Saturday, February 26, 2011

Management Accounting - 12

Management Accounting - 12


Multiple Choice Multiple Answer
Question The objects of cost accountancy are :-
Correct 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

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

True/False
Question Under the accelerating premium system incentive increases at a fast rate with the decrease in output.
Correct 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

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/-

True/False
Question Predetermined rate of absorption of overheads helps in quick preparation of cost estimates and quoting prices.
Correct 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

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

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/-

True/False
Question High time wages means necessarily high cost of production.
Correct 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

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

Select The Blank
Question Interest receivable is a________ for the organization.
Correct Answer Current asset

True/False
Question Period cost is the cost assigned to the products.
Correct Answer False

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

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

True/False
Question New companies can adopt Uniform costing system as a ready-made system.
Correct 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

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.

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

Multiple Choice Single Answer
Question Select the information to be considered before installing a costing system :-
Correct Answer Labour intensity of the product

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/-

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

Select The Blank
Question Payment by ________ method lowers the cost of production through their impact on fixed costs.
Correct Answer Results

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

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

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

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

Select The Blank
Question If the owner brings in personal calculator for office use, ________ account should be credited.
Correct Answer Capital

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

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

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/-

True/False
Question Profitability statement is a period statement & provides information about the results of operations.
Correct 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

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

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/-

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

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

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/-

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

Match The Following
Question Correct Answer

Ledger Maintain all types of accounts

Audit Reviewing internal control system

Accounting Process of analyzing & interpretation

Journal Book of original entry


Match The Following
Question Correct Answer

Daily Time sheets Time spent by worker on job is recorded

Time Keeping Department Recording of workers time

Time booking department Jobwise booking of time.

Time Recording Clock Method 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

True/False
Question For a manufacturing company, dividend received is a non-operating income.
Correct Answer True

Select The Blank
Question A standard that is never altered, after being established, is known as ________ standard.
Correct Answer Ideal

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

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