Thursday, April 29, 2010

Management Accounting - 14

 

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

 

 

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 Multiple Choice Multiple Answer

  Question  

Essentials for effective implementation of budgetary control system are

  Correct Answer  

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

  Your Answer  

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

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 Multiple Choice Multiple Answer

  Question  

Features of convention of consistency are . . .

  Correct Answer  

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

  Your Answer  

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

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 True/False

  Question  

The bin card and stores ledger, being independent records, comparison of these two records should be avoided.

  Correct Answer  

False

  Your Answer  

False

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 Match The Following

Question

Correct Answer

Your Answer

Dividend paid

Profit and loss appropriation account

Profit and loss account

Freight inwards

Manufacturing account

Manufacturing account

Sales

Trading account

Capital account

Freight outwards

Profit and loss account

Trading account

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 Select The Blank

  Question  

Large angle of incidence indicates ________ amount of profits.

  Correct Answer  

higher

  Your Answer  

same

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 True/False

  Question  

Error of commission refer to a situation where a transaction is not recorded in the books of account.

  Correct Answer  

False

  Your Answer  

True

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 Multiple Choice Single Answer

  Question  

Relevant costs in decision making are :

  Correct Answer  

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

  Your Answer  

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

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 Select The Blank

  Question  

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

  Correct Answer  

Trial Balance

  Your Answer  

Trial Balance

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 Multiple Choice Multiple Answer

  Question  

Overhead capacity variance is the outcome of:

  Correct Answer  

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

  Your Answer  

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

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 True/False

  Question  

Factory overheads consist of all overhead costs incurred from the stage of procurement of material till the production of finished goods.

  Correct Answer  

True

  Your Answer  

True

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 True/False

  Question  

Bank reconciliation statement must be prepared before the preparation of profit and loss account and balance sheet.

  Correct Answer  

True

  Your Answer  

True

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 Multiple Choice Single Answer

  Question  

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.

  Correct Answer  

The net profit will decrease by Rs.6,300/-

  Your Answer  

The gross profit will increase by Rs.6,300/-

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 Select The Blank

  Question  

In calculation of total sales margin variance, the ________cost of sales is deducted from the actual sales revenue.

  Correct Answer  

Standard

  Your Answer  

Actual

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 Match The Following

Question

Correct Answer

Your Answer

Increase in contribution will lead to

Increase in profits

Increase in profit volume ratio

Increase in fixed cost will lead to

Increase in break even point

Decrease in contribution

Decrease in variable cost will lead to

Increase in profit volume ratio

Increase in profits

Decrease in selling price will lead to

Decrease in contribution

Increase in break even point

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 Multiple Choice Multiple Answer

  Question  

Marginal costing technique is useful in taking decisions relating to which of the following courses of action?

  Correct Answer  

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

  Your Answer  

Decision to drop a product line , Decision to accept a special offer at price lower than the normal selling price , Decision to accept a special offer at price higher than the normal selling price , Decision regarding temporary shut-downs

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 Multiple Choice Single Answer

  Question  

Basic objective of Uniform Costing is . . .

  Correct Answer  

comparison

  Your Answer  

To control cost

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 Select The Blank

  Question  

Re-order level should be higher than ________ but lesser than maximum stock level.

  Correct Answer  

Minimum level

  Your Answer  

Minimum level

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 True/False

  Question  

The variable costs are controllable at the lower lever.

  Correct Answer  

True

  Your Answer  

False

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 Select The Blank

  Question  

Economical use of labour, materials and facilities can achieved with the help of ________.

  Correct Answer  

Budgetary control

  Your Answer  

Budgetary control

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 Select The Blank

  Question  

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 ? ________

  Correct Answer  

Suspense account

  Your Answer  

Personal account

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 True/False

  Question  

The purchase account should be debited when an order is placed with the supplier of material.

  Correct Answer  

False

  Your Answer  

False

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 True/False

  Question  

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

  Correct Answer  

True

  Your Answer  

True

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 Select The Blank

  Question  

Interest receivable is a________ for the organisation.

  Correct Answer  

Current sset

  Your Answer  

Long term asset

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 Multiple Choice Single Answer

  Question  

Purchases returns of Rs.18,000/- were wrongly transferred to the sales returns account. Calculate its impact on net profit.

  Correct Answer  

The net profit will not be affected

  Your Answer  

The net profit will decrease by Rs.18,000/-

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 Multiple Choice Single Answer

  Question  

Amit sold Goods to Atul for Rs. 50,000/- on cash & Rs. 50,000/- on credit basis. Amit allowed 10% discount for on the spot transaction. What is the amount that should be debited to the cash account?

  Correct Answer  

Rs.45,000/-

  Your Answer  

Rs.50,000/-

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 Multiple Choice Single Answer

  Question  

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.

  Correct Answer  

Rs.72,000/-

  Your Answer  

Rs.36,000/-

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 Multiple Choice Single Answer

  Question  

The features of the Halsey Plan are:

  Correct Answer  

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

  Your Answer  

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

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 True/False

  Question  

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

  Correct Answer  

False

  Your Answer  

True

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 Multiple Choice Single Answer

  Question  

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.

  Correct Answer  

2,400 units

  Your Answer  

2,400 units

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 Select The Blank

  Question  

An error of partial omission can be rectified by either debiting or crediting the ________ account, as the case maybe.

  Correct Answer  

suspense

  Your Answer  

adjusted profit and loss

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 Multiple Choice Multiple Answer

  Question  

Select the examples of functional budgets:

  Correct Answer  

Sales budget , Production budget , Research and development budget

  Your Answer  

Sales budget , Production budget , Research and development budget

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 Multiple Choice Single Answer

  Question  

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/-.

  Correct Answer  

Rs.600,000/-

  Your Answer  

Rs.525,000/-

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 Select The Blank

  Question  

Furniture account will always have a ________ balance.

  Correct Answer  

Debit

  Your Answer  

Credit

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 Select The Blank

  Question  

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

  Correct Answer  

Increase

  Your Answer  

Increase

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 Multiple Choice Multiple Answer

  Question  

Which of the following information is included in the goods received note?

  Correct Answer  

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

  Your Answer  

Date of receipt of material , Quantity received , Price of goods , Description of goods

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 Multiple Choice Multiple Answer

  Question  

Select the non-monetary incentives

  Correct Answer  

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

  Your Answer  

Health and safety services , Canteen facility

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 True/False

  Question  

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

  Correct Answer  

True

  Your Answer  

True

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 True/False

  Question  

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

  Correct Answer  

True

  Your Answer  

True

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 Multiple Choice Multiple Answer

  Question  

The operating profit as per cost statement may differ from the profit as per Profit and Loss Account due to existence of

  Correct Answer  

Depreciation on plant and machinery , Interest on loans taken from other , Interest on loans granted to others

  Your Answer  

Depreciation on plant and machinery , Interest on loans taken from other

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 Multiple Choice Multiple Answer

  Question  

The main advantages of profit sharing are :

  Correct Answer  

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

  Your Answer  

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

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 Multiple Choice Multiple Answer

  Question  

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.

  Correct Answer  

Labour cost variance -Rs.700/- (Favourable) , Labour yield variance -Rs.1,260/- , Labour yield variance is favourable

  Your Answer  

Labour cost variance -Rs.700/- (Favourable) , Labour yield variance -Rs.1,260/-

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 True/False

  Question  

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

  Correct Answer  

False

  Your Answer  

False

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 True/False

  Question  

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

  Correct Answer  

True

  Your Answer  

True

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 Multiple Choice Multiple Answer

  Question  

Select the items which may be classified as selling and distribution overheads.

  Correct Answer  

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

  Your Answer  

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

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 Select The Blank

  Question  

In India the gas industry and electricity industry, and ________ industry are examples of industries using the uniform costing system.

  Correct Answer  

fertilizer

  Your Answer  

fertilizer

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 Multiple Choice Single Answer

  Question  

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 . . .

  Correct Answer  

Cost accounting

  Your Answer  

Cost accounting

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 Multiple Choice Single Answer

  Question  

Fixed deposit bearing interest @ 5.50%, for Rs.10,000/- was kept with Bank of India on 1st June, 2003, for a period of one year. The type of the fixed deposit is cumulative, i.e. interest shall be received only on maturity. What treatment should be given in the books of accounts on 31st March, 2004, the year ending date?

  Correct Answer  

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

  Your Answer  

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

 

 

 

 

True/False

  Question  

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

  Correct Answer  

True

  Your Answer  

True

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 True/False

  Question  

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

  Correct Answer  

True

  Your Answer  

True

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 True/False

  Question  

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

  Correct Answer  

True

  Your Answer  

False

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 True/False

  Question  

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

  Correct Answer  

True

  Your Answer  

True

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 True/False

  Question  

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

  Correct Answer  

False

  Your Answer  

False

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 True/False

  Question  

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

  Correct Answer  

True

  Your Answer  

True

 

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