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