Saturday, February 26, 2011

Management Accounting - 14

Management Accounting - 14

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

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

True/False
Question The bin card and stores ledger, being independent records, comparison of these two records should be avoided.
Correct Answer False

Match The Following
Question Correct Answer

Dividend paid Profit and loss appropriation account

Freight inwards Manufacturing account

Sales Trading account



Select The Blank
Question Large angle of incidence indicates ________ amount of profits.
Correct Answer higher

True/False
Question Error of commission refer to a situation where a transaction is not recorded in the books of account.
Correct Answer False

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

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

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

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

True/False
Question Bank reconciliation statement must be prepared before the preparation of profit and loss account and balance sheet.
Correct Answer True

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/-

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

Match The Following
Question Correct Answer

Increase in contribution will lead to Increase in profits

Increase in fixed cost will lead to Increase in break even point

Decrease in variable cost will lead to Increase in profit volume ratio

Decrease in selling price will lead to Decrease in contribution


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

Multiple Choice Single Answer
Question Basic objective of Uniform Costing is . . .
Correct Answer Comparison

Select The Blank
Question Re-order level should be higher than ________ but lesser than maximum stock level.
Correct Answer Minimum level

True/False
Question The variable costs are controllable at the lower lever.
Correct Answer True

Select The Blank
Question Economical use of labour, materials and facilities can achieved with the help of ________.
Correct Answer Budgetary control

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

True/False
Question The purchase account should be debited when an order is placed with the supplier of material.
Correct 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

Select The Blank
Question Interest receivable is a________ for the organisation.
Correct Answer Current sset

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

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/-

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/-

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

True/False
Question The sum of indirect material cost, indirect labour cost and indirect expenses is termed as factory cost.
Correct Answer False

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

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

Multiple Choice Multiple Answer
Question Select the examples of functional budgets:
Correct Answer Sales budget , Production budget , Research and development budget

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/-

Select The Blank
Question Furniture account will always have a ________ balance.
Correct Answer Debit

Select The Blank
Question If the ordering cost ________s, then the economic order quantity will Increase.
Correct Answer Increase

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

Multiple Choice Multiple Answer
Question Select the non-monetary incentives
Correct Answer Health and safety services , Canteen facility , Loans at reduced rate of interest

True/False
Question A business is an activity carried out with the intention of earning the profit.
Correct Answer True

True/False
Question Linking overhead to a cost unit is known as overhead absorption.
Correct Answer True

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

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

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

Question The best way to reduce labour cost is to recruit cheap labour.
Correct Answer False

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

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

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

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

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




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

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

True/False
Question Accounting is an art of recording, classifying & summarizing in a significant manner.
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 The reports generated by financial accounting are meant for the use by management for effective decisions.
Correct Answer True

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