minutes. Time allowed is
increased by 2
Rs. 83.60

Office & Administration overhead includes

Salary , Rent & Taxes , Stationary & postage

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.
Rs.4500/- ( Favorable )

Cost-sheet may be prepared separately for each

Different Cost Centre

The cost of asset is Rs. 1,10,000, Estimated scrap value

10,000,estimated life 10 yrs. Calculate the depreciation according
to straight line method
10000

To ascertain the ________ of all the transactions recorded in the

ledger account, the account is required to be ________
Net effect
Balanced

In fixed overhead variance, the volume variance is further analyzed

as
Variance Efficiency Variance , Capacity Variance , Calendar
Variance

For a unit, if opening stock of raw material is 10,000 units, closing

Manufacturing process involves study of

Designing the product , The quantity and quality , Material used

LAST IN FIRST OUT (LIFO)

The Bin card and stores ledges do not match due to the following
reasons:
Arithmetical errors in calculating , Non- posting a certain
document , Posting a wrong Bin card

Flux method is important method of wage payment.

False

If production overheads to be absorbed are Rs. 50000/- and labour

hours worked are 100000 then the labour hour rate will be,
Re. 0.50 per labour hour.

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

Flexible budget is an effective tool for evaluation of performance.

True

Material Mix Variance occurs where only one raw material is

required
False

Calculate Efficiency Variance, If actual production is 22,000 units,

Standard production in actual hours is 21,000 units and Standard
rate per unit is Rs.1.5/-.
Rs.1,500/-( Favorable )

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.
Rs.200/- ( Favorable )
Standard may not be necessarily useful for this purpose.
Forecasting

In Cash budget , Non operating cash inflow includes

Receipt of loan/borrowings , Issue of shares , Sale of fixed assets

In Cash budget , Non-Operating cash outflow includesVarious kinds

of over heads
Loan instalments , Taxes , Purchase of fixed assets.

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
20,000 kg

Correct Answer
Cost of holding the inventory
Economic Ordering Quantity
Maintain the inventory of any kind
Associated with administrative efforts
Ordering cost + carrying cost

Generally accounts of the assets will have ________ balance and

liabilities will have ________ balance
debits
credits

Interest on overdraft charged by the bank is ________ to the pass

book and ________ to the cash book
debited
credited

While selecting source of supply ________ epartment may call for

the ________ from the prospective suppliers
purchase
quotation

Administration overheads are ________ in nature and can be

controlled mainly at ________ level of the management
fixed
top

Planning lays down the course of action to be taken in future. In

case budgetary control, it is in the form of the ________ and in case
of ________ costing, it is in the form of the standard cost
budgets
standard

Fixed cost is the cost that tend to remain ________ irrespective of

________
constant
level of activity

The process of Allocation & apportionment can followed to decide

the ________ of overheads to each budget center
Allocation & apportionment
Loading

The ideal standards are generally ________ in nature and the

variances always shows ________ trends
theoretical
unfavorable

Bin card is maintained by department whereas is

maintained by costing department.
Stores
Store ledger

Advance received from customers is ________ for the organisation.

A liability

The features of multiplicity of key factors are as follows :

More than one key factors , Refers to a complex situation , Can be
resolved by using linear programming technique

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

The ________ adjustment is necessary to relfect the cost for the use
of fixed asset during the year.
Depreciation

Identify the budgets for which the production manager sould be

held responsible :
Production budget , Production overheads budget , Plant utilisation
budget

Financial statements are basically in two forms i.e. profitability

statement and balance sheet.
True
The data for XYZ Ltd. is as follows : Fixed assets Rs.60,000/-; total
cost Rs.105,000/-; working capital is equal to 25% of the sales
value. The company expects 25% return on capital employed.
Capital employed is equal to fixed assets plus working capital.
Select the correct answers:
Sales Rs.128,000/- , Return on capital employed , Working capital
Rs.32,000/-

Select the cost that indicates increased or decreased total cost due
to the increased or decreased volume of operations.
Differential cost

If the owner brings in personal calculator for office use, ________

account should be credited.
Capital

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

Financial Accounting discloses the financial performance & financial

statements of the business as a whole.
True

Variable cost + Profit = Sales

False

P&L statement which is a period statement & relates to a certain

period tells about results of operations.
True

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

A firm employs ten workers at an hourly rate of Rs.20/-. They

worked for 40 hours each and completed the job for which standard
time was 48 hours for each worker. Calculate labour cost for the job
under the Rowan Plan.
Rs.9,333.33

Features of material usage variance are :

Measures the difference between the quantity of materials actually
used and that should have been used. , Considers standard price X
actual quantity , Considers standard price X standard quantity
Treating capital receipt as revenue income is an example of errors
of commission.
False

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

Features of Sunk cost are . . .

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

For a manufacturing company, dividend received is a non-operating

income.
True

Features of purchase requisition slip are :

Raised when the stock of a raw material has fallen to the re-order
level. , Indicates the type, quantity and quality of material
required , The information about the price of material is excluded

Judge the sentence in italics according to criteria given below : " It

is difficult to adopt Uniform costing system when a product can be
manufactured by employing more than one method because the
cost of production will vary according to the method used."
The assertion and the reason are both correct

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

Features of convention of consistency are . . .

The accounting policies and procedures should be followed
consistently , Facilitates the comparison of financial statements , It
facilitates comparison of financial statements on period-to-period
basis

Uniform costing is not a separate method of ________.

cost accounting

Suspense account is closed automatically after rectification of all

the errors.
True

Manufacturing overheads represents all costs incurred in the

factory including direct material cost and direct labour cost.
False

Generally all the liabilities will have ________balance.

Credit

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 ________.
Over-absorbed

Balance sheet indicates the expenditure & income from the

business.
False

Loan @ 12% p.a. of Rs.50,000/- was taken on 1st March, 2004. Find
the interest expenditure on 31st March, 2004.
Rs.500/-

Following are the examples of service cost centre

Stores department , Transport department , Accounting department

The sum of indirect material cost, indirect labour cost and indirect
expenses is termed as Overheads.
True

Error of commission refer to calculation errors, totaling errors,

errors in carrying forward etc.
True

Cheque received from a client on 28th September, 2004 must be

entered in the bank book only after it is credited in the pass book.
False

Copy of a firm's account in the bank's ledger is known as ________.

Bank statement

The column which refers to the page number of the ledger is known
as ________.
Ledger folio

Management Accounting is the process of analysis and

interpretation of financial data collected with help of financial
accounting and cost accounting
True

The direct material useage budget and direct material purchase

budget differ because of which of the following:
A planned change in the level of material stock
Loss is equal to fixed cost minus ________
Contribution

The different purposes served by standard costing technique are :

Cost control , Cost awareness , Performance appraisal

Error of commission refer to a situation where a transaction is not

recorded in the books of account.
False

A materials requisition form normally contains the following

aspects:
Quantity requisitioned , Per unit material cost , Job number

If a predetermined overhead rate is not employed an the volume of

production is increased over the level planned, the cost per unit
would be expected to :
Decrease for fixed costs and remain unchanged for variable costs

The variance which measures the difference between what is paid

for a given quantity of materials and what should have been paid
for, is known as ________ variance.
Direct material cost

It is said that adoption of uniform costing creates customer

confidence because . . .
Prices are reliable

Deferred revenue expenditure written off account is a real account.

False

In practical circumstances, the ________ are referred to as

application of funds.
Assets

Balance sheet is considered to be a part of the financial

statements.
True

The cost-volume-profit analysis basically highlights the effect of

changes in sales volume on the profit of the company, in the
________.
short run

The following figures relate to a company manufacturing a varied

range of products : Year 2003 Total sales Rs.22,23,000/- and total
cost Rs.19,83,600/-. Year 2004 : Total sales Rs.24,51,000/- and
Total cost Rs.21,43,200/-. Assuming stability in prices, calculate the
profit volume ratio
0.3
Calculate the machine hour rate. The amount of overhead
pertaining to June, 2004 to be apportioned is Rs.170,010/-. The
machine cannot work without an operator. During the month June,
2004 the machine operator has been paid for 5,670 hours.
Rs.29.98

While preparing sales budget the following factors must be

considered :
The number and types of products sold by the organisation ,
Whether the organisation's market share is increasing or
decreasing? , Details of seasonal fluctuations in sales

Techniques of management accounting include:

Marginal costing , Budgetary control , Standard costing

Which of the following aspects are mainly responsible for difficulty

in application of Uniform costing system.
Capital investment , Plant size , Location

The expenses relating to maintenance and creation of demand for

the product should be included in the ________budget
Selling expenses

Management Accounting is…

Designed particularly for internal use , Helpful in estimating the
future along with past period , Useful in furnishing the necessary
information to the management

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/-.
True

Flood occurred on 18th March, 2004 and goods worth Rs.28,000/-

The selection of the supplier may depend upon the following

aspects:
Geographical location of the supplier , Price quoted by the supplier ,
Goodwill of the supplier

The labour cost which can be identified with the individual cost
centre is known as the Direct Labour Cost.
True
If the firm is operating with zero margin of safety, decline of even a
single unit in sales will result in ________.
Loss

When bank balance as per bank book is considered for preparing

bank reconciliation statement, then following items need to be
added :
Cheques issued but not presented , Direct deposit made by
customer , Wrong credits given by bank

If you are required to enforce uniform costing system in your

industry, how would you proceed ?
Collecting data from all units of your industry , Ensuring that the
data collected is complete and correct , Maintaining secrecy of the
data collected

The indirect material cost, indirect labour cost and indirect

expenses cost, collectively are termed as ________.
Overhead

Under time rate system a worker is paid on the basis of production

achieved by him in a given time.
False

Labour efficiency variance Rs.1,000/- (favourable); labour mix

variance Rs.260/- (adverse) and labour rate variance Rs.300/-
(adverse). Compute labour cost variance and labour yield variance.
Labour cost variance -Rs.700/- (Favourable) , Labour yield variance
-Rs.1,260/- , Labour yield variance is favourable

If the standard contribution is less than the actual contribution,

then ________ variance arises.
Favourable

Correct Answer
Objective is performance evaluation
Analyses the performance of different budget centres
Assists in predicting shortage of cash
Forecast of quantity and value of materials

As a part of the data presented in support of a proposal to icnrease

the production of clock radios, the sales manager of Wittman
Electronics reproted the total additional cost required for the
proposed increased production level. The increase in total cost is
known as :
Incremental cost

Benefits available from revenue expenditure are received in the :

Same year
The variable costs are controllable at the lower lever.
True

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

Financial Accounting is …
Designed to supply information to internal/ external users ,
Referred as 'Historical' form of accounting , Concerned with
financial factors
If the total manufacturing overhead of a tiles producing factory
amounted to Rs.15 lakhs and the overhead rate was Rs.5/- per
sq.ft, then the production for the period can be stated as ________
sq.ft. tiles.
300000

The system which provides an opportunity to the small units to take

advantage of the research work taken by the large scale units of
the same industry is known as ________ system.
Uniform costing

The net profit before certain adjustments was Rs.95,040/-. After

giving due effects to the adjustments, the revised net profit (after
considering the adjustments) is Rs.78,560/-. Select the adjustments
which might brought this change.
Accrued commission income of-Rs.32,960/- was not entered in the
books , Rent for the month of March was payable and yet to be
recorded Rs.19,280/- , Repairs expenditure to the extent of
Rs.30,160/- was wrongly transferred to Machinery account

If the customer is not likely to pay the amount receivable from him,
this amount should to be treated as ________.
Bad debts

Creditors as on 31st March, 2004 amount to Rs.15,225/-. Provision

for discount from creditors is to made @ 5%. Find the impact of this
provision on the net profit.
The net profit will increase by Rs.761.25

Under the Rowan plan bonus is a fixed percentage.

False

Margin of safety indicates ________ of operations.

Profitability

XYZ Ltd. has sufficient idle capacity. It has received an enquiry 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 company expects a profit of Rs.6,000/- from this
wholesale offer. What minimum price should it quote for this deal?
Rs.190/-

Period cost is the cost assigned to the products.

False

In calculation of total sales margin variance, the ________cost of

sales is deducted from the actual sales revenue.
Standard

The sales mix variance highlights the fact that the actual mix of
sales has been in the same ratio as budgeted.
False

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

Accounting period Concept________________

Longer life-span on business is divided into shorter segments , Each
one being in the form of accounting period , Selection of accounting
period may depend on various factors

Depreciation
Amount charged on Fixed Assets.

Purchased computers of Rs. 50,000 come under the heading of

fixed asset
True

Amount with drawn for personal purpose drawing A/C to be debited.

True

Profit & Loss A/C credit side has

Gross profit , Commission received , Interested received

When bank balance as per pass book is considered then following

to be deducted.
cheques issued but not presented , direct deposit by customer ,
wrong credits given by bank

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
Drawing A/C

Discount received from the Creditors has been entered in the

Creditors A/C but discount amount has not been credited, for
rectifying such error which account to be debited.
Suspense A/C

Total of purchase register for the month of March is taken 50,000

instead of 55,000. Posting to individual A/C of supplier total to
correct amount is 55,000 but purchase account is debited by Rs.
50,0
True

There is reverse relationship between the ordering cost and

carrying cost
True

Store ledger
Record of all receipts and issue transactions , Financial expressions
of all transactions , Maintenance of Store ledges provides a second
check
Following points are taking into consideration for evaluation of
receipts
The Price , The trade discount is to be deducted , Other amounts
such as sales tax, excise duty, octroi duty

In EOQ, to express carrying cost as a percentage of the unit cost of

purchases this is used in the formula-----------
i

Under the differential time rate method of wage payment between

90% to 100% of efficiency following rate is offered.
Rs. 1.40 per hour

Where overheads chargeable to the department are Rs. 5000/- ,

direct labour hours worked are 24000 then labour hour rate is Re.
0.2083 labour hour.
True

The selection of the base on which overheads should be

apportioned depend on the following principles.
service or use basis , survey basis , ability to pay basis

The Budget key factor may be in the form of sales, raw material,
labour etc.
True
For a material, if standard quantity is 500 kg and standard price is
Rs.6/- per kg. Find out the Material Cost variance if actual quantity
is 400 kg and actual price is Rs.6/- per kg.
Rs.600/-( favorable )

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.
Rs.900/- ( Adverse )

Calculate Labour Mix Variance, If revised standard hours are

16,500/-, Standard rate is Rs.3/- and Actual hours are 13, 500.
Rs.9,000/- ( favourable )

Calendar Variance arises only if there is abnormal increase or

decrease in
Actual number of working days

The following factors affects the budgeted advertisement cost

Percentage of profits , Availability of funds , Competitors policy

Accounting to the matching principles of accounting, the ________

incurred during an accounting period are required to be match with
________ during that period
cost
revenues

Management Accounting has a very ________ scope and it requires

________ organizational structure
wide
elaborate

Along with financial accounting, ________ and ________ are the other
streams of accounting
Cost Accounting
Management Accounting

The cost accountancy is defined as “ the application of costing

principles,methods and techniques to the ________, art and practice
of ________ ascertainment of the profitability and the presenta
science
cost control

Preventive costs of labour turnover refers to all the costs which

may be incurred by the organisation to keep workers happy and
________ them from ________ the job
discourage
leaving

Replacement costs of labour turnover are and

training
breakages of machine

Break even point is a situation of no no

profit
loss

Uncontrollable variances are

Strike , Change in customers demand , Devaluation of currency

Indirect labour cost indicates that labour cost which cannot be

identified with the individual cost centre.
True

There is no need to open a suspense account if the trial balance

does not agree.
False

Bank reconciliation statement is the statement prepared to explain

the ________ as to why the bank balance as per ________ and bank
balance as per bank book does not match
reasons
pass book

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

Material Price Variance may occur due to

Change in price of material , Failure to take discounts , Weak
purchase organization

In financial statements P& L Accounts relates to a specific duration

whereas ________ is for a given point of time
P& L Accounts
Balance sheet
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 credited
Suspense A/C

Bin Card is not an record but only a record.

Accounting
Quantitative

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 --
Transfer to balance sheet liability side

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

If at 50% capacity, total factory overheads are Rs.10,000/- (out of

which 60% are fixed and 40 % are variable) then what will the
amount of total factory overheads at 60% capacity
Rs.10,800/-

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

These are the features of fixed overheads

total cost remains the same , per unit cost may vary , not
dependent on volume of output

__________ Accounting is primarily protects the interest of the

outsiders dealing with the organization various capacities like
investors, suppliers, customers etc.
Financial

Head of the Department should sign the purchase requisition.

True

FIFO method
The price of the earliest available lot is considered first , If the lot is
exhausted, the price of the next available lot is considered , It is
used for issue of material

The situation of over absorption arises if the overheads absorbed

are less than the actual overheads.
False
If production overheads to be absorbed are Rs. 20000/- and
machine hours worked are 5000 then the machine hour rate will be,
Re. 4 per machine hour.

Due to errors of principle the arithmetical accuracy of the trial

balance get affected.
False

These are the methods of measuring labour turnover.

Replacement Method , Separation Method , Flux Method

From the following data, workout the EOQ annual demand. 5000
units, ordering cost Rs. 60 per unit, price per unit Rs. 100, inventory
carrying cost15% on average inventory
300

Correct Answer
Assets
Debtors
Suppliers
Borrowed capital
Liabilities

canteen facility to workers, health and safety services are

examples of monetary incentives.
False

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

material

This is the process of recording attendance time of the workers.

Time keeping

Wage rate standards takes into consideration the following factors

The system of wage payments , System for bonus payment ,
Grades of workers required

Standard Costing system facilitates and for each

individual or department
Delegation of authority
Fixation of responsibility

If actual cost is more than the standard cost then it is called

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

Fixed cost is the cost that tend to remain ________ irrespective of

________
constant

Cost Accounting restrict itself with historical transactions

False

A very wide scope of Management Accounting is the limitation by

itself.
True

Journal is popularly known as 'Book of . . .

Original Entry

In a Balance-Sheet right hand side is referred as assets side and

left hand side is referred as liabilities.
True

Locate the steps involved in rectifying the errors in the books of

accounts
Find the wrong entry passed , Find the correct entry to be passed ,
Find the entry that will resolve the mistake in the books

The cost that indicates historical cost, which is incurred in past, is

known as
Sunk cost

Presentation of information to enable managerial decision making'

is one of the objects of which of the following
Cost Accounting

The objects of cost accountancy are . .

To ascertain cost and profitability , Cost Control , Presentation of
Information

Examples of indirect material are

Consumable stores , Glue used in book binding , Nails used in
packing boxes
The principle of ________ is followed while preparing the financial
statements.
Going concern

The process of attributing proportions of items of costs amongst

const centres is called ________.
Cost apportionment

Correct Answer
Normality wise classification
Function wise classification
Variability wise classification
Element wise classification

In India the gas industry and electricity industry, and ________

industry are examples of industries using the uniform costing
system.
fertilizer

New companies can adopt Uniform costing system as a ready-made

system.
True

Ram and Laxman are partners of Kush & Bros. As on 1st April, 2003
Ram's capital is Rs.50,000/- and Laxman's capital is Rs.80,000/-. If
interest on capital is to be provided @ 10% p.a., what will be
amount of capital of each of the partners as on 31st March, 2004,
assuming there were no additions during this period? Also, state
the treatment of this item in the Profit and loss account.
Ram's capital Rs.55,000/- , Laxman's capital Rs.88,000/- , Interest
on capital should be debited to the Profit and loss account

Non-trading income is disclosed on the credit side of ________

account.
Profit and loss

In the adjustment entry passed for closing stock, the ________

account should be credited.
Trading

Goods returned to the suppliers from whom it was ________d is

recorded in thePurchasereturn register.
Purchase

An advertisement contract was made with an artist which stated

that the remuneration will be 12% of net sales. On an average the
monthly sales were Rs.36,000/-, however the average rate of sales
return was 5% of that month's sale. Find the expenditure on
account of advertisement.
Rs.49,248/-

Goods kept in the godown were destroyed by fire on 18th June,

2004. The cost of such goods was Rs.18,950/-. The goods were not
insured. Find the amont which should be debited to the profitability
statement.
Rs.18,950/-

Generally speaking income represents wealth increase and

business success; higher the income, lower will be the success of a
business.
False
While preparing the bank reconciliation statement as on 31st
March, 2004 you find the following discrepancy : 'a cheque of
Rs.3,700/- received and deposited in bank on 27th March, 2004 was
entered credited in the pass book on 3rd April, 2004.' In this
background, which of the following statement holds true as on 31st
March, 2004?
Balance as per pass book < Balance as per bank book

The stores department is a ________ department.

Service

The ________ is responsible for material losses while in storage.

Store-keeper

The ________ is a perpetual inventory record.

Bin card

A written request sent to a supplier for specified goods at an

agreed upon price is often called as :
Purchase order

Selecting an appropriate method of valuation of inventory is

important because :
It influences the figure of gross profit

Re-order level for materials is determined considering maximum

consumption and maximum delivery period.
True

Control on purchase of material is exercised by the storekeeper.

False

The disadvantages of time rate system are :

Ignores the efficiency of workers , Higher labour cost , Lack of
motivation to increase productivity

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

False

Under some circumstances, it may be advisable to sell at prices

equal to or below the marginal cost ignoring fixed cost.
True

Correct Answer
Decrease in contribution
Increase in profit volume ratio
Increase in profits
Increase in break even point
Economical use of labour, materials and facilities can achieved with
the help of ________.
Budgetary control

Select the advantages of standard cost system.

Provides reliable basis for budgeting , Facilitates delegation of
authority , Promotes economy and efficiency

Which variance is used to analyse the effect of change in the

quantity of output from a given mix of inputs?
Materials yield variance

Depreciation can be defined as a permanent, continuous and

gradual reduction in the book value of a fixed asset.
True

Carriage charges paid for a new machine purchased if debited to

carriage account would affect the ________
Machinery A/c and carriage A/c

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

The difference between sales and cost of sales is termed as

________.
Net Profit

________ Accounting assists the management in establishing the

plans to attain the economic objectives and take proper decisions
for the attainment of its objectives.
Management

The objectives of cost accounting are :

Cost control , Ascertain ment of cost of each product , Assist in
managerial decision-making

The capacity utilised to installed capacity ratio is 80% for the

company. The capacity utilisation ratio in respect of a machine for a
particular 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 waiting for tools - 3 hours.
Calculate the idle time cost when the hourly fixed cost of running
the machine is Rs.8/-.
Rs.96/-
Semi variable expenses fluctuate in direct proportion to volume.
False

GAIL having monopoly in the CNG (Compressed Natural Gas)

market can implement the Uniform costing system.
False

From the following, select intangible assets:

Goodwill , Patents , Trade Marks

Items credited to Profit & Loss Account are…

Gross profit , Commission received , Interested received

Judge the given statement according to the given criteria. Goods

being real account, when goods are lost by fire, the goods account
should be debited because the goods are not going out of the
factory.
The statement is correct but the reason is incorrect

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?
The liability side of the balance sheet will increase by Rs.2,000/-

It is said that the income statement represents wealth increase

/decrease for the organisation.
True

All personal expenses of the owner should be debited to the

organisation's profit and loss account.
False

Depreciation on assets is credited to the trading account.

False

Correct Answer
Real account
Nominal account
Proprietor's account
Personal account

If the bank pays off the credit card bill, as per the standing
instructions, the overdraft as per bank book will be ________ the
overdraft as per pass book.
Lesser than
A cheque of Rs.400/- received and deposited into bank on 26th
September, was credited in the pass book but was omitted to be
entered in the bank book: this error will result in :
Difference in the balance as per bank book and as per pass book

Inventory holding cost comprises of :

Cost of insurance , Rent of store house , Salary of store keeper

If the ordering cost ________s, then the economic order quantity will
Increase.
Increase

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 at purchase price of Rs.20/-. The ordering cost is Rs.120/-
per order and the holding 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?
Rs.80/-

An entry in the stores ledger is required for transfer of material

from one job to another in the same department.
False

The causes of idle time can be analysed as -

Administrative causes , Productive causes , Economic causes

The method which deals with ownership rights being given to

workers is known as ________ method of remuneration.
Co-partnership

Which of the following is the most efficient use of the clock card?
To facilitate payment for time spend on the work premises

A firm of boiler-house engineers provides engineering services to

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 as 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
Rs.182.29

Marginal costing is useful in the following areas :

Plant shut down decisions , Make or buy decisions , Profit planning

Cost volume profit analysis focuses attention on the ________ effect

of a particular course of action.
short run
ABC Ltd. has a proposal of utilising a cheaper raw material which
will increase the contribution from Rs.100/- per unit to Rs.125/- per
unit. However, the use of cheaper raw material may result in
decrease in sales by 10% (to 450 units only). Find the impact of
using the cheaper raw material on the amount of contribution ( net
increase or decrease in contribution).
Increase in contribution Rs.6,250/-

Which of the following budgets may be termed as a long term

budget?
Capital expenditure budget , Research and Development
expenditure budget , Budget of a transportation company

A ________ can be defined as a part of the orgainsation for which

separate budget can be prepared and implemented.
Budget centre

The finance manager is responsible for which of the following

budget?
Cash budget

The role of the budget committee may be taken as an advisory role

to the Chief Executive.
True

While preparing the labour cost budget, factors such as overtime

working or night shift working may be ignored.
False

The variance which measures the deviation of the rate actually paid
to labour as from the standard hourly rate is known as:
Labour rate variance

The actual hours taken by the labour are compared with the
standard hours allowed for output to find out the labour yield
variance.
True

From the following data, determine the net profit if sales are 20%
above the break even point. Selling price Rs.20/- per unit, variable
cost Rs.15/- per unit and fixed overheads Rs.20,000/-
Rs.4,000/-

As on 30th September, 2004 the cost of closing stock was

Rs.84,696/- and its market price as on the same day was
Rs.66,584/-. Which value of closing stock should be considered in
the final statement of accounts for the year ended on 30th
September, 2004?
Rs.66,584/-
Correct Answer
Profit
Total cost
Variable cost
Sales

Marginal costing technique is useful in taking decisions relating to

which of the following courses of action?
Decision to drop a product line , Decision to accept a special offer
at price lower than the normal selling price , Decision regarding
temporary shut-downs
Profit and loss account indicates the profit earned as on a particular
date.
False

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

A' started business with cash Rs. 5,000/-, building Rs. 5,000/-,
furniture Rs. 2,000/-. What is the total amount of capital?
Rs. 12,000

The ideal budget period for a company engaged in generation and

distribution of electricity is one year.
False

Income Tax Act, recognise only one method of depreciation namely

________.
Written down value method

The present unit cost data for a product is as follows: selling price
Rs.15/-, variable costs Rs.8/-. If selling prices are reduced by 10%
and variable costs are increased by 12.5%. Which of the following is
the amended contribution to sales ratio?
0.33

The document which lays down the cost accounting plans and
procedures to be followed by the constituent units is known as
________.
uniform cost manual

Select the items which may be classified as selling and distribution

overheads.
Delivery van expenses , Rent of finished goods warehouse , Sales
research expenses

The purchase account should be debited when an order is placed

with the supplier of material.
False
Loss on account of goods lost due to earthquake should be debited
to which account?
Profit and loss account

Factory overheads consist of all overhead costs incurred from the

stage of procurement of material till the production of finished
goods.
True

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?
Maximisation of short-term profit

Identify the variable expenses.

Repairs of plant when it is undertaken by an outside agency ,
Carriage inward by hired carriers , Wages paid to casual workers

Profit volume ratio is also known as ________.

Contribution to sales ratio

If the physical stock is less than the stock as per the stores ledger,
such shortage should be treated as an issue of material.
True

Which of the following is a correct definition of the key factor?

The factor which limits the activites of the undertaking

Marginal costing is a technique of cost control.

True

The process of recording the costs in a formal and systematic

manner with the intention of preparing statistical data there from a
ascertain the cost, is known as . . .
Cost accounting

A ________ inventory turnover period indicates efficient utilisation of

material.
Low

Provision for discount on debtors account should be credited to the

Profit and Loss Account.
False

Insurance premium of Rs.18,000/- was paid on 15th January, 2004.

The policy period is one year from the date of payment of
insurance. On 31st March, 2004 what amount should be debited to
the Profit and Loss account as expenditure on account of insurance
premium?
Rs.3,750/-
The factors which influence the selection of the method for
absorption of overheads are:
Type of industry , Nature of products , Manufacturing process

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

Opening entries , Closing entries , Rectification entries

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

Out of debtors totaling to Rs.58,750/-, Rs.5,000/- were expected to

be bad. What should be the amount of debtors that must be
disclosed in the balance sheet?
Rs.53,750/-

Dividend received on amount invested in shares is an example of

________.
Non-operating income

________ variance represents the over or under utilisation of pland

and machinery.
Capacity

Which of the following transactions should be excluded while

preparing a cost sheet ?
Interest on loan , Bad debts , Expenses on criminal law suit

Under Differential Time Rate method payment is made at Rs. 1.40

per hour when the level of efficiency is between________.
90% to 100%

Absorption costing is more suitable for decision making than

marginal costing
False

Features of Taylor's differential piece rate system are as follows :

Minima clerical work is involved in calculating the wages , Helps in
building up an efficient labour force , Strong incentive to efficient
and ambitious workers.

While preparing trial balance, the balance as per ________ book is

considered as bank balance.
Bank

State the features of these transactions : (i) Commission paid

Select the steps to be followed while preparing bank reconciliation

statement.
Compare the transactions in the bank book and the pass book ,
Check the totals and the balancing of both the books , Confirm that
the opening balances of both the books are tallying

Bank charges debited in the pass book represent clerical mistake

on the part of the bank employees.
False

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 :
Direct deposit into the bank

________ Accounting is the process of analysis and interpretation of

financial data collected with help of financial accounting & cost
accounting
Management

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

The wages paid to a trainee who constructs wooden mould for

concrete laying on a building contract should be defined as :
Direct labour cost

Depreciation, interest and property tax continue even when the

operations are discontinued.
True

The objectives of Uniform costing system are as follows :

To fix a common selling price for the industry as a whole , To
compare efficiency of each unit against industry's overall
performance , To compile reliable cost data for inter-firm
comparison of costs

If it is given that the office expenses account includes Rs.10,000/-

for purchase of computer-table, the net profit will ________, after the
necessary adjustment is done.
Increase

The final result disclosed by trading account is the ________profit

earned by the organization.
Gross

The half-yearly sales of product X are as follows : 1st half -30,000

units; 2nd half - 37,500 units. The production pattern of the
company is based on 80% of the sales of the current six months
and 20% of the budgeted sales of the next six months. Calcu
1st half -31,500 units; 2nd half - 30,000 units

Any amount of profit earned in the past which is not distributed to

the owner, belongs to the creditors.
False

Features of convention of materiality are . . .

transactions having material impact on profitability should be
considered , Insignificant transactions will be ignored

Unearned commission of Rs.5,000/- needs to be recorded in the

books of accounts. Find its correct impact.
The asset side of the balance sheet will increase by Rs.5,000/-

Overhead absorption is an exercise by which overhead is properly

spread over production for the period.
True

Price based on Uniform Costing may be taken to be reliable and

representative of the whole industry.
True

Select the appropriate rectification entries for the following

transactions (i) Rs.200/- received in respect of a bad debt
previously written off was credited to Debtors account. (ii) Paid
Rs.6,000/- to a Mr. Rao, clerk, as salary in lieu of notice. This
amount was debited to his personal account (iii) Interest @ 5% p.a.
on a loan of Rs.5,000/- was debited to general expenses account.
Debtors A/c ..........Dr. Rs.200/- to bad debts recovered A/c
Rs.200/- , Rs.6,000/- to Rao's A/c Rs.6,000/- , Rs.250/- to General
Expenses A/c Rs.250/-

Locate the error and its features in the following -

Compensating errors , Trial balance will not be affected , Trial
balance will be affected

The purchase budget is a forecast of the value of fixed assets

requiring replacements in the budget period.
False
If the sales forecast is less than the past sales but the top
management insists upon a certain amount of additional profits,
then following steps can be taken to achieve the target profit
Increase the selling price , Reduce cost of sales , Increase the
selling efforts

The selection of ________ may depend upon the various factors like
characteristics of the business organisation, tax considerations,
statutory requirements etc.
Accounting period

The various contents of a uniform cost manual are organisation,

cost accounting system and ________.
presentation of information

In marginal costing, decisions are guided by profit rather than

contribution margin.
False

The following data relates to the month of October : Actual variable

overheads Rs.60,000/-; budgeted variable overheads Rs.80,000/-;
actual output 900 units; budgeted output 1,000 units; standard
time for one unit - 2 hours. Calculate variable overhead efficiency
variance.
Rs.4,000/- (Favourable)

In order to rectify the totaling mistake, wherein the sales return

ledger was undercast by Rs.2,000/-, the suspense account should
be ________ with Rs.2,000/-
credited

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

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.
Sales margin volume

Urgent action for replenishment of material stock must be taken

once the inventory reaches its :
Danger level

The principal functions of the cost accounting department are :

Classifying labour cost according to jobs, processes, etc. ,
Preparation of different reports based on direct, indirect labour
cost, etc. , To focus on areas where labour cost may be reduced.

Match
True

The treatment of ________ time in cost accounting depends upon the

distinction between normal and abnormal time.
Idle

Items debited to Profit & Loss Account are…

Salary , Discount allowed , Postage & telegram

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

Which system can assist in fixing a common selling price for the
industry as a whole on the basis of cost of production of all units
belonging to that industry ?
Uniform costing

A lathe machine was purhcased on 31st March, 2004 for

Rs.65,000/-, however it was installed only on 5th April, 2004. The
depreciation is charged @ 15% p.a.. Find the amount of
depreciation charge for the said lathe machine for the year ended
31st March, 2004.
Nil

Differential cost analysis is incorporated in the cost books.

False

The process of recording attendance time of the workers is known

as time booking.
False

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

If the quantity of material purchased and quantity used are

different, then which quantity should be used to compute the
material price variance?
Quantity of material purchased

Uniform costing system can be successfully implemented in any

Factory light, telephone expenses are examples of ________

expenses.
Indirect

For successful implementation of uniform costing system, it is very

essential to devise ________, containing recommended cost
accounting plan and procedures.
cost manual

The combination in which different products are sold by a company

is known as ________.
Sales mix

Which of the following is usually prepared daily by employees for

each job worked on?
Job card

Profit = Profit volume ratio X Margin of safety

True

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.
Loss of trained personnel , Loss of regular customers , Expenditure
required to restart the factory

Indirect material cost is an integral part of finished goods.

False

It is difficult to apply Uniform costing system for an industry which

has labour intensive companies as well as capital intensive
companies, because :
The cost structure is different

Rs.2,650/- were paid to ABC Ltd. for maintenance of machine;

which account should be debited for this transaction?
Maintenance of machine account

Margin of safety = Contribution / Profit volume ratio

False

The key factor determines the :

Level of activity , Capacity utilization , Level of sales
Discount received from the creditor has been entered in the
creditor's account but discount has not been credited; what type of
error is this ________
Omission of posting an amount in the ledger

Which of the following operations would normally be carried out

first when preparing a master budget?
Determining the budget period

Interest on capital is an allowable expenditure for parntership firms,

as per the provisions of the ________ .
Income Tax Act, 1961

Mixers Ltd. is engaged in producing a standard mix using 60kg of

Select the examples of functional budgets:

Sales budget , Production budget , Research and development
budget

Sita and Gita are partners of SGL & Co. As on 1st August, 2003
Sita's capital stood as Rs.10,000/- and Gita's capital as Rs.18,000/-.
If interest on capital is to be provided @ 10% p.a., what should be
the treatment of this interest in the profitability statement,
assuming there were no additions to capital during this period?
Profit and loss account should be debited with Rs.1,866.67

KDL Ltd. charges depreciation @ 20% on written down value

method. The net book value of its machinery on 1st January, 2003
was Rs.125,000/-. What will be the net book value of its machinery
on year end, i.e.31st December, 2003, assuming there were no
additions or disposals during the year?
Rs.100,000/-

Standard costing is always accompanied by a system of budgeting

but budgetary control may be operated in business where standard
costing is impracticable.
True

An amount of Rs.200/- is received from P and is credited to Q. The

rectification entry would affect ________
P's A/c and Q's A/c

Select the items which may be classified as administration

overheads.
Depreciation on office furniture , Director's remuneration ,
Telephone expenses
Budgetary control system provides a basis for establishment of the
incentive systems.
True

A fixed budget is useful only when the actual level of activity

corresponds to the budgeted level of activity.
True

A low margin of safety indicates ________ fixed overheads.

higher

Category A items, as per ABC analysis, represent ________ % of the

total number of items in inventory.
less than 10

The gross profit transferred from the trading account is Rs.98,999/-.

The expenses debited to the profit and loss account are salary
Rs.12,000/-; advertisement expenses Rs.18,000/-; printing and
stationery Rs.5,500/- and managing director's incentive
Rs.28,000/-. It was noted that no entry was made for salary of one
month which was due but not yet paid. Find the net profit of the
company.
Rs.34,408.09

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

A complete list of all material required, with quantities, for a

particular job is given in the ________.
Bill of material

The term ________ indicates expenditure incurred on or attributable

to a given thing.
Cost

The budget manual must contain statement regarding:

Objectives of the orgainsation

Annual subscription paid by bank to the Chamber of Commerce on

31/03/04, as per the standing instructions, and advise sent
thereafter, may lead to:
Balance as per bank book > Balance as per pass book

Entry for dishonour of cheque appears only in the pass book, this
entry should be ________ in the bank book.
Passed
Since the pass book and the bank book record the ________
transactions, the bank balance as per these books should be equal.
Same

A pre-determined factory overhead rate holds up product costing.

False

These are the replacement costs of labour turnover.

Inefficiency of new workers , Cost of selection and placement ,
Increased spoilage and defectives

Rent of Rs.7,500/- for the month of April was received in March.

Which account should be credited in the books of accounts for
making an entry for receipt of the said amount?
Rent received in advance account

Bank reconciliation statement can be prepared on weekly basis.

True

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?
Rs.45,000/-

Financial Accounting ______________

Designed to supply information for internal/ external uses. , Deals
with the transaction during specific period. , It is compulsory

Cost Accounting ______________.

Concerned with specific activities. , Classified according to their
nature. , It deals with both i.e. past & present.

Features of double entry accounting system are . . .

Every business transaction has two elements , When business
receives something, it has to pay something , Every debit has a
corresponding credit
Penalty paid for delay in payment to creditors represents
uncontrollable cost.
False

Features of a cost sheet are as follows

Indicates the total cost of production during a given period ,
Indicates the unit cost of production during a given period , Helps
the management in fixing the selling price to be quoted for the

Depreciation charged on office furniture on straight line basis is an

example of ________.
Administration overheads

Uniform Costing Methods may be advantageously applied to . . .

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

Purchased goods worth Rs.6,450/- on 10th March, 2004. However

If Rs.15,000/- has been paid to Kargil Relief Fund as the owner's

personal contribution, ________ account should be debited in the
books of accounts of the business.
Drawings

Included in the trial balance is the sales promotion suspense

account with a debit balance of Rs.6,300/-. It is given that this
balance should be written off. Calculate its impact on profit of the
company.
The net profit will decrease by Rs.6,300/-

While passing the journal entry, it is of utmost importance to

ensure that the total of amount debited is equal to the total of the
amount credited.
True

The bin card and stores ledger, being independent records,

comparison of these two records should be avoided.
False

The cost of idle time incurred by employees that is considered

normal for the production process should be charged to :
Factory overheads

The cost of abnormal time may be recovered by inflating the hourly

labour rate.
True

Contribution represents pool of resources available for meeting all

costs other than ________.
Variable costs

ABC Ltd. is planning to sell 200,000 units of product B. The fixed

costs are Rs.400,000/- and the variable costs are 60% of the selling
price. In order to realize a profit of Rs.100,000/-, the selling price
per unit would have to be :
Rs.6.25
The total production cost for making 20,000 units was Rs.21,000/-
and the total production cost for making 50,000 units was
Rs.34,000/-. Once production exceeds 25,000 units, additional fixed
costs of Rs.4,000/- are incurred. The full production cost per unit of
making 30,000 units is:
Re.0.98

In which of the following situations, the flexible budget should be

preferred?
Sales are too difficult to predict , Supply level of input cannot be
predicted , Varying levels of production activity

The budget that represents the funds investment for expansion,

diversification, etc. is known as ________.
Capital expenditure budget

Purchased goods by paying Rs.35,000/-: In this case, the cash

account should be debited.
True

Under the AB________ analysis, nuts and bolts used as material will
be classified as category C.
C

Which of the following is a more descriptive term for the type of

cost accounting often called "direct costing"?
Variable costing

The advantages of Halsey plan are :

Bonus goes on increasing with increase in time saved. , Provides
more incentive to speed up production , Guaranteed time rate
payment is made

Marginal costing is also known as ________.

Variable costing

Category C items, as per the ABC analysis, usually refers to indirect

material.
True

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

All costs are controllable.

False

Which of the following cost is also termed as Prime Cost ?

Direct cost

Purchase of national saving certificates by the company from its

profits, should be debited to ________ account.
Investments

The difference between sales and prime cost is known as ________.

Gross Profit

The opening balance of cash account is Rs. 25,000/-, cash received

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 closing balance of the cash account?
Rs. 80,000

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?
Rs.18,100/-

Under-recovery of overheads implies that the profit will be________

to the extent of total under-recovered overheads.
Increased

Correct Answer
Salary of CEO
Interest on loan
Carriage inwards
Cost of demand creation

Quantify the increase in profit on account of following errors : (a)

Repairs of furniture amounting to Rs.2,000/- were debited to
furniture account. Furniture is depreciated @10% p.a. (b) Interest
received on bank deposits was credited to dividend received
account, Rs.1,550/- (c) A television purchased for the managing
director's office for Rs.45,000/- was debited to Interior decoration
expenses.
Rs.43,200/-

Under ABC analysis, category A represents items with high

volumes.
False

An order for goods worth Rs.18,000/- was placed on 25th March,

2004. The goods were received on 1st April, 2004. Calculate the
impact of this transaction on the final statements of accounts for
the year ended 31st March, 2004.
The net profit will not be affected

Which of the formulae can be used to calculate profit volume ratio :

Change in contribution / Change in sales , 1 - (Change in variable
cost / Change in sales) , (Fixed cost + Profit) / Sales

Marginal costing rewards sales whereas absorption costing rewards

production.
True

Following errors affect the trial balance

Wrong totaling of subsidiary books , Posting on the wrong side of an
account , Omission of posting an account in the ledger

Sold goods to Amitabh worth Rs. 15,000/- against 15% trade

discount. In this case with what amount should the sales account
be credited?
Rs. 12,750

Furniture account will always have a ________ balance.

Debit

Accounting is the art where transactions are …

Summarized , Classified , Recorded

The ________ variance is the difference between the actual variable

overhead incurred and the standard variable overhead charged to
production.
Total variable overhead

Standard costs are used for external reporting.

False

Mr. Oak, materials manager, spends 40% time in the factory and
the remaining in office. If his annual salary is Rs.500,000/-, what
amount should be charged as office overheads ?
Rs.300,000/-

The factors to be considered while preparing the direct materials

budget are :
Adequacy of material storing space , Availability of funds , Material
in stores but reserved for specific purposes

Correct Answer
Land & Building
Work in Progress
Commission received
Closing stock of finished goods

Bank reconciliation statement must be prepared before the

preparation of profit and loss account and balance sheet.
True
Find the budget which is inadequate as a cost control technique :
Fixed budget

Predetermined rate of absorption of overheads helps in quick

preparation of cost estimates and quoting prices.
True

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.
Rs.3,00,000/-

________ is an example of intangible asset.

Goodwill

Goods sent to the customers on approval basis should be treated as

sales.
False

Identify the steps involved in selecting the optimum product mix,

when the limiting factor is number of labour hours and sales
demand.
For each product find the contribution per unit and per labour hour ,
Award ranks to each of the products based on contribution per
limiting factor , Priority is given to fulfill the market demand of the
product which gives maximum contribution per labour hour.

According to Reducing Balance Method, the depreciation is

provided at a predetermined percentage on the balance of cost of
asset after deduction of the depreciation previously charged.
True

A forecast is mere estimate of what is likely to happen, but ________

is the action plan to be followed.
Budget

The reporting method used in the costing system should be based

on the principle of
Management by exception

The wages paid to maintenance department workers who do repair

work principally for production departments but also on the
vehicles in the distribuiton department shoud be charged as:
Service costs

M/s Vivek Enterprises has paid rent relating to the residence of Mr.
Vivek, proprietor of Vivek Enterprises. This payment should be
treated as
Drawings
Measurement of ________ gives an idea of the degree of mobility of
labour.
Labour turnover

Correct Answer
Repair for factory building
Profit on sale of investment
Advertisement expenses
Cost of finished goods

A company wishes to earn a 15% profit margin on selling price

when quoting for a job. Which of the following is the profit margin
of cost which will achieve the required profit margin ?
0.18

Contents of Uniform Cost Manual are

Organization , Cost Accounting system , Presentation of information

The process of accounting has three streams of accounting

---------------,--------and ----------------------.
Financial Accounting , Cost Accounting , Management Accounting

Long term loan borrowed from financial institution comes under the
heading of long term liabilities.
True

Judge the statement according to the criteria given : ' The

accounting period for XYZ Ltd. ends on 31st December, 2003. It is
noted that office rent for the month of December, 2003 is paid on
15th January, 2004. "According to concept of matching expenses
with the revenues, this expenditure should be recorded in the
books of accounts in January,
The statement and its reason are both incorrect

The installation and operation of ___________ accounting requires a

very elaborate organizational structure and large number of rules &
regulations
Management

Credit note is an intimation send to person dealing with the

business that his account being debited for the purpose indicated
therein.
False
Primary distribution is effected on the basis of service rendered to
the service departments by the production departments.
False

Marginal costing is found to be unsuccessful in the following

situations
Impossible:-to distinguish costs into fixed and variable component. ,
With respect to capital intensive industries where fixed costs are
very large and hence cannot be ignored , With respect to service
industries where employee costs are very large and almost fixed in
nature

Debit Note is an intimation sent to person dealing with the business

that his account is being credited for the purpose indicated therein.
False

Labour efficiency variance arises due to:

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

A person in charge of a ________ may be held responsible for its

proper functioning and cost control.
Cost centre

The organization chart shows the following aspects :

Functional responsibility of different functional managers ,
Delegation of authority to various managers , Inter-functional
relationships of these managers
Danger level for inventory of materials means the safety stock of
inventory.
False

The main advantages of profit sharing are :

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

Which of the following is likely to be a contributory factor to the

incidence of excess expenditure on material cost?
The level of control of the used of material in the production cycle ,
The incorrect choice of purchase order quantity , Failure to control
the issue of materials from stores

Management accounting is concerned with the following activities :

Decision making , Safeguarding assets , Planning and controlling
activities
Select the accounts to be disclosed on the liability side of the
Balance sheet.
Loan , Outstanding expenses , Creditors
Which document facilitates estimating material cost of a particular
job, before completion of that job?
Bill of material

Purchases returns of Rs.18,000/- were wrongly transferred to the

sales returns account. Calculate its impact on net profit.
The net profit will not be affected

Features of convention of conservation are :-

Applicable to valuation of current assets , Anticipates all future
losses and expenses , Ignores all future incomes and profits, unless
they are actually realized

Amortization of goodwill should be considered while preparing cash

budget.
False

Generally, all real accounts will have a ________ balance.

Debit

Angle formed by the intersection of total cost line and sales line is
called angle of ________.
Incidence

Labour turnover means :-

Influx and exit of employees , Quantitative measurement of
instability of working force , Rate of change in the average working
force
Essentials for effective implementation of budgetary control system
are :-
Commitment of top management , Clearly defined objectives ,
Continuous budget education

________ authorizes the production department to issue requisition

for materials.
Bill of material

A written order sent to inform the purchasing department of a need

for materials is called a ________.
Purchase requisition note

Features of convention of materiality are :-

Transactions having material impact on profitability should be
considered , Insignificant transactions will be ignored

Actual costs determined on the basis of costing records maintained

have following limitations :-
No practical utility from control point of view , No practical utility for
price fixation , Expensive

Select the accounts to be disclosed on the assets side of the

Balance sheet :-
Furniture , Loan to Bank of U.S.A. , Land & building

Management Accounting is :-
Designed particularly for internal use , Helpful in estimating the
future along with past period , Useful in furnishing the necessary
information to the management

Creditors as on 31st March, 2004 amount to Rs.15,225/-. Provision

for discount from creditors is to be made @ 5%. Find the impact of
this provision on the net profit.
The net profit will increase by Rs.761.25

Time rate system is suitable for workers of the maintenance

department.
True

The overheads apportioned to three production departments A, B

and C and two service departments P and Q are Rs.75,000/-;
Rs.100,000/-; Rs.80,000/-; Rs.60,000/- and Rs.40,000/- respectively.
Overheads of department P are shared by A, B, C and Q in the ratio
of 4 : 3 : 2 : 1 and that of department Q are shared by A, B, C and P
in the ratio of 3 : 3 : 2 : 2. Ascertain the total overheads of each
production department.
A -Rs.116,836/-; B -Rs.134,889/- and C -Rs.103,265/-

Credit balance in interest account indicates income for the

organization.
True

All personal expenses of the owner should be debited to the

organization's profit and loss account.
False

Basic objective of Uniform Costing is :-

Comparison

The integrated form of all functional budgets is known as :-

Master budget

The capital expenditure budget is important because it involves :-

Huge cash outflow

If excess of cash is estimated in the cash budget, it may be possible

to utilize it to give bonus to the employees.
False
Which of the following is most likely to be an allocated production
overhead cost to the finishing cost centre?
Salary of the finishing center's manager

In differential cost analysis, decisions are taken by comparing the

incremental revenue with differential costs.
True

Correct Answer
Not affected by output related remuneration schemes

Useful when ratio of skilled and unskilled labour remains constant

Useful when prices of materials are fairly stable

Useful when there are no wide fluctuations in processing

In considering a special order situation that will enable a company

to make use of presently idle capacity, which of the following costs
would be irrelevant?
Depreciation

The ________ is of immense help in guiding the companies to

operate their accounts on uniform basis.
Uniform cost manual

As per the provisions of Section 209 of ________, all the company

form of organization is legally required to follow the mercantile or
accrual system of accounting.
The Companies Act, 1956

The disadvantages of supplementary overhead rates are:-

It can be determined only after the end of the accounting period ,
Defeats the basic concept of normal cost , Involves lot of clerical
activity

The system which combines the benefits of time rate and piece
rate system by providing a minimum time rate payment along with
incentives is known as ________ system.
Gantt task bonus

Currently Beta Ltd. is earning a contribution of Rs.80/- per unit 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 staff 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 amount of
profit assuming the proposal is accepted?
Rs.177,000/-
Dividend received on amount invested in shares is an example of
________.
non-operating income

Essentials for effective implementation of budgetary control system

are
Commitment of top management , Clearly defined objectives ,
Continous budget education

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

Large angle of incidence indicates ________ amount of profits.

higher

Relevant costs in decision making are :

Those costs which will arise as a result of the proposed action

________is the summary of all the balances in all the accounts listed
in ledger account of an organization at any given point of time.
Trial Balance

Overhead capacity variance is the outcome of:

Shortage of labour , Enforced idle time, e.g.power breakdowns ,
Customer demand being more or less than anticipated

Basic objective of Uniform Costing is . . .

comparison

Re-order level should be higher than ________ but lesser than

maximum stock level.
Minimum level

Goods returned by Pawan worth Rs.1,000/- is debited to Pawan's

Account. In order to rectify the mistake, which account should be
debited ? ________
Suspense account

Interest receivable is a________ for the organisation.

Current sset

Interest on bank loan, was paid till the quarter ending 30th
September, 2003, Rs.36,000/-. Find the amount to be debited to
the profit and loss account for the year ending on 31st March,
2004, assuming the loan is not yet repaid as on this date.
Rs.72,000/-

The features of the Halsey Plan are:

The benefit of time saved is divided equally between the employer
and employee

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

Determine re-order level from the following : Maximum daily

consumption - 200 units; maximum delivery period - 12 days;
average daily consumption - 150 units and average delivery period
- 8 days.
2,400 units

An error of partial omission can be rectified by either debiting or

crediting the ________ account, as the case maybe.
suspense

Which of the following information is included in the goods received

note?
Date of receipt of material , Quantity received , Description of
goods

The operating profit as per cost statement may differ from the
profit as per Profit and Loss Account due to existence of
Depreciation on plant and machinery , Interest on loans taken from
other , Interest on loans granted to others

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?
An entry for Rs.458.34, debiting interest accrued but not due
account should be passed

The advantages of written communication are

Accuracy , Can be recorded , Brevity

Business letters can be useful in different ways like

Legal evidence , Permanent information , Recovering dues

Essential parts of business letters would be

Head address , Date , Outward number

The Head address includes

Tel no. , Name of organization

The body of the letter may be divided into

Opening Para , Main communication , Closing paragraph

Examples of salutations would be

Dear sir , Respected Sir

The matter in the memorandum may include

Procedures , Rules , Instructions

People external to the organization do not have any access to the

costing records.
True

Features of Financial Accounting includes-----------------

It is a legal requirement , It protects the interest of outsiders , It
considers historical transactions

A cheque received from a customer but not deposited into bank

must be recorded in the cash book.
True

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

Due to compensating errors the arithmetical accuracy of the trial

balance get affected.
False

Correct Answer
Repair for factory building
Dividend on shares
Profit on sale of shares
Advertisement
Cost of finished goods

Non Operating Expenses includes

Loss on sale of asset , Goodwill , Only a, b
Perpectual inventory system includes continuous verification of
physical stock at regular intervals.
True

Under the differential time rate method of wage payment up to

80% of efficiency following rate is offered.
Rs. 1.00 per hour

Per unit cost of variable overheads may reduce as the volume of

output increases but the total overheads remain constant.
False

Machine hour rate is calculated as (amount of overheads to be

absorbed)/(labour hours required for production)
False

This is an example of semi variable overheads.

electricity

wise classification of overheads takes the form of –

indirect material , indirect labour , indirect expenses

To take make or buy decision under the marginal costing , if

purchase price of the product is less than its variable cost it is
advisable to go for manufacturing proposition.
False

Budget is prepared for a fixed period of time.

True

Depreciation does not involve cash out flow

True

Basic three steps in Standard Costing are

Setting standards , Comparing actuals with standards ,
Measurement of variance

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.
Rs.6750/- ( Adverse )

Following factors will have to be considered before preparing

Production Budget in terms of quantity
Production capacity , Co-ordination with Sales forecast ,
Management Policy
Correct Answer
Below minimum level
Initiating proper action for movement of material
The level above which actual stock should not exceed
The level below which actual stock should not reduce
To take the step for procurement of further lots of material

If ________ is not provided, the asset may appear in the Balance

Sheet at an ________ amount
depreciation
overstated

Expenditure like general lighting are apportioned considering

________ as a base and expenditure like depreciation are
apportioned considering ________ as a base.
number of light points
value of assets

Under absorption of overheads may take place due to the reasons

like ________ overheads being more than the ________ overheads
actual
estimated

A key factor is defined as the factor which, at a particular point of

time or over a period will ________ the volume of ________
limit
output

Overhead absorption rate will be different at different capacity

levels.
True

Factory cost of a product is Rs.335,000/-, if the selling overheads

are charged @25% of factory cost, then the amount of selling
overheads should be Rs.________/-
83750

Creche expenses may be appropriately approtioned on the basis of

________.
Number of female workers

Opening stock of Rs.1,80,000/-, purchases Rs.8,00,000/-, freight

inward Rs.35,000/-, closing stock Rs.2,00,000/-, direct wages
Rs.2,35,000/-. Calculate the prime cost.
Rs.10,50,000/-

Indirect Cost is termed as ________.

Overhead
A group of 10 men and 20 women workers were expected to
produce 400 units of a product in an 8 hour day. The standard
hourly rate was fixed at Rs.25/- and Rs.15/-, respectively.Actually, a
group of 15 men and 10 women workers was deployed and paid for
8 hours a day at an hourly rate of Rs.22/- and Rs.18/-, respectively.
Two hours were wasted for the entire group due to power failure
and only 300 units were produced. Calculate labour rate variance.
Rs.120/- (Favourable)

A grinding machine is an example of impersonal cost centre

True

Uniform costing system is useful in the following areas

Classification of cost accounts

Interim dividend paid by the company should be debited to the

profit and loss appropriation account.
True

The production budget may be prepared in terms of :

Units produced , Production cost , Material cost, labour cost and
overheads
Panna Ltd. temporarily has excess production capacity. The idle
plant facilties can be used to manufacture a low-margin item. The
low-margin item should be produced if it can be sold for more than
its:
Variable costs

Receipts and payments method of cash budget is useful for

preparing long term estimates.
False

In case of seasonal industry, the budget period may be taken as

________.
One season

Lack of efficient control on various aspects related to raw-material

increases the material cost component of the finished product.
True

Due to compensating errors the arithmetical accuracy of the trial

balance is affected.
False

Material price variance for a job is Rs.800/- (Favourable). Actual

quantity of material used is 100 kg whereasthe standard quantity of
material is 120% of actual quantity. Actual price paid for the
material is 80% of the standard price. Calculate material cost
variance.
Rs.1,600/- (Favourable)

The process of recording the business transactions in a defined set

of records is referred to as ________.
Balance sheet

The ________ books are preferred when the volume of transactions

is very large.
Subsidiary

Limitations of Management Accounting includes-------------------

Its wide scope , Possibility of intuitive decision , Requires elaborate
organizational structure

Business Entity Concept ______________.

Business is separated from the owner. , The accounting process
carried out for the business , Separate legal entity

Double Entry Accounting System__________________

Every business transactions have two elements , When business
receives something, it has to pay something , Every debit has a
corresponding credit
Goods distributed as free sample amounted to Rs. 10,000. Prepare
Neonboard Rs. 5000. The total amount transfer to advertisement
account is Rs.____
15000

When bank balance as per bank book is considered then following

to be added.
cheques issued but not presented , direct deposit by customer ,
wrong credits given by bank

Manufacturing process involves study of

Designing the product , The quantity and quality , Material used

LAST IN FIRST OUT (LIFO)

The Bin card and stores ledges do not match due to the following
reasons:
Arithmetical errors in calculating , Non- posting a certain
document , Posting a wrong Bin card

The causes of idle time can be analysed as

Administrative causes , Productive causes , economic causes

Limitations of marginal costing are

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.

In fixed overhead variance, the volume variance is further analyzed

as
Variance Efficiency Variance , Capacity Variance , Calendar
Variance

Standard may not be necessarily useful for this purpose.

Forecasting

In Cash budget , Non operating cash inflow includes

Receipt of loan/borrowings , Issue of shares , Sale of fixed assets

In Cash budget , Non-Operating cash outflow includesVarious kinds

of over heads
Loan instalments , Taxes , Purchase of fixed assets.

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
20,000 kg

The features of multiplicity of key factors are as follows :

More than one key factors , Refers to a complex situation , Can be
resolved by using linear programming technique

Identify the budgets for which the production manager sould be

held responsible :
Production budget , Production overheads budget , Plant utilisation
budget

Features of material usage variance are :

Measures the difference between the quantity of materials actually
used and that should have been used. , Considers standard price X
actual quantity , Considers standard price X standard quantity

Identify the causes due to which the cost of labour may be high:
Excess staffing , Lack of experienced and efficient personnel , High
labour turnover

Features of Sunk cost are . . .

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

Features of purchase requisition slip are :

Raised when the stock of a raw material has fallen to the re-order
level. , Indicates the type, quantity and quality of material
required , The information about the price of material is excluded

Features of convention of consistency are . . .

Following are the examples of service cost centre

Stores department , Transport department , Accounting department

Pre-requisites of Uniform Costing are . . .

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

Amortisation of goodwill should be considered while preparing cash

budget.
False

The objects of cost accountancy are . .

To ascertain cost and profitability , Cost Control , Presentation of
Information

Management Accounting is…

Designed particularly for internal use , Helpful in estimating the
future along with past period , Useful in furnishing the necessary
information to the management

The causes of idle time can be analysed as -

Administrative causes , Productive causes , Economic causes

The components of the selling and distribution cost budget are :

Distribution expenses , Publicity expenditure , Salary of sales-office
workers

Locate the error and its features in the following -

Compensating errors , Trial balance will not be affected , Trial
balance will be affected

Business Entity Concept

Business is separated from the owner. , The accounting process
carried out for the business , Separate legal entity

Standard Costs are used as tool for

Cost Control

The danger level fixed below maximum level

False

Following example comes under service cost centre

Store department , Internal Transport department ,
Accounting/Costing department

The material physically received is compared with material ordered

as per the this order
Purchase Order

Correct Answer
Halsey system & Gantt System
Different hourly rates are fixed for different levels of efficiency
Workers are paid according to the production achieved by him
The rate of payment is fixed per piece
Worker is paid on the basis of time attended by him

When bank balance as per pass book is considered then following

to be added.
cheques deposited but not cleared , Interest debited by bank , bank
charges debited by bank

(No. of unit * Rate of depreciation per unit ) this formula is used for
written down value method.
False

Sold Goods of Amitabh worth Rs. 15,000 against 15% Trade

discount. The Goods worth appear on account ___________.
12750

Cash and ____________ are the two systems of accounting.

Mercantile

This cost indicates increased or decreased cost due to the

increased or decreased volume of operations.
Differential Cost
Correct Answer
profit
Total cost
contribution
variable cost
Sales

Important advantages of Uniform Costing can be said to be

It is a useful tool for management control , It avoids cut throat
competition , Weaker units can take advantage of settled systems
of better managed units

Margin of safety are the sales beyond

break even point

Indirect Labour Cost

Wages paid to storekeeper , Salary of works manager , Wages paid
to gatekeeper
The difference between sales and factory/ works cost is termed as
________ the difference between sales and ________ ermed as net
profit
gross profit
cost of sales

Labour cost is the cost of __________ paid to employees of the

organization.
Remuneration

For a material, if standard quantity is 400 kg and standard price is

Rs.3.75/- per kg. Find out the Material Usage variance if actual
quantity is 500 kg and actual price is Rs.3.60/- per kg.
Rs.375/-( Adverse )

Labour Efficiency Standards are decided by considering following

factors
Records of past performance , Time & Motion Study , Trial Runs

A budget manual is a document setting out the ________ of the

persons and ________ required for the budget control.
Responsibilities
Forms and procedures

Selling price per tonne is Rs. 69.50 , variable cost per tonne is Rs.
35.50 and fixed cost is Rs. 18,02000. Find out the BEP in units,
53000

The difference between standard cost and actual cost is termed as

Variance.
True
Wage payment system should be properly tied up with quality
control procedures to ensure that the workers are paid only for
good and quality production.
True

In Cash budget Operating cash inflow includes

Cash Sales , Collection from Debtors , Interest/Dividend received

If the product is labour intensive, more stress may be necessary on

inventory control procedure.
False

A good wage payment system will not punish the workers for the
matters beyond the control of the workers.
True

Fixed assets do not give the returns during the same period during
which they are paid for
True

The material issued to production department may be returned

back to the stores because material issued in excess requirement
and
Material issued is defective

Following are called the element of Cost

Material , Labour , Expenses

of Trial Balance generally ensures accuracy of the

process of ledger posting.
Talling
arithmetical

Convention of Materiality __________________

Only those transactions will be considered which have material
impact on profitability , Insignificant transaction will be ignored ,
The cost of non-used should not be considered as the item of cost

Under the repeated distribution method the overheads of ________

department are distributed to other departments on agreed
________
service
percentage

Under time rate system a worker is paid on the basis of production

achieved by him.
False
Cost Accountancy is a science, art and practice of a cost
Accountant.
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.

Financial Accounting primarily protects the interests of the

outsiders dealing with organization in various capacities.
True

Money Measurement Concept__________________

Only those transactions and facts expressed in terms of money ,
This Concept imposes severe restrictions on the kind of information
available from financial statements , Due to several restrictions it
becomes drawback of financial accounting

P/L A/C debit side includes

salary , discount allowed , postage & telegram

Profit & Loss A/C credit side has

Gross profit , Commission received , Interested received

A started business with cash 5000, building 5000, furniture 2000,

having depreciation of 10% on building. The total amount of capital
comes to Rs. __________
11500

Following errors do not affect the trial balance

Error of Principle , Error of Omission , Error of Commission

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

A contractor’s bill for the extension of premises amounting to Rs.

2750 has been debited to building repair account
False

Correct Answer
Increase or Decrease in cost
Historical Cost
Cost can be controlled
Cannot be controlled
Return or yield
Dividend received is a Non-operating Income.
True

Company having opening stock of Rs. 1,80,000 purchase Rs.

8,00,000. Freight Inward Rs, 35000 & closing stock Rs. 2,00,000,
having direct wages Rs. 2,35,000. What will be prime cost.
10,50,000

A Co. having factory cost of Rs. 13,10,800. The administrative

overheads are salaries 40,000, rent & rates 6400, Traveling
expenses 12,400, Depreciation 2400, Directors fees 24,000,
General Charges 2
14,59,200

Factory overheads are termed as

Production overheads , Works overheads , Manufacturing
overheads

Selling and distribution overheads includes

Indirect Material such as packing material, samples etc., , Indirect
labour like salaries to sales personnel manager , Indirect expenses
like warehouse charges, advertisement

The aims of perpetual inventory system are as follows

Maintaining Bin cards , Maintaining store ledger , Continuous
verification of physical stock

These are the preventive costs of labour turnover.

cost of maintaining good relations with the workers , Cost of
medical services , cost of welfare facilities

These are the features of variable overheads

vary directly in proportion to volume of output. , per unit cost
remains the same , total overheads may increase or decrease as
per volume of output.
The cost that varies in direct proportion with the level of activity is
called
variable cost

The ultimate incorporation of all functional budgets takes the form

of budgeted Profit & Loss Account and Balance Sheet.
True

Calendar Variance arises only if there is abnormal increase or

decrease in
Actual number of working days

If during a month anticipated sales are 5,000 kg, opening stock is

1,000 kg and closing stock is 500 kg then what will be the quantity
of production
4,500 kg

Variable costs are the controllable costs at the ________ level of the
management whereas fixed costs can be controlled only on the
________ level of the management
Lower
Top

________ Legal charges and ________ are the accounts which are
shown on the debit side of Profit & Loss Account
Like office rent
Audit fees

If the profit volume ratio is 25%, then the variable cost is equal to
________ of sales value.
0.75

Direct Cost includes

Direct material , Direct labour , Direct expenses

Which of the following costs is most likely to have a cost behaviour

pattern described as ..a fixed cost upto an activity level of 1,000
units, with a variable cost there after which decreases from 10
paise
Wagestopayment
8 paise per unitisat
which 2,000
fixed forunits?
a minimum output quantity after
which a bonus per unit is paid which reduces when activity level
exceeds 1,000 units
In case of defective material being returned by the stores
department to the vendor, such material should be valued at
the________.
Purchase Price

Piece rate system is suitable when quality of goods produced is of

extreme importance.
False

A firm earns profit when contribution is equal to fixed costs under

variable costing.
False

Standard time required for a job is 10 hours, i.e.10 X 60 = 600 'Bs'.

The worker has actually completed the job in 6 hours, i.e.6 X 60 =
360 'Bs'. Time wage rate is Rs.20/- per hour. Bonus is shared
between the worker and the foreman in the ratio of 3:1. Calculate
total earning of the worker as per Bedeaux Point System.
Rs.180/-

Contribution represents pool of resources available for meeting all

costs other than ________.
Variable Costs

Locate the steps involved in rectifying the errors in the books of

accounts
Find the wrong entry passed , Find the correct entry to be passed ,
Find the entry that will resolve the mistake in the books

Judge the following narrative according to the criteria given : There

are many organizations whose sales fluctuate with fluctuations in
the weather, viz. ice-cream, sweaters, etc.
The statement and the reason are both incorrect

Overheads chargeable to a product, using direct labour cost basis,

may be calculated by multiplying percentage of direct labour cost
and ________.
Direct labour cost of the product

Causes for adverse material price variance are:

Uneconomical size of purchase orders , Failure to avail discounts
allowed by suppliers. , Excessive freight charges

The objectives of Uniform costing system are as follows :

200 units of material were purchased from X @ Rs.5/- per unit and
300 units were purchased from Y @ Rs.6/- per unit. The
organisation follows FIFO system of pricing of issues and the above
purchases have been recorded in stores ledger. 120 units have
already been issued. 60 units received from X are defective and are
therefore returned. Find the value of the material returned to X.
Rs.300/-

These are the methods of measuring labour turnover.

Replacement Method , Separation Method , Flux Method

According to the standard costing principles, only adverse variance

must be further investigated.
False

Education facility to workers and their children, pension,

superannuation fund are examples of ________ incentives.
Non-monetary

Mr. Oak, materials manager, spends 40% time in the factory and
the remaining in office. If his annual salary is Rs.500,000/-, what
amount should be charged as office overheads?
Rs.300,000/-
Find the balance as per pass book. Bank Book - 10/10/04 - Paid rent
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 - Issued 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.
Rs.70,000/-

The document which lays down the cost accounting plans and
procedures to be followed by the constituent units is known as
________.
Uniform cost manual

From the following, select intangible assets:-

Goodwill , Patents , Trade Marks

________ is the summary of all the balances in all the accounts listed
in ledger account of an organization at any given point of time.
Trial Balance

Going concern concept is also known as :-

Continuity concept

An item of cost that is direct for one business organization may be

indirect for another business organization.
True

Which system provides an opportunity to companies to adopt the

one best method of cost accounting system known to the industry?
Uniform costing

Mixers Ltd. is engaged in producing a standard mix using 60kg of

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

Pre-requisites of Uniform Costing are :-

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

The net profit before certain adjustments was Rs.95,040/-. After

giving due effects to the adjustments, the revised net profit (after
considering the adjustments) is Rs.78,560/-. Select the adjustments
which might have brought this change.
Accrued commission income of Rs.32,960/- was not entered in the
books , Rent for the month of March was payable and yet to be
recorded Rs.19,280/- , Repairs expenditure to the extent of
Rs.30,160/- was wrongly transferred to Machinery account

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 :-
Direct deposit into the bank

Tom company has sales of Rs.200,000/- with variable expenses of

Rs.150,000/-, fixed expenses of Rs.60,000/-, and an operating loss
of Rs.10,000/-. By how much would Tom have to increase its sales
in order to achieve an operating income of 10% of sales?
Rs.200,000/-

Correct Answer
Forecast of quantity and value of materials
Analyses the performance of different budget centres
Assists in predicting shortage of cash
Objective is performance evaluation

Time-keeping facilitates the preparation of payroll.

True

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.
Semi-variable

Accounts representing expenses will have ________ balance.

Debit

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 dishonored cheque, originally received from
Mr.A. The fact of dishonor was not recorded in the bank book. Find
the balance as per pass book.
Rs.128/- (overdraft)

A low margin of safety indicates ________ fixed overheads.

Higher
The details regarding a food product manufactured by ABC Co. for
the last one week are as follows : Standard cost (for one unit) :
direct material -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/-; direct wages -Rs.16,324/-. Analysis of
variances : direct materials price variance -Rs.585/- (Adverse);
direct material usage variance -Rs.375/- (Favourable); direct wages
rate variance -Rs.636/- (Favourable); direct wages efficiency
variance -Rs.360/- (Adverse); production overheads expenditure
variance -Rs.400/- (Favourable) and production overheads volume
variance -Rs.750/- (Favourable). You are required to calculate the
amount of production overheads incurred.
Rs.19,600/-

The amount of profit which is retained by the organization is

transferred to 'Reserves and Surplus' in the balance sheet.
True

Cash budget is extremely useful since it:-

Gives information about estimated cash inflows and outflows

The objects of cost accountancy are :-

To ascertain cost and profitability , Cost Control , Presentation of
Information

Uniform costing is not a separate method of ________.

Cost accounting

If the storage cost of inventory increases, then the economic order

quantity also increases.
False

The organization chart shows the following aspects :-

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

Find the budget which is inadequate as a cost control technique :-

Fixed budget

The key factor determines the :-

Level of activity , Capacity utilization , Level of sales

Cost control procedure deals with :-

Establishment of plans , Comparison of actual and planed
performance , Computation of variance
State the features of these transactions : (i) Commission paid
Rs.250/- was posted twice to Commission account (ii) Rs.5,000/-
representing goods sold to A, was posted to the credit to
commission received account (iii) Sold machine for Rs.8000/-, was
credited to Sales account.
The debit side of the trial balance will be in excess by Rs.250/- ,
Involves an error of principle , Involves an error of commission

S Ltd. operates a system of standard costing in respect of one of its

products which is manufactured within a single cost centre. For one
unit of 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 price
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 price variance-Rs.8,000/-
(Fabourable); direct material usage variance -Rs.5,000/- (Adverse);
direct labour rate variance -Rs.5,760/-(Adverse); direct labour
efficiency variance -Rs.2,760/- (Favourable) and fixed produciton
overheads expenditure variance -Rs.8,000/-(Adverse). Calculate
budgeted output in units for the month, actual hours worked and
number of litres purchased during the month.
Budgeted output - 5,000 units , Actual hours worked - 24,040 hours
, Litres purchased - 160,000 litres

Which of the following transactions should be excluded while

preparing a cost sheet?
Interest on loan , Bad debts , Expenses on criminal law suit

Baum Differential Plan is a combination of Taylor's differential piece

rate system and Halsey system and is also known as ________.
Milwankee plan

Features of double entry accounting system are :-

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

Features of convention of conservation are . . .

Anticipates all future losses and expenses , Ignores all future
incomes and profits, unless they are actually realised , Applicable
to valuation of current assets

The suspense account has a debit balance of Rs.40,000/-. Select

the transactions which are capable of nullifying this balance.
Conveyance expenses of Rs.25,000/- were posted on the wrong
side of the account. , Purchased computer worth Rs.28,000/- was
recorded in the ledger as , The total of the purchase book was cast
short by Rs.44,000/-
From the following select the examples of errors of commission -
Sales recorded in the sales register as Rs.2,020/- instead of
Rs.2,200/- , Received cash from Sham, credited to Ram's account ,
Paid transport charges, credited to transport charges account

Purchase day book for the month of April was under cast by
Rs.1000/- which account should be credited ? ________
Suspense Account

Revenues are more than the differential costs, then the proposed
project should be ________
accepted

Cost of fringe benefits provided to a factory worker should be

charged to:
Factory overheads

Indirect material indicates that material which can be identified

with the individual cost centre
False

The process of recording the business transactions in a defined set

of records is referred to as ________.
Balance Sheet

Identify the fixed expenses from the following.

Rent and taxes of the factory , Wages paid to indirect workers like
cleaners, helpers,etc. , Salary paid to factory supervisor

The disadvantages of supplementary overhead rates are:

It can be determined only after the end of the accounting period ,
Defeats the basic concept of normal cost , Involves lot of clerical
activity

Judge the sentence in italics according to criteria given below: " It is

difficult to adopt Uniform costing system when a product can be
manufactured by employing more than one method because the
cost of production will vary according to the method used."
The assertion and the reason are both correct

The objectives of Uniform costing system are as follows:

The system which provides an opportunity to the small units to take

advantage of the research work taken by the large scale units of
the same industry is known as ________ system.
Uniform Costing

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

In practical circumstances, control ledgers may be maintained for

the following categories:
Sundry debtors , Sundry creditors , Advance to Staff

Annual maintenance of Rs.28,000/- was paid on 15th June, 2003 for

a period of one year therefrom. Find the amount of prepaid
maitenance expenditure for the year ended 31st March.
Rs.5,833/-

The amount of profit which is retained by the organisation is

transferred to 'Reserves and Surplus' in the balance sheet.
True

Correct Answer
Real account
Nominal account
Proprietor's account
Personal account

While preparing bank reconciliation statement for the month of

September 2004, one should consider the balance as per bank
book as on 1st September, 2004 and the balance as per pass book
as on 30th September, 2004.
False

The main advantages of profit sharing are:

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

These are the preventive costs of labour turnover.

Cost of maintaining good relations with the workers, Cost of
medical services, Cost of welfare facilities

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 earnings for Harry under Halsey Plan.
Rs.28.12

Marginal costing is found to be unsuccessful in the following

situations:-
Impossible to distinguish costs into fixed and variable component. ,
With respect to capital intensive industries where fixed costs are
very large and hence cannot be ignored , With respect to service
industries where employee costs are very large and almost fixed in
nature

Graphically, fixed cost line will be ________ the 'x-axis'.

Parallel to

If the sales forecast is less than the past sales but the top
management insists upon a certain amount of additional profits,
then following steps can be taken to achieve the target profit
Increase the selling price , Reduce cost of sales , Increase the
selling efforts

Preparation of direct material ________ budget is the responsibility

of the Purchase manager.
Purchase

The integrated form of all functional budgets is known as:

Master budget

For the given transaction find the wrong entry that has been passed
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, 2004 the total of the previous month's wages
was debited to 'Manufacturing Wages Account". During the
previous month, a new machine was installed, and the firm's own
employees had spent time thereon; the previous month's wages for
all such employees amounted to
Machinery A/c. . . Dr. Rs.14,100/- To Manufacturing Wages 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/-

Management accounting is concerned with the following activities:

Decision making , Safeguarding assets , Planning and controlling
activities

The overheads of a machine shop X should be apportioned using

which of the following basis?
Machine hours

Which system involves adoption of same costing principles,

practices and procedures by the individual firms of an industry?
Uniform costing

If you are required to enforce uniform costing system in your

industry, how would you proceed?
Collecting data from all units of your industry, Ensuring that the
data collected is complete and correct, Maintaining secrecy of the
data collected
Which of the following aspects are mainly responsible for difficulty
in application of Uniform costing system.
Capital investment , Plant size , Location

If the proprietor has taken away goods worth Rs.5,500/- for

personal use, find its impact on the proprietor's account in the
organisatin.
The capital will decrease by Rs.5,500/-

Accrued income indicates:

Current year's income not received in the current year

The actual loss incurred by a company, due to fire, is the extent of

difference between the cost of goods destroyed and the amount of
claim settled by the insurance company.
True

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

The process of finding the reasons for the difference in the balance
as per bank book and pass book is known as ________.
Reconciliation

Which of the following transactions fall within the definition of the

'standing instruction'
Club membership subscription

The selection of the supplier may depend upon the following

aspects:
Geographical location of the supplier , Price quoted by the supplier ,
Goodwill of the supplier

Calculate inventory turnover ratio from the following: Maximum

stock -7,000 units; minimum stock - 3,000 units and quantity of
material issued during the year - 150,000 units.
30

Re-order quantity may be measured as:

Maximum stock level - re-order level + (minimum usage X
minimum re-order period)

Labour turnover means:

Influx and exit of employees , Quantitative measurement of
instability of working force , Rate of change in the average working
force

Select the non-monetary incentives

Health and safety services , Canteen facility , Loans at reduced rate
of interest

Under the accelerating premium system incentive increases at a

fast rate with the decrease in output.
False

Select the correct formulae for calculating break even point.

Fixed cost / (Selling price per unit - Variable cost per unit), [Fixed
cost / Marginal contribution] X Sales, [Fixed cost / (Fixed cost + Net
Profit)] X Sales

Merits of break even point analysis are as follows:

Useful diagnostic tool. , Used for analysing the risk implication of
alternative actions. , Used to graphically represent complicated
data.

Identify the budgets for which the production manager sould be

held responsible:
Production budget , Production overheads budget , Plant utilisation
budget
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/-.
Rs.9,000/-

Production costs of a factory for the year 2003-04 are as follows:

direct labour cost Rs.100,000/-; direct material cost Rs.150,000/-;
production overheads (fixed) Rs.50,000/- and production overheads
(variable) Rs.80,000/-. The production manager projec
Rs.426,800/-

It is very easy to measure the portion of increased sales which is

due to expenditure incurred for advertisement of the product
False

Correct Answer
Issue of shares
Cash Sales
Cash Budget
Capital Expenditure Budget

Overhead capacity variance is the outcome of:

Shortage of labour , Enforced idle time, e.g.power breakdowns ,
Customer demand being more or less than anticipated
The systematic process of identifying and reporting variance is
known as ________.
Variance analysis

In the scheme of cost-________-profit analysis, an attempt is made

to measure the variations of cost with volume.
volume

A cash payment of Rs. 1,000/- for travelling expenses has been

entered in the books but not debited to travelling A/c. The trial
balance will not agree.
True

Purchases included an amount of Rs. 25,450/- representing

purchase of computer. The rate of depreciation is 10% for
computers. Calculate the net effect of this transaction on the
profitability statement.
Net profit will increase by Rs. 22,905/-

Ram is the owner of Dashrath & Sons. He is entitled to annual

salary of Rs. 8,000/-. Find its impact on profit of the entriprise.
The net profit will decrease by Rs. 8,000/-

Fundamentally, changes in price and changes in sales volume give

rise to sales variances.
True

The factors that influence determination of budget period are:

Type of budget, viz. Sales or capital expenditure budget, General
economic conditions, Trade cycle of business

XYZ Ltd. is selling 50,000 units of a product at Rs.40/- per unit.

Variable cost is Rs.25/- per unit and fixed cost is Rs.200,000/-. The
producer can increase sales volume by 20% by reducing the price
by 10%. Do you recommend reduction in price? What will be profit
if this action is undertaken?
No: Revised profit Rs.460,000/-

Subsidiary books include:

Cash Book, Purchase Register, Sales Register
Management Accounting
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Management Accounting
ist of Attempted Questions and Answers

In India, where public undertakings operate along with the private

sector undertakings, ________ enables a comparative assessment to
be made of the two sectors.
uniform costing

The ________ ledger carries the individual accounts, whereas the

general ledger records the consolidated effect of the individual
transactions.
Control

The handloom industry will have ________ fixed cost and high
variable cost.
Low

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.
Production capacity

________ authorises the production department to issue requistion

for materials.
Bill of material

An adjustment relating to outstanding expenses will ________ the

net profit.
Decrease

Token or disc method is a related to the system of ________.

Time-keeping

Crane expenses should be apportioned on the basis of ________.

Number of hours crane worked in the department

Depreciation is caused by use factor, obsolescence and ________.

Time factor

________account can be defined as the record of all the transactions

pertaining to a person, asset, liability income or expenditure which
have taken place in a specified period.
Ledger

Profit = Contribution per unit X ________.

Margin of safety (units)

Advance received from customers is ________ for the organisation.

A liability

The ________ adjustment is necessary to relfect the cost for the use
of fixed asset during the year.
Depreciation

If the owner brings in personal calculator for office use, ________

account should be credited.
Capital

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

Uniform costing is not a separate method of ________.

cost accounting

Generally all the liabilities will have ________balance.

Credit

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 ________.
Over-absorbed

Copy of a firm's account in the bank's ledger is known as ________.

Bank statement

The column which refers to the page number of the ledger is known
as ________.
Ledger folio

Loss is equal to fixed cost minus ________

Contribution

The variance which measures the difference between what is paid

for a given quantity of materials and what should have been paid
for, is known as ________ variance.
Direct material cost

In practical circumstances, the ________ are referred to as

application of funds.
Assets

The cost-volume-profit analysis basically highlights the effect of

changes in sales volume on the profit of the company, in the
________.
short run
The expenses relating to maintenance and creation of demand for
the product should be included in the ________budget
Selling expenses

If the firm is operating with zero margin of safety, decline of even a

single unit in sales will result in ________.
Loss

The indirect material cost, indirect labour cost and indirect

expenses cost, collectively are termed as ________.
Overhead

If the standard contribution is less than the actual contribution,

then ________ variance arises.
Favourable

If the total manufacturing overhead of a tiles producing factory

amounted to Rs.15 lakhs and the overhead rate was Rs.5/- per
sq.ft, then the production for the period can be stated as ________
sq.ft. tiles.
300000

The system which provides an opportunity to the small units to take

advantage of the research work taken by the large scale units of
the same industry is known as ________ system.
Uniform costing

If the customer is not likely to pay the amount receivable from him,
this amount should to be treated as ________.
Bad debts

Margin of safety indicates ________ of operations.

Profitability

In calculation of total sales margin variance, the ________cost of

sales is deducted from the actual sales revenue.
Standard

Fixed cost is the cost that tend to remain ________ irrespective of

________
constant

The principle of ________ is followed while preparing the financial

statements.
Going concern

The process of attributing proportions of items of costs amongst

const centres is called ________.
Cost apportionment
In India the gas industry and electricity industry, and ________
industry are examples of industries using the uniform costing
system.
fertilizer

Non-trading income is disclosed on the credit side of ________

account.
Profit and loss

In the adjustment entry passed for closing stock, the ________

account should be credited.
Trading

Goods returned to the suppliers from whom it was ________d is

recorded in thePurchasereturn register.
Purchase

The stores department is a ________ department.

Service

The ________ is responsible for material losses while in storage.

Store-keeper

The ________ is a perpetual inventory record.

Bin card

Economical use of labour, materials and facilities can achieved with

the help of ________.
Budgetary control

Carriage charges paid for a new machine purchased if debited to

carriage account would affect the ________
Machinery A/c and carriage A/c

The difference between sales and cost of sales is termed as

________.
Net Profit

________ Accounting assists the management in establishing the

plans to attain the economic objectives and take proper decisions
for the attainment of its objectives.
Management

If the bank pays off the credit card bill, as per the standing
instructions, the overdraft as per bank book will be ________ the
overdraft as per pass book.
Lesser than

If the ordering cost ________s, then the economic order quantity will
Increase.
Increase

The method which deals with ownership rights being given to

workers is known as ________ method of remuneration.
Co-partnership

Cost volume profit analysis focuses attention on the ________ effect

of a particular course of action.
short run

A ________ can be defined as a part of the orgainsation for which

separate budget can be prepared and implemented.
Budget centre

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

Income Tax Act, recognise only one method of depreciation namely

________.
Written down value method

The document which lays down the cost accounting plans and
procedures to be followed by the constituent units is known as
________.
uniform cost manual

Profit volume ratio is also known as ________.

Contribution to sales ratio

A ________ inventory turnover period indicates efficient utilisation of

material.
Low

Dividend received on amount invested in shares is an example of

________.
Non-operating income

________ variance represents the over or under utilisation of pland

and machinery.
Capacity

Under Differential Time Rate method payment is made at Rs. 1.40

per hour when the level of efficiency is between________.
90% to 100%

While preparing trial balance, the balance as per ________ book is

considered as bank balance.
Bank
________ Accounting is the process of analysis and interpretation of
financial data collected with help of financial accounting & cost
accounting
Management

If it is given that the office expenses account includes Rs.10,000/-

for purchase of computer-table, the net profit will ________, after the
necessary adjustment is done.
Increase

The final result disclosed by trading account is the ________profit

earned by the organization.
Gross

The selection of ________ may depend upon the various factors like
characteristics of the business organisation, tax considerations,
statutory requirements etc.
Accounting period

The various contents of a uniform cost manual are organisation,

cost accounting system and ________.
presentation of information

In order to rectify the totaling mistake, wherein the sales return

ledger was undercast by Rs.2,000/-, the suspense account should
be ________ with Rs.2,000/-
credited

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.
Sales margin volume

The treatment of ________ time in cost accounting depends upon the

distinction between normal and abnormal time.
Idle

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

Factory light, telephone expenses are examples of ________

expenses.
Indirect

For successful implementation of uniform costing system, it is very

essential to devise ________, containing recommended cost
accounting plan and procedures.
cost manual

The combination in which different products are sold by a company

is known as ________.
Sales mix

Discount received from the creditor has been entered in the

creditor's account but discount has not been credited; what type of
error is this ________
Omission of posting an amount in the ledger

Interest on capital is an allowable expenditure for parntership firms,

as per the provisions of the ________ .
Income Tax Act, 1961

An amount of Rs.200/- is received from P and is credited to Q. The

rectification entry would affect ________
P's A/c and Q's A/c

A low margin of safety indicates ________ fixed overheads.

higher

Category A items, as per ABC analysis, represent ________ % of the

total number of items in inventory.
less than 10

A complete list of all material required, with quantities, for a

particular job is given in the ________.
Bill of material

The term ________ indicates expenditure incurred on or attributable

to a given thing.
Cost

Entry for dishonour of cheque appears only in the pass book, this
entry should be ________ in the bank book.
Passed

Since the pass book and the bank book record the ________
transactions, the bank balance as per these books should be equal.
Same

Depreciation charged on office furniture on straight line basis is an

example of ________.
Administration overheads
If Rs.15,000/- has been paid to Kargil Relief Fund as the owner's
personal contribution, ________ account should be debited in the
books of accounts of the business.
Drawings

Contribution represents pool of resources available for meeting all

costs other than ________.
Variable costs

The budget that represents the funds investment for expansion,

diversification, etc. is known as ________.
Capital expenditure budget

Under the AB________ analysis, nuts and bolts used as material will
be classified as category C.
C

Marginal costing is also known as ________.

Variable costing

Purchase of national saving certificates by the company from its

profits, should be debited to ________ account.
Investments

The difference between sales and prime cost is known as ________.

Gross Profit

Under-recovery of overheads implies that the profit will be________

to the extent of total under-recovered overheads.
Increased

Furniture account will always have a ________ balance.

Debit

The ________ variance is the difference between the actual variable

overhead incurred and the standard variable overhead charged to
production.
Total variable overhead

________ is an example of intangible asset.

Goodwill

A forecast is mere estimate of what is likely to happen, but ________

is the action plan to be followed.
Budget

Measurement of ________ gives an idea of the degree of mobility of

labour.
Labour turnover

A person in charge of a ________ may be held responsible for its

proper functioning and cost control.
Cost centre

Generally, all real accounts will have a ________ balance.

Debit

Angle formed by the intersection of total cost line and sales line is
called angle of ________.
Incidence

________ authorizes the production department to issue requisition

for materials.
Bill of material

A written order sent to inform the purchasing department of a need

for materials is called a ________.
Purchase requisition note

The ________ is of immense help in guiding the companies to

operate their accounts on uniform basis.
Uniform cost manual

As per the provisions of Section 209 of ________, all the company

form of organization is legally required to follow the mercantile or
accrual system of accounting.
The Companies Act, 1956

The system which combines the benefits of time rate and piece
rate system by providing a minimum time rate payment along with
incentives is known as ________ system.
Gantt task bonus

Dividend received on amount invested in shares is an example of

________.
non-operating income

Large angle of incidence indicates ________ amount of profits.

higher

________is the summary of all the balances in all the accounts listed
in ledger account of an organization at any given point of time.
Trial Balance
Re-order level should be higher than ________ but lesser than
maximum stock level.
Minimum level

Goods returned by Pawan worth Rs.1,000/- is debited to Pawan's

Account. In order to rectify the mistake, which account should be
debited ? ________
Suspense account

Interest receivable is a________ for the organisation.

Current sset

An error of partial omission can be rectified by either debiting or

crediting the ________ account, as the case maybe.
suspense

Factory cost of a product is Rs.335,000/-, if the selling overheads

are charged @25% of factory cost, then the amount of selling
overheads should be Rs.________/-
83750

Creche expenses may be appropriately approtioned on the basis of

________.
Number of female workers

Indirect Cost is termed as ________.

Overhead

In case of seasonal industry, the budget period may be taken as

________.
One season

The process of recording the business transactions in a defined set

of records is referred to as ________.
Balance sheet

The ________ books are preferred when the volume of transactions

is very large.
Subsidiary

If the profit volume ratio is 25%, then the variable cost is equal to
________ of sales value.
0.75

In case of defective material being returned by the stores

department to the vendor, such material should be valued at
the________.
Purchase Price

Contribution represents pool of resources available for meeting all

costs other than ________.
Variable Costs

Overheads chargeable to a product, using direct labour cost basis,

may be calculated by multiplying percentage of direct labour cost
and ________.
Direct labour cost of the product

Education facility to workers and their children, pension,

superannuation fund are examples of ________ incentives.
Non-monetary

The document which lays down the cost accounting plans and
procedures to be followed by the constituent units is known as
________.
Uniform cost manual

________ is the summary of all the balances in all the accounts listed
in ledger account of an organization at any given point of time.
Trial Balance

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.
Semi-variable

Accounts representing expenses will have ________ balance.

Debit

A low margin of safety indicates ________ fixed overheads.

Higher

Uniform costing is not a separate method of ________.

Cost accounting

Baum Differential Plan is a combination of Taylor's differential piece

rate system and Halsey system and is also known as ________.
Milwankee plan

Purchase day book for the month of April was under cast by
Rs.1000/- which account should be credited ? ________
Suspense Account

Revenues are more than the differential costs, then the proposed
project should be ________
accepted

The process of recording the business transactions in a defined set

of records is referred to as ________.
Balance Sheet
The system which provides an opportunity to the small units to take
advantage of the research work taken by the large scale units of
the same industry is known as ________ system.
Uniform Costing

Graphically, fixed cost line will be ________ the 'x-axis'.

Parallel to

Preparation of direct material ________ budget is the responsibility

of the Purchase manager.
Purchase

The process of finding the reasons for the difference in the balance
as per bank book and pass book is known as ________.
Reconciliation

The systematic process of identifying and reporting variance is

known as ________.
Variance analysis

In the scheme of cost-________-profit analysis, an attempt is made

to measure the variations of cost with volume.
volume

Financial Accounting protects the interest of outsiders . it considers

________ transaction and it is a ________ requirement
historical
legal

After material is received from the supplier, quantity actually

received is compared with quantity ________-and ________-if any, are
taken up with the supplier
ordered
variation

Labour Turnover indicates ________ in labour force showing a highly

increasing trend or highly ________ trend
change
decreasing

Under Gannt Task bonus system where the output is ________

payment is made as per minimum time rate, output is ________
payment is made as per time wages plus some increase in wage
rates
below standard
at standard
________ and ________ are non monetary incentives
Safety services
education facility

Semi overheads are neither nor variable in nature.

fixed
variable

Fixed overheads normally arise as a result of policy and are largely

________ in nature at the ________ level of the management
uncontrollable
lower

variable cost is the cost that tend to ________ in direct proportion

with ________
vary
level of activity

and are examples of semi- variable overheads.

Maintenance cost
electricity

Rs.5000 paid as to should be debited to salary

account
Mahesh
salary

Over absorption of overheads may take place due to the reasons

like ________ overheads being less than the ________ overheads
actual
estimated

________ Legal charges and ________ are the accounts which are
shown on the debit side of Profit & Loss Account
Like office rent,
Audit fees

of Trial Balance generally ensures accuracy of the

process of ledger posting .
Talling
arithmetical

To ascertain the ________ of all the transactions recorded in the

ledger account, the account is required to be ________
Net effect
Balanced
The levels indicated on the Bin card enables the ________
department to keep a watch on the balance and replace the
material as soon as it reached at ________ level.
Stores
Re-order level

Generally accounts of the assets will have ________ balance and

liabilities will have ________ balance
debits
credits

Interest on overdraft charged by the bank is ________ to the pass

book and ________ to the cash book
debited
credited

While selecting source of supply ________ epartment may call for

the ________ from the prospective suppliers
purchase
quotation

Administration overheads are ________ in nature and can be

controlled mainly at ________ level of the management
fixed
top

Planning lays down the course of action to be taken in future. In

case budgetary control, it is in the form of the ________ and in case
of ________ costing, it is in the form of the standard cost
budgets
standard

Fixed cost is the cost that tend to remain ________ irrespective of

________
constant
level of activity

The process of Allocation & apportionment can followed to decide

the ________ of overheads to each budget center
Allocation & apportionment
Loading

The ideal standards are generally ________ in nature and the

variances always shows ________ trends
theoretical
unfavorable
Bin card is maintained by ________ department whereas ________ is
maintained by costing department.
Stores
Store ledger

Accounting to the matching principles of accounting, the ________

incurred during an accounting period are required to be match with
________ during that period
cost
revenues

Management Accounting has a very ________ scope and it requires

________ organizational structure
wide
elaborate

Along with financial accounting, ________ and ________ are the other
streams of accounting
Cost Accounting
Management Accounting

The cost accountancy is defined as “ the application of costing

principles,methods and techniques to the ________, art and practice
of ________ ascertainment of the profitability and the presenta
science
cost control

Preventive costs of labour turnover refers to all the costs which

may be incurred by the organisation to keep workers happy and
________ them from ________ the job
discourage
leaving

Replacement costs of labour turnover are and

training
breakages of machine

Break even point is a situation of no no

profit
loss

Bank reconciliation statement is the statement prepared to explain

the ________ as to why the bank balance as per ________ and bank
balance as per bank book does not match
reasons
pass book
In financial statements P& L Accounts relates to a specific duration
whereas ________ is for a given point of time
P& L Accounts
Balance sheet

Bin Card is not an record but only a record.

Accounting
Quantitative

Standard Costing system facilitates and for each

individual or department
Delegation of authority
Fixation of responsibility

If ________ is not provided, the asset may appear in the Balance

Sheet at an ________ amount
depreciation
overstated

Expenditure like general lighting are apportioned considering

________ as a base and expenditure like depreciation are
apportioned considering ________ as a base.
number of light points
value of assets

Under absorption of overheads may take place due to the reasons

like ________ overheads being more than the ________ overheads
actual
estimated

A key factor is defined as the factor which, at a particular point of

time or over a period will ________ the volume of ________
limit
output

The difference between sales and factory/ works cost is termed as

________ the difference between sales and ________ ermed as net
profit
gross profit
cost of sales

A budget manual is a document setting out the ________ of the

persons and ________ required for the budget control.
Responsibilities
Forms and procedures
________ of Trial Balance generally ensures ________ accuracy of the
process of ledger posting.
Talling
arithmetical

Under the repeated distribution method the overheads of ________

department are distributed to other departments on agreed
________
service
percentage

Variable costs are the controllable costs at the ________ level of the
management whereas fixed costs can be controlled only on the
________ level of the management
Lower
Top

________ Legal charges and ________ are the accounts which are
shown on the debit side of Profit & Loss Account
Like office rent
Audit fees
Management Accounting
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Management Accounting
ist of Attempted Questions and Answers

Re-order quantity may be measured as :

Maximum stock level - re-order level + (minimum usage X
minimum re-order period)

Which of the following is a valid classification of the salary paid to

the foreman in charge of the packing department?
Direct product cost

Cool-wind Ltd., manufactures fans, which at sold at Rs.400 pre

The main object of establishing the maximum stock level for

material is :
To ensure that inventory never exceeds this limit

The pass book showed a credit balance of Rs.1,000/-. This balance

was after considering the dividend of Rs.25/- collected by bank and
Rs.5/- charged as collection expenses: these enteries are not made
in the bank book. Find the balance as per bank book.
Rs.1,020/-

Compute fixed overheads calendar variance when fixed overhead

volume variance is Rs.250/- (Favourable); fixed overheads
efficiency variance is Rs.2,150/- (Adverse) and fixed overheads
capacity variance is Rs.800/-(Favourable).
Rs.1,600/- (Favourable)

The cost of fixed asset is Rs. 1,00,000. Rs. 17,000 is charged as

depreciation. Calculate the rate of depreciation.
0.17
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?
Rs.26,545.45

A good purchase system, for materials, prevents production hold-

ups due to:
Lack of material

The store-keeper should initiate action for the purchase of a

material, when it reaches its :
Re-order level

Amit sold Goods to Atul for Rs. 50,000 on cash & Rs. 50,000 on
credit basis & allowed 10% discount on on the spot transaction.
Cash Account debited to Rs. _____________
45000

A proprietor purchase goods worth Rs. 5500 & cash account

credited to Rs. 5000 rectification of the suspense accounted
debited to Rs
500

Amit purchase of Rs. 6710 had been posted to the debit of the
creditors A/C as 6170 rectifying the transaction the creditor A/C is
to be debited amount to Rs
540

This cost indicates increased or decreased cost due to the

increased or decreased volume of operations.
Differential cost

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

Under Merrick Differential Piece rate System of wage payment up

to 83% of efficiency following rate is offered.
Normal

Under the Emerson’s Efficiency Bonus System at following

efficiency level no bonus is payable.
Below 66.66%

In case of industries where capital investment is very high, budget

should be prepared for a
Longer period
Labour cost indicates that labour cost which cannot be identified
with the individual cost centre and is incurred for those employees
who are not engaged in the manufacturing process but only assist i
Remuneration

During one week X makes 200 units. He receives wages for a

guaranted 44hours per week at a rate of Rs. 1.50 per hour.
Estimated time to produce one unit is 15 minutes. Time allowed is
increased by 2
Rs. 83.60

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.
Rs.4500/- ( Favorable )

Cost-sheet may be prepared separately for each

Different Cost Centre

The cost of asset is Rs. 1,10,000, Estimated scrap value

10,000,estimated life 10 yrs. Calculate the depreciation according
to straight line method
10000

For a unit, if opening stock of raw material is 10,000 units, closing

stock of raw material is 5,000 units and consumption is 3,20,000
units, what will be the quantum of raw material to be purchased
3,15,000

Accounts is a
Record of all transaction

Budget is prepared in terms of

Quantity and/or Money

__________ Accounting becomes a source of information for

Management Accounting.
Financial

Standard costs are the targets to be attained by the actual

performance.
Minimum

During one week X makes 200 units. He receives wages for a

guaranted 44hours per week at a rate of Rs. 1.50 per hour.
Estimated time to produce one unit is 15 minutes. Time allowed is
increased by 2
Rs. 75
Purchase Goods of Rs. 7500 on 10% cash discount. The discount
amount is _______
750

The cost of fixed asset is Rs. 1,00,000. Rs. 17,000 deducted as

depreciation. Calculate the percentage
0.17

Goods distributed as free sample amounted to Rs. 10,000. Prepare

Neonboard Rs. 5000. The total amount transfer to advertisement
account is Rs.____
15000

This cost indicates historical cost which is incurred in past.

Sunk cost

If production overheads to be absorbed are Rs. 50000/- and labour

hours worked are 100000 then the labour hour rate will be,
Re. 0.50 per labour hour.

Calculate Efficiency Variance, If actual production is 22,000 units,

Standard production in actual hours is 21,000 units and Standard
rate per unit is Rs.1.5/-.
Rs.1,500/-( Favorable )

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.
Rs.200/- ( Favorable )

Standard may not be necessarily useful for this purpose.

Forecasting

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
20,000 kg

Select the cost that indicates increased or decreased total cost due
to the increased or decreased volume of operations.
Differential cost

A firm employs ten workers at an hourly rate of Rs.20/-. They

worked for 40 hours each and completed the job for which standard
time was 48 hours for each worker. Calculate labour cost for the job
under the Rowan Plan.
Rs.9,333.33
Two competing companies Hero Ltd. and Zero Ltd. sell the same
type of product in the market. Their forecasted profit and loss
accounts for the year ending December 2003 are as follows : Hero
Ltd.: Sales Rs.500,000/-; Variable cost Rs.400,000/-; fixed costs
Rs.50,000/-. Zero Ltd.:Sales Rs.500,000/-; Variable cost
Rs.300,000/-; fixed costs Rs.150,000/-. You are
Hero Ltd.

Judge the sentence in italics according to criteria given below : " It

Loan @ 12% p.a. of Rs.50,000/- was taken on 1st March, 2004. Find
the interest expenditure on 31st March, 2004.
Rs.500/-

The direct material useage budget and direct material purchase

budget differ because of which of the following:
A planned change in the level of material stock

If a predetermined overhead rate is not employed an the volume of

production is increased over the level planned, the cost per unit
would be expected to :
Decrease for fixed costs and remain unchanged for variable costs

It is said that adoption of uniform costing creates customer

confidence because . . .
Prices are reliable

The following figures relate to a company manufacturing a varied

Calculate the machine hour rate. The amount of overhead

pertaining to June, 2004 to be apportioned is Rs.170,010/-. The
machine cannot work without an operator. During the month June,
2004 the machine operator has been paid for 5,670 hours.
Rs.29.98

Flood occurred on 18th March, 2004 and goods worth Rs.28,000/-

were destroyed. The insurance company accepted on 28th March,
2004 the claim for Rs.10,000/- only. The claim amount was
received on 2nd April, 2004. Find the impact of this transaction on
net profit for the year ending 31st March, 2004.
The net profit will decrease by Rs.18,000/-
As a part of the data presented in support of a proposal to icnrease
the production of clock radios, the sales manager of Wittman
Electronics reproted the total additional cost required for the
proposed increased production level. The increase in total cost is
known as :
Incremental cost

Benefits available from revenue expenditure are received in the :

Same year

Creditors as on 31st March, 2004 amount to Rs.15,225/-. Provision

for discount from creditors is to made @ 5%. Find the impact of this
provision on the net profit.
The net profit will increase by Rs.761.25

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
Drawing A/C

Discount received from the Creditors has been entered in the

Creditors A/C but discount amount has not been credited, for
rectifying such error which account to be debited.
Suspense A/C

Under the differential time rate method of wage payment between

90% to 100% of efficiency following rate is offered.
Rs. 1.40 per hour

For a material, if standard quantity is 500 kg and standard price is

Rs.6/- per kg. Find out the Material Cost variance if actual quantity
is 400 kg and actual price is Rs.6/- per kg.
Rs.600/-( favorable )

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.
Rs.900/- ( Adverse )

Calculate Labour Mix Variance, If revised standard hours are

16,500/-, Standard rate is Rs.3/- and Actual hours are 13, 500.
Rs.9,000/- ( favourable )
Calendar Variance arises only if there is abnormal increase or
decrease in
Actual number of working days

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

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 credited
Suspense A/C

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 --
Transfer to balance sheet liability side

If at 50% capacity, total factory overheads are Rs.10,000/- (out of

which 60% are fixed and 40 % are variable) then what will the
amount of total factory overheads at 60% capacity
Rs.10,800/-

__________ Accounting is primarily protects the interest of the

outsiders dealing with the organization various capacities like
investors, suppliers, customers etc.
Financial

If production overheads to be absorbed are Rs. 20000/- and

machine hours worked are 5000 then the machine hour rate will be,
Re. 4 per machine hour.

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

material

This is the process of recording attendance time of the workers.

Time keeping

Journal is popularly known as 'Book of . . .

Original Entry

The cost that indicates historical cost, which is incurred in past, is

known as
Sunk cost

Presentation of information to enable managerial decision making'

is one of the objects of which of the following
Cost Accounting
An advertisement contract was made with an artist which stated
that the remuneration will be 12% of net sales. On an average the
monthly sales were Rs.36,000/-, however the average rate of sales
return was 5% of that month's sale. Find the expenditure on
account of advertisement.
Rs.49,248/-

Goods kept in the godown were destroyed by fire on 18th June,

2004. The cost of such goods was Rs.18,950/-. The goods were not
insured. Find the amont which should be debited to the profitability
statement.
Rs.18,950/-

While preparing the bank reconciliation statement as on 31st

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

A written request sent to a supplier for specified goods at an

agreed upon price is often called as :
Purchase order

Selecting an appropriate method of valuation of inventory is

important because :
It influences the figure of gross profit

Which variance is used to analyse the effect of change in the

quantity of output from a given mix of inputs?
Materials yield variance

The capacity utilised to installed capacity ratio is 80% for the

Judge the given statement according to the given criteria. Goods

being real account, when goods are lost by fire, the goods account
should be debited because the goods are not going out of the
factory.
The statement is correct but the reason is incorrect

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?
The liability side of the balance sheet will increase by Rs.2,000/-
A cheque of Rs.400/- received and deposited into bank on 26th
September, was credited in the pass book but was omitted to be
entered in the bank book: this error will result in :
Difference in the balance as per bank book and as per pass book

P Ltd. produces a product having a monthly demand of 4,000 units.

Which of the following is the most efficient use of the clock card?
To facilitate payment for time spend on the work premises

A firm of boiler-house engineers provides engineering services to

ABC Ltd. has a proposal of utilising a cheaper raw material which

will increase the contribution from Rs.100/- per unit to Rs.125/- per
unit. However, the use of cheaper raw material may result in
decrease in sales by 10% (to 450 units only). Find the impact of
using the cheaper raw material on the amount of contribution ( net
increase or decrease in contribution).
Increase in contribution Rs.6,250/-

The finance manager is responsible for which of the following

budget?
Cash budget

The variance which measures the deviation of the rate actually paid
to labour as from the standard hourly rate is known as:
Labour rate variance

As on 30th September, 2004 the cost of closing stock was

Rs.84,696/- and its market price as on the same day was
Rs.66,584/-. Which value of closing stock should be considered in
the final statement of accounts for the year ended on 30th
September, 2004?
Rs.66,584/-
A' started business with cash Rs. 5,000/-, building Rs. 5,000/-,
furniture Rs. 2,000/-. What is the total amount of capital?
Rs. 12,000

Loss on account of goods lost due to earthquake should be debited

to which account?
Profit and loss account

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?
Maximisation of short-term profit

Which of the following is a correct definition of the key factor?

The factor which limits the activites of the undertaking

The process of recording the costs in a formal and systematic

manner with the intention of preparing statistical data there from a
ascertain the cost, is known as . . .
Cost accounting

Insurance premium of Rs.18,000/- was paid on 15th January, 2004.

Out of debtors totaling to Rs.58,750/-, Rs.5,000/- were expected to

be bad. What should be the amount of debtors that must be
disclosed in the balance sheet?
Rs.53,750/-

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 :
Direct deposit into the bank

The wages paid to a trainee who constructs wooden mould for

concrete laying on a building contract should be defined as :
Direct labour cost
The half-yearly sales of product X are as follows : 1st half -30,000
units; 2nd half - 37,500 units. The production pattern of the
company is based on 80% of the sales of the current six months
and 20% of the budgeted sales of the next six months. Calcu
1st half -31,500 units; 2nd half - 30,000 units

Unearned commission of Rs.5,000/- needs to be recorded in the

books of accounts. Find its correct impact.
The asset side of the balance sheet will increase by Rs.5,000/-

The following data relates to the month of October : Actual variable

Urgent action for replenishment of material stock must be taken

once the inventory reaches its :
Danger level

Which system can assist in fixing a common selling price for the
industry as a whole on the basis of cost of production of all units
belonging to that industry ?
Uniform costing

A lathe machine was purhcased on 31st March, 2004 for

If the quantity of material purchased and quantity used are

different, then which quantity should be used to compute the
material price variance?
Quantity of material purchased

Which of the following is usually prepared daily by employees for

each job worked on?
Job card

It is difficult to apply Uniform costing system for an industry which

has labour intensive companies as well as capital intensive
companies, because :
The cost structure is different

Rs.2,650/- were paid to ABC Ltd. for maintenance of machine;

which account should be debited for this transaction?
Maintenance of machine account
Which of the following operations would normally be carried out
first when preparing a master budget?
Determining the budget period

Mixers Ltd. is engaged in producing a standard mix using 60kg of

KDL Ltd. charges depreciation @ 20% on written down value

The gross profit transferred from the trading account is Rs.98,999/-.

The budget manual must contain statement regarding:

Objectives of the orgainsation

Annual subscription paid by bank to the Chamber of Commerce on

31/03/04, as per the standing instructions, and advise sent
thereafter, may lead to:
Balance as per bank book > Balance as per pass book

Rent of Rs.7,500/- for the month of April was received in March.

Which account should be credited in the books of accounts for
making an entry for receipt of the said amount?
Rent received in advance account

Included in the trial balance is the sales promotion suspense

account with a debit balance of Rs.6,300/-. It is given that this
balance should be written off. Calculate its impact on profit of the
company.
The net profit will decrease by Rs.6,300/-

The cost of idle time incurred by employees that is considered

normal for the production process should be charged to :
Factory overheads

ABC Ltd. is planning to sell 200,000 units of product B. The fixed

costs are Rs.400,000/- and the variable costs are 60% of the selling
price. In order to realize a profit of Rs.100,000/-, the selling price
per unit would have to be :
Rs.6.25

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

Which of the following is a more descriptive term for the type of

cost accounting often called "direct costing"?
Variable costing

Which of the following cost is also termed as Prime Cost ?

Direct cost

The opening balance of cash account is Rs. 25,000/-, cash received

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?
Rs.18,100/-
Quantify the increase in profit on account of following errors : (a)
Repairs of furniture amounting to Rs.2,000/- were debited to
furniture account. Furniture is depreciated @10% p.a. (b) Interest
received on bank deposits was credited to dividend received
account, Rs.1,550/- (c) A television purchased for the managing
director's office for Rs.45,000/- was debited to Interior decoration
expenses.
Rs.43,200/-

An order for goods worth Rs.18,000/- was placed on 25th March,

2004. The goods were received on 1st April, 2004. Calculate the
impact of this transaction on the final statements of accounts for
the year ended 31st March, 2004.
The net profit will not be affected

Sold goods to Amitabh worth Rs. 15,000/- against 15% trade

discount. In this case with what amount should the sales account
be credited?
Rs. 12,750

Mr. Oak, materials manager, spends 40% time in the factory and
the remaining in office. If his annual salary is Rs.500,000/-, what
amount should be charged as office overheads ?
Rs.300,000/-

Find the budget which is inadequate as a cost control technique :

Fixed budget

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.
Rs.3,00,000/-

The reporting method used in the costing system should be based

on the principle of
Management by exception

The wages paid to maintenance department workers who do repair

work principally for production departments but also on the
vehicles in the distribuiton department shoud be charged as:
Service costs

M/s Vivek Enterprises has paid rent relating to the residence of Mr.
Vivek, proprietor of Vivek Enterprises. This payment should be
treated as
Drawings

Net profit for the year before charging commission to the manager,
is Rs.111,775/-. The manager of the company is entitled to
commission @ 8% on net profits after charging commission. Find
the amount of commission due to the manager.
Rs.8,279.63
A company wishes to earn a 15% profit margin on selling price
when quoting for a job. Which of the following is the profit margin
of cost which will achieve the required profit margin ?
0.18

Judge the statement according to the criteria given : ' The

The installation and operation of ___________ accounting requires a

very elaborate organizational structure and large number of rules &
regulations
Management

Which document facilitates estimating material cost of a particular

job, before completion of that job?
Bill of material

Purchases returns of Rs.18,000/- were wrongly transferred to the

sales returns account. Calculate its impact on net profit.
The net profit will not be affected

Creditors as on 31st March, 2004 amount to Rs.15,225/-. Provision

for discount from creditors is to be made @ 5%. Find the impact of
this provision on the net profit.
The net profit will increase by Rs.761.25

The overheads apportioned to three production departments A, B

Basic objective of Uniform Costing is :-

Comparison

The integrated form of all functional budgets is known as :-

Master budget

The capital expenditure budget is important because it involves :-

Huge cash outflow
Which of the following is most likely to be an allocated production
overhead cost to the finishing cost centre?
Salary of the finishing center's manager

In considering a special order situation that will enable a company

to make use of presently idle capacity, which of the following costs
would be irrelevant?
Depreciation

Currently Beta Ltd. is earning a contribution of Rs.80/- per unit and

Relevant costs in decision making are :

Those costs which will arise as a result of the proposed action

Basic objective of Uniform Costing is . . .

comparison

The features of the Halsey Plan are:

The benefit of time saved is divided equally between the employer
and employee
Determine re-order level from the following : Maximum daily
consumption - 200 units; maximum delivery period - 12 days;
average daily consumption - 150 units and average delivery period
- 8 days.
2,400 units

With the help of the given information, find actual fixed overheads
for actual output. Fixed overheads volume variance -Rs.75,000/-
(Favourable); fixed overheads efficiency variance -Rs.95,000/-
(Favourable); fixed overheads calendar variance Rs.20,000/-
(Adverse); fixed voerheads expenditure variance Rs.100,000/-
(Adverse) and standard fixed overheads for actual output
-Rs.575,000/-.
Rs.600,000/-
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?
An entry for Rs.458.34, debiting interest accrued but not due
account should be passed

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

Under the differential time rate method of wage payment up to

80% of efficiency following rate is offered.
Rs. 1.00 per hour

This is an example of semi variable overheads.

electricity

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.
Rs.6750/- ( Adverse )

Opening stock of Rs.1,80,000/-, purchases Rs.8,00,000/-, freight

inward Rs.35,000/-, closing stock Rs.2,00,000/-, direct wages
Rs.2,35,000/-. Calculate the prime cost.
Rs.10,50,000/-

A group of 10 men and 20 women workers were expected to

produce 400 units of a product in an 8 hour day. The standard
hourly rate was fixed at Rs.25/- and Rs.15/-, respectively.Actually, a
group of 15 men and 10 women workers was deployed and paid for
8 hours a day at an hourly rate of Rs.22/- and Rs.18/-, respectively.
Two hours were wasted for the entire group due to power failure
and only 300 units were produced. Calculate labour rate variance.
Rs.120/- (Favourable)

Uniform costing system is useful in the following areas

Classification of cost accounts

Panna Ltd. temporarily has excess production capacity. The idle

plant facilties can be used to manufacture a low-margin item. The
low-margin item should be produced if it can be sold for more than
its:
Variable costs
Material price variance for a job is Rs.800/- (Favourable). Actual
quantity of material used is 100 kg whereasthe standard quantity of
material is 120% of actual quantity. Actual price paid for the
material is 80% of the standard price. Calculate material cost
variance.
Rs.1,600/- (Favourable)

Goods distributed as free sample amounted to Rs. 10,000. Prepare

Neonboard Rs. 5000. The total amount transfer to advertisement
account is Rs.____
15000

Standard may not be necessarily useful for this purpose.

Forecasting

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
20,000 kg

Standard Costs are used as tool for

Cost Control

The material physically received is compared with material ordered

as per the this order
Purchase Order

Sold Goods of Amitabh worth Rs. 15,000 against 15% Trade

discount. The Goods worth appear on account ___________.
12750

This cost indicates increased or decreased cost due to the

increased or decreased volume of operations.
Differential Cost

Margin of safety are the sales beyond

break even point

Labour cost is the cost of __________ paid to employees of the

organization.
Remuneration
For a material, if standard quantity is 400 kg and standard price is
Rs.3.75/- per kg. Find out the Material Usage variance if actual
quantity is 500 kg and actual price is Rs.3.60/- per kg.
Rs.375/-( Adverse )

Selling price per tonne is Rs. 69.50 , variable cost per tonne is Rs.
35.50 and fixed cost is Rs. 18,02000. Find out the BEP in units,
53000

The material issued to production department may be returned

back to the stores because material issued in excess requirement
and
Material issued is defective

A started business with cash 5000, building 5000, furniture 2000,

having depreciation of 10% on building. The total amount of capital
comes to Rs. __________
11500

Company having opening stock of Rs. 1,80,000 purchase Rs.

8,00,000. Freight Inward Rs, 35000 & closing stock Rs. 2,00,000,
having direct wages Rs. 2,35,000. What will be prime cost.
10,50,000

A Co. having factory cost of Rs. 13,10,800. The administrative

overheads are salaries 40,000, rent & rates 6400, Traveling
expenses 12,400, Depreciation 2400, Directors fees 24,000,
General Charges 2
14,59,200

The cost that varies in direct proportion with the level of activity is
called
variable cost

Calendar Variance arises only if there is abnormal increase or

decrease in
Actual number of working days

If during a month anticipated sales are 5,000 kg, opening stock is

1,000 kg and closing stock is 500 kg then what will be the quantity
of production
4,500 kg

Which of the following costs is most likely to have a cost behaviour

pattern described as ..a fixed cost upto an activity level of 1,000
units, with a variable cost there after which decreases from 10
paise
Wagestopayment
8 paise per unitisat
which 2,000
fixed forunits?
a minimum output quantity after
which a bonus per unit is paid which reduces when activity level
exceeds 1,000 units
Standard time required for a job is 10 hours, i.e.10 X 60 = 600 'Bs'.
The worker has actually completed the job in 6 hours, i.e.6 X 60 =
360 'Bs'. Time wage rate is Rs.20/- per hour. Bonus is shared
between the worker and the foreman in the ratio of 3:1. Calculate
total earning of the worker as per Bedeaux Point System.
Rs.180/-

Judge the following narrative according to the criteria given : There

are many organizations whose sales fluctuate with fluctuations in
the weather, viz. ice-cream, sweaters, etc.
The statement and the reason are both incorrect

Mr. Oak, materials manager, spends 40% time in the factory and
the remaining in office. If his annual salary is Rs.500,000/-, what
amount should be charged as office overheads?
Rs.300,000/-

Find the balance as per pass book. Bank Book - 10/10/04 - Paid rent
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 - Issued 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.
Rs.70,000/-

Going concern concept is also known as :-

Continuity concept

Which system provides an opportunity to companies to adopt the

one best method of cost accounting system known to the industry?
Uniform costing

Mixers Ltd. is engaged in producing a standard mix using 60kg of

chemical X and 40 kg of chemical Y. The standard loss of
production is 30%. The standard price of X is Rs.5/- per kg. and of Y
Rs.10/- per kg. The actual mix and yield were as follows : X - 80 kg
@ Rs.4.50 per kg; Y - 70 kg @ Rs.8/- per kg. Actual yield - 115 kg.
Compute material yield variance.
Rs.100/- (Favourable)
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 :-
Direct deposit into the bank

Tom company has sales of Rs.200,000/- with variable expenses of

The bank book shows an overdraft of Rs.117/- as on 31st

The details regarding a food product manufactured by ABC Co. for

the last one week are as follows : Standard cost (for one unit) :
direct material -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/-; direct wages -Rs.16,324/-. Analysis of
variances : direct materials price variance -Rs.585/- (Adverse);
direct material usage variance -Rs.375/- (Favourable); direct wages
rate variance -Rs.636/- (Favourable); direct wages efficiency
variance -Rs.360/- (Adverse); production overheads expenditure
variance -Rs.400/- (Favourable) and production overheads volume
variance -Rs.750/- (Favourable). You are required to calculate the
amount of production overheads incurred.
Rs.19,600/-

Cash budget is extremely useful since it:-

Gives information about estimated cash inflows and outflows

Find the budget which is inadequate as a cost control technique :-

Fixed budget

Cost of fringe benefits provided to a factory worker should be

charged to:
Factory overheads

Judge the sentence in italics according to criteria given below: " It is

Annual maintenance of Rs.28,000/- was paid on 15th June, 2003 for

a period of one year therefrom. Find the amount of prepaid
maitenance expenditure for the year ended 31st March.
Rs.5,833/-
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 earnings for Harry under Halsey Plan.
Rs.28.12

The integrated form of all functional budgets is known as:

Master budget

The overheads of a machine shop X should be apportioned using

which of the following basis?
Machine hours

Which system involves adoption of same costing principles,

practices and procedures by the individual firms of an industry?
Uniform costing

If the proprietor has taken away goods worth Rs.5,500/- for

personal use, find its impact on the proprietor's account in the
organisatin.
The capital will decrease by Rs.5,500/-

Accrued income indicates:

Current year's income not received in the current year

Which of the following transactions fall within the definition of the

'standing instruction'
Club membership subscription

Calculate inventory turnover ratio from the following: Maximum

stock -7,000 units; minimum stock - 3,000 units and quantity of
material issued during the year - 150,000 units.
30

Re-order quantity may be measured as:

Maximum stock level - re-order level + (minimum usage X
minimum re-order period)

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/-.
Rs.9,000/-

Production costs of a factory for the year 2003-04 are as follows:

Purchases included an amount of Rs. 25,450/- representing

purchase of computer. The rate of depreciation is 10% for
computers. Calculate the net effect of this transaction on the
profitability statement.
Net profit will increase by Rs. 22,905/-

Ram is the owner of Dashrath & Sons. He is entitled to annual

salary of Rs. 8,000/-. Find its impact on profit of the entriprise.
The net profit will decrease by Rs. 8,000/-

XYZ Ltd. is selling 50,000 units of a product at Rs.40/- per unit.

True/False

1 Question

Correct Answer
True/False

2 Question

Correct Answer
True/False

3 Question

  Correct Answer
True/False
4   Question
  Correct Answer
True/False

5 Question

Correct Answer
True/False

6 Question

  Correct Answer
True/False
7   Question
  Correct Answer
True/False

8 Question

  Correct Answer
True/False
9   Question
  Correct Answer
True/False
10   Question
  Correct Answer
True/False

11 Question

  Correct Answer
True/False
12
12   Question
  Correct Answer
True/False

13 Question

Correct Answer
True/False

14 Question

  Correct Answer
True/False
15   Question
  Correct Answer
True/False

16 Question

Correct Answer
True/False

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Management Accounting
ist of Attempted Questions and Answers

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

significant manner.
True

Bank reconciliation statement is a systematic presentation of errors

made by the accountant.
False

Accounting refers to the process of analyzing & interpreting the

information already recorded in the books of accounts.
True

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

True

Uniform costing system is a pre-requisite to an inter-firm

comparison of firms belonging to the different industries.
False

Uniform costing system is defined as a system using common

concepts and standard accounting practices by different entities in
different industry to facilitate inter-firm comparison.
True

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

the profit.
True

Uniform Costing simplifies the work of wage boards of fixing

minimum wages and fair wages.
True

Maintenance Department is a service cost centre.

True

Balance sheet indicates the financial status of the business at given

period.
True

Fixed overhead variances may be calculated either on the basis of

units of output or on the basis of standard hours.
True
Profitability statement indicates the amount of assets & liabilities.
False

Real Accounts may also consist the accounts of some intangible

assets like Goodwill Account
True

The rate at which the depreciation is to be calculated are also

specified in the Income Tax Act 1961.
True

A bill of Rs. 500 for old furniture sold to Raj, was entered in the
sales day book
False

Abnormal cost indicates that cost which is normally incurred at a

certain level of output under normal circumstances.
False

Indirect material cost assist the manufacturing process is an

integral part of finish goods.
False

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

If the organisation follows the policy of considering predetermined

overhead absorption rates, it may face the problem of under or
over absorption of overheads if the actual overheads to be
absorbed o
True

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

The analysis of overhead variances is different and the most

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

Flexible budget is an effective tool for evaluation of performance.

True

Material Mix Variance occurs where only one raw material is

required
False

Financial statements are basically in two forms i.e. profitability

statement and balance sheet.
True

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

Financial Accounting discloses the financial performance & financial

statements of the business as a whole.
True

Variable cost + Profit = Sales

False

P&L statement which is a period statement & relates to a certain

period tells about results of operations.
True

Treating capital receipt as revenue income is an example of errors

of commission.
False

For a manufacturing company, dividend received is a non-operating

income.
True

Suspense account is closed automatically after rectification of all

the errors.
True

Manufacturing overheads represents all costs incurred in the

factory including direct material cost and direct labour cost.
False

Balance sheet indicates the expenditure & income from the

business.
False

The sum of indirect material cost, indirect labour cost and indirect
expenses is termed as Overheads.
True

Error of commission refer to calculation errors, totaling errors,

errors in carrying forward etc.
True

direct labour hours worked are 24000 then labour hour rate is Re.
0.2083 labour hour.
True

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

Indirect labour cost indicates that labour cost which cannot be

identified with the individual cost centre.
True

There is no need to open a suspense account if the trial balance

All personal expenses of the owner should be debited to the

organisation's profit and loss account.
False
Depreciation on assets is credited to the trading account.
False

An entry in the stores ledger is required for transfer of material

from one job to another in the same department.
False

The role of the budget committee may be taken as an advisory role

to the Chief Executive.
True

While preparing the labour cost budget, factors such as overtime

working or night shift working may be ignored.
False

The actual hours taken by the labour are compared with the
standard hours allowed for output to find out the labour yield
variance.
True

Profit and loss account indicates the profit earned as on a particular

date.
False

The ideal budget period for a company engaged in generation and

distribution of electricity is one year.
False

The purchase account should be debited when an order is placed

with the supplier of material.
False

Factory overheads consist of all overhead costs incurred from the

stage of procurement of material till the production of finished
goods.
True

If the physical stock is less than the stock as per the stores ledger,
such shortage should be treated as an issue of material.
True

Marginal costing is a technique of cost control.

True

Provision for discount on debtors account should be credited to the

Profit and Loss Account.
False
The problem of multiple key factors can be solved with the help of
techniques like linear programming, operations research, etc.
True

Absorption costing is more suitable for decision making than

marginal costing
False

Bank charges debited in the pass book represent clerical mistake

on the part of the bank employees.
False

Depreciation, interest and property tax continue even when the

operations are discontinued.
True

Any amount of profit earned in the past which is not distributed to

the owner, belongs to the creditors.
False

Overhead absorption is an exercise by which overhead is properly

spread over production for the period.
True

Price based on Uniform Costing may be taken to be reliable and

representative of the whole industry.
True

The purchase budget is a forecast of the value of fixed assets

requiring replacements in the budget period.
False

In marginal costing, decisions are guided by profit rather than

provided at a predetermined percentage on the balance of cost of
asset after deduction of the depreciation previously charged.
True

Long term loan borrowed from financial institution comes under the
heading of long term liabilities.
True

Credit note is an intimation send to person dealing with the

Debit Note is an intimation sent to person dealing with the business

that his account is being credited for the purpose indicated therein.
False

Danger level for inventory of materials means the safety stock of

inventory.
False

Amortization of goodwill should be considered while preparing cash

budget.
False

Time rate system is suitable for workers of the maintenance

department.
True

Credit balance in interest account indicates income for the

organization.
True

All personal expenses of the owner should be debited to the

organization's profit and loss account.
False

If excess of cash is estimated in the cash budget, it may be possible

to utilize it to give bonus to the employees.
False

In differential cost analysis, decisions are taken by comparing the

The danger level fixed below maximum level

False

(No. of unit * Rate of depreciation per unit ) this formula is used for
written down value method.
False

The difference between standard cost and actual cost is termed as

Variance.
True

Wage payment system should be properly tied up with quality

control procedures to ensure that the workers are paid only for
good and quality production.
True

If the product is labour intensive, more stress may be necessary on

inventory control procedure.
False

A good wage payment system will not punish the workers for the
matters beyond the control of the workers.
True

Fixed assets do not give the returns during the same period during
which they are paid for
True

Under time rate system a worker is paid on the basis of production

achieved by him.
False

Financial Accounting primarily protects the interests of the

outsiders dealing with organization in various capacities.
True

A contractor’s bill for the extension of premises amounting to Rs.

2750 has been debited to building repair account
False
Dividend received is a Non-operating Income.
True

The ultimate incorporation of all functional budgets takes the form

of budgeted Profit & Loss Account and Balance Sheet.
True

Piece rate system is suitable when quality of goods produced is of

extreme importance.
False

A firm earns profit when contribution is equal to fixed costs under

variable costing.
False

According to the standard costing principles, only adverse variance

must be further investigated.
False

An item of cost that is direct for one business organization may be

indirect for another business organization.
True

Time-keeping facilitates the preparation of payroll.

True

The amount of profit which is retained by the organization is

transferred to 'Reserves and Surplus' in the balance sheet.
True

If the storage cost of inventory increases, then the economic order

quantity also increases.
False

Indirect material indicates that material which can be identified

with the individual cost centre
False

The amount of profit which is retained by the organisation is

transferred to 'Reserves and Surplus' in the balance sheet.
True

While preparing bank reconciliation statement for the month of

September 2004, one should consider the balance as per bank
book as on 1st September, 2004 and the balance as per pass book
as on 30th September, 2004.
False
The actual loss incurred by a company, due to fire, is the extent of
difference between the cost of goods destroyed and the amount of
claim settled by the insurance company.
True

Under the accelerating premium system incentive increases at a

fast rate with the decrease in output.
False

It is very easy to measure the portion of increased sales which is

due to expenditure incurred for advertisement of the product
False

A cash payment of Rs. 1,000/- for travelling expenses has been

entered in the books but not debited to travelling A/c. The trial
balance will not agree.
True

Fundamentally, changes in price and changes in sales volume give

rise to sales variances.
True
Management Accounting
List of Attempted Questions and Answers

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Management Accounting
ist of Attempted Questions and Answers

The components of the selling and distribution cost budget are :

Distribution expenses , Publicity expenditure , Salary of sales-office
workers

Features of money measurement concept are . . .

The various areas in which uniform costing can be adopted are . .

Valuation of inventories , Charging of depreciation , Apportionment
of overheads

Special aspects of co-partnership include:

Workers are granted ownership rights , Indirect monetary
remuneration , The morale of the workers is increased

Pre-requisites of Uniform Costing are . . .

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

Causes for adverse material price variance are:

Uneconomical size of purchase orders , Failure to avail discounts
allowed by suppliers. , Excessive freight charges

Features of real account are . . .

Mainly deals with items which are having physical , Consists of
some intangible assets , examples include - Lane, Building, Vehicles

Select the correct statements. Ram's account…….Dr. Rs.10,000 To

Bank account Rs.10,000
Ram is a creditor , Rs.10,000/- has been paid to Ram , The payment
is made by cheque
Identify the causes due to which the cost of labour may be high:
Excess staffing , Lack of experienced and efficient personnel , High
labour turnover

Identify the items which are correctly classified.

Carriage inward - Factory overheads , Carriage outward - Selling
and distribution overheads , Sales research expenses -Selling and
distribution overheads

Cash and---------------are the two systems of accounting.

Mercantile

P/L A/C debit side includes

salary , discount allowed , postage & telegram

Trading a/c credit side includes

sales , goods lost by fire , closing stock

Indirect Expenses includes

Rent , Telephone expenses , Insurance

Under stocking may have following consequences

Payment for idle time to workers , Production hold ups resulting
into disturbed delivery schedule , Eleventh hour purchase

Goods received note or goods received report is prepared in

following copies
One copy to Purchase department , One copy to Accounts
department , One copy to Costing department

Valuation of material uses the following methods

FIFO and LIFO , Average price method , Market price

Limitations of marginal costing are

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.

Budgetory Control deals with

Establishment of budgets , Comparison of budgeted results with
actuals , Computation of variance.

Current standards includes

Expected standards , Normal standards , Ideal standards

Office & Administration overhead includes

Salary , Rent & Taxes , Stationary & postage
In fixed overhead variance, the volume variance is further analyzed
as
Variance Efficiency Variance , Capacity Variance , Calendar
Variance

Standard Costing may not be useful in

Small concerns , Industries having non-standardized products ,
Contract jobs

Limitations of Management Accounting includes-------------------

Its wide scope , Possibility of intuitive decision , Requires elaborate
organizational structure

Business Entity Concept ______________.

Business is separated from the owner. , The accounting process
carried out for the business , Separate legal entity

Double Entry Accounting System__________________

Every business transactions have two elements , When business
receives something, it has to pay something , Every debit has a
corresponding credit
When bank balance as per bank book is considered then following
to be added.
cheques issued but not presented , direct deposit by customer ,
wrong credits given by bank

Manufacturing process involves study of

Designing the product , The quantity and quality , Material used

LAST IN FIRST OUT (LIFO)

The Bin card and stores ledges do not match due to the following
reasons:
Arithmetical errors in calculating , Non- posting a certain
document , Posting a wrong Bin card

In Cash budget , Non operating cash inflow includes

Receipt of loan/borrowings , Issue of shares , Sale of fixed assets

In Cash budget , Non-Operating cash outflow includesVarious kinds

of over heads
Loan instalments , Taxes , Purchase of fixed assets.

The features of multiplicity of key factors are as follows :

More than one key factors , Refers to a complex situation , Can be
resolved by using linear programming technique
Identify the budgets for which the production manager sould be
held responsible :
Production budget , Production overheads budget , Plant utilisation
budget
The data for XYZ Ltd. is as follows : Fixed assets Rs.60,000/-; total
cost Rs.105,000/-; working capital is equal to 25% of the sales
value. The company expects 25% return on capital employed.
Capital employed is equal to fixed assets plus working capital.
Select the correct answers:
Sales Rs.128,000/- , Return on capital employed , Working capital
Rs.32,000/-

Features of material usage variance are :

Measures the difference between the quantity of materials actually
used and that should have been used. , Considers standard price X
actual quantity , Considers standard price X standard quantity

Features of Sunk cost are . . .

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

Features of purchase requisition slip are :

Raised when the stock of a raw material has fallen to the re-order
level. , Indicates the type, quantity and quality of material
required , The information about the price of material is excluded

Features of convention of consistency are . . .

Following are the examples of service cost centre

Stores department , Transport department , Accounting department

The different purposes served by standard costing technique are :

Cost control , Cost awareness , Performance appraisal

A materials requisition form normally contains the following

aspects:
Quantity requisitioned , Per unit material cost , Job number

While preparing sales budget the following factors must be

considered :
The number and types of products sold by the organisation ,
Whether the organisation's market share is increasing or
decreasing? , Details of seasonal fluctuations in sales

Techniques of management accounting include:

Marginal costing , Budgetary control , Standard costing
Which of the following aspects are mainly responsible for difficulty
in application of Uniform costing system.
Capital investment , Plant size , Location

Management Accounting is…

Designed particularly for internal use , Helpful in estimating the
future along with past period , Useful in furnishing the necessary
information to the management

The selection of the supplier may depend upon the following

aspects:
Geographical location of the supplier , Price quoted by the supplier ,
Goodwill of the supplier

When bank balance as per bank book is considered for preparing

bank reconciliation statement, then following items need to be
added :
Cheques issued but not presented , Direct deposit made by
customer , Wrong credits given by bank

If you are required to enforce uniform costing system in your

industry, how would you proceed ?
Collecting data from all units of your industry , Ensuring that the
data collected is complete and correct , Maintaining secrecy of the
data collected

Labour efficiency variance Rs.1,000/- (favourable); labour mix

Financial Accounting is …
Designed to supply information to internal/ external users ,
Referred as 'Historical' form of accounting , Concerned with
financial factors

The net profit before certain adjustments was Rs.95,040/-. After

Accounting period Concept________________

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

Profit & Loss A/C credit side has

Gross profit , Commission received , Interested received

When bank balance as per pass book is considered then following

to be deducted.
cheques issued but not presented , direct deposit by customer ,
wrong credits given by bank

In EOQ, to express carrying cost as a percentage of the unit cost of

purchases this is used in the formula-----------
i

The selection of the base on which overheads should be

apportioned depend on the following principles.
service or use basis , survey basis , ability to pay basis

The following factors affects the budgeted advertisement cost

Percentage of profits , Availability of funds , Competitors policy

Uncontrollable variances are

Strike , Change in customers demand , Devaluation of currency

Material Price Variance may occur due to

Change in price of material , Failure to take discounts , Weak
purchase organization

These are the features of fixed overheads

total cost remains the same , per unit cost may vary , not
dependent on volume of output

FIFO method
The price of the earliest available lot is considered first , If the lot is
exhausted, the price of the next available lot is considered , It is
used for issue of material

These are the methods of measuring labour turnover.

Replacement Method , Separation Method , Flux Method

From the following data, workout the EOQ annual demand. 5000
units, ordering cost Rs. 60 per unit, price per unit Rs. 100, inventory
carrying cost15% on average inventory
300

Wage rate standards takes into consideration the following factors

The system of wage payments , System for bonus payment ,
Grades of workers required

Locate the steps involved in rectifying the errors in the books of

accounts
Find the wrong entry passed , Find the correct entry to be passed ,
Find the entry that will resolve the mistake in the books

The objects of cost accountancy are . .

To ascertain cost and profitability , Cost Control , Presentation of
Information

Examples of indirect material are

Consumable stores , Glue used in book binding , Nails used in
packing boxes

The disadvantages of time rate system are :

Ignores the efficiency of workers , Higher labour cost , Lack of
motivation to increase productivity

Select the advantages of standard cost system.

Provides reliable basis for budgeting , Facilitates delegation of
authority , Promotes economy and efficiency

The objectives of cost accounting are :

Cost control , Ascertain ment of cost of each product , Assist in
managerial decision-making

From the following, select intangible assets:

Goodwill , Patents , Trade Marks

Items credited to Profit & Loss Account are…

Gross profit , Commission received , Interested received
Inventory holding cost comprises of :
Cost of insurance , Rent of store house , Salary of store keeper

The causes of idle time can be analysed as -

Administrative causes , Productive causes , Economic causes

Marginal costing is useful in the following areas :

Plant shut down decisions , Make or buy decisions , Profit planning

Which of the following budgets may be termed as a long term

budget?
Capital expenditure budget , Research and Development
expenditure budget , Budget of a transportation company

Marginal costing technique is useful in taking decisions relating to

which of the following courses of action?
Decision to drop a product line , Decision to accept a special offer
at price lower than the normal selling price , Decision regarding
temporary shut-downs
Select the items which may be classified as selling and distribution
overheads.
Delivery van expenses , Rent of finished goods warehouse , Sales
research expenses

Identify the variable expenses.

Repairs of plant when it is undertaken by an outside agency ,
Carriage inward by hired carriers , Wages paid to casual workers

The factors which influence the selection of the method for

absorption of overheads are:
Type of industry , Nature of products , Manufacturing process

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

Opening entries , Closing entries , Rectification entries

Which of the following transactions should be excluded while

preparing a cost sheet ?
Interest on loan , Bad debts , Expenses on criminal law suit

Features of Taylor's differential piece rate system are as follows :

Minima clerical work is involved in calculating the wages , Helps in
building up an efficient labour force , Strong incentive to efficient
and ambitious workers.

State the features of these transactions : (i) Commission paid

Select the steps to be followed while preparing bank reconciliation

statement.
Compare the transactions in the bank book and the pass book ,
Check the totals and the balancing of both the books , Confirm that
the opening balances of both the books are tallying

The objectives of Uniform costing system are as follows :

Features of convention of materiality are . . .

transactions having material impact on profitability should be
considered , Insignificant transactions will be ignored

Select the appropriate rectification entries for the following

Locate the error and its features in the following -

Compensating errors , Trial balance will not be affected , Trial
balance will be affected

The principal functions of the cost accounting department are :

Classifying labour cost according to jobs, processes, etc. ,
Preparation of different reports based on direct, indirect labour
cost, etc. , To focus on areas where labour cost may be reduced.

Items debited to Profit & Loss Account are…

Salary , Discount allowed , Postage & telegram

Uniform costing system can be successfully implemented in any

industry only when :
Information is freely supplied by all the units , Well organised sector
is ready to share the technological improvements , Information
furnished by the units is complete and correct
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.
Loss of trained personnel , Loss of regular customers , Expenditure
required to restart the factory

The key factor determines the :

Level of activity , Capacity utilization , Level of sales

Select the examples of functional budgets:

Sales budget , Production budget , Research and development
budget
Select the items which may be classified as administration
overheads.
Depreciation on office furniture , Director's remuneration ,
Telephone expenses

These are the replacement costs of labour turnover.

Inefficiency of new workers , Cost of selection and placement ,
Increased spoilage and defectives

Financial Accounting ______________

Designed to supply information for internal/ external uses. , Deals
with the transaction during specific period. , It is compulsory

Cost Accounting ______________.

Concerned with specific activities. , Classified according to their
nature. , It deals with both i.e. past & present.

Features of double entry accounting system are . . .

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

Features of a cost sheet are as follows

Indicates the total cost of production during a given period ,
Indicates the unit cost of production during a given period , Helps
the management in fixing the selling price to be quoted for the

Uniform Costing Methods may be advantageously applied to . . .

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

Purchased goods worth Rs.6,450/- on 10th March, 2004. However

the goods were delivered directly to the plant situated at Nagar and
hence this transaction was not recorded in the purchase book,
which is maintained at the corporate office. Analyse the impact of
this transaction.
The gross profit will increase by Rs.6,450/-
In which of the following situations, the flexible budget should be
preferred?
Sales are too difficult to predict , Supply level of input cannot be
predicted , Varying levels of production activity

The advantages of Halsey plan are :

Bonus goes on increasing with increase in time saved. , Provides
more incentive to speed up production , Guaranteed time rate
payment is made

Which of the formulae can be used to calculate profit volume ratio :

Change in contribution / Change in sales , 1 - (Change in variable
cost / Change in sales) , (Fixed cost + Profit) / Sales

Following errors affect the trial balance

Wrong totaling of subsidiary books , Posting on the wrong side of an
account , Omission of posting an account in the ledger

Accounting is the art where transactions are …

Summarized , Classified , Recorded

The factors to be considered while preparing the direct materials

budget are :
Adequacy of material storing space , Availability of funds , Material
in stores but reserved for specific purposes

Identify the steps involved in selecting the optimum product mix,

Contents of Uniform Cost Manual are

Organization , Cost Accounting system , Presentation of information

The process of accounting has three streams of accounting

---------------,--------and ----------------------.
Financial Accounting , Cost Accounting , Management Accounting

Marginal costing is found to be unsuccessful in the following

Labour efficiency variance arises due to:

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

The organization chart shows the following aspects :

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

The main advantages of profit sharing are :

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

Which of the following is likely to be a contributory factor to the

Management accounting is concerned with the following activities :

Decision making , Safeguarding assets , Planning and controlling
activities
Select the accounts to be disclosed on the liability side of the
Balance sheet.
Loan , Outstanding expenses , Creditors

Features of convention of conservation are :-

Applicable to valuation of current assets , Anticipates all future
losses and expenses , Ignores all future incomes and profits, unless
they are actually realized

Labour turnover means :-

Features of convention of materiality are :-

Transactions having material impact on profitability should be
considered , Insignificant transactions will be ignored

Actual costs determined on the basis of costing records maintained

have following limitations :-
No practical utility from control point of view , No practical utility for
price fixation , Expensive

Select the accounts to be disclosed on the assets side of the

Balance sheet :-
Furniture , Loan to Bank of U.S.A. , Land & building

Management Accounting is :-
Designed particularly for internal use , Helpful in estimating the
future along with past period , Useful in furnishing the necessary
information to the management

The disadvantages of supplementary overhead rates are:-

It can be determined only after the end of the accounting period ,
Defeats the basic concept of normal cost , Involves lot of clerical
activity
Essentials for effective implementation of budgetary control system
are
Commitment of top management , Clearly defined objectives ,
Continous budget education

Overhead capacity variance is the outcome of:

Shortage of labour , Enforced idle time, e.g.power breakdowns ,
Customer demand being more or less than anticipated

Which of the following information is included in the goods received

note?
Date of receipt of material , Quantity received , Description of
goods

The advantages of written communication are

Accuracy , Can be recorded , Brevity

Business letters can be useful in different ways like

Legal evidence , Permanent information , Recovering dues

Essential parts of business letters would be

Head address , Date , Outward number

The Head address includes

Tel no. , Name of organization

The body of the letter may be divided into

Opening Para , Main communication , Closing paragraph

Examples of salutations would be

Dear sir , Respected Sir

The matter in the memorandum may include

Procedures , Rules , Instructions

Features of Financial Accounting includes-----------------

It is a legal requirement , It protects the interest of outsiders , It
considers historical transactions

Non Operating Expenses includes

Loss on sale of asset , Goodwill , Only a, b

wise classification of overheads takes the form of –

indirect material , indirect labour , indirect expenses

Basic three steps in Standard Costing are

Setting standards , Comparing actuals with standards ,
Measurement of variance

Following factors will have to be considered before preparing

Production Budget in terms of quantity
Production capacity , Co-ordination with Sales forecast ,
Management Policy

The production budget may be prepared in terms of :

Units produced , Production cost , Material cost, labour cost and
overheads

Limitations of Management Accounting includes-------------------

Its wide scope , Possibility of intuitive decision , Requires elaborate
organizational structure

Business Entity Concept ______________.

Business is separated from the owner. , The accounting process
carried out for the business , Separate legal entity

Double Entry Accounting System__________________

Manufacturing process involves study of

Designing the product , The quantity and quality , Material used

LAST IN FIRST OUT (LIFO)

The price of the latest available lot is considered first , If that lot is
exhausted, the price of the 10% prior to that is considered ,
Physical issue of the material may not be made out of the said lot
The Bin card and stores ledges do not match due to the following
reasons:
Arithmetical errors in calculating , Non- posting a certain
document , Posting a wrong Bin card

The causes of idle time can be analysed as

Administrative causes , Productive causes , economic causes

Limitations of marginal costing are

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.

In fixed overhead variance, the volume variance is further analyzed

as
Variance Efficiency Variance , Capacity Variance , Calendar
Variance

In Cash budget , Non operating cash inflow includes

Receipt of loan/borrowings , Issue of shares , Sale of fixed assets

In Cash budget , Non-Operating cash outflow includesVarious kinds

of over heads
Loan instalments , Taxes , Purchase of fixed assets.

The features of multiplicity of key factors are as follows :

More than one key factors , Refers to a complex situation , Can be
resolved by using linear programming technique

Identify the budgets for which the production manager sould be

held responsible :
Production budget , Production overheads budget , Plant utilisation
budget

Features of material usage variance are :

Measures the difference between the quantity of materials actually
used and that should have been used. , Considers standard price X
actual quantity , Considers standard price X standard quantity

Identify the causes due to which the cost of labour may be high:
Excess staffing , Lack of experienced and efficient personnel , High
labour turnover

Features of Sunk cost are . . .

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

Features of purchase requisition slip are :

Raised when the stock of a raw material has fallen to the re-order
level. , Indicates the type, quantity and quality of material
required , The information about the price of material is excluded

Features of convention of consistency are . . .

Following are the examples of service cost centre

Stores department , Transport department , Accounting department

Pre-requisites of Uniform Costing are . . .

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

The objects of cost accountancy are . .

To ascertain cost and profitability , Cost Control , Presentation of
Information

Management Accounting is…

Designed particularly for internal use , Helpful in estimating the
future along with past period , Useful in furnishing the necessary
information to the management

The causes of idle time can be analysed as -

Administrative causes , Productive causes , Economic causes

The components of the selling and distribution cost budget are :

Distribution expenses , Publicity expenditure , Salary of sales-office
workers

Locate the error and its features in the following -

Compensating errors , Trial balance will not be affected , Trial
balance will be affected

Business Entity Concept

Business is separated from the owner. , The accounting process
carried out for the business , Separate legal entity
Following example comes under service cost centre
Store department , Internal Transport department ,
Accounting/Costing department

When bank balance as per pass book is considered then following

to be added.
cheques deposited but not cleared , Interest debited by bank , bank
charges debited by bank

Cash and ____________ are the two systems of accounting.

Mercantile

Important advantages of Uniform Costing can be said to be

It is a useful tool for management control , It avoids cut throat
competition , Weaker units can take advantage of settled systems
of better managed units

Indirect Labour Cost

Wages paid to storekeeper , Salary of works manager , Wages paid
to gatekeeper
Labour Efficiency Standards are decided by considering following
factors
Records of past performance , Time & Motion Study , Trial Runs

In Cash budget Operating cash inflow includes

Cash Sales , Collection from Debtors , Interest/Dividend received

Following are called the element of Cost

Material , Labour , Expenses

Convention of Materiality __________________

Only those transactions will be considered which have material
impact on profitability , Insignificant transaction will be ignored ,
The cost of non-used should not be considered as the item of cost

Cost Accountancy is a science, art and practice of a cost

Accountant.
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.

Money Measurement Concept__________________

P/L A/C debit side includes

salary , discount allowed , postage & telegram
Profit & Loss A/C credit side has
Gross profit , Commission received , Interested received

Following errors do not affect the trial balance

Error of Principle , Error of Omission , Error of Commission

Factory overheads are termed as

Production overheads , Works overheads , Manufacturing
overheads

Selling and distribution overheads includes

Indirect Material such as packing material, samples etc., , Indirect
labour like salaries to sales personnel manager , Indirect expenses
like warehouse charges, advertisement

The aims of perpetual inventory system are as follows

Maintaining Bin cards , Maintaining store ledger , Continuous
verification of physical stock

These are the preventive costs of labour turnover.

cost of maintaining good relations with the workers , Cost of
medical services , cost of welfare facilities

These are the features of variable overheads

vary directly in proportion to volume of output. , per unit cost
remains the same , total overheads may increase or decrease as
per volume of output.

Direct Cost includes

Direct material , Direct labour , Direct expenses

Locate the steps involved in rectifying the errors in the books of

accounts
Find the wrong entry passed , Find the correct entry to be passed ,
Find the entry that will resolve the mistake in the books

Causes for adverse material price variance are:

Uneconomical size of purchase orders , Failure to avail discounts
allowed by suppliers. , Excessive freight charges

The objectives of Uniform costing system are as follows :

These are the methods of measuring labour turnover.

Replacement Method , Separation Method , Flux Method

From the following, select intangible assets:-

Goodwill , Patents , Trade Marks

Pre-requisites of Uniform Costing are :-

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

The net profit before certain adjustments was Rs.95,040/-. After

The objects of cost accountancy are :-

To ascertain cost and profitability , Cost Control , Presentation of
Information

The organization chart shows the following aspects :-

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

The key factor determines the :-

Level of activity , Capacity utilization , Level of sales

Cost control procedure deals with :-

Establishment of plans , Comparison of actual and planed
performance , Computation of variance

State the features of these transactions : (i) Commission paid

Rs.250/- was posted twice to Commission account (ii) Rs.5,000/-
representing goods sold to A, was posted to the credit to
commission received account (iii) Sold machine for Rs.8000/-, was
credited to Sales account.
The debit side of the trial balance will be in excess by Rs.250/- ,
Involves an error of principle , Involves an error of commission
S Ltd. operates a system of standard costing in respect of one of its
products which is manufactured within a single cost centre. For one
unit of 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 price
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 price variance-Rs.8,000/-
(Fabourable); direct material usage variance -Rs.5,000/- (Adverse);
direct labour rate variance -Rs.5,760/-(Adverse); direct labour
efficiency variance -Rs.2,760/- (Favourable) and fixed produciton
overheads expenditure variance -Rs.8,000/-(Adverse). Calculate
budgeted output in units for the month, actual hours worked and
number of litres purchased during the month.
Budgeted output - 5,000 units , Actual hours worked - 24,040 hours
, Litres purchased - 160,000 litres

Which of the following transactions should be excluded while

preparing a cost sheet?
Interest on loan , Bad debts , Expenses on criminal law suit

Features of double entry accounting system are :-

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

Features of convention of conservation are . . .

Anticipates all future losses and expenses , Ignores all future
incomes and profits, unless they are actually realised , Applicable
to valuation of current assets

The suspense account has a debit balance of Rs.40,000/-. Select

From the following select the examples of errors of commission -

Sales recorded in the sales register as Rs.2,020/- instead of
Rs.2,200/- , Received cash from Sham, credited to Ram's account ,
Paid transport charges, credited to transport charges account

Identify the fixed expenses from the following.

Rent and taxes of the factory , Wages paid to indirect workers like
cleaners, helpers,etc. , Salary paid to factory supervisor

The disadvantages of supplementary overhead rates are:

It can be determined only after the end of the accounting period ,
Defeats the basic concept of normal cost , Involves lot of clerical
activity

The objectives of Uniform costing system are as follows:

In practical circumstances, control ledgers may be maintained for

the following categories:
Sundry debtors , Sundry creditors , Advance to Staff

The main advantages of profit sharing are:

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

These are the preventive costs of labour turnover.

Cost of maintaining good relations with the workers, Cost of
medical services, Cost of welfare facilities

Marginal costing is found to be unsuccessful in the following

Management accounting is concerned with the following activities:

Decision making , Safeguarding assets , Planning and controlling
activities

If you are required to enforce uniform costing system in your

industry, how would you proceed?
Collecting data from all units of your industry, Ensuring that the
data collected is complete and correct, Maintaining secrecy of the
data collected

Which of the following aspects are mainly responsible for difficulty

in application of Uniform costing system.
Capital investment , Plant size , Location

The selection of the supplier may depend upon the following

aspects:
Geographical location of the supplier , Price quoted by the supplier ,
Goodwill of the supplier

Labour turnover means:

Influx and exit of employees , Quantitative measurement of
instability of working force , Rate of change in the average working
force

Select the non-monetary incentives

Health and safety services , Canteen facility , Loans at reduced rate
of interest

Select the correct formulae for calculating break even point.

Fixed cost / (Selling price per unit - Variable cost per unit), [Fixed
cost / Marginal contribution] X Sales, [Fixed cost / (Fixed cost + Net
Profit)] X Sales

Merits of break even point analysis are as follows:

Useful diagnostic tool. , Used for analysing the risk implication of
alternative actions. , Used to graphically represent complicated
data.

Identify the budgets for which the production manager sould be

held responsible:
Production budget , Production overheads budget , Plant utilisation
budget

Overhead capacity variance is the outcome of:

Shortage of labour , Enforced idle time, e.g.power breakdowns ,
Customer demand being more or less than anticipated

The factors that influence determination of budget period are:

Type of budget, viz. Sales or capital expenditure budget, General
economic conditions, Trade cycle of business

Subsidiary books include:

Cash Book, Purchase Register, Sales Register
Management Accounting
List of Attempted Questions and Answers

Match The Following

  Question
Dismissal of employee
1
Increased spoilage and defectives
Relationship between supervisor and worker
Transport facilities to employees
Match The Following
  Question
Accounting
2
Audit
Journal
Ledger
Match The Following
  Question
Advantageously applicable in similar
3 industries
Avoids cut throat competition
Spirit of mutual trust
Treatment given to research and
development costs
Match The Following
  Question
Budget
4
Budget committee
Cash budget
Purchase budget
Match The Following
  Question
Cost Centre
5
Cost Control
Differential Cost
Sunk Cost
Match The Following
  Question
Abnormal overheads
6
Administration overheads
Fixed overheads
Indirect Material
Match The Following
  Question
Decrease in selling price will lead to
7
Decrease in variable cost will lead to
Increase in contribution will lead to
Increase in fixed cost will lead to
Match The Following
  Question
Compensating Error
8
Error of commission
Error of Omission
Error of Principle
Match The Following
  Question
Deferred revenue expenditure
9
Deferred revenue expenditure written off
Drawings
Loan
Match The Following
  Question
Contribution - Fixed cost
10
Fixed cost + Variable cost
Total cost - Fixed cost
Total cost + Profit
Match The Following
  Question
Cash Discount
11
Real A/C
Rs.1 Personal A/C
Trade Discount
Match The Following
  Question
Daily Time sheets
12
Time booking department
Time Keeping Department
Time Recording Clock Method
Match The Following
  Question
Administration budget
13
Cash budget
Materials budget
Selling and distribution budget
Match The Following
  Question
Balance Sheet
14
Manufacturing account
Profit and loss account
Trading account
Match The Following
  Question
Factory overheads
15
Non operating income
Selling and distribution overheads
15

Total cost
Match The Following
  Question
Labour hour method of absorption of
overheads
Percentage of direct labour cost methods of
16 absorption of overheads
Percentage of direct material cost methods
of absorption of overheads
Percentage of prime cost methods of
absorption of overheads
Match The Following
  Question
Dividend paid
17
Freight inwards
Freight outwards
Sales
Match The Following
  Question
Purchase budget
18
Budget committee
Cash budget
Budget
Match The Following
  Question
Advantageously applicable in similar
19 industries
Avoids cut throat competition
Spirit of mutual trust
Treatment given to research and
development costs
Match The Following
  Question
Deferred revenue expenditure
20
Deferred revenue expenditure written off
Drawings
Loan
Match The Following
  Question
Dividend paid
21
Freight inwards
Freight outwards
Sales
Match The Following
  Question
Non-Operating income
22
Operating income
Plan for surplus/shortage of cash
Plan of investment in fixed assets
Match The Following

23
  Question
Compensating Error
23
Error of Principle
Error of Omission
Error of commission
Match The Following
  Question
Accounting
24 Balance-sheet
Book-Keeping
Financial statement
Profitability statement
Match The Following
  Question
Bad debts
25 Bills Payable
Bills Receivable
Cash Discount
Trade Discount
Match The Following
  Question
Carrying cost
26 E.O.Q
Inventory control
Ordering cost
Total cost
Match The Following
  Question
Assets
27 Drawing
Journal
Ledger
Liabilities
Match The Following
  Question
In tangible assets
28 Nominal A/C
Personal A/C
Real A/C
Tangible assets
Match The Following
  Question
Daily Time sheets
29 Hand Written method
Time Recording Clock Method
Token or Disc Method
Weekly Time sheets
Match The Following
  Question
Advance
30 Application
Drawing
Outstanding
Prepaid
Match The Following
  Question
Depreciation
31 Discount allowed
Discount received
Interest on capital
Outstanding expenses
Match The Following
  Question
Factory Cost
32 Non-operating Expense
Non-operating Income
Selling & Distribution
Total Cost
Match The Following
  Question
Danger level
33 Fixation of inventory level
Maximum level
Minimum level
Re-order level
Match The Following
  Question
Diemer system
34 Differential Time rate
Payment by Result
Straight Piece rate system
Time rate System
Match The Following
  Question
contribution – fixed cost
35 Fixed cost + variable cost
sales- variable cost
Total cost – fixed cost
Total cost + profit
Match The Following
  Question
Compensating Error
36 Difference in trial balance
Error of commission
36

Error of Omission
Error of Principle
Match The Following
Question
Controllable Cost
37 Differential Cost
Opportunity Cost
Sunk Cost
Uncontrollable Cost
Management Accounting
ist of Attempted Questions and Answers

Correct Answer
Unavoidable cause of labour turnover
Replacement cost of labour turnover
Avoidable cause of labour turnover
Preventive cost of labour turnover

Correct Answer
Process of analyzing & interpretation
Reviewing internal control system
Book of original entry
Maintain all types of accounts

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

Correct Answer
Objective is performance evaluation
Analyses the performance of different budget centres
Assists in predicting shortage of cash
Forecast of quantity and value of materials

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

Correct Answer
Normality wise classification
Function wise classification
Variability wise classification
Element wise classification

Correct Answer
Decrease in contribution
Increase in profit volume ratio
Increase in profits
Increase in break even point
Correct Answer
Wrong classification
Wrong Posting
Transaction is totally omitted
Trial Balance does not get affected

Correct Answer
Real account
Nominal account
Proprietor's account
Personal account

Correct Answer
Profit
Total cost
Variable cost
Sales

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

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

Correct Answer
Salary of CEO
Interest on loan
Carriage inwards
Cost of demand creation

Correct Answer
Land & Building
Work in Progress
Commission received
Closing stock of finished goods

Correct Answer
Repair for factory building
Profit on sale of investment
Advertisement expenses
Cost of finished goods

Correct Answer
Not affected by output related remuneration schemes

Useful when ratio of skilled and unskilled labour remains constant

Useful when prices of materials are fairly stable

Useful when there are no wide fluctuations in processing

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

Correct Answer
Forecast of quantity and value of materials
Analyses the performance of different budget centres
Assists in predicting shortage of cash
Objective is performance evaluation

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

Correct Answer
Real account
Nominal account
Proprietor's account
Personal account

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

Correct Answer
Issue of shares
Cash Sales
Cash Budget
Capital Expenditure Budget
Correct Answer
Wrong classification
Trial Balance does not get affected
Transaction is totally omitted
Wrong Posting

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

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

Correct Answer
Cost of holding the inventory
Economic Ordering Quantity
Maintain the inventory of any kind
Associated with administrative efforts
Ordering cost + carrying cost

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

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

Correct Answer
Time spent by worker on job is recorded
Attendance register
Ticket number & clock card allotted to worker
Token number & identification number allotted to worker
Record of time for all the jobs during the week is made
Correct Answer
Not related in current year
Increase in Assets
Amount of personal use
Amount still payable in current year
Amount paid for next year

Correct Answer
Assets
Debtors
Suppliers
Borrowed capital
Liabilities

Correct Answer
Repair for factory building
Dividend on shares
Profit on sale of shares
Advertisement
Cost of finished goods

Correct Answer
Below minimum level
Initiating proper action for movement of material
The level above which actual stock should not exceed
The level below which actual stock should not reduce
To take the step for procurement of further lots of material

Correct Answer
profit
Total cost
contribution
variable cost
Sales

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

Correct Answer
Increase or Decrease in cost
Historical Cost
Cost can be controlled
Cannot be controlled
Return or yield

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