LIST OF ATTEMPTED QUESTIONS AND ANSWERS True/False Question A business is an activity carried out with the intention of earning

the profit. Correct Answer True Your Answer True True/False Question Balance sheet indicates the financial status of the business at given period. Correct Answer True Your Answer True

True/False Question Accounting refers to the process of analyzing & interpreting the information already recorded in the books of accou Correct Answer True Your Answer False

Multiple Choice Multiple Answer Question Features of convention of conservation are . . . Correct Answer Anticipates all future losses and expenses , Ignores all future incomes and profits, unless they are actually re Your Answer Anticipates all future losses and expenses , Applicable to valuation of current assets , Applicable to valuation of True/False Question Depreciation can be defined as a permanent, continuous and gradual reduction in the book value of a fixed asset. Correct Answer True Your Answer True

Multiple Choice Multiple Answer Question The suspense account has a debit balance of Rs.40,000/-. Select the transactions which are capable of nullifying th Correct Answer Conveyance expenses of Rs.25,000/- were posted on the wrong side of the account. , Purchased computer Your Answer Free samples worth Rs.40,000/- distributed during the year were credited to sales account

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, credite Your Answer Purchases of fixed assets recorded in the purchase register , Received cash from Sham, credited to Ram's acc True/False Question Treating capital receipt as revenue income is an example of errors of commission. Correct Answer False Your Answer False

Select The Blank Question Purchase day book for the month of April was under cast by Rs.1000/- which account should be credited ? ______ Correct Answer Suspense Account Your Answer Purchase Account Multiple Choice Single Answer Question Presentation of information to enable managerial decision making' is one of the objects of which of the following Correct Answer Cost Accounting Your Answer Management Accounting

Multiple Choice Multiple Answer Question Features of Sunk cost are . . . Correct Answer Indicates historical cost , Not relevant in decision making process , Incurred in past Your Answer Indicates historical cost , Not relevant in decision making process , Incurred in past True/False Question Penalty paid for delay in payment to creditors represents uncontrollable cost. Correct Answer False Your Answer False Select The Blank Question Revenues are more than the differential costs, then the proposed project should be ________ Correct Answer accepted Your Answer accepted Multiple Choice Single Answer Question Cost of fringe benefits provided to a factory worker should be charged to : Correct Answer Factory overheads Your Answer Factory overheads True/False Question Indirect material indicates that material which can be identified with the individual cost centre Correct Answer False Your Answer False True/False Question For a manufacturing company, dividend received is a non-operating income. Correct Answer True Your Answer True Select The Blank Question The indirect material cost, indirect labour cost and indirect expenses cost, collectively are termed as ________. Correct Answer Overhead Your Answer Overhead Select The Blank Question The process of recording the business transactions in a defined set of records is referred to as ________. Correct Answer Balance sheet Your Answer Trial Balance

Select The Blank Question ________ Accounting is the process of analysis and interpretation of financial data collected with help of financial a Correct Answer Management Your Answer Management

Multiple Choice Multiple Answer Question Identify the fixed expenses from the following. Correct Answer Rent and taxes of the factory , Wages paid to indirect workers like cleaners, helpers,etc. , Salary paid to fact Your Answer Rent and taxes of the factory , Wages paid to indirect workers like cleaners, helpers,etc. , Salary paid to factory Multiple Choice Multiple Answer Question The disadvantages of supplementary overhead rates are:

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

Multiple Choice Single Answer Question Judge the sentence in italics according to criteria given below : " It is difficult to adopt Uniform costing system when Correct Answer The assertion and the reason are both correct Your Answer The assertion and the reason are both incorrect

Multiple Choice Multiple Answer Question The objectives of Uniform costing system are as follows : Correct Answer To fix a common selling price for the industry as a whole , To compare efficiency of each unit against industr Your Answer To compare efficiency of each unit against industry's overall performance , To compile reliable cost data for inte

True/False Question Uniform costing system is defined as a system using common concepts and standard accounting practices by diffe Correct Answer True Your Answer True

Select The Blank Question The system which provides an opportunity to the small units to take advantage of the research work taken by the la Correct Answer Uniform costing Your Answer Uniform costing Match The Following Question Correct Answer Your Answer Spirit of mutual trust Requisite for uniform costing Requisite for uniform costing Avoids cut throat competition Advantage of uniform costing Advantage of uniform costing Treatment given to research and development costs Fields covered by uniform costing Fields covered by uniform costing Advantageously applicable in similar industries Scope of uniform costing Scope of uniform costing

Multiple Choice Multiple Answer Question In practical circumstances, control ledgers may be maintained for the following categories: Correct Answer Sundry debtors , Sundry creditors , Advance to Staff Your Answer Sundry debtors , Sundry creditors , Advance to Staff Select The Blank Question ________ is an example of intangible asset. Correct Answer Goodwill Your Answer Goodwill

Multiple Choice Single Answer Question Annual maintenance of Rs.28,000/- was paid on 15th June, 2003 for a period of one year therefrom. Find the amou Correct Answer Rs.5,833/Your Answer Rs.5,833/True/False Question Goods sent to the customers on approval basis should be treated as sales.

Correct Answer False Your Answer False

True/False Question The amount of profit which is retained by the organisation is transferred to 'Reserves and Surplus' in the balance sh Correct Answer True Your Answer True True/False Question Any amount of profit earned in the past which is not distributed to the owner, belongs to the creditors. Correct Answer False Your Answer True Match The Following Question Correct Answer Your Answer Deferred revenue expenditure Real account Real account Deferred revenue expenditure written off Nominal account Non-real account Loan Personal account Nominal account Drawings Proprietor's account Proprietor's account

True/False Question While preparing bank reconciliation statement for the month of September 2004, one should consider the balance Correct Answer False Your Answer True Select The Blank Question The ________ is responsible for material losses while in storage. Correct Answer Store-keeper Your Answer Warehouse- keeper

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' ef Your Answer Employees try to increase productivity , Incentives are shared by all the employees , Augments emplyees' effici Multiple Choice Multiple Answer Question These are the preventive costs of labour turnover. Correct Answer Cost of maintaining good relations with the workers , Cost of medical services , Cost of welfare facilities Your Answer Cost of maintaining good relations with the workers , Cost of medical services , Cost of welfare facilities Multiple Choice Single Answer Question Standard time required for a job is 10 hours, i.e.10 X 60 = 600 'Bs'. The worker has actually completed the job in 6 Correct Answer Rs.180/Your Answer Rs.180/-

Multiple Choice Single Answer Question Hourly wage rate is Rs.25/- and the time allowed for a job is 15 hours. Harry completed the job in 12 hours. Calcula

Correct Answer Rs.28.12 Your Answer Rs.28.12

Multiple Choice Multiple Answer Question Marginal costing is found to be unsuccessful in the following situations :Correct Answer Impossible to distinguish costs into fixed and variable component. , With respect to capital intensive industrie Your Answer Impossible to distinguish costs into fixed and variable component. , Existence of key factor which will limit the v Select The Blank Question Profit = Contribution per unit X ________. Correct Answer Margin of safety (units) Your Answer Sales (units) Select The Blank Question Graphically, fixed cost line will be ________ the 'x-axis'. Correct Answer Parallel to Your Answer Perpendicular to

Multiple Choice Single Answer Question Panna Ltd. temporarily has excess production capacity. The idle plant facilties can be used to manufacture a low-m Correct Answer Variable costs Your Answer Fixed costs

Multiple Choice Multiple Answer Question If the sales forecast is less than the past sales but the top management insists upon a certain amount of additional Correct Answer Increase the selling price , Reduce cost of sales , Increase the selling efforts Your Answer Increase the sales volume , Reduce cost of sales , Increase the selling efforts Select The Blank Question Preparation of direct material ________ budget is the responsibility of the Purchase manager. Correct Answer Purchase Your Answer Purchase Multiple Choice Single Answer Question The budget manual must contain statement regarding: Correct Answer Objectives of the orgainsation Your Answer Objectives of the orgainsation Multiple Choice Single Answer Question The integrated form of all functional budgets is known as : Correct Answer Master budget Your Answer Master budget

eady recorded in the books of accounts.

and profits, unless they are actually realised , Applicable to valuation of current assets ent assets , Applicable to valuation of non-current asset

n in the book value of a fixed asset.

ions which are capable of nullifying this balance. 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.4 o sales account

, Received cash from Sham, credited to Ram's account , Paid transport charges, credited to transport charges account sh from Sham, credited to Ram's account , Paid transport charges, credited to transport charges account

account should be credited ? ________

e objects of which of the following

ld be ________

ual cost centre

ectively are termed as ________.

is referred to as ________.

data collected with help of financial accounting & cost accounting

ners, helpers,etc. , Salary paid to factory supervisor s, helpers,etc. , Salary paid to factory supervisor

ts the basic concept of normal cost , Involves lot of clerical activity lot of clerical activity , It can be determined only in the beginning of the accounting period

adopt Uniform costing system when a product can be manufactured by employing more than one method because the cost of production w

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

tandard accounting practices by different entities in different industry to facilitate inter-firm comparison.

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

lds covered by uniform costing

categories:

of one year therefrom. Find the amount of prepaid maitenance expenditure for the year ended 31st March.

serves and Surplus' in the balance sheet.

elongs to the creditors.

04, 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,

employees , Augments emplyees' efficiency mployees , Augments emplyees' efficiency

rvices , Cost of welfare facilities ces , Cost of welfare facilities

r 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 an

ompleted the job in 12 hours. Calculate the effective hourly earnings for Harry under Halsey Plan.

h respect to capital intensive industries where fixed costs are very large and hence cannot be ignored , With respect to service industries whe nce of key factor which will limit the volume of output. , With respect to service industries where employee costs are very large and almost fix

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:

upon a certain amount of additional profits, then following steps can be taken to achieve the target profit

chase manager.

urchase book was cast short by Rs.44,000/-

harges account

od because the cost of production will vary according to the method used."

comparison of costs maximize profits of each unit

er pass book as on 30th September, 2004.

nus 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.

With respect to service industries where employee costs are very large and almost fixed in nature ee costs are very large and almost fixed in nature

d for more than its:

ker as per Bedeaux Point System.

LIST OF ATTEMPTED QUESTIONS AND ANSWERS 1 True/False Question Accounting is an art of recording, classifying & summarizing in a significant manner. Correct Answer True Your Answer False 2 True/False Question Profitability statement indicates the amount of assets & liabilities. Correct Answer False Your Answer False 3 Select The Blank Question Income Tax Act, recognise only one method of depreciation namely ________. Correct Answer Written down value method Your Answer Straight line method

4 Multiple Choice Multiple Answer Question For the given transaction find the wrong entry that has been passed in the books of accounts, the corre Correct Answer Machinery A/c. . . Dr. Rs.14,100/- To Manufacturing Wages A/c Rs.14,100/- , Machinery A/c . . . Your Answer Manufacturing Wages A/c. . . Dr. Rs.14,100/- To Machinery A/c Rs.14,100/- , Machinery A/c. . . Dr. 5 True/False Question Error of commission refer to calculation errors, totaling errors, errors in carrying forward etc. Correct Answer True Your Answer True 6 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 False 7 Select The Blank Question The term ________ indicates expenditure incurred on or attributable to a given thing. Correct Answer Cost Your Answer Expense 8 Select The Blank Question Revenues are more than the differential costs, then the proposed project should be ________ Correct Answer accepted Your Answer accepted

9 Select The Blank Question Factory cost of a product is Rs.335,000/-, if the selling overheads are charged @25% of factory cost, th Correct Answer 83750 Your Answer 83750 10 Select The Blank Question Dividend received on amount invested in shares is an example of ________. Correct Answer non-operating income Your Answer non-operating income

11 Select The Blank Question Information as to the cost and profit / loss associated with the firm's operations is provided to the _____ Correct Answer Management Your Answer Management 12 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 , Safeguarding assets , Planning and controlling activities 13 Select The Blank Question The principle of ________ is followed while preparing the financial statements. Correct Answer Going concern Your Answer Closing concern 14 Multiple Choice Single Answer Question The overheads of a machine shop X should be apportioned using which of the following basis? Correct Answer Machine hours Your Answer Machine hours

Select The Blank Question The various contents of a uniform cost manual are organisation, cost accounting system and ________ Correct Answer presentation of information Your Answer presentation of information

Select The Blank Question In India the gas industry and electricity industry, and ________ industry are examples of industries usin Correct Answer fertilizer Your Answer construction Multiple Choice Single Answer Question Which system involves adoption of same costing principles, practices and procedures by the individual Correct Answer Uniform costing Your Answer Uniform costing

Multiple Choice Multiple Answer Question If you are required to enforce uniform costing system in your industry, how would you proceed ? Correct Answer Collecting data from all units of your industry , Ensuring that the data collected is complete and c Your Answer Collecting data from all units of your industry , Ensuring that the data collected is complete and corr

Multiple Choice Multiple Answer Question Which of the following aspects are mainly responsible for difficulty in application of Uniform costing syst Correct Answer Capital investment , Plant size , Location Your Answer Capital investment , Plant size , Location True/False Question Price based on Uniform Costing may be taken to be reliable and representative of the whole industry. Correct Answer True Your Answer True Multiple Choice Single Answer Question Loss on account of goods lost due to earthquake should be debited to which account?

Correct Answer Profit and loss account Your Answer Trading account

Multiple Choice Single Answer Question If the proprietor has taken away goods worth Rs.5,500/- for personal use, find its impact on the propriet Correct Answer The capital will decrease by Rs.5,500/Your Answer The balance of drawings account will increase by Rs.5,500/Multiple Choice Single Answer Question Accrued income indicates: Correct Answer Current year's income not received in the current year Your Answer Current year's income not received in the current year

True/False Question The actual loss incurred by a company, due to fire, is the extent of difference between the cost of goods Correct Answer True Your Answer True Match The Following Question Correct Answer Your Answer Freight inwards Manufacturing account Balance sheet Sales Trading account Trading account Freight outwards Profit and loss account Manufacturing account Dividend paid Profit and loss appropriation account Profit and loss account

Select The Blank Question The process of finding the reasons for the difference in the balance as per bank book and pass book is Correct Answer Reconciliation Your Answer Reconciliation Multiple Choice Single Answer Question Which of the following transactions fall within the definition of the 'standing instruction' Correct Answer Club membership subscription Your Answer Bank interest Multiple Choice Single Answer Question The pass book showed a credit balance of Rs.1,000/-. This balance was after considering the dividend Correct Answer Rs.1,020/Your Answer Rs.1,030/Multiple Choice Multiple Answer Question The selection of the supplier may depend upon the following aspects: Correct Answer Geographical location of the supplier , Price quoted by the supplier , Goodwill of the supplier Your Answer Geographical location of the supplier , Price quoted by the supplier , Goodwill of the supplier

Multiple Choice Single Answer Question Calculate inventory turnover ratio from the following : Maximum stock -7,000 units; minimum stock - 3,0

Correct Answer 30 Your Answer 15 Multiple Choice Single Answer Question Re-order quantity may be measured as : Correct Answer Maximum stock level - re-order level + (minimum usage X minimum re-order period) Your Answer Re-order level + minimum stock - (maximum usage X maximum re-order period)

Multiple Choice Multiple Answer Question Labour turnover means : Correct Answer Influx and exit of employees , Quantitative measurement of instability of working force , Rate of c Your Answer Influx and exit of employees , Quantitative measurement of instability of working force , Rate of cha 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 , Loans at reduced rate of interest True/False Question The best way to reduce labour cost is to recruit cheap labour. Correct Answer False Your Answer False 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

Multiple Choice Multiple Answer Question Select the correct formulae for calculating break even point. Correct Answer Fixed cost / (Selling price per unit - Variable cost per unit) , [Fixed cost / Marginal contribution] X Your Answer Fixed cost / (Selling price per unit - Variable cost per unit) , [Fixed cost / Marginal contribution] X Sa

Multiple Choice Multiple Answer Question Merits of break even point analysis are as follows: Correct Answer Useful diagnostic tool. , Used for analysing the risk implication of alternative actions. , Used to gr Your Answer Useful diagnostic tool. , Used for analysing the risk implication of alternative actions. , Used to graph True/False Question Profit = Profit volume ratio X Margin of safety Correct Answer True Your Answer True True/False Question Marginal costing is a technique of cost control. Correct Answer True Your Answer False Multiple Choice Multiple Answer Question Identify the budgets for which the production manager sould be held responsible : Correct Answer Production budget , Production overheads budget , Plant utilisation budget Your Answer Materials budget , Production budget , Production overheads budget

Multiple Choice Single Answer Question The composition of selling costs is given below : 1 salaries 4% of sales, travelling expenses 1.5% of sa Correct Answer Rs.9,000/Your Answer Rs.9,000/-

Multiple Choice Single Answer Question Production costs of a factory for the year 2003-04 are as follows: direct labour cost Rs.100,000/-; direct Correct Answer Rs.426,800/Your Answer Rs.380,000/-

True/False Question It is very easy to measure the portion of increased sales which is due to expenditure incurred for advert Correct Answer False Your Answer True Match The Following Question Correct Answer Your Answer Plan of investment in fixed assets Capital Expenditure Budget Capital Expenditure Budget Plan for surplus/shortage of cash Cash Budget Cash Budget Operating income Cash Sales Cash Budget Non-Operating income Issue of shares Issue of shares

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 o Your Answer Use of sub-standard quality of material , Shortage of labour , Enforced idle time, e.g.power breakdo Select The Blank Question The systematic process of identifying and reporting variance is known as ________. Correct Answer Variance analysis Your Answer Standard costing

True/False Question The sales mix variance highlights the fact that the actual mix of sales has been in the same ratio as bud Correct Answer False Your Answer True

gnificant manner.

y ________.

d in the books of accounts, the correct entry that should have been passed and the rectification entry required to rectify the mistake. "On 1st 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/c Rs.14,100/- , 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 in carrying forward etc.

ecorded in the books of account.

le to a given thing.

project should be ________

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

s operations is provided to the ________ by Management accounting.

olling activities ng activities

which of the following basis?

ost accounting system and ________.

ustry are examples of industries using the uniform costing system.

es and procedures by the individual firms of an industry ?

ry, how would you proceed ? the data collected is complete and correct , Maintaining secrecy of the data collected e data collected is complete and correct , Allowing free access to all the units to the collected data

in application of Uniform costing system.

presentative of the whole industry.

d to which account?

al use, find its impact on the proprietor's account in the organisatin.

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

e as per bank book and pass book is known as ________.

tanding instruction'

e was after considering the dividend of Rs.25/- collected by bank and Rs.5/- charged as collection expenses: these enteries are not made in

upplier , Goodwill of the supplier plier , Goodwill of the supplier

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

minimum re-order period) m re-order period)

nstability of working force , Rate of change in the average working force tability of working force , Rate of change in the average working force

ced rate of interest d rate of interest

st rate with the decrease in output.

Fixed cost / Marginal contribution] X Sales , [Fixed cost / (Fixed cost + Net Profit)] X Sales ed cost / Marginal contribution] X Sales , [Fixed cost / Marginal contribution] X Variable cost

on of alternative actions. , Used to graphically represent complicated data. of alternative actions. , Used to graphically represent complicated data.

d responsible : isation budget

ales, 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/-.

irect labour cost Rs.100,000/-; direct material cost Rs.150,000/-; production overheads (fixed) Rs.50,000/- and production overheads (variab

ue to expenditure incurred for advertisement of the product

ns , Customer demand being more or less than anticipated nforced idle time, e.g.power breakdowns

wn as ________.

es has been in the same ratio as budgeted.

quired to rectify the mistake. "On 1st September, 2004 the total of the previous month's wages was debited to 'Manufacturing Wages Accoun Rs.14,100/A/c . . . Dr. Rs.14,100/- To Cash A/c Rs.14,100/-

nses: these enteries are not made in the bank book. Find the balance as per bank book.

ads if the sales are Rs.120,000/-.

0/- and production overheads (variable) Rs.80,000/-. The production manager projec

ted to 'Manufacturing Wages Account". During the previous month, a new machine was installed, and the firm's own employees had spent tim

e firm's own employees had spent time thereon; the previous month's wages for all such employees amounted to