Wednesday, April 28, 2010

Management Accounting - 12

 

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

 

 

 

 Multiple Choice Multiple Answer

  Question  

The objects of cost accountancy are :-

  Correct Answer  

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

  Your Answer  

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

 

 Multiple Choice Multiple Answer

  Question  

Management accounting is concerned with the following activities :-

  Correct Answer  

Decision making , Safeguarding assets , Planning and controlling activities

  Your Answer  

Decision making , Planning and controlling activities

 

 Multiple Choice Multiple Answer

  Question  

Features of material usage variance are :-

  Correct Answer  

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

  Your Answer  

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

 

 True/False

  Question  

Under the accelerating premium system incentive increases at a fast rate with the decrease in output.

  Correct Answer  

False

  Your Answer  

False

 

 True/False

  Question  

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

  Correct Answer  

True

  Your Answer  

False

 

 Multiple Choice Single Answer

  Question  

An analysis of the time card of a worker on a machine shows that of the total 48 hours, he worked 45 hours (including 4 hours overtime) on production and that 3 hours was idle due to machine break-down. The rate of the worker is rupees ten per hour : but overtime is paid at 50 per cent extra. You are required to calculate the earnings of the worker.

  Correct Answer  

Rs.500/-

  Your Answer  

Rs.500/-

 

 True/False

  Question  

Predetermined rate of absorption of overheads helps in quick preparation of cost estimates and quoting prices.

  Correct Answer  

True

  Your Answer  

True

 

 Select The Blank

  Question  

If overhead absorbed i.e. overheads charged to units during the period is more than the overhead incurred, it is said that the overheads are ________.

  Correct Answer  

Over-absorbed

  Your Answer  

Under-absorbed

 

 Select The Blank

  Question  

A worker is paid a monthly salary of Rs.500/- along with a bonus of 50 paise per unit completed, this type of labour cost may be classified as ________ cost.

  Correct Answer  

Semi-variable

  Your Answer  

Semi-variable

 

 Select The Blank

  Question  

Goods purchased from A for Rs.2,020/- were passed through the sales book. The rectification of this error will result in ________.

  Correct Answer  

Decrease in gross profit by Rs.2,020/-

  Your Answer  

Increase in gross profit by Rs.2,020/-

 

 True/False

  Question  

High time wages means necessarily high cost of production.

  Correct Answer  

False

  Your Answer  

False

 

 Multiple Choice Multiple Answer

  Question  

The management of Dick Ltd. is deciding whether to buy component Y from the supplier, since the purchase cost is less than the manufacturing cost. State the non-financial aspects that must be considered before arriving at a decision :-

  Correct Answer  

Reliability regarding quality of the material supplied by the supplier , Alternative use of labour of engaged in manufacturing component Y , Regularity of material supplies from the supplier

  Your Answer  

Reliability regarding quality of the material supplied by the supplier , Alternative use of labour of engaged in manufacturing component Y , Regularity of material supplies from the supplier

 

 Select The Blank

  Question  

Loans which are borrowed from financial institutions are to be paid off in 8 years, should be disclosed as ________ in the balance sheet.

  Correct Answer  

Long term liabilities

  Your Answer  

Long term liabilities

 

 Select The Blank

  Question  

Interest receivable is a________ for the organization.

  Correct Answer  

Current asset

  Your Answer  

Current asset

 

 True/False

  Question  

Period cost is the cost assigned to the products.

  Correct Answer  

False

  Your Answer  

True

 

 Multiple Choice Single Answer

  Question  

A new computer worth Rs.35,000 was purchased on 18th June, 2003. The company has 10 such computers costing Rs.20,000/- each. The depreciation is charged @ 18% p.a. Find the depreciation on computers to be charged for the year.

  Correct Answer  

Rs.40,953.70

  Your Answer  

Rs.40,953.70

 

 Multiple Choice Single Answer

  Question  

The direct material usage budget and direct material purchase budget differ because of which of the following?

  Correct Answer  

A planned change in the level of material stock

  Your Answer  

The level of efficiency of men or machines

 

 True/False

  Question  

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

  Correct Answer  

True

  Your Answer  

True

 

 Multiple Choice Multiple Answer

  Question  

Pre-requisites of Uniform Costing are :-

  Correct Answer  

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

  Your Answer  

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

 

 Multiple Choice Multiple Answer

  Question  

The principal functions of the cost accounting department are :-

  Correct Answer  

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

  Your Answer  

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

 

 Multiple Choice Multiple Answer

  Question  

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

  Correct Answer  

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

  Your Answer  

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

 

 Multiple Choice Single Answer

  Question  

Select the information to be considered before installing a costing system :-

  Correct Answer  

Labour intensity of the product

  Your Answer  

Number of workers required

 

 Multiple Choice Single Answer

  Question  

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

  Correct Answer  

Rs.200,000/-

  Your Answer  

Rs.231,000/-

 

 Multiple Choice Single Answer

  Question  

As on 31st March, 2004, it was decided to write off Rs.800/- of debtors as bad debts. Also, provision for bad and doubtful debts is to be made @ 5% and for discount on debtors @ 4%. Find the net amount of debtors to be disclosed in the balance sheet, if the total debtors before the aforesaid adjustments is Rs.98,623/-.

  Correct Answer  

Rs.89,214.58

  Your Answer  

Rs.88,285.26

 

 Select The Blank

  Question  

Payment by ________ method lowers the cost of production through their impact on fixed costs.

  Correct Answer  

Results

  Your Answer  

Time

 

 Multiple Choice Multiple Answer

  Question  

Which of the following aspects are mainly responsible for difficulty in application of Uniform costing system?

  Correct Answer  

Capital investment , Plant size , Location

  Your Answer  

Capital investment , Plant size , Location

 

 Select The Blank

  Question  

The most appropriate method for apportionment of overheads of the purchasing and stores department is percentage on ________.

  Correct Answer  

Direct Material

  Your Answer  

Direct Material

 

 Multiple Choice Single Answer

  Question  

Judge the given statement according to the given criteria :- 'Provision for doubtful debts account' and 'provision for discount on debtors account' mean same account can be maintained under two account-heads, since both are related to debtors and indicate a loss to the organization.

  Correct Answer  

The statement is incorrect but the reason is correct

  Your Answer  

The statement and the reason both are incorrect

 

 Multiple Choice Multiple Answer

  Question  

Following errors affect the trial balance :-

  Correct Answer  

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

  Your Answer  

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

 

 Select The Blank

  Question  

If the owner brings in personal calculator for office use, ________ account should be credited.

  Correct Answer  

Capital

  Your Answer  

Cash

 

 Multiple Choice Multiple Answer

  Question  

From the following select the examples of errors of commission :-

  Correct Answer  

Sales recorded in the sales register as Rs.2,020/- instead of Rs.2,200/- , Received cash from Sham, credited to Ram's account , Paid transport charges, credited to transport charges account

  Your Answer  

Sales recorded in the sales register as Rs.2,020/- instead of Rs.2,200/- , Received cash from Sham, credited to Ram's account , Paid transport charges, credited to transport charges account

 

 Select The Blank

  Question  

A ________ can be defined as a part of the organization for which separate budget can be prepared and implemented.

  Correct Answer  

Budget centre

  Your Answer  

Budget centre

 

 Multiple Choice Single Answer

  Question  

Net sales Rs,7,50,000/-, opening stock Rs.1,14,375/-, purchases Rs.483,375/- and closing stock Rs.1,47,750/-. Calculate the Gross Profit.

  Correct Answer  

Rs.3,00,000/-

  Your Answer  

Rs.3,00,000/-

 

 True/False

  Question  

Profitability statement is a period statement & provides information about the results of operations.

  Correct Answer  

True

  Your Answer  

True

 

 Select The Blank

  Question  

The method of overhead apportionment which considers both the material cost as well as the labour cost, is known as ________ method.

  Correct Answer  

Prime cost percentage rate

  Your Answer  

Prime cost percentage rate

 

 Multiple Choice Single Answer

  Question  

Net profit for the year before charging commission to the manager, is Rs.111,775/-. The manager of the company is entitled to commission @ 8% on net profits after charging commission. Find the amount of commission due to the manager.

  Correct Answer  

Rs.8,279.63

  Your Answer  

Rs.8,942/-

 

 Multiple Choice Single Answer

  Question  

A manufacturer is producing alloy for which standard mix is 25% copper and 75% iron. Standard price for copper is Rs.80/- per kg. and for iron Rs.20/- per kg. 20% of input is standard loss. Actual output is 8,000 kg. of alloy using 2,000 kg of copper at Rs.90/- per kg. and 9,000 kg of iron at Rs.15/- per kg. Calculate the standard cost of copper.

  Correct Answer  

Rs.200,000/-

  Your Answer  

Rs.150,000/-

 

 True/False

  Question  

Cheque received from a client on 28th September, 2004 must be entered in the bank book only after it is credited in the pass book.

  Correct Answer  

False

  Your Answer  

False

 

 Multiple Choice Multiple Answer

  Question  

The various areas in which uniform costing can be adopted are :-

  Correct Answer  

Valuation of inventories , Charging of depreciation , Apportionment of overheads

  Your Answer  

Valuation of inventories , Charging of depreciation , Apportionment of overheads

 

 Multiple Choice Single Answer

  Question  

The gross profit for the year 2004 is Rs.184,326/-. The depreciation on furniture for the year is Rs.24,561/-; dividend received amounted to Rs.12,000/- and the director's remuneration worked out to be Rs.95,784/-. Find the net profit for the year 2004.

  Correct Answer  

Rs.75,981/-

  Your Answer  

Rs.75,981/-

 

 True/False

  Question  

The purpose of the profit and loss account is to bring together information which relates to gross profit and the expenses for running the business.

  Correct Answer  

True

  Your Answer  

True

 

 Match The Following

Question

Correct Answer

Your Answer

Ledger

Maintain all types of accounts

Maintain all types of accounts

Audit

Reviewing internal control system

Reviewing internal control system

Accounting

Process of analyzing & interpretation

Process of analyzing & interpretation

Journal

Book of original entry

Book of original entry

 

 Match The Following

Question

Correct Answer

Your Answer

Daily Time sheets

Time spent by worker on job is recorded

Time spent by worker on job is recorded

Time Keeping Department

Recording of workers time

Recording of workers time

Time booking department

Jobwise booking of time.

Jobwise booking of time.

Time Recording Clock Method

Ticket number & clock card allotted to worker

Ticket number & clock card allotted to worker

 

 Multiple Choice Multiple Answer

  Question  

Items credited to Profit & Loss Account are :-

  Correct Answer  

Gross profit , Commission received , Interested received

  Your Answer  

Gross profit , Commission received , Interested received

 

 True/False

  Question  

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

  Correct Answer  

True

  Your Answer  

False

 

 Select The Blank

  Question  

A standard that is never altered, after being established, is known as ________ standard.

  Correct Answer  

Ideal

  Your Answer  

Basic

 

 Multiple Choice Single Answer

  Question  

Rs.2,650/- were paid to ABC Ltd. for maintenance of machine; which account should be debited for this transaction?

  Correct Answer  

Maintenance of machine account

  Your Answer  

ABC Ltd.'s Account

 

 

 

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