Professional Documents
Culture Documents
Correct Answer Health and safety services , Canteen facility , Loans at reduced
rate of interest
Your Answer Health and safety services , Canteen facility
True/False
Question A business is an activity carried out with the intention of earning
the profit.
Correct 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 accounts.
Correct Answer True
Your Answer False
True/False
Question Accounting is an art of recording, classifying & summarizing in
a significant manner.
Correct Answer True
Your Answer True
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
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
Multiple Choice Multiple Answer
Question Cost Accounting ______________.
Correct Answer Concerned with specific activities. , Classified according to
their nature. , It deals with both i.e. past & present.
Your Answer Concerned with specific activities. , Classified according to
their nature. , It covers whole business
True/False
Question Credit note is an intimation send to person dealing with the
business that his account being debited for the purpose
indicated therein.
Correct Answer False
Your Answer True
True/False
Question Amount invested in purchasing Fixed Asset is a revenue
expenditure.
Correct Answer False
Your Answer False
True/False
Question As per double entry system o accounting , total of all debits
should be equal to all credits.
Correct Answer True
Your Answer True
True/False
Question Fixed cost tends to vary with time rather than with level of
activity.
Correct Answer True
Your Answer True
True/False
Question 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.
Correct Answer False
Your Answer False
True/False
Question For better control, variances of a period may be compare with
the previous period.
Correct Answer True
Your Answer True
True/False
Question Expected standards are more realistic and useful for cost
control.
Correct Answer True
Your Answer True
True/False
Question The difference between standard cost and actual cost is
termed as Variance.
Correct Answer True
Your Answer True
True/False
Question Lack of efficient control on various aspects related to raw-material
increases the material cost component of the finished product.
Correct Answer True
True/False
Question Due to compensating errors the arithmetical accuracy of the trial balance
is affected.
Correct Answer False
Daily Time sheets Time spent by worker on job Time spent by worker on job is
is recorded recorded
Time Keeping Department Recording of workers time Recording of workers time
Time Recording Clock Ticket number & clock card Ticket number & clock card
Method allotted to worker allotted to worker
True/False
Question Purchased goods by paying Rs.35,000/-: In this case, the cash account
should be debited.
Correct Answer True
LIST OF ATTEMPTED QUESTIONS AND ANSWERS MA1
True/False
Question 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/-.
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 False
Financial statement Profitability statement & Balance-sheet Profitability statement & Balance-
sheet
Profitability statement Indicates the amount of profit earned Indicates the amount of profit earned
True/False
Question Uniform costing system is a pre-requisite to an inter-firm comparison of firms
belonging to the different industries.
Correct Answer False
Your Answer False
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
True/False
Question Profitability statement indicates the amount of assets & liabilities.
Correct Answer False
Your Answer False
True/False
Question Accounting is an art of recording, classifying & summarizing in a significant manner.
Correct Answer True
Your Answer True
True/False
Question Balance sheet indicates the expenditure & income from the business.
Correct Answer False
Your Answer False
True/False
Question Interim dividend paid by the company should be debited to the profit and loss
appropriation account.
Correct Answer True
Your Answer True
True/False
Question The process of accounting split into three steams i.e. financial, cost, management
accounting.
Correct Answer True
Your Answer True
Real A/C Debit what comes in, Credit what goes out Debit the receiver, Credit the giver
Trade Discount Not accounted for in the books of Accounts Not accounted for in the books of
Accounts
Cash Discount Accounted for in the books of Accounts Accounted for in the books of Accounts
Rs.1 Personal A/C Debit the receiver, Credit the giver Debit what comes in, Credit what goes out
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 The effect of price reduction is always reduction in the margin of safety and also
reduction in the break even point.
Correct Answer False
Your Answer False
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 False
True/False
Question If excess of cash is estimated in the cash budget, it may be possible to utilise it to
give bonus to the employees.
Correct Answer False
Your Answer False
True/False
Question A fixed budget is useful only when the actual level of activity corresponds to
the budgeted level of activity.
Correct Answer True
Your Answer True
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 , Preliminary expenses written off
Question 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
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
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
Question Under time rate system a worker is paid on the basis of production achieved
by him in a given time.
Correct Answer False
Your Answer False
Question Budgeted profit and loss account and budgeted balance sheet are also known
as ________.
Correct Answer Master budget
Your Answer Master budget
Question Which of the following budgets may be termed as a long term budget?
Correct Answer Capital expenditure budget , Research and Development expenditure budget ,
Budget of a transportation company
Your Answer Capital expenditure budget , Research and Development expenditure budget ,
Budget of a transportation company
Question Piece rate systems are very useful in the following circumstances:
Correct Answer Units of output are measurable , Job is standardised , The flow of work is
regular
Your Answer Work delays are frequent , Job is standardised , The flow of work is regular
Question P&L statement which is a period statement & relates to a certain period tells
about results of operations.
Correct Answer True
Your Answer True
Liabilities All the amount owed by the business All the amount owed by the business
Assets All the properties owned by the business All the properties owned by the business
Question 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.
Correct Answer The statement is correct but the reason is incorrect
Your Answer The statement and the reason both are incorrect
Question Financial accounting may deal with the ascertainment of cost & calculation of
profitability of the individual product.
Correct Answer False
Your Answer False
Question Financial Accounting primarily protects the interests of the outsiders dealing
with organization in various capacities.
Correct Answer True
Your Answer False
Question Purchased 200 shares of Bharat Forge Ltd. for Rs.850/- per share, which
account should be debited?
Correct Answer Investment account - Rs.170,000/-
Your Answer Investment account - Rs.170,000/-
Question The data for two materials P and Q is given below : Material P : opening stock
Rs.80,000/-; closing stock Rs.40,000/- and purchases Rs.500,000/-. Material Q : opening
stock Rs.170,000/-; closing stock Rs.60,000/- and purchases Rs.750,000/-. Identify which of
the given statements relevant to the data given are correct.
Correct Answer Inventory turnover period for material P is 40.5 days , Material P is faster
moving material , Consumption of material Q is Rs.860,000/-
Your Answer Inventory turnover period for material P is 40.5 days , Material Q is faster moving
material , Consumption of material Q is Rs.860,000/-
Question Cost Accounting is concerned with calculation of the profitability and state of
affairs of the organization as a whole.
Correct Answer False
Your Answer True
Question Under Differential Time Rate method payment is made at Rs. 1.40 per hour
when the level of efficiency is between________.
Correct Answer 90% to 100%
Your Answer 90% to 100%
Question The alternative courses of action for an integrated textile mill are:
Correct Answer Sell cloth
Your Answer Sell carpets
Question Direct labour hour rate method of absorption of overheads is suitable where
most of the production is done by using machines.
Correct Answer False
Your Answer True
Question The Ezee Company Ltd. plans to sell 108,000 units of product E in first quarter
of 2004, 120,000 units in second quarter of 2004, 132,000 units in third quarter of 2004,
156,000 units in fourth quarter of 2004and 138,000 units in the first quarter of 20
Correct Answer 153,000 units
Your Answer 136,000 units
Question The sales mix variance highlights the fact that the actual mix of sales has been
in the same ratio as budgeted.
Correct Answer False
Your Answer True
Question The selection of ________ may depend upon the various factors like
characteristics of the business organisation, tax considerations, statutory requirements
etc.
Correct Answer Accounting period
Your Answer Accounting period
Question 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.
Correct Answer Rs.29.98
Your Answer Rs.30/-
Question Uniform Costing simplifies the work of wage boards of fixing minimum wages
and fair wages.
Correct Answer True
Your Answer True
Question If the profit volume ratio is 25%, then the variable cost is equal to ________ of
sales value.
Correct Answer 0.75
Your Answer 0.75
Question Select the cost that indicates increased or decreased total cost due to the
increased or decreased volume of operations.
Correct Answer Differential cost
Your Answer Differential cost
Question 1) Financial statements are basically in two forms i.e. profitability statement
and balance sheet.
Correct Answer True
Your Answer True
Question The variance which measures the deviation of the rate actually paid to labour
as from the standard hourly rate is known as:
Correct Answer Labour rate variance
Your Answer Labour rate variance
Question 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.
Correct Answer Drawings
Your Answer Capital
Question Uniform costing may lead to monopolistic conditions within the industry,
prices may be raised and customers may suffer.
Correct Answer True
Your Answer False
Question The sum of indirect material cost, indirect labour cost and indirect expenses is
termed as factory cost.
Correct Answer False
Your Answer False
True/False
Question Budgetary control is one of the techniques of management accounting.
Correct Answer True
Your Answer True
True/False
Question Management Accounting is a developed stage of Cost Accounting
Correct Answer True
Your Answer False
True/False
Question In the ledger account only credit entries relating to a particular account are posted.
Correct Answer False
Your Answer False
Global Tender Any supplier from the global market can fill the tender Any supplier from the global
market can fill the tender
Single Tender Tender from only one supplier Tender from only one supplier
Limited Tender Tenders from reliable but few suppliers Tenders from reliable but few suppliers
Open Tender Any supplier from the local market can fill the tender Any supplier from the local
market can fill the tender
True/False
Question Fixed overhead variances may be calculated either on the basis of units of output or
on the basis of standard hours.
Correct Answer True
Your Answer True
True/False
Question Financial Accounting discloses the financial performance & Financial status of the
business as a whole
Correct Answer True
Your Answer True
True/False
Question Cost Accounting is a legal requirement.
Correct Answer False
Your Answer False
True/False
Question Cash account can have a credit balance.
Correct Answer False
Your Answer True
True/False
Question Period cost is the cost assigned to the products.
Correct Answer False
Your Answer False
True/False
Question Book keeping is clerical while accounting is managerial
Correct Answer True
Your Answer True
True/False
Question Financial Statements which are generated as a result of the management accounting
report & financial performance of the organization as a whole.
Correct Answer False
Your Answer False
True/False
Question An entry in the stores ledger is required for transfer of material from one job to
another in the same department.
Correct Answer False
Your Answer False
True/False
Question GAIL having monopoly in the CNG (Compressed Natural Gas) market can implement
the Uniform costing system.
Correct Answer False
Your Answer True
True/False
Question Bank reconciliation statement can be prepared on weekly basis.
Correct Answer True
Your Answer True
Select The Blank
Question The ________ ledger carries the individual accounts, whereas the general ledger
records the consolidated effect of the individual transactions.
Correct Answer Control
Your Answer Control
True/False
Question 1) Cost Accounting and Management Accounting are similar to each other in many
respects.
Correct Answer True
Your Answer True
True/False
Question The reports generated by financial accounting are meant for the use by management
for effective decisions.
Correct Answer True
Your Answer False
True/False
Question Cost Accounting may be considered to be a part of management Accounting.
Correct Answer True
Your Answer True
True/False
Question It is said that marginal costs are used primarily in guiding decisions that are
yet to be made.
Correct Answer True
Your Answer True
True/False
Question Uniform Costing simplifies the work of wage boards of fixing minimum wages and fair
wages.
Correct Answer True
Your Answer True
True/False
Question Management Accounting is not at all a legal requirement
Correct Answer True
Your Answer True
Plan of investment in fixed assets Capital Expenditure Budget Capital Expenditure Budget
True/False
Question It is said that marginal costs are used primarily in guiding decisions that are yet to be
made.
Correct Answer True
Your Answer True
True/False
Question The sum of indirect material cost, indirect labour cost and indirect expenses is termed
as Overheads.
Correct Answer True
Your Answer True
True/False
Question The balance sheet has three columns, viz. assets, liabilities and ledger folio.
Correct Answer False
Your Answer False
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 is an art of recording, classifying & summarizing in a significant manner.
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 accounts.
Correct Answer True
Your Answer True
True/False
Question While preparing the labour cost budget, factors such as overtime working or night
shift working may be ignored.
Correct Answer False
Your Answer False
True/False
Question If excess of cash is estimated in the cash budget, it may be possible to utilise it to
give bonus to the employees.
Correct Answer False
Your Answer False
True/False
Question It is very easy to measure the portion of increased sales which is due to expenditure
incurred for advertisement of the product
Correct Answer False
Your Answer True
True/False
Question The role of the budget committee may be taken as an advisory role to the Chief
Executive.
Correct Answer True
Your Answer True
True/False
Question Depreciation under Reducing Balance Method is calculated as (Number of units *
Rate of depreciation per unit)
Correct Answer False
Your Answer False
True/False
Question All cash sales are recorded in the sales register.
Correct Answer False
Your Answer True
Transport facilities to employees Preventive cost of labour turnover Preventive cost of labour
turnover
Relationship between supervisor and worker Avoidable cause of labour turnover Avoidable cause
of labour turnover
Increased spoilage and defectives Replacement cost of labour turnover Replacement cost of
labour turnover
True/False
Question Profitability statement indicates the amount of assets & liabilities.
Correct Answer False
Your Answer False
True/False
Question Balance sheet indicates the expenditure & income from the business.
Correct Answer False
Your Answer True
True/False
Question Uniform costing may lead to monopolistic conditions within the industry, prices may
be raised and customers may suffer.
Correct Answer True
Your Answer True
True/False
Question Indirect material cost is an integral part of finished goods.
Correct Answer False
Your Answer False
True/False
Question Generally speaking income represents wealth increase and business success; higher
the income, lower will be the success of a business.
Correct Answer False
Your Answer False
True/False
Question Cost Accounting is concerned with calculation of the profitability and state of affairs of
the organization as a whole.
Correct Answer False
Your Answer False
True/False
Question 1) Financial statements are basically in two forms i.e. profitability statement and
balance sheet.
Correct Answer True
Your Answer True
True/False
Question P&L statement which is a period statement & relates to a certain period tells about
results of operations.
Correct Answer True
Your Answer True
True/False
Question Management Accounting aims at enabling the management to take the decisions
about the future. It may consider future data as well as non-financial factors.
Correct Answer True
Your Answer True
True/False
Question Financial Accounting primarily protects the interests of the outsiders dealing with
organization in various capacities.
Correct Answer True
Your Answer True
Normal Standards Anticipated to be achieved in future Established for a longer period of time
Basic Standards Established for a longer period of time Once established can never be altered
Current Standards Established for a shorter period of time Established for a shorter period of time
True/False
Question Management Accounting is the process of analysis and interpretation of financial data
collected with help of financial accounting and cost accounting
Correct Answer True
Your Answer True
True/False
Question Trading account is an important account which will be used to analyse how
successful and how efficiently the firm runs its business.
Correct Answer True
Your Answer True
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
Budget committee Analyses the performance of different budget centres Analyses the
performance of different budget centres
Cash budget Assists in predicting shortage of cash Assists in predicting shortage of cash
True/False
Question The labour cost which can be identified with the individual cost centre is known as the
Direct Labour Cost.
Correct Answer True
Your Answer True
True/False
Question The process of accounting split into three steams i.e. financial, cost, management
accounting.
Correct Answer True
Your Answer True
True/False
Question Variable cost + Profit = Sales
Correct Answer False
Your Answer False
True/False
Question Cash account can have a credit balance.
Correct Answer False
Your Answer False
True/False
Question Budgetary control is one of the techniques of management accounting.
Correct Answer True
Your Answer True
True/False
Question All personal expenses of the owner should be debited to the organisation's profit and
loss account.
Correct Answer False
Your Answer False
Factory overheads Repair for factory building Repair for factory building
True/False
Question The amount of profit which is retained by the organisation is transferred to 'Reserves
and Surplus' in the balance sheet.
Correct Answer True
Your Answer True
True/False
Question Yield variance equal to zero indicates that the standard yield and actual yield are the
same.
Correct Answer True
Your Answer True
True/False
Question Book keeping is clerical while accounting is managerial
Correct Answer True
Your Answer True
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
True/False
Question Material mix and material yield variance can be calculated even when only one raw
material is used for production.
Correct Answer False
Your Answer False
True/False
Question Management Accounting is not at all a legal requirement
Correct Answer True
Your Answer True
True/False
Question Cost Accounting is a legal requirement.
Correct Answer False
Your Answer False
True/False
Question Management Accounting is a developed stage of Cost Accounting
Correct Answer True
Your Answer True
True/False
Question Trading account is used to analyse how successfully and how efficiently the firm runs,
particularly with regards to the maintenance of the gross profit margin.
Correct Answer True
Your Answer True
True/False
Question Standard costing is always accompanied by a system of budgeting but budgetary
control may be operated in business where standard costing is impracticable.
Correct Answer True
Your Answer True
True/False
Question In marginal costing, under and over absorption of fixed overheads is bound to arise.
Correct Answer False
Your Answer True
True/False
Question New companies can adopt Uniform costing system as a ready-made system.
Correct Answer True
Your Answer False
True/False
Question Cost Accounting may be considered to be a part of management Accounting.
Correct Answer True
Your Answer True
True/False
Question 1) Cost Accounting and Management Accounting are similar to each other in many
respects.
Correct Answer True
Your Answer True
True/False
Question Credit balance in interest account indicates income for the organisation.
Correct Answer True
Your Answer True
Correct Answer Health and safety services , Canteen facility , Loans at reduced
rate of interest
Your Answer Health and safety services , Canteen facility
True/False
Question A business is an activity carried out with the intention of earning
the profit.
Correct Answer True
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
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
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
True/False
Question 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.
Correct Answer True
Your Answer True
Dividend paid Profit and loss appropriation account Profit and loss account
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
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
True/False
Question It is very easy to measure the portion of increased sales which is due to
expenditure incurred for advertisement of the product
Correct Answer False
Your Answer True
Plan of investment in fixed assets Capital Expenditure Budget Capital Expenditure Budget
True/False
Question The sales mix variance highlights the fact that the actual mix of sales has been
in the same ratio as budgeted.
Correct Answer False
Your Answer True
True/False
Question Lack of efficient control on various aspects related to raw-material
increases the material cost component of the finished product.
Correct Answer True
True/False
Question Due to compensating errors the arithmetical accuracy of the trial balance
is affected.
Correct Answer False
Daily Time sheets Time spent by worker on job Time spent by worker on job is
is recorded recorded
Time Keeping Department Recording of workers time Recording of workers time
Time Recording Clock Ticket number & clock card Ticket number & clock card
Method allotted to worker allotted to worker
True/False
Question Purchased goods by paying Rs.35,000/-: In this case, the cash account
should be debited.
Correct Answer True
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Question Correct Answer Your Answer
True/False
Question An item of cost that is direct for one business organization may
be indirect for another business organization.
Correct Answer True
Your Answer Furniture , Loan from Bank of America , Land & building
Your Answer The asset side of the balance sheet will increase by Rs.5,000/-
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The Blank
Question The ________ books are preferred when the volume of
transactions is very large.
Correct Answer Subsidiary
True/False
Question It is very easy to measure the portion of increased sales which is
due to expenditure incurred for advertisement of the product.
Correct Answer False
True/False
Question Compound journal entry avoids duplication of effort.
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The Blank
Question Carriage charges paid for a new machine purchased if debited to
carriage account would affect the ________.
Correct Answer Machinery A/c and carriage A/c
True/False
Question Purchased goods by paying Rs.35,000/-: In this case, the cash
account should be debited.
Correct Answer True
True/False
Question Financial accounting may deal with the ascertainment of cost &
calculation of profitability of the individual product.
Correct Answer False
True/False
Question Management Accounting aims at enabling the management to
take the decisions about the future. It may consider future data
as well as non-financial factors.
Correct Answer True