Management Accounting - A21

• People external to the organization do not have any access to the costing records.-true
• Features of Financial Accounting includes-----------------= It is a legal requirement , It protects the interest of outsiders , It considers historical transactions
• A cheque received from a customer but not deposited into bank must be recorded in the cash book.= True
• Goods return by Pande worth Rs. 2000 should have appeared on the credit side of Pande’s account for rectifying the same.Following account to be credited= Suspense A/C
• Amit purchase of Rs. 6710 had been posted to the debit of the creditors A/C as 6170 rectifying the transaction the creditor A/C is to be debited amount to Rs= 540
• The periodical total of sales book was cash short by Rs. 5000 for rectifying the same, which A/C to be debited = Suspense A/C
• Old furniture sold for Rs. 5400 has been entered as Rs 4500 in the cash book, for rectifying the same Suspense A/C credited to= Rs 900
• Following error affect the trial balance=Wrong totaling of subsidiary books , Posting on the wrong side of an account , Omission of posting an account in the ledger
• Due to compensating errors the arithmetical accuracy of the trialbalance get affected.=False
• This cost indicates historical cost which is incurred in past.=Sunk cost
• Non-operating Income= Profit on sale of shares, Non-operating Expense= Dividend on shares, Selling & Distribution = Advertisement,Factory Cost =Repair for factory building ,Total Cost = Cost of finished goods
• The prime cost is Rs. 10,00,000 the factory cost is Rs. 13,00,000, the total administration overheads are 14,00,000 and having selling overhead of Rs. 86000. What is the Total cost?= 37,86,000
• Non Operating Expenses includes=Loss on sale of asset , Goodwill , Only a, b
• Perpectual inventory system includes continuous verification of physical stock at regular intervals.=True
• Under the differential time rate method of wage payment up to 80% of efficiency following rate is offered.= Rs. 1.00 per hour
• Per unit cost of variable overheads may reduce as the volume of output increases but the total overheads remain constant.=False
• Machine hour rate is calculated as (amount of overheads to be absorbed)/(labour hours required for production)=False
• This is the best example of element wise classification of cost.= material
• This is an example of semi variable overheads.=electricity
• wise classification of overheads takes the form of –=indirect material , indirect labour , indirect expenses
• 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.=False
• Budget is prepared for a fixed period of time.=True
• Depreciation does not involve cash out flow=True
• Uncontrollable variances are=Strike , Change in customers demand , Devaluation of currency
• Basic three steps in Standard Costing are=Setting standards , Comparing actuals with standards ,Measurement of variance
• Calculate Labour Rate Variance, If actual rate per hour isRs.3.50/- , Standard rate is Rs.3/- per unit and actual hours are13, 500.=Rs.6750/- ( Adverse )
• Calculate Labour Efficiency Variance, If actual rate per hour is Rs.3.50/- , Standard rate is Rs.3/- per unit and standard hours are 15,000 and Actual hours are 13, 500.=Rs.4500/- ( Favorable )
• Following factors will have to be considered before preparing Production Budget in terms of quantity=Production capacity , Co-ordination with Sales forecast , Management Policy
• Maximum level =The level above which actual stock should not exceed,Minimum level= The level below which actual stock should not reduce.Re-order level=To take the step for procurement of further lotsof material,Danger level =Below minimum level .Fixation of inventory level =Initiating proper action for movement of material
• If ________ is not provided, the asset may appear in the Balance Sheet at an ________ amount ,=depreciation,overstated
• Generally accounts of the assets will have ________ balance and liabilities will have ________ balance= debits,credits
• In financial statements P& L Accounts relates to a specific duration whereas ________ is for a given point of time =Balance sheet
• Along with financial accounting, ________ and ________ are the other streams of accounting =Cost Accounting,Management Accounting
• Labour Turnover indicates ________ in labour force showing a highly increasing trend or highly ________ trend =change,decreasing
• Preventive costs of labour turnover refers to all the costs whichmay be incurred by the organisation to keep workers happy and ________ them from ________ the job=discourage,,leaving
• Expenditure like general lighting are apportioned considering________ as a base and expenditure like depreciation areapportioned considering ________ as a base.=number of light points.value of asset
• Under absorption of overheads may take place due to the reasons like ________ overheads being more than the________ overheads=actual,estimated
• Fixed overheads normally arise as a result of policy and arelargely ________ in nature at the ________ level of the management=uncontrollable,lower
• A key factor is defined as the factor which, at a particular point oftime or over a period will ________ the volume of ________=limit,output
• ________ of Trial Balance generally ensures ________ accuracy of the process of ledger posting .=Talling,arithmetical
• Essentials for effective implementation of budgetary control system are=Commitment of top management , Clearly defined objectives ,Continous budget education
• Features of convention of consistency are . . .=The accounting policies and procedures should be followed consistently , Facilitates the comparison of financial statements ,It facilitates comparison of financial statements on period-toperiod basis
• The bin card and stores ledger, being independent records,comparison of these two records should be avoided.=False
• Dividend paid Profit and loss appropriation account, Freight inwards= Manufacturing account .Sales =Trading account ,Freight outwards =Profit and loss account
• Large angle of incidence indicates ________ amount of profits.=higher
• Error of commission refer to a situation where a transaction is not recorded in the books of account.=False
• Relevant costs in decision making are :=Those costs which will arise as a result of the proposed action
• ________is the summary of all the balances in all the accounts listed in ledger account of an organization at any given point of time.=Trial Balance
• Overhead capacity variance is the outcome of:= Shortage of labour , Enforced idle time, e.g.power breakdowns ,Customer demand being more or less than anticipated
• Factory overheads consist of all overhead costs incurred fromthe stage of procurement of material till the production of finished goods.=True
• Bank reconciliation statement must be prepared before the preparation of profit and loss account and balance sheet.=True
• 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.=The net profit will decrease by Rs.6,300/-
• In calculation of total sales margin variance, the ________cost of sales is deducted from the actual sales revenue.=Standard
• 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
• Marginal costing technique is useful in taking decisions relating to which of the following courses of action?=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
• Basic objective of Uniform Costing is . . .=comparison
• Re-order level should be higher than ________ but lesser than maximum stock level.=Minimum level
• The variable costs are controllable at the lower lever.=True
• Economical use of labour, materials and facilities can achieved with the help of ________.=Budgetary control
• 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 ? ________=Suspense account
• The purchase account should be debited when an order is placed with the supplier of material.=False
• Accounting refers to the process of analyzing & interpreting the information already recorded in the books of accounts.=True
• Interest receivable is a________ for the organisation.=Current sset
• Purchases returns of Rs.18,000/- were wrongly transferred to the sales returns account. Calculate its impact on net profit.=The net profit will not be affected
• 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?=Rs.45,000/-
• Interest on bank loan, was paid till the quarter ending 30th September, 2003, Rs.36,000/-. Find the amount to be debited tothe profit and loss account for the year ending on 31st March, 2004, assuming the loan is not yet repaid as on this date.=Rs.72,000/-
• The features of the Halsey Plan are:=The benefit of time saved is divided equally between th eemployer and employee
• The sum of indirect material cost, indirect labour cost and indirect expenses is termed as factory cost.=False
• Determine re-order level from the following : Maximum dailyconsumption - 200 units; maximum delivery period - 12 days;average daily consumption - 150 units and average delivery period - 8 days.=2,400 units
• An error of partial omission can be rectified by either debiting or crediting the ________ account, as the case maybe.=suspense
• Select the examples of functional budgets:=Sales budget , Production budget , Research and development budget
• 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/-.=Rs.600,000/-
• Furniture account will always have a ________ balance.=Debit
• If the ordering cost ________s, then the economic order quantity will Increase.=Increase
• Which of the following information is included in the goods received note?=Date of receipt of material , Quantity received , Description of goods
• Select the non-monetary incentives =Health and safety services , Canteen facility , Loans at reduced rate of interest
• A business is an activity carried out with the intention of earning the profit.=True
• Linking overhead to a cost unit is known as overhead absorption.=True
• The operating profit as per cost statement may differ from theprofit as per Profit and Loss Account due to existence of=Depreciation on plant and machinery , Interest on loans taken from other , Interest on loans granted to others
• The main advantages of profit sharing are :=Employees try to increase productivity , Incentives are shared by all the employees , Augments emplyees' efficiency
• 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 yieldvariance. =Labour cost variance -Rs.700/- (Favourable) , Labour yield variance -Rs.1,260/- , Labour yield variance is favourable
• The best way to reduce labour cost is to recruit cheap labour.=False
• Balance sheet indicates the financial status of the business at given period.=True\
• Select the items which may be classified as selling and distribution overheads.
• Delivery van expenses , Rent of finished goods warehouse , Sales research expenses
• In India the gas industry and electricity industry, and ________ industry are examples of industries using the uniform costing system.=fertilize
• The process of recording the costs in a formal and systematicmanner with the intention of preparing statistical data there from a ascertain the cost, is known as . .=Cost accounting
• 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?=An entry for Rs.458.34, debiting interest accrued but not due account should be passed
• KDL Ltd. charges depreciation @ 20% on written down value method. The net book value of its machinery on 1st January, 2003 was Rs.125,000/-. What will be the net book value of its machinery on year end, i.e.31st December, 2003, assuming there were no additions or disposals during the year?=Rs.100,000/-
• 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/-.=True
• The system which provides an opportunity to the small units to take advantage of the research work taken by the large scale units of the same industry is known as ________ system.=Uniform costing
• As cost centers facilitate the control function, in many cases, they are termed as . . . =Responsibility centers
• Lata and Tara are partners of Latara & Co. As on 31st March, 2004 Lata's annual drawings were as Rs.25,000/- and Tara's annual drawings amounted to Rs.18,000/-. If interest on drawings is charged @ 15% p.a., what is the amount of income for Latara & Co.?=Rs.6,450/-
• XYZ & Co. has taken a loan of Rs.100,000/- @ 15% p.a.on 1st October, 2003. Interest is to be paid on half yearly basis. What treatment should be given in the books of accounts of XYZ & Co. as on 31st March, 2004?=Interest account should be debited with Rs.7,520.55 and outstanding interest account should be credited with Rs.7,520.55
• Labour turnover rate is best defined as :=The number of leavers replaced divided by the average of employees on the payroll
• Which system provides an opportunity to companies to adopt the one best method of cost accounting system known to the industry ?=Uniform costing
• The key factor determines the : Level of activity , Capacity utilization , Level of sales
• The difference between sales and cost of sales is termed as ________.=Net Profit
• The method which deals with ownership rights being given to workers is known as ________ method of remuneration.=Co-partnership
• Book-Keeping Books of Accounts Financial status Financial statement = Profitability statement & Balancesheet
• Accounting =Process of analyzing & interpretation ,Profitability statement =Indicates the amount of profit earned,Balance-sheet Financial status
• Uniform costing system is a pre-requisite to an inter-firm comparison of firms belonging to the different industries.=False
• Uniform Costing Methods may be advantageously applied to . . . Single organization having number of branches. , Number of companies in same industry , Similar Industries such as cotton, jute etc.
• Profitability statement indicates the amount of assets & liabilities. =False
• Accounting is an art of recording, classifying & summarizing in a significant manner.=True
• An order for goods worth Rs.18,000/- was placed on 25th March, 2004. The goods were received on 1st April, 2004. Calculate the impact of this transaction on the final statements of accounts for the year ended 31st March, 2004. =The net profit will not be affected\
• Balance sheet indicates the expenditure & income from the business.=False
• Interim dividend paid by the company should be debited to the profit and loss appropriation account.=True
• The short run financial plan which acts as a guide to achieve the predefined targets is known as ________.=Budget
• The process of accounting split into three streams i.e. financial, cost, management accounting.=True
• Real A/C =Debit what comes in, Credit what goes out , Trade Discount= Not accounted for in the books of Accounts ,Cash Discount = Accounted for in the books of Accounts,Rs.1 Personal A/C Debit the receiver, Credit the giver
• Indirect Cost is termed as ________.=Overhead
• The objectives of cost accounting are :=Cost control , Ascertain ment of cost of each product , Assist in managerial decision-making
• The finance manager is responsible for which of the following budget?=Cash budget
• Interest on ________ is credited to Capital account.=Capital
• Under the average cost method of valuing material issues, new issue price is determined after ________ issue.=Each
• The effect of price reduction is always reduction in the margin of safety and also reduction in the break even point.= False
• Price based on Uniform Costing may be taken to be reliable and representative of the whole industry.= True
• Which of the following is likely to be a contributory factor to the incidence of excess expenditure on material cost?=The level of control of the used of material in the production cycle , The incorrect choice of purchase order quantity , Failure to control the issue of materials from stores
• If the total manufacturing overhead of a tiles producing factory amounted to Rs.15 lakhs and the overhead rate was Rs.5/- per sq.ft, then the production for the period can be stated as ________ sq.ft. tiles.=300000
• Accounting is the art where transactions are…= Summarized , Classified , Recorded
• If excess of cash is estimated in the cash budget, it may be possible to utilise it to give bonus to the employees. =False
• A fixed budget is useful only when the actual level of activity corresponds to the budgeted level of activity.= True
• From the following select the examples of errors of commission - =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
• Expenditure on income-tax is an example of ________. =non-operating expenditure
• 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=Increase the selling price , Reduce cost of sales , Increase the selling efforts
• These are the preventive costs of labour turnover.= Cost of maintaining good relations with the workers , Cost of medical services ,Cost of welfare facilities
• Select the items which may be classified as administration overheads.=Depreciation on office furniture , Director's remuneration , Telephone expenses
• Any amount of profit earned in the past which is not distributed to the owner, belongs to the creditors.=False
• Management accounting is concerned with the following activities :=Decision making , Safeguarding assets , Planning and controlling activities
• Under time rate system a worker is paid on the basis of production achieved by him in a given time.=False
• Budgeted profit and loss account and budgeted balance sheet are also known as ________.=Master budget
• Drawings- Proprietor's account ,Deferred revenue expenditure= Real account, Deferred revenue expenditure written off = Nominal account,Loan = Personal account
• ________ Accounting is the process of analysis and interpretation of financial data collected with help of financial accounting & cost accounting= Management
• A grinding machine is an example of impersonal cost centre=True
• Which of the following budgets may be termed as a long term budget?= Capital expenditure budget , Research and Development expenditure budget , Budget of a transportation company
• Piece rate systems are very useful in the following circumstances:=Units of output are measurable , Job is standardised , The flow of work is regular
• The process of recording the business transactions in a defined set of records is referred to as ________.=Balance sheet
• P&L statement which is a period statement & relates to a certain period tells about results of operations.= True
• Liabilities =All the amount owed by the business ,Drawing =Withdrawn for personal use , Journal=book of original entry,Ledger= Maintain all types of Accounts ,Assets = All the properties owned by the business
• 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.=The statement is correct but the reason is incorrect
• A ________ inventory turnover period indicates efficient utilisation of material.=Low
• Financial accounting may deal with the ascertainment of cost & calculation of profitability of the individual product.=False
• 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.= True
• Financial Accounting primarily protects the interests of the outsiders dealing with organization in various capacities. =True
• Purchased 200 shares of Bharat Forge Ltd. for Rs.850/- per share, which account should be debited? =Investment account - Rs.170,000/-
• Contents of Uniform Cost Manual are =Organization , Cost Accounting system , Presentation of information
• 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. =Inventory turnover period for material P is 40.5 days , Material P is faster moving material , Consumption of material Q is Rs.860,000/-
• Cost Accounting is concerned with calculation of the profitability and state of affairs of the organization as a whole. False
• Overhead absorption rate will be different at different capacity levels. True
• Features of a cost sheet are as follows=Indicates the total cost of production during a given period , Indicates the unit cost of production during a given period , Helps the management in fixing the selling price to be quoted for the
• Under Differential Time Rate method payment is made at Rs. 1.40 per hour when the level of efficiency is between________.=90% to 100%
• The alternative courses of action for an integrated textile mill are: Sell cloth
• Direct labour hour rate method of absorption of overheads is suitable where most of the production is done by using machines.=False
• 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=153,000 units
• The sales mix variance highlights the fact that the actual mix of sales has been in the same ratio as budgeted.=False
• The selection of ________ may depend upon the various factors like characteristics of the business organisation, tax considerations, statutory requirementsetc. =Accounting period
• 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.=Rs.29.98
• Uniform Costing simplifies the work of wage boards of fixing minimum wages and fair wages.=True
• If the profit volume ratio is 25%, then the variable cost is equal to ________ of sales value. =0.75
• Balance sheet is considered to be a part of the financial statements. True
• Select the cost that indicates increased or decreased total cost due to the increased or decreased volume of operations.=Differential cost
• The objects of cost accountancy are . .To ascertain cost and profitability , Cost Control , Presentation of Information
• The process of attributing proportions of items of costs amongst const centres is called ________.=Cost apportionment
• Financial statements are basically in two forms i.e. profitability statement and balance sheet.=True
• The variance which measures the deviation of the rate actually paid to labour as from the standard hourly rate is known as: Labour rate variance
• Advance received from customers is ________ for the organisation.=A liability
• Financial Accounting discloses the financial performance & financial statements of the business as a whole. True
• 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.=Drawings
• Product costs under direct costing include:=Prime cost and variable factory overheads
• Uniform costing may lead to monopolistic conditions within the industry,prices may be raised and customers may suffer.=True
• Items debited to Profit & Loss Account are…=Salary , Discount allowed , Postage & telegram
• Following are the examples of service cost centre=Stores department , Transport department , Accounting department
• Select the entries which need to be rectified=Purchase A/c ......... Dr. to Damodar's A/c (Being furniture purchased fromDamodar) , Gopal's A/c ........... Dr. to cash A/c (Being entry for payment of railway freight forgoods purchased) , Cash A/c ............Dr. to Suresh's A/c (Being cash received from Suresh forgoods sold to him for)
• If you are required to enforce uniform costing system in your industry, how would you proceed ?= Collecting data from all units of your industry , Ensuring that the data collected is complete and correct , Maintaining secrecy of the data collected
• The bank book shows an overdraft of Rs.117/- as on 31st December, 2003. It is found that the pass book is debited with Rs.11/- representing a dishonoured cheque, originally received from Mr.A. The fact of dishonour was not recorded in the bank book. Find the balance as per pass book.=Rs.128/- (overdraft)
• Identify the steps involved in the process of decision making :=Determination of the problem , Ascertainment of alternative courses of action ,Screening each alternative so as to select the best one
• Identify the fixed expenses from the following.=Rent and taxes of the factory , Wages paid to indirect workers like cleaners,helpers,etc. , Salary paid to factory supervisor
• Management Accounting is a developed stage of Cost Accounting=True
• In the ledger account only credit entries relating to a particular account are posted.=False
• Features of Sunk cost are .=Indicates historical cost , Not relevant in decision making process , Incurred in past
• Global Tender= Any supplier from the global market can fill the tender ,Single Tender= Tender from only one supplier ,Limited Tender= Tenders from reliable but few suppliers,Open Tender= Any supplier from the local market can fill the tender
• Fixed overhead variances may be calculated either on the basis of units of output or on the basis of standard hours.=True
• Loss is equal to fixed cost minus ________=Contribution
• Direct Cost includes=Direct material , Direct labour , Direct expenses
• The document which lays down the cost accounting plans and procedures to be followed by the constituent units is known as ________.=uniform cost manual
• Cost Accounting is a legal requirement.=False
• The principle of ________ is followed while preparing the financial statements.=Going concern
• Cash account can have a credit balance.=False
• Identify the causes due to which the cost of labour may be high:=Excess staffing , Lack of experienced and efficient personnel , High labour turnover
• Copy of a firm's account in the bank's ledger is known as ________.=Bank statement
• Period cost is the cost assigned to the products.=False
• Interest on drawings of partners should be credited to which account?=Profit and loss account
• Labour turnover means :=Influx and exit of employees , Quantitative measurement of instability of working force , Rate of change in the average working force
• Book keeping is clerical while accounting is managerial=True
• Financial Statements which are generated as a result of the management accounting report & financial performance of the organization as a whole.=False
• Fixed overheads = Variability wise classification,Abnormal overheads =Normality wise classification,Indirect Material =Element wise classification ,Administration overheads = Function wise classification
• The half-yearly sales of product X are as follows : 1st half -30,000 units; 2nd half -37,500 units. The production pattern of the company is based on 80% of the sales of the currentsix months and 20% of the budgeted sales of the next six months. Labour turnover means :calcu=1st half -31,500 units; 2nd half - 30,000 units
• The variance which denotes the variation in overhead recovery due to the budgeted quantity of products being greater or less than actual production, is known as ________ variance.=Volume
• Annual sales were Rs.10,50,000/- and sales returned by customers amounted to Rs.28,000/-. The salesmen are entitled to an incentive of 3% of net sales. calculate the amount of incentive due to the salesmen.=Rs.30,660/-
• An entry in the stores ledger is required for transfer of material from one job to another in the same department.=False
• As per the provisions of Section 209 of ________, all the company form of organisation is legally required to follow the mercantile or accrual system of accounting.=The Companies Act, 1956
• Sita and Gita are partners of SGL & Co. As on 1st August, 2003 Sita's capital stood as Rs.10,000/- and Gita's capital as Rs.18,000/-. If interest on capital is to be provided 10% p.a., what should be the treatment of this interest in the profitability statement, assuming there were no additions to capital during this period?=Profit and loss account should be debited with Rs.1,866.67
• GAIL having monopoly in the CNG (Compressed Natural Gas) market can implement the Uniform costing system.=False
• Bank reconciliation statement can be prepared on weekly basis.=True
• The ________ ledger carries the individual accounts, whereas the general ledger records the consolidated effect of the individual transactions.=Control
• Following errors affect the trial balance=Wrong totaling of subsidiary books , posting on the wrong side of an account ,Omission of posting an account in the ledger
• Token or disc method is a related to the system of ________.Time-keeping
• Cost Accounting may be considered to be a part of management ccounting.=True
• The ________ variance is the difference between the actual variable overhead incurred and the standard variable overhead charged to production.=Total variable overhead
• It is said that marginal costs are used primarily in guiding decisions that are yet to be made.=True
• Management Accounting is not at all a legal requirement=True
• The variance which measures the profit consequences of selling different products in proportions other than the standard, is known as ________ variance.=Sales margin mix
• Non-Operating income =Issue of shares ,Plan of investment in fixed assets= Capital Expenditure Budget,Plan for surplus/shortage of cash =Cash Budget ,Operating income = Cash Sales
• Identify the variable expenses.=Repairs of plant when it is undertaken by an outside agency , Carriage inwardby hired carriers , Wages paid to casual workers
• The budget that represents the funds investment for expansion, diversification, etc. is known as ________.=Capital expenditure budget
• Which of the following cost is also termed as Prime Cost ?=Direct cost
• Financial Accounting is …=Designed to supply information to internal/ external users , Referred as'Historical' form of accounting , Concerned with financial factors
• The method of remuneration under which the workers are given in share in profits of the organization, at a specified percentage, along-with their wages, is known as ________method.=Profit-sharing
• The disadvantages of time rate system are :=Ignores the efficiency of workers , Higher labour cost , Lack of motivation toincrease productivity
• An adjustment relating to outstanding expenses will ________ the net profit.=Decrease
• Select the appropriate rectification entries for the following transactions (i) Rs.200/-received in respect of a bad debt previously written off was credited to Debtors account. (ii) PaidRs.6,000/- to a Mr. Rao, clerk, as salary in lieu of notice. This amount was debited to his personal account (iii) Interest @ 5% p.a. on a loan of Rs.5,000/- was debited to general expenses account.=Debtors A/c ..........Dr. Rs.200/- to bad debts recovered A/c Rs.200/- ,Rs.6,000/- to Rao's A/c Rs.6,000/- , Rs.250/- to General Expenses A/c Rs.250/-
• Quantify the increase in profit on account of following errors : (a) Repairs of furniture amounting to Rs.2,000/- were debited to furniture account. Furniture is depreciated @10% p.a.(b) Interest received on bank deposits was credited to dividend received account, Rs.1,550/- (c) Atelevision purchased for the managing director's office for Rs.45,000/- was debited to Interior decoration expenses.=Rs.43,200/-
• The analysis which is also referred as 'what if' analysis is known as________.=Cost volume profit analysis
• The balance sheet has three columns, viz. assets, liabilities and ledger folio.=False
• Income Tax Act, recognise only one method of depreciation namely ________.=Written down value method
• The various areas in which uniform costing can be adopted are . .=Valuation of inventories , Charging of depreciation , Apportionment of Overheads
• Flood occurred on 18th March, 2004 and goods worth Rs.28,000/- were destroyed.The insurance company accepted on 28th March, 2004 the claim for Rs.10,000/- only. The claimamount was received on 2nd April, 2004. Find the impact of this transaction on net profit for theyear ending 31st March, 2004.=The net profit will decrease by Rs.18,000/-
• While preparing the labour cost budget, factors such as overtime working or nightshift working may be ignored.=False
• Unearned commission of Rs.5,000/- needs to be recorded in the books of accounts.Find its correct impact.=The asset side of the balance sheet will increase by Rs.5,000/-
• Examples of indirect material are=Consumable stores , Glue used in book binding , Nails used in packing boxes
• A person in charge of a ________ may be held responsible for its proper functioningand cost control.=Cost centre
• It is very easy to measure the portion of increased sales which is due to expenditureincurred for advertisement of the product=False
• Which of the following is a correct definition of the key factor?=The factor which limits the activites of the undertaking
• The varinace that attempts to ascertain the effect of change in sales volume on the difference between actual and budgeted contribution is known as ________ variance.=Sales margin volume
• The role of the budget committee may be taken as an advisory role to the ChiefExecutive.=True
• Depreciation is caused by use factor, obsolescence and ________.=Time factor
• A business's telephone bill should nromally be classified into which one of thefollowing categories?=Semi-variable cost
• Depreciation under Reducing Balance Method is calculated as (Number of units *Rate of depreciation per unit)=False
• Which system can assist in fixing a common selling price for the industry as a wholeon the basis of cost of production of all units belonging to that industry ?=Uniform costing
• All cash sales are recorded in the sales register.=False
• Transport facilities to employees =Preventive cost of labour turnover ,
• Relationship between supervisor and worker= Avoidable cause of labour turnover ,Dismissal of employee =Unavoidable cause of labour turnover,Increased spoilage and defectives= Replacement cost of labour turnover
• Indirect material cost is an integral part of finished goods.=False
• Select the various methods adopted for treatment of under or over absorbed overheads=Use of supplementary rates , Carrying over the amount to remaining period ,Writing off to the Costing Profit and Loss Account
• Generally speaking income represents wealth increase and business success; higherthe income, lower will be the success of a business.=False
• It is difficult to apply Uniform costing system for an industry which has labour intensive companies as well as capital intensive companies, because :=The cost structure is different
• Trading account is an important account which will be used to analyse how successful and how efficiently the firm runs its business.=True
• Loans which are borrowed from financial institutions are to be paid off in 8 years,should be disclosed as ________ in the balance sheet.=Long term liabilities
• 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.=Rs.75,981/-
• The components of the selling and distribution cost budget are :=Distribution expenses , Publicity expenditure , Salary of sales-office workers
• The present unit cost data for a product is as follows: selling price Rs.15/-, variable costs Rs.8/-. If selling prices are reduced by 10% and variable costs are increased by 12.5%. Which of the following is the amended contribution to sales ratio?=0.333
• Select the correct statements. Ram's account…….Dr. Rs.10,000 To Bank account Rs.10,000 Ram is a creditor , Rs.10,000/- has been paid to Ram , The payment is madeby cheque
• Generally, all real accounts will have a ________ balance=Debit
• A written order sent to inform the purchasing department of a need for materials is called a ________.=Purchase requisition note
• The overheads apportioned to three production departments A, B and C and two service departments P and Q are Rs.75,000/-; Rs.100,000/-; Rs.80,000/-; Rs.60,000/- and Rs.40,000/- respectively. Overheads of department P are shared by A, B, C and Q in the ratio of 4 : 3 : 2 : 1 and that of department Q are shared by A, B, C and P in the ratio of 3 : 3 : 2 : 2. Ascertain the total overheads of each production department.=A -Rs.116,836/-; B -Rs.134,889/- and C -Rs.103,265/-
• Purchase budget= Forecast of quantity and value of materials,Budget committee = Analyses the performance of different budget centres,Cash budget-= Assists in predicting shortage of cash ,Budget =Objective is performance evaluation
• Re-order quantity may be measured as :=Maximum stock level - re-order level + (minimum usage X minimum re-order period)
• If the total amount on the ________ side of commission account is more than the total of its credit side, the commission account is said to have a Debit balance.=Debit
• These are the replacement costs of labour turnover.=Inefficiency of new workers , Cost of selection and placement , Increasedspoilage and defectives
• The labour cost which can be identified with the individual cost centre is known as theDirect Labour Cost.=True
• Variable cost + Profit = Sales=FalseThe ________ adjustment is necessary to relfect the cost for the use of fixed asset during the year.=Depreciation
• The integrated form of all functional budgets is known as :=Master budget
• 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 ________.= Over-absorbed
• The final result disclosed by trading account is the ________profit earned by the organization.=Gross
• Number of days inventory is held can be calculated by dividing number of days in a year by ________.=Inventory turnover ratio
• Budgetary control is one of the techniques of management accounting.=TruE
• All personal expenses of the owner should be debited to the organisation's profit and loss account.=False
• Total cost= Cost of finished goods,Non operating income= Profit on sale of investment ,Selling and distribution overheads =Advertisement expenses ,Factory overheads = Repair for factory building
• The amount of profit which is retained by the organisation is transferred to 'Reservesand Surplus' in the balance sheet.=True
• Purchase of national saving certificates by the company from its profits, should be debited to ________ account.=Investments
• Yield variance equal to zero indicates that the standard yield and actual yield are the same.=True
• Advantageously applicable in similar industries= Scope of uniform costing ,Spirit of mutual trust = Requisite for uniform costing,Avoids cut throat competition = Advantage of uniform costing,Treatment given to research and development COSTS= Fieldscovered by uniform costing
• Calculate inventory holding period. Safety stock - 250 units; maximum stock - 6,500 units; re-order quantity - 3,800 units and material issued during 2003 is 24,000 units.=66.9 days
• Material mix and material yield variance can be calculated even when only one raw material is used for production.=False
• A lathe machine was purhcased on 31st March, 2004 for Rs.65,000/-, however it was installed only on 5th April, 2004. The depreciation is charged @ 15% p.a.. Find the amount of depreciation charge for the said lathe machine for the year ended 31st March, 2004.=Nil
• A factory has 8 hours a day and the standard daily wage is Rs.80/-. Standard output per hour is 5 units. During a day worker P produced 30 units, Q produced 36 units and S produced 42 units. Calculate wages payable to P,Q and S under Merrick Multiple Piece RateSystem.=P - Rs.60/-; Q - Rs.79.20; S - Rs.100.80
• A company budgets for a production of 150,000 units. The variable cost per unit is Rs.14/- and fixed cost is Rs.2/- per unit. The company fixes its selling price to fetch a profit of 15% on total cost. What is the break even point for the company? =68,182 units
• The organization chart shows the following aspects :=Functional responsibility of different functional managers , Delegation of authority to various managers , Inter-functional relationships of these managers
• An advertisement contract was made with an artist which stated that the remuneration will be 12% of net sales. On an average the monthly sales were Rs.36,000/-,however the average rate of sales return was 5% of that month's sale. Find the expenditure on account of advertisement.=Rs.49,248/-
• Features of Taylor's differential piece rate system are as follows :=Minima clerical work is involved in calculating the wages , Helps in building up an efficient labour force , Strong incentive to efficient and ambitious workers.
• Select the correct formulae for calculating break even point.=Fixed cost / (Selling price per unit - Variable cost per unit) , [Fixed cost /Marginal contribution] X Sales , [Fixed cost / (Fixed cost + Net Profit)] X Sales
• Select the transactions which can be entered in the Journal proper.=Opening entries , Closing entries , Rectification entries
• Management Accounting is…=Designed particularly for internal use , Helpful in estimating the future along with past period , Useful in furnishing the necessary information to the management
• Warehousing cost is an item of ________=Distribution overheads
• The lowest profit volume ratio can be ________%.=0
• 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.=True
• Calculate the earnings of workers Monica and Sonica under Taylor's differential piece rate system. Hours in a day =8; normal rate per unit = Rs.12/-; standard time per unit = 30 seconds; rate differential : 80% of piece rate below standard, 120% of piece rate at or above standard. Monica produces 900 units per day and Sonica produces 1,100 units per day.=Monica -Rs.72/-; Sonica - Rs.132/-
• Standard costing is always accompanied by a system of budgeting but budgetarycontrol may be operated in business where standard costing is impracticable. =True
• The factors that influence determination of budget period are :=Type of budget, viz. Sales or capital expenditure budget , General economic conditions , Trade cycle of business
• Inventory holding cost comprises of :=Cost of insurance , Rent of store house , Salary of store keeper
• Uniform costing system can be successfully implemented in any industry only when :=Information is freely supplied by all the units , Well organised sector is ready to share the technological improvements , Information furnished by the units is complete and correct
• In marginal costing, under and over absorption of fixed overheads is bound to arise.=False
• Judge the following narrative according to the criteria given : There are many organizations whose sales fluctuate with fluctuations in the weather, viz. ice-cream, sweaters, etc.=The statement and the reason are both incorrect
• New companies can adopt Uniform costing system as a ready-made system.=True
• An amount of Rs.200/- is received from P and is credited to Q. The rectification entry would affect ________=P's A/c and Q's A/c
• Trade Discount refers to the discount . . .=received on purchases
• In India, where public undertakings operate along with the private sector undertakings, ________ enables a comparative assessment to be made of the two sectors.=uniform costing
• A firm has monthly fixed cost commitment of Rs.200,000/-. It is producing only one product which is sold at a price of Rs.80/- per unit. Per unit variable cost is Rs.50/-. Calculate annual break even point.=80,000 units
• Cool-wind Ltd., manufactures fans, which at sold at Rs.400 pre piece. The cost of sales is composed of 40% of direct material, 30% wages and 30% overheads. An increase in material price by 25% and in wage rate by 10% is expected in the forthcoming year; as a result of which the profit at current selling price may dwindle by 39% of present gross profit. With the above information, you are required to determine the future selling price, if the present rate of gross profit is to be maintained.=Rs.452/-
• Credit balance in interest account indicates income for the organisation.=True
• The reports generated by financial accounting are meant for the use by management for effective decisions.=True
• Cost Accounting ______________.=Concerned with specific activities. , Classified according to their nature. , It deals with both i.e. past & present.
• Management Accounting _____=Designed particularly for internal use only. , Looks forward in estimating the future along with past period. , This furnishes the necessary information to management.
• Credit note is an intimation send to person dealing with the business that his account being debited for the purpose indicated therein.= False
• Amount invested in purchasing Fixed Asset is a revenue expenditure.=False
• As per double entry system o accounting , total of all debitsshould be equal to all credits. =True
• Convention of Consistency Materiality ___=The accounting policies & procedures should follow consistently on period to period , It facilitates the comparison of financial statements on period to period , If any change the fact should be disclosed with its effects on profitability
• Cash and---------------are the two systems of accounting.=Mercantile
• The opening balance of cash account is Rs. 25,000, cash received from debtors Rs. 30,000, sold goods amounted to Rs. 50,000, paid to creditors Rs. 20,000, purchase furniture Rs. 5000. What is the clos =80,000
• Bank Reconciliation statement is required in case of =difference between the bank balance as per the bank book and as per pass book
• Error of Principle= Trial Balance does not get affected ,Error of Omission =The transaction is totally omitted, Error of commission =Wrong Posting Compensating Error= Wrong classification ,Difference in trial balance =Transferred to suspense account
• Labour cost indicates that labour cost which cannot be identified with the individual cost centre and is incurred for those employees who are not engaged in the manufacturing process but only assist =Remuneration
• The Prime Cost includes the aggregate of=Direct Material Cost , Direct Labour Cost , Direct Expenses
• From the following particulars what must appear in purchase requisition=Material to be purchased should be cleanly specified , Material should purchase whenever the market for the same is favorable , Purchase requisition should state the quantity of material required.
• Following points are taking into consideration for evaluation of receipts=The Price , The trade discount is to be deducted , Other amounts such as sales tax, excise duty, octroi duty
• While fixing the maximum level following factors are considered=Maximum usage , Storage facilities , Availability of funds
• Fixed cost tends to vary with time rather than with level of activity.=True
• Find out the break even point and profit if sales are Rs. 50,00,000 and P/V Ratio is 50% and margin of safety is 40%=Rs.30,00,000 and Rs.10,00,000
• For better control, variances of a period may be compare with the previous period.=True
• Expected standards are more realistic and useful for costcontrol. =True
• The difference between standard cost and actual cost is termed as Variance.=True
• For reporting of variance, following propositions should be considered= Responsibility of each individual should be defined , Reporting should be simple, clear and quick , Analysis of variance should be accurate.
• Basic three steps in Standard Costing are= Setting standards , Comparing actuals with standards , Measurement of variance
• Find out Labour Efficiency Variance, if Standard Rate is Rs.1.50/- per hour, Standard hours are 12,000 and Actual hours are 12,600. =Rs.900/- ( Adverse )
• Standard costs are the targets to be attained by the actual performance.=Minimum
• Standard Costs are used as tool for=Cost Control
• Accounting to the matching principles of accounting, the ________ incurred during an accounting period are required to be match with ________ during that period=cost,revenues
• Along with financial accounting, ________ and ________ are the other streams of accounting =Cost Accounting,Management Accounting
• If the revenue expenditure is treated as ________ expenditure , it will not affect the agreement of ________ balance =capital ,trial
• While selecting source of supply ________ epartment may call for the ________ from the prospective suppliers =Purchase,quotation
• After material is received from the supplier, quantity actually received is compared with quantity ________-and ________-if any, are taken up with the supplier= ordered ,variation
• Under the daily ________ sheets method, each worker is provided with a daily time sheet on which time ________ by him on various jobs is expected to be mentioned =time,spent
• 4.Under the differential time rate method the wages are paid at Rs. 1.50 per hour between ________ efficiency and Rs.1.25 per hour between ________ efficiency =101% to 125 %,80% to90%
• Under Gannt Task bonus system where the output is _______ payment is made as per minimum time rate, output is ________ payment is made as per time wages plus some increase in wage rates =elow standard, at standard
• ________ and ________ are examples of element wise lassification ofoverhead costs =Idirect material,indirect labour
• Fixed cost is the cost that tend to remain ________ irrespective of ________ = constant,level of activity
• The process of Allocation & apportionment can followed to ecide the ________ of overheads to each budget center Allocation & apportionment=Distribution
• The selection of the supplier may depend upon the following aspects: =Geographical location of the supplier , Price quoted by the supplier ,Goodwill of the supplier
• Net book value of loose tools as on 1st April, 2003 was Rs.45,000/-. As on 31st March, 2004 the management felt that the real worth of these loose tools is only Rs.30,000/-. What can be done to achieve the desired reduction in the net book value of loose tools?=By providing depreciation to the extent of Rs.15,000/-
• Information as to the cost and profit / loss associated with the firm's operations is provided to the ________ by Management accounting.=Management
• Factory cost of a product is Rs.335,000/-, if the selling overheads are charged @25% of factory cost, then the amount of selling overheads should be Rs.________/- =83750
• Uniform costing is not a separate method of ________.=cost accounting
• The following figures relate to a company manufacturing a varied range of products : Year 2003 Total sales Rs.22,23,000/- and total cost Rs.19,83,600/-. Year 2004 : Total sales Rs.24,51,000/- and Total cost Rs.21,43,200/-. Assuming stability in prices, calculate the profit volume ratio =0.3
• The cost of idle time incurred by employees that is considered normal for the production process should be charged to : =Factory overheads
• Creche expenses may be appropriately approtioned on the basis of________.=Number of female workers
• Opening stock of Rs.1,80,000/-, purchases Rs.8,00,000/-, freight inward Rs.35,000/-, closing stock Rs.2,00,000/ -, direct wages Rs.2,35,000/-. Calculate the prime cost.=Rs.10,50,000/-
• Limitations of Management Accounting includes------=Its wide scope , Possibility of intuitive decision , Requires elaborate organizational structure
• Identify the budgets for which the production manager sould be held responsible :=Production budget , Production overheads budget , Plant utilization budget
• A group of 10 men and 20 women workers were expected to produce 400 units of a product in an 8 hour day. The standard hourly rate was fixed at Rs.25/- and Rs.15/-, respectively.Actually, a group of 15 men and 10 women workers was deployed and paid for 8 hours a day at an hourly rate of Rs.22/- and Rs.18/-, respectively. Two hours were wasted for the entire group due to power failure and only 300 units were produced. Calculate labour rate variance. =Rs.120/- (Favourable)
• Techniques of management accounting include:=Marginal costing , Budgetary control , Standard costing
• Uniform costing system is useful in the following areas = Classification of cost accounts
• The features of multiplicity of key factors are as follows :=More than one key factors , Refers to a complex situation , Can be resolved by using linear programming technique
• A materials requisition form normally contains the following aspects:=Quantity requisitioned , Per unit material cost , Job number
• The production budget may be prepared in terms of :=Units produced , Production cost , Material cost, labour cost and overheads
• Panna Ltd. temporarily has excess production capacity. The idle plant facilties 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: =Variable costs
• Receipts and payments method of cash budget is useful for preparing long term estimates. =False
• Select the advantages of standard cost system.=Provides reliable basis for budgeting , Facilitates delegation of authority , Promotes economy and efficiency
• In case of seasonal industry, the budget period may be taken as ____=One season
• Lack of efficient control on various aspects related to raw-material increases the material cost component of the finished product.=True
• Due to compensating errors the arithmetical accuracy of the trial balanceis affected.=False
• Material price variance for a job is Rs.800/- (Favourable). Actual quantity of material used is 100 kg whereasthe standard quantity of material is 120% of actual quantity. Actual price paid for the material is 80% of the standard price. Calculate material cost variance.=Rs.1,600/- (Favourable)
• 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
• Purchased goods by paying Rs.35,000/-: In this case, the cash account should be debited.=True
• If the customer is not likely to pay the amount receivable from him, this amount should to be treated as ________. =Bad
• The problem of multiple key factors can be solved with the help of techniques like linear programming, operations research, etc.=True
• The ________ books are preferred when the volume of transactions is very large. =subsidiary
• All costs are controllable.=False
• Manufacturing overheads represents all costs incurred in the factory including direct material cost and direct labour cost. =False
• The use of contribution per unti of limiting factor as the basis for ranking products to be produced and sold is aimed at which of the following?=Maximisation of short-term profit
• Profit volume ratio is also known as ________.=Contribution to sales ratio
• If the physical stock is less than the stock as per the stores ledger, such shortage should be treated as an issue of material. =True
• Which of the following is the most efficient use of the clock card?= To facilitate payment for time spend on the work premises
• Marginal costing is a technique of cost control.=True
• Provision for discount on debtors account should be credited to the Profit and Loss Account. =False
• Insurance premium of Rs.18,000/- was paid on 15th January, 2004. The policy period is one year from the date of payment of insurance. On 31st March, 2004 what amount should be debited to the Profit and Loss account as expenditure on account of insurance premium? =Rs.3,750/-
• The factors which influence the selection of the method for absorption of overheads are: =Type of industry , Nature of products , Manufacturing process
• Out of debtors totaling to Rs.58,750/-, Rs.5,000/- were expected to be bad. What should be the amount of debtors that must be disclosed in the balance sheet?=Rs.53,750/-
• Dividend received on amount invested in shares is an example of ________.=non-operating income
• ________ variance represents the over or under utilisation of pland and machinery.=Capacity
• Which of the following transactions should be excluded while preparing a cost sheet ?= Interest on loan , Bad debts , Expenses on criminal law suit
• Absorption costing is more suitable for decision making than marginal costing=False
• While preparing trial balance, the balance as per ________ book is considered as bank balance. =Bank
• ________account can be defined as the record of all the transactions pertaining to a person, asset, liability income or expenditure which have taken place in a specified period. =Ledger
• State the features of these transactions : (i) Commission paid Rs.250/- was posted twice to Commission account (ii) Rs.5,000/- representing goods sold to A, was posted to the credit to commission received account (iii) Sold machine for Rs.8000/-, was credited to Sales account.=The debit side of the trial balance will be in excess by Rs.250/- , Involves an error of principle , Involves an error of commission
• S elect the steps to be followed while preparing bank reconciliation statement. =Compare the transactions in the bank book and the pass book , Check the totals and the balancing of both the books , Confirm that the opening balances of both the books are tallying
• Bank charges debited in the pass book represent clerical mistake on the part of the bank employees.=False
• A dividend warrant of Rs.2,076/- was paid direct to the bank and nothing appeared in the cash book. This is an example of : =Direct deposit into the bank
• The wages paid to a trainee who constructs wooden mould for concrete laying on a building contract should be defined as : =Direct labour
• Margin of safety indicates ________ of operations.=Profitability
• Depreciation, interest and property tax continue even when the operations are discontinued.=true
• Indirect labour cost indicates that labour cost which cannot be identified with the individual cost centre.=True
• There is no need to open a suspense account if the trial balance does not agree.=False
• Interest on overdraft charged by the bank is ________ to the pass book and ________ to the cash book =debited,credited
• Bank reconciliation statement is the statement prepared to explain the ________ as to why the bank balance as per ________ and bank balance as per bank book does not match=reasons, pass book
• Material Price Variance may occur due to =Change in price of material , Failure to take discounts , Weak purchase organization
• Bin Card is not an ________ record but only a ________ record.=Accounting,Quantitative
• Salary given in trial balance Rs. 5000/-, still 2000/- is to be paid . The outstanding salary is debited to Profit &Loss A/C. The second effect is -- =Transfer to balance sheet liability side
• Calculate Sales Price Variance, If actual price is Rs.5.40/- per unit, Standard price is Rs.5/- per unit and actual sales volume is 500 units.=Rs.200/- ( Favorable )
• Debit the receiver & credit the giver is a rule of Real a/c.=False
• If at 50% capacity, total factory overheads are Rs.10,000/- (out of which 60% are fixed and 40 % are variable) then what will the amount of total factory overheads at 60% capacity =Rs.10,800/-
• Administration overheads are ________ in nature and can be controlled mainly at ________ level of the management =fixed,top
• Advance= Not related in current year , Application = Increase in Assets,Outstanding= Amount still payable in current year,Prepaid= Amount paid for next year,Drawing Amount of personal use
• These are the features of fixed overheads=total cost remains the same , per unit cost may vary , not dependent on volume of output
• __________ Accounting is primarily protects the interest of the outsiders dealing with the organization various capacities like investors, suppliers, customers etc.=Financial
• Head of the Department should sign the purchase requisition.=True
• FIFO method=The price of the earliest available lot is considered first , If the lot is exhausted, the price of the next available lot is considered , It is used forissue of material
• Bin card is maintained by ________ department whereas ________ is maintained by costing department. =Stores,Store ledger
• The situation of over absorption arises if the overheads absorbed are less than the actual overheads. =False
• Accounts is a =Record of all transaction
• If production overheads to be absorbed are Rs. 20000/- and machine hours worked are 5000 then the machine hour rate will be, Re. 4 per machine hour.
• Due to errors of principle the arithmetical accuracy of the trial balance get affected.=False
• PL A/C debit side includes=salary , discount allowed , postage & telegram
• These are the methods of measuring labour turnover. =Replacement Method , Separation Method , Flux Method
• Trading a/c credit side includes=sales , goods lost by fire , closing stock
• From the following data, workout the EOQ annual demand. 5000 units, ordering cost Rs. 60 per unit, price per unit Rs. 100, inventory carrying cost15% on average inventory=300
• Financial Accounting protects the interest of outsiders . it considers ________ transaction and it is a ________ requirement =historical,legal
• Under the Emerson’s Efficiency Bonus System at following efficiency level no bonus is payable. =Below 66.66%
• Planning lays down the course of action to be taken in future. In case budgetary control, it is in the form of the ________ and in case of ________ costing, it is in the form of the standard cost=budgets,standard
• Discount received = Suppliers,Outstanding expenses = Liabilities,Depreciation =Assets,Interest on capital = Borrowed capital,Discount allowed = Debtors
• canteen facility to workers, health and safety services are examples ofmonetary incentives.=False
• This is the process of recording attendance time of the workers.=Time keeping
• Wage rate standards takes into consideration the following factors= The system of wage payments , System for bonus payment , Grades of workers required
• Standard Costing system facilitates ________ and ________ for each individual or department=Delegation of authority,Fixation of responsibility
• If actual cost is more than the standard cost then it is called favorable variance.=False
• The aggregate of indirect material cost, indirect labour cost and indirect expenses is termed as factory cost. =False
• 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 hours, i.e.6 X 60 = 360 'Bs'. Time wage rate is Rs.20/- per hour. Bonus 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.=Rs.180/-
• The objectives of Uniform costing system are as follows :=To fix a common selling price for the industry as a whole , To compare efficiency of each unit against industry's overall performance , To compile reliable cost data for inter-firm comparison of costs
• Computation of gross wages, deductions and net wages payable is the function of the ________ department. =Personnel
• Features of purchase requisition slip are :=Raised when the stock of a raw material has fallen to the re-order level. , Indicates the type, quantity and quality of material required , The information about the price of material is excluded
• Normal Standards =Anticipated to be achieved in future ,Basic Standards= Established for a longer period of time ,Current Standards= Established for a shorter period of time ,Expected Standards =Anticipated to be achieved in the budget period
• Cost Accounting restrict itself with historical transactions=False
• A very wide scope of Management Accounting is the limitation by itself.=True
• Depreciation can be defined as a permanent, continuous and gradual reduction in the book value of a fixed asset. =True
• Penalty paid for delay in payment to creditors represents uncontrollable cost.=False
• Cost Centre =Facilitate the fixation of responsibility, Cost Control= Process of controlling costs of operations,Differential Cost= Increase or Decrease incost, Sunk Cost = Historical Cost
• _______ Accounting assists the management in establishing the plans to attain the economic objectives and take proper decisions for the attainment of its objectives.= Management
• Purchased goods worth Rs.6,450/- on 10th March, 2004. However the goods were delivered directly to the plant situated at Nagar and hence this transaction was not recorded in the purchase book, which is maintained at the corporate office. Analyse the impact of this transaction. =The gross profit will increase by Rs.6,450/-
• In practical circumstances, the ________ are referred to as application of funds.=Assets
• While passing the journal entry, it is of utmost importance to ensure that the total of amount debited is equal to the total of the amount credited.=True
• A cheque of Rs.400/- received and deposited into bank on 26th September, was credited in the pass book but was omitted to be entered in the bank book: this error will result in :=Difference in the balance as per bank book and as per pass book
• The ________ is responsible for material losses while in storage.=Store-keeper
• The cost of abnormal time may be recovered by inflating the hourly labour rate.=True
• the cost-volume-profit analysis basically highlights the effect of changes in sales volume on the profit of the company, in the ________.=short run
• Contribution represents pool of resources available for meeting all costs other than ________.=Variable costs
• A BC Ltd. is planning to sell 200,000 units of product B. The fixed costs are Rs.400,000/- and the variable costs are 60% of the selling price. In order to realize a profit of Rs.100,000/-, the selling price per unit would have to be :=Rs.6.25
• The total production cost for making 20,000 units was Rs.21,000/- and the total production cost for making 50,000 units was Rs.34,000/-. Once production exceeds 25,000 units, additional fixed costs of Rs.4,000/- are incurred. The full production cost per unit of making 30,000 units is: =Re.0.98
• In which of the following situations, the flexible budget should be preferred?=Sales are too difficult to predict , Supply level of input cannot be predicted , Varying levels of production activity
• Amortisation of goodwill should be considered while preparing cash budget.=False
• Features of material usage variance are :=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
• Compound journal entry avoids duplication of effort.=True
• Commission payable to General Manager is 10 % of the net profits. If the net profit before charging commission is Rs.29,200/-, then what will be the amount of his net profit after commission?Rs.29,200/- Rs.26,000/- Rs.26,545.45 Rs.26,788.99
• The credit purchases are as follows : July Rs.80,000/- and August Rs.140,000/-. Creditors are paid either on a 'prompt basis' (on the spot) or 30 days basis. It is estimated that 10% of the creditors are in the prompt category. Find the amount paid to =Rs.161,000/- Rs.121,000/- Rs.177,000/- Rs.118,000/-
• A company budgets for a production of 150,000 units. The variable cost per unit is Rs.14/- and fixed cost is Rs.2/- per unit. The company fixes its selling price to fetch a profit of 15% on total cost. What is the break even point for the company?68,182 units 68,100 units 61,182 units 61,100 units
• Profit = Contribution per unit X ________.=Margin of safety (units)
• The different purposes served by standard costing technique are :=Cost control , Cost awareness , Performance appraisal
• If a predetermined overhead rate is not employed an the volume of production is increased over the level planned, the cost per unit would be expected to :=Decrease for fixed costs and remain unchanged for variablecosts
• The variance which measures the difference between what is paid for a given quantity of materials and what should have been paid for, is known as ________ variance.=Direct material cost
• It is said that adoption of uniform costing creates customer confidence because . . .=Prices are reliable The cost of fixed asset is Rs. 1,00,000. Rs. 17,000 is charged
• as depreciation. Calculate the rate of depreciation.=0.17
• While preparing sales budget the following factors must be considered : =The number and types of products sold by the organisation , Whether the organisation's market share is increasing or decreasing? , Details of seasonal fluctuations in sales
• Generally all the liabilities will have ________balance.=Credit
• Error of commission refer to calculation errors, totaling errors, errors in carrying forward etc.=True
• Which of the following aspects are mainly responsible for difficulty in application of Uniform costing system. =Capital investment , Plant size , Location
• The expenses relating to maintenance and creation of demand for the product should be included in the ________budget =Selling expenses
• If the firm is operating with zero margin of safety, decline of even a single unit in sales will result in ________.=Loss
• When bank balance as per bank book is considered for preparing bank reconciliation statement, then following items need to be added :=Cheques issued but not presented , Direct deposit made by customer , Wrong credits given by bank
• The indirect material cost, indirect labour cost and indirect expenses cost, collectively are termed as ________.=Overhead
• If the standard contribution is less than the actual contribution, then ________ variance arises. =Favorable
• As a part of the data presented in support of a proposal to icnrease the production of clock radios, the sales manager of Wittman Electronics reproted the total additional cost required for the proposed increased production level. The increase in total cost is known as :=Incremental cost
• Real Accounts may also consist the accounts of some intangible assets like Goodwill Account=True
• The rate at which the depreciation is to be calculated are also specified in the Income Tax Act 1961.=True
• A proprietor purchase goods worth Rs. 5500 & cash account credited to Rs. 5000 rectification of the suspense accounted debited to Rs=500
• A bill of Rs. 500 for old furniture sold to Raj, was entered in the sales day book=False
• Abnormal cost indicates that cost which is normally incurred at a certain level of output under normal circumstances.=False
• This cost indicates increased or decreased cost due to the increased or decreased volume of operations.=Differential cost
• Material cost is the first and probably the most important element of cost. =True
• Under stocking may have following consequences=Payment for idle time to workers ,Production hold ups resulting into disturbed delivery schedule , Eleventh hour purchase
• Goods received note or goods received report is prepared in following copies =One copy to Purchase department , One copy to Accounts department , One copy to Costing department
• Valuation of material uses the following methods FIFO and LIFO , Average price method , Market price
• Under Merrick Differential Piece rate System of wage payment up to 83% of efficiency following rate is offered.=Normal
• If the organisation follows the policy of considering predetermined overhead absorption rates, it may face the problem of under or over absorption of overheads if the actual overheads to be absorbed o =True
• Limitations of marginal costing are =difficult for classification as fixed cost and
• variable cost. , does not provide any standard for the evaluation of performance. , it is useful technique only in the short run.
• Budgetary Control deals with Establishment of budgets , Comparison of budgeted results with actuals , Computation of variance.
• The analysis of overhead variances is different and the most complex task.=True
• Standard costing and Marginal Costing are the best possible tools available to the management for cost control =False
• Current standards includes =Expected standards , Normal standards , Ideal standards
• In case of industries where capital investment is very high, budget should be prepared for a =Longer period
• ________ and ___ are non monetary incentives= Safety services, education facility
• Variable cost is the cost that tend to - in direct proportion with __=vary,level of activity
• __ and__ are examples of semi- variable overheads.=Maintenance cost, electricity
• Rs.5000 paid as ________ to ________should be debited to salary account=Mahesh, salary
• The sales forecast (quantity) should be compared with the ________ to find out whether it is possible for the firm to handle this level of sales.=Production capacity
• Discount received from the creditor has been entered in the creditor's account but discount has not been credited; what type of error is this ________ Omission of posting an amount in the=ledger
• Under some circumstances, it may be advisable to sell at prices equal to or below the marginal cost ignoring fixed cost. =True
• Which of the following operations would normally be carried out first when preparing a master budget? =Determining the budget period
• Interest on capital is an allowable expenditure for parntership firms, as per the provisions of the ________ . =Income Tax Act, 1961
• Mixers Ltd. is engaged in producing a standard mix using 60kg of chemical X and 40 kg of chemical Y. The standard loss of production is 30%. The standard price of X is Rs.5/- per kg.and of Y Rs.10/- per kg. The actual mix and yield were as follows : X - 80 kg @ Rs.4.50 per kg; Y - 70 kg @ Rs.8/- per kg. Actual yield – 115 kg.Compute material yield variance. =Rs.100/- (Favourable)
• The net profit before certain adjustments was Rs.95,040/-. After giving due effects to the adjustments, the revised net profit (after considering the adjustments) is Rs.78,560/- . Select the adjustments which might brought this change. Accrued commission income of-Rs.32,960/- was not entered in the books , Rent for the month of March was payable and yet to be recorded Rs.19,280/- , Repairs expenditure to the extent of Rs.30,160/- was wrongly transferred to Machinery account
• Causes for adverse material price variance are: =Uneconomical size of purchase orders , Failure to avail discounts allowed by suppliers. , Excessive freight charges
• Budgetary control system provides a basis for establishment of the incentive systems.=True
• A low margin of safety indicates ________ fixed overheads.=higher
• Category A items, as per ABC analysis,represent ________ % of the total numberof items in inventory.=less than 10
• The gross profit transferred from the trading account is Rs.98,999/-. The expenses debited to the profit and loss account are salary Rs.12,000/-; advertisement expenses Rs.18,000/-; printing and stationery Rs.5,500/- and managing director's incentive Rs.28,000/-. It was noted that no entry was made for salary of one month which was due but not yet paid. Find the net profit of the company.=Rs.34,408.09
• Credit balances in all the Personal & Real accounts appear on asset side.=False
• A complete list of all material required, with quantities, for a particular job is given in the ________.=Bill of material
• The term ________ indicates expenditure incurred on or attributable to a given thing.=Cost
• The budget manual must contain statement regarding: =Objectives of the orgainsation
• Annual subscription paid by bank to the Chamber of Commerce on 31/03/04, as per the standing instructions, and advise sent thereafter, may lead to: =Balance as per bank book > Balance as per pass book
• Entry for dishonour of cheque appears only in the pass book, this entry should be ________ in the bank book. =Passed
• Since the pass book and the bank book record the ________ transactions, the bank balance as per these books should be equal.=Same
• A pre-determined factory overhead rate holds up product costing.=False
• Rent of Rs.7,500/- for the month of April was received in March. Which account should be credited in the books of accounts for making an entry for receipt of the said amount?=Rent received in advance account
• Maintenance Department is a service cost centre.=True
• The data for XYZ Ltd. is as follows : Fixed assets Rs.60,000/-; total cost Rs.105,000/-; working capital is equal to 25% of the sales value. The company expects 25% return on capital employed. Capital employed is equal to fixed assets plus working capital. Select the s:Sales Rs.128,000/- , Return on capital employed , Workingcapital Rs.32,000/-
• If the owner brings in personal calculator for office use, ________ account should be credited.=capital
• A firm employs ten workers at an hourly rate of Rs.20/-. They worked for 40 hours each and completed the job for which standard time was 48 hours for each worker. Calculate labour cost for the job under the Rowan Plan.=Rs.9,333.33
• Treating capital receipt as revenue income is an example of errors of commission.=False
• Judge the sentence in italics according to criteria given below : " It is difficult to adopt Uniform costing system when a product can be manufactured by employing more than one method because the cost of production will vary according to the method used." =The assertion and the reason are both correct
• Crane expenses should be apportioned on the basis of=__=Number of hours crane worked in the department
• Suspense account is closed automatically after rectification of all the errors.=True
• loan @ 12% p.a. of Rs.50,000/- was taken on 1st March, 2004. Find the interest expenditure on 31st March, 2004. =Rs.500/-
• You are using petrol as one of the raw materials. Daily you purchase 1,000 litres of petrol at Rs.28.50 per ltire. 5% of it generally gets lost due to spillage and evaporation. On a particular hot and dry day, the issue of petrol from 1,000 litres drum was as follows : To job X 200 litres; job Y 400 litres and job Z 320 litres. After these issues the drum was empty. Calculate per litre charge for use of petrol, quantum of loss and total quantum of petrol used for jobs X,Y and Z. =Loss due to spillage and evaporation - 30 litres. , Rate of charge per litre of petrol - Rs.30/-
• The column which refers to the page number of the ledger is known as ________.=Ledger folio
• The direct material useage budget and direct material purchase budget differ because of which of the following: =A planned change in the level of material stock
• Double Entry Accounting System__________________=Every business transactions have two elements , When business receives something, it has to pay something , Every debit has a corresponding credit
• Sundry creditors transfer to asset side. =False
• Purchase Goods of Rs. 7500 on 10% cash discount. The discount amount is ___=750
• A bank reconciliation statement is prepared on a particular date=true
• As soon as the suspense account balance is wiped out , it may be assumed that all mistakes have been corrected. =False
• Credit sale of Rs. 5000 to Bobby should be entered in the purchase book.=False
• manufacturing process involves study of =Designing the product , The quantity and quality , Material used
• LAST IN FIRST OUT (LIFO)=The price of the latest available lot is considered first , If that lot is exhausted, the price of the 10% prior to that is considered , Physical issue of the material may not be made out of the said lot
• The Bin card and stores ledges do not match due to the following reasons:=Arithmetical errors in calculating , Non- posting a certain document , Posting a wrong Bin card
• Flux method is important method of wage payment. =False
• The causes of idle time can be analysed as=Administrative causes , Productive causes , economic causes
• Flexible budget is an effective tool for evaluation of performance.=True
• Material Mix Variance occurs where only one raw materialis required =False
• In fixed overhead variance, the volume variance is further analyzed as =Variance Efficiency Variance , Capacity Variance , Calendar Variance
• Calculate Efficiency Variance, If actual production is 22,000 units, Standard production in actual hours is 21,000 units and Standard rate per unit is Rs.1.5/-.=Rs.1,500/-( Favorable )
• Standard may not be necessarily useful for this purpose.=Forecasting
• In Cash budget , Non operating cash inflow includes=Receipt of loan/borrowings , Issue of shares , Sale of fixed assets
• In Cash budget , Non-Operating cash outflow includesVarious kinds of over heads=Loan instalments , Taxes , Purchase of fixed assets.
• During a month opening stock is 5,000 kg, closing stock is 6,000 kg and production is 21,000 kg , what is the quantity of sales=20,000 kg
• Ordering cost= Associated with administrative efforts, Carrying cost =Cost of holding the inventory, Total cost =Ordering cost + carrying , Inventory control= Maintain the inventory of any kind ,E.O.Q =Economic Ordering Quantity
• The ideal standards are generally ________ in nature and the variances always shows ________ trends=theoretical,unfavorable
• Goods distributed as free sample amounted to Rs. 10,000. Prepare Neonboard Rs. 5000. The total amount transfer to=advertisement account is Rs.____
• In a Balance-Sheet right hand side is referred as assets side and left hand side is referred as liabilities.=True
• Locate the steps involved in rectifying the errors in the books of accounts =Find the wrong entry passed , Find the correct entry to be passed , Find the entry that will resolve the mistake in the books
• Pre-requisites of Uniform Costing are . . .=Spirit of mutual trust , Free Exchange of ideas , No rivalry
• Ram and Laxman are partners of Kush & Bros. As on 1st April, 2003 Ram's capital is Rs.50,000/- and Laxman's capital is Rs.80,000/-. If interest on capital is to be provided @ 10% p.a., what will be amount of capital of each of the partners as on 31stMarch, 2004, assuming there were no additions during this period? Also, state the treatment of this item in the Profit and loss account.=Ram's capital Rs.55,000/- , Laxman's capital Rs.88,000/- , Interest on capital should be debited to the Profit and loss account
• Non-trading income is disclosed on the credit side of ________ account.=Profit and loss
• In the adjustment entry passed for closing stock, the ________ account should be credited.=Trading
• Goods kept in the godown were destroyed by fire on 18th June,2004. The cost of such goods was Rs.18,950/-. The goods were not insured. Find the amont which should be debited to the profitability statement.=Rs.18,950/-
• While preparing the bank reconciliation statement as on 31st March, 2004 you find the following discrepancy : 'a cheque of Rs.3,700/- received and deposited in bank on 27th March, 2004 was entered credited in the pass book on 3rd April, 2004.' In this background, which of the following statement holds true as on 31st March, 2004?=Balance as per pass book <>
• Bank reconciliation statement is a systematic presentation of errors made by the accountant.=False
• The ________ is a perpetual inventory record.=Bin card
• A written request sent to a supplier for specified goods at an agreed upon price is often called as : =Purchase order
• Selecting an appropriate method of valuation of inventory is important because :=It influences the figure of gross profit
• Re-order level for materials is determined considering maximum consumption and maximum delivery period. =True
• Control on purchase of material is exercised by the storekeeper. =False
• Which variance is used to analyse the effect of change in the quantity of output from a given mix of inputs?=Materials yield variance
• Accounting period Concept________________=Longer life-span on business is divided into shorter segments ,Each one being in the form of accounting period , Selection ofaccounting period may depend on various factors
• Purchased computers of Rs. 50,000 come under the heading of fixed asset=TrueAmount with drawn for personal purpose drawing A/C to be debited.=True
• Profit & Loss A/C credit side has=Gross profit , Commission received , Interested received
• Rs. 2500 paid for the purchase of radio set for personal use of proprietor debited to general expenses account for rectifying the error, which A/C to be debited=Drawing A/C
• Discount received from the Creditors has been entered in the Creditors A/C but discount amount has not been credited, for rectifying such error which account to be debited.=Suspense A/C
• Total of purchase register for the month of March is taken 50,000 instead of 55,000. Posting to individual A/C of supplier total to correct amount is 55,000 but purchase account is debited by Rs. 50,0=True
• There is reverse relationship between the ordering cost and carrying cost=True
• Store ledger=Record of all receipts and issue transactions , Financial expressions of all transactions , Maintenance of Store ledges provides a second check
• In EOQ, to express carrying cost as a percentage of the unit cost of purchases this is used in the formula-----------=I
• Under the differential time rate method of wage payment between 90% to 100% of efficiency following rate is offered. =Rs. 1.40 per hour
• Where overheads chargeable to the department are Rs. 5000/- , direct labour hours worked are 24000 then labour hour rate is Re. 0.2083 labour hour.=True
• The selection of the base on which overheads should be apportioned depend on the following principles. =service or use basis , survey basis , ability to pay basis
• The Budget key factor may be in the form of sales, raw material, labour etc.=True
• For a material, if standard quantity is 500 kg and standard price is Rs.6/- per kg. Find out the Material Cost variance if actual quantity is 400 kg and actual price is Rs.6/- per kg. =Rs.600/-( favorable )
• Calendar Variance arises only if there is abnormal increase or decrease in=Actual number of working days
• The following factors affects the budgeted advertisement cost=Percentage of profits , Availability of funds , Competitors policy
• Token or Disc Method Token number &identification number allotted to worker, Time Recording Clock Method=Ticket number & clock card allotted to worker, Daily Time sheets= Time spent by worker on job is recorded, Weekly Time sheets= Record of time for all the jobs during the week is made , Hand Written method =Attendance REGISTEr
• Management Accounting has a very ________ scope and it requires ________ organizational structure =wide ,elaborate
• The cost accountancy is defined as “ the application of costing principles,methods and techniques to the ________, art and practice of ________ ascertainment of the profitability and the presenta=science ,cost control
• Replacement costs of labour turnover are ________ and________=training,breakages of machine
• Over absorption of overheads may take place due to the reasons like ________ overheads being less than the ________ overheads=actual,estimated
• ________ Legal charges and ________ are the accounts which are shown on the debit side of Profit & Loss Account =Like office rent, ,Audit fees
• While calculating the minimum level, normal lead time is not necessary=False
• To Increase the existing production capacity, additional capital expenditure is required.=True
• During one week X makes 200 units. He receives wages for a guaranted 44hours per week at a rate of Rs. 1.50 per hour. Estimated time to produce one unit is 15 minutes. Time allowed is increased by 2=Rs. 83.60
• Cost-sheet may be prepared separately for each=Different Cost Centre
• The cost of asset is Rs. 1,10,000, Estimated scrap value 10,000,estimated life 10 yrs. Calculate the depreciation according to straight line method=10,000
• To ascertain the ________ of all the transactions recorded in the ledger account, the account is required to be ________ =Net effect,Balanced
• For a unit, if opening stock of raw material is 10,000 units, closing stock of raw material is 5,000 units and consumption is 3,20,000 units, what will be the quantum of raw material to be purchased=3,15,000
• Whatever is to be sold need not be produced. =True
• Patents and Trade Marks Account is a Real Account.=True
• Budget is prepared in terms of=Quantity and/or Money
• Favorable variances need on investigation=False
• Standard Costing may not be useful in=Small concerns , Industries having non-standardized products ,Contract jobs
• __________ Accounting becomes a source of information for Management Accounting.=Financial
• The levels indicated on the Bin card enables the ________ department to keep a watch on the balance and replace the material as soon as it reached at ________ level.=Stores ,Re-order level
• principal functions of the cost accounting department are :=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.
• The treatment of ________ time in cost accounting depends upon the distinction between normal and abnormal time.=Idle
• Differential cost analysis is incorporated in the cost books.=False
• The process of recording attendance time of the workers is known as time booking.=False
• If the quantity of material purchased and quantity used are different, then which quantityshould be used to compute the material price variance?=Quantity of material purchased
• Factory light, telephone expenses are examples of ________ expenses.=Indirect
• For successful implementation of uniform costing system, it is very essential to devise________, containing recommended cost accounting plan and procedures.=cost manual
• The combination in which different products are sold by a company is known as________.=Sales mix
• Which of the following is usually prepared daily by employees for each job worked on?=Job card
• Profit = Profit volume ratio X Margin of safety=True
• The management of Horngreen Ltd. is deciding whether to continue working at loss or to temporarily shut down the factory. State the qualitative aspects that must be considered before arriving at a decision.=Loss of trained personnel , Loss of regular customers , Expenditure required to restart the factory
• Locate the error and its features in the following - =Compensating errors , Trial balance will not be affected , Trial balance will be affected
• Rs.2,650/- were paid to ABC Ltd. for maintenance of machine; which account should be debited for this transaction?=Maintenance of machine account
• Margin of safety = Contribution / Profit volume ratio=False
• If the profit volume ratio is 25%, then the variable cost is equal to ________ of sales value.=0.75
• Which of the following costs is most likely to have a cost behaviour pattern described as ..a fixed cost upto an activity level of 1,000 units, with a variable cost there after which decreases from 10 paise to 8 paise per unit at 2,000 units?=Wages payment which is fixed for a minimum output quantity after which a bonus per unit is paid which reduces when activity level exceeds 1,000 units
• In case of defective material being returned by the stores department to the vendor, such material should be valued at the________.=Purchase price
• Piece rate system is suitable when quality of goodsproduced is of extreme importance.=False
• A firm earns profit when contribution is equal to fixed costs under variable costing.=False
• Contribution represents pool of resources available for meeting all costs other than ________.=Variable
• Overheads chargeable to a product, using direct labour cost basis, may be calculated by multiplying percentage of direct labour cost and ________.=Direct labour cost of the product
• 200 units of material were purchased from X @ Rs.5/- per unit and 300 units were purchased from Y @ Rs.6/- per unit. The organisation follows FIFO system of pricing of issues and the above purchases have been recorded in stores ledger. 120 units have already been issued. 60 units received from X are defective and are therefore returned. Find the value of the material returned to X. =Rs.300/-
• Long term loan borrowed from financial institution comes under the heading of long term liabilities. =True
• Category C items, as per the ABC analysis, usually refers to indirect material.=True
• According to the standard costing principles, only adverse variance must be further investigated. =False
• Education facility to workers and their children, pension, superannuation fund are examples of ________ incentives.=Non-monetary
• Closed the account with State Bank of India= Henceforth, there shall beno difference in overdraft balances,Debit side of bank book is overcast =Overdraft as per bank book
• Overdraft as per pass book ,Interest on debentures directly credited by bank= Overdraft as per bank book > Overdraft as per pass book , Received sanction for a loan of Rs.10 lakhs =Overdraft as per bank book= Overdraft as per pass book
• The purchase account should be debited when an order is placed with the supplier of material.=False
• The purchase budget for October is Rs.12,500/- and November is Rs.15,000/-. If the materials are purchased for cash the supplier is offering a rebate of 5%. If the materials are purchased on credit of 30 days, no rebate is offered. The company purchase= October- NIL, November- Rs.26,750/-
• The composition of selling costs is given below : 1 salaries 4% of sales, 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/-.=Rs.9,000/-
• The characteristics of a good wage system are : =Flexible , Economical to use , Easy to understand
• Marginal costing is found to be unsuccessful in the following situations :- = Impossible to distinguish costs into fixed and variable component. , With respect to capital intensive industries where fixed costs are very large and hence cannot be ignored , With respect to service industries where employee costs are very large and almost fixed in nature
• Master budget provides a basis for computing effect of changes in :=product mix of the company , sales volume , production facilities
• Money Measurement Concept__________________= Only those transactions and facts expressed in terms of money, This Concept imposes severe restrictions on the kind of information available from financial statements , Due to several restrictions it becomes drawback of financial accounting
• A started business with cash 5000, building 5000, furniture 2000, having depreciation of 10% on building. The total amount of capital comes to Rs.__=11500
• A contractor’s bill for the extension of premises amounting to Rs. 2750 has been debited to building repair account=False
• Company having opening stock of Rs. 1,80,000 purchase Rs. 8,00,000. Freight Inward Rs, 35000 & closing stock Rs. 2,00,000, having direct wages Rs. 2,35,000. What will be prime cost.=10,50,000
• The aims of perpetual inventory system are as follows=Maintaining Bin cards , Maintaining store ledger , Continuous verification of physical stock
• These are the features of variable overheads=vary directly in proportion to volume of output. , per unit cost remains the same , total overheads may increase or decrease as per volume of output.
• The ultimate incorporation of all functional budgets takes the form of budgeted Profit & Loss Account and Balance Sheet.-=True
• If during a month anticipated sales are 5,000 kg, opening stock is 1,000 kg and closing stock is 500 kg then what will be the quantity of production =4,500 kg
• Under the repeated distribution method the overheads of ___department are distributed to other departments on agreed ____=service,percentage
• Business Entity Concept ____=Business is separated from the owner. , The accounting process carried out for the business , Separate legal entity
• The danger level fixed below maximum level=False
• Following example comes under service cost centre = Store department , Internal Transport department , Accounting/Costing department
• The material physically received is compared with material ordered as per the this order=Purchase order
• Straight Piece rate system= The rate of payment is fixed per piece ,Diemer system =Halsey system & Gantt System,Time rate System =Worker is paid on the basis of time attended by him. ,Payment by Result =Workers are paid according to the production achieved by him,Differential Time rate =Different hourly rates are fixed for different levels of efficiency
• Important advantages of Uniform Costing can be said to be It is a useful tool for management control , It avoids cut throat competition , Weaker units can take advantage of settled systems of better managed units
• Margin of safety are the sales beyond=break even point The difference between sales and factory/ works cost is termed as=gross profit
• Labour cost is the cost of ___ paid to employees of theorganization.=Remuneration
• labour Efficiency Standards are decided by considering followingfactors=Records of past performance , Time & Motion Study , Trial Runs
• Wage payment system should be properly tied up with quality control procedures to ensure that the workers are paid only for good and quality production.=True
• Semi _ overheads are neither _nor variable in nature.=fixed,variable
• If the product is labour intensive, more stress may be necessary on inventory control procedure.=False
• Fixed assets do not give the returns during the same period during which they are paid for=True
• The material issued to production department may be returned back to the stores because material issued in excess requirement and=Material issued is defective
• Convention of Materiality _____=Only those transactions will be considered which have material impact on profitability , Insignificant transaction will be ignored ,The cost of non-used should not be considered as the item of cost
• Under the Merrick's differential piece rate system of wage payment if the efficiency level of a worker is below 83%, then he is paid wages at ________ piece rate.=Normal
• A standard that is never altered, after being established, is known as _______standard.=Ideal
• Benefits available from revenue expenditure are received in the : Same year
• Profit and loss account indicates the profit earned as on a particular date.=false
• Interest on drawings of partners should be credited to which account?=Profit and loss
• The overheads of a machine shop X should be apportioned using which of the following basis?=Machine
• The system which provides an opportunity to the small units to take advantage of the research work taken by the large scale units of the same industry is known as ________ system.=Uniform costing
• Larger the size of the purchase order, smaller will be the number of orders required to be placed in a year. =True
• High time wages means necessarily high cost of production.=False
• The statement, mainly applicable to company form of organization, which discloses the manner in which the profit after tax is distributed is known as:=Profit & Loss Account Appropriation Account
• comparison of financial statements on period-to-period basisUnearned commission of Rs.5,000/- needs to be recorded in the books of accounts. Find its correct impact. =The asset side of the balance sheet will increase by Rs.5,000/-
• Calculate the earnings of workers Monica and Sonica under Taylor's differential piece rate system. Hours in a day =8; normal rate per unit = Rs.12/-; standard time per unit = 30 seconds; rate differential : 80% of piece rate below standard, 120% of piece rate at or above standard. Monica produces 900 units per day and Sonica produces 1,100 units per day.=Monica -Rs.72/-; Sonica - Rs.132/-
• Depreciation on assets is credited to the trading account.=False
• Different types of tenders are :-=Singly tender , Open tender , Global tender
• The handloom industry will have ________ fixed cost and high variable cost.=Low
• The reasons and objectives of budgets may be stated as :-=To aid the planning of annual operations , To communicate the organizational plans to the different departments , To motivate the managers to strive for attainment of the organizational goals
• Accounting= Process of analyzing & interpretation , Profitability statement =Indicates the amount of profit earned ,Balance-sheet = Financial status, Book-Keeping = Books of Accounts, Financial statement= Profitability statement & Balance-sheet
• Salary paid to employee amounted Rs. 10,000, transferred to Trading A/C is an example of_______=Error of Commission
• Labour cost indicates that labour cost which cannot be identified with the individual cost centre and is incurred for those employees who are not engaged in the manufacturing process but only assist i=Remuneration
• 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.=False
• Over absorption of overheads may take place due to the reasons like ________ overheads being less than the ________ overheads=actual,estimated
• Income received in advance transfer to current liabilities=True
• Bank reconciliation statement is the statement prepared to explain the ________ as to why the bank balance as per ________ and bank balance as per bank book does not match=reasons,pass book
• Fixed cost is the cost that tend to remain ________ irrespective of ________= constant, level of activity
• A business is an activity carried out with the intention of earning the profit.=True
• If wages for the month of January, February and March are Rs.4,000, Rs.4,400 and Rs.4,600 respectively and if delay in payment of wages is ½ month , payment of wages for the month of February is=4,200
• Management Accounting has a very ________ scope and it requires ________ organizational structure=wide,elaborate
• Accounting is an art of recording, classifying & summarizing in a significant manner.=True
• For a unit, if opening stock of raw material is 10,000 units, closing stock of raw material is 5,000 units and consumption is 3,20,000 units, what will be the quantum of raw material to be purchased=3,15,000
• Important advantages of Uniform Costing can be said to be=It is a useful tool for management control , It avoids cut throat competition , Weaker units can take advantage of settled systems of better managed units
• P/L A/C debit side includes=salary , discount allowed , postage & telegram
• Actual costs may be affected due to inefficient functioning such as=Abnormal expenses , In efficient use of labour , In efficient use of material
• Calculate Labour Efficiency Variance, If actual rate per hour is Rs.3.50/- , Standard rate is Rs.3/- per unit and standard hours are 15,000 and Actual hours are 13, 500.=Rs.4500/- ( Favorable )
• Sales quantity may be forecasted after taking into consideration various factors such as=Analysis of past trends , Market research , Reports by salesmen
• For taking make or buy decision marginal costing technique provide useful assistance.=True
• Profitability statement indicates the amount of assets & liabilities.=False
• It is an appropriate basis of apportionment of depreciation expenditure =value of assets
• The variable costs are controllable at the lower level.=True
• Balance sheet indicates the expenditure & income from the business.=False
• Journal Book of original entry Book of original entry
• Ledger Maintain all types of Accounts Maintain all types of Accounts
• Assets All the properties owned by the business All the properties owned by the business
• Liabilities All the amount owed by the business All the amount owed by the business
• Drawing Withdrawn for personal use Withdrawn for personal use
• A budget manual is a document setting out the ________ of the persons and ________ required for the budget control.=Responsibilities, Forms and procedures
• credit balances in all the Personal & Real accounts appear on asset side.=False
• The process of accounting split into three steams i.e. financial, cost, management accounting.=True
• Omission of posting an amount in the ledger=Error of Omission
• non-operating / financial expenses are added while calculating net profit.=False
• Balance sheet indicates the financial status of the business at given period.=True
• A Budget Manual may contain the following particulars=Duties and responsibilities of various executives , Functions and duties of Budget Officer , Scope of the Budget and area to be covered
• Semi ________ overheads are neither ________ nor variable in nature.=fixed,variable
• Due to errors of principle the arithmetical accuracy of the trial balance does not get affected.=True
• Direct Cost includes=Direct material , Direct labour , Direct expenses
• Financial Accounting protects the interest of outsiders . it considers ________ transaction and it is a ________ requirement=historical
• Bin Card is having all the information of item received and issued.=False
• Budgetary Control is useful for ________-and ________-as a powerful tool in the hands of management=Cost control, Maximization of profits
• Accounting refers to the process of analyzing & interpreting the information already recorded in the books of accounts.=True
• The material Requisition note contains=Number and date , Department demanding the material , Signature of the authority approving the demand
• Following error affect the trial balance=Wrong totaling of subsidiary books , Posting on the wrong side of an account , Omission of posting an account in the ledger
• Fixed overheads normally arise as a result of policy and are largely ________ in nature at the ________ level of the management=uncontrollable,lower
• Budget is prepared for a fixed period of time.=True
• Sold Goods of Amitabh worth Rs. 15,000 against 15% Trade discount. The Goods worth appear on account ___________=12750
• This is not the non monetary incentive.=Co-partnership
• Along with financial accounting, ________ and ________ are the other streams of accounting=Cost Accounting, Management Accounting
• A very wide scope of Management Accounting is the limitation by itself.=True
• Contents of Uniform Cost Manual are=Organization , Cost Accounting system , Presentation of information
• Uniform Costing Methods may be advantageously applied to . . .=Single organization having number of branches. , Number of companies in same industry , Similar Industries such as cotton, jute etc.
• Financial statements are basically in two forms i.e. profitability statement and balance sheet.=True
• The process of accounting has three streams of accounting ---------------,--------and -----=Financial Accounting , Cost Accounting , Management Accounting
• Long term loan borrowed from financial institution comes under the heading of long term liabilities.=True
• Judge the statement according to the criteria given : ' The accounting period for XYZ Ltd. ends on 31st December, 2003. It is noted that office rent for the month of December, 2003 is paid on 15th January, 2004. "According to concept of matching expenses with the revenues, this expenditure should be recorded in the books of accounts in January,=The statement and its reason are both incorrect
• Features of money measurement concept are . . .=Only those transactions and facts are included expressed in terms of money are considered , Imposes severe restrictions on the kind of information available from financial statements , Works as a major drawback of financial accounting
• The installation and operation of ___________ accounting requires a very elaborate organizational structure and large number of rules & regulations=management
• ________account can be defined as the record of all the transactions pertaining to a person, asset, liability income or expenditure which have taken place in a specified period.=Ledger
• Sunk Cost= Historical Cost, Cost Centre=Facilitate the fixation of responsibility, Cost Control=Process of controlling costs of operations, Differential Cost=Increase or Decrease in cost
• Which of the following transactions should be excluded while preparing a cost sheet ?=Interest on loan , Bad debts , Expenses on criminal law suit
• In a Balance-Sheet right hand side is referred as assets side and left hand side is referred as liabilities.=True
• Credit note is an intimation send to person dealing with the business that his account being debited for the purpose indicated therein.=False
• Primary distribution is effected on the basis of service rendered to the service departments by the production departments.=FalseMarginal costing is found to be unsuccessful in the following situations :-Impossible to distinguish costs into fixed and variable component. , With respect to capital intensive industries where fixed costs are very large and hence cannot be ignored , With respect to service industries where employee costs are very large and almost fixed in nature
• Debit Note is an intimation sent to person dealing with the business that his account is being credited for the purpose indicated therein.=False
• Labour efficiency variance arises due to:=Inefficient supervisor , Poor working conditions , Use of sub-standard quality of material
• Financial Accounting discloses the financial performance & financial statements of the business as a whole.=True
• Balance sheet indicates the expenditure & income from the business.=False
• The indirect material cost, indirect labour cost and indirect expenses cost, collectively are termed as ________.=Overhead
• A person in charge of a ________ may be held responsible for its proper functioning and cost control.=Cost centre
• The organization chart shows the following aspects :=Functional responsibility of different functional managers , Delegation of authority to various managers , Inter-functional relationships of these managers
• Uniform costing system is a pre-requisite to an inter-firm comparison of firms belonging to the different industries.=False
• P&L statement which is a period statement & relates to a certain period tells about results of operations.=True
• Depreciation charged on office furniture on straight line basis is an example of ________.=Administration overheads
• Under time rate system a worker is paid on the basis of production achieved by him in a given time.=False
• Information as to the cost and profit / loss associated with the firm's operations is provided to the ________ by Management accounting.=Management
• Danger level for inventory of materials means the safety stock of inventory.=False
• The role of the budget committee may be taken as an advisory role to the Chief Executive.=True
• The main advantages of profit sharing are :=Employees try to increase productivity , Incentives are shared by all the employees , Augments emplyees' efficiency
• ________ Accounting assists the management in establishing the plans to attain the economic objectives and take proper decisions for the attainment of its objectives.=Management
• Which of the following is likely to be a contributory factor to the incidence of excess expenditure on material cost?=The level of control of the used of material in the production cycle , The incorrect choice of purchase order quantity , Failure to control the issue of materials from stores
• Management accounting is concerned with the following activities :=Decision making , Safeguarding assets , Planning and controlling activities
• Features of double entry accounting system are . . .=Every business transaction has two elements , When business receives something, it has to pay something , Every debit has a corresponding credit
• Under Differential Time Rate method payment is made at Rs. 1.40 per hour when the level of efficiency is between________.=90% to 100%
• Maintenance Department is a service cost centre.=True
• The difference between sales and cost of sales is termed as ________.=Net Profit
• The final result disclosed by trading account is the ________profit earned by the organization.=Gross
• Select the accounts to be disclosed on the liability side of the Balance sheet.=Loan , Outstanding expenses , Creditors
• Penalty paid for delay in payment to creditors represents uncontrollable cost.=False
• Which document facilitates estimating material cost of a particular job, before completion of that job?=Bill of material
• Purchases returns of Rs.18,000/- were wrongly transferred to the sales returns account. Calculate its impact on net profit.=The net profit will not be affected
• It is said that adoption of uniform costing creates customer confidence because . . =Prices are reliable
• An order for goods worth Rs.18,000/- was placed on 25th March, 2004. The goods were received on 1st April, 2004. Calculate the impact of this transaction on the final statements of accounts for the year ended 31st March, 2004.=The net profit will not be affected
• Furniture account will always have a ________ balance.=Debit
• Accounting is the art where transactions are …=Summarized , Classified , Recorded
• The phrase 'By Balance c/d.' written on the credit side of the rent account, indicates credit balance for this account.=False
• The ________ variance is the difference between the actual variable overhead incurred and the standard variable overhead charged to production.=Total variable overhead
• The selection of ________ may depend upon the various factors like characteristics of the business organisation, tax considerations, statutory requirements etc.=Accounting period
• Standard costs are used for external reporting.=False
• It is said that the income statement represents wealth increase /decrease for the organisation.=True
• Mr. Oak, materials manager, spends 40% time in the factory and the remaining in office. If his annual salary is Rs.500,000/-, what amount should be charged as office overheads ?=Rs.300,000/-
• The factors to be considered while preparing the direct materials budget are :=Adequacy of material storing space , Availability of funds , Material in stores but reserved for specific purposes
• In which of the following situations, the flexible budget should be preferred?=Sales are too difficult to predict , Supply level of input cannot be predicted , Varying levels of production activity
• Techniques of management accounting include:=Marginal costing , Budgetary control , Standard costing
• Profit and loss account=commission received, Manufacturing account= Work in Progress, Balance Sheet=Land & Building, Trading account=Closing stock of finished goods
• While preparing the labour cost budget, factors such as overtime working or night shift working may be ignored.=False
• 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=Increase the selling price , Reduce cost of sales , Increase the selling efforts
• From the following, select intangible assets:=Goodwill , Patents , Trade Marks
• Bank reconciliation statement must be prepared before the preparation of profit and loss account and balance sheet.=True
• Find the budget which is inadequate as a cost control technique :=Fixed budget
• Predetermined rate of absorption of overheads helps in quick preparation of cost estimates and quoting prices.=True
• 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.=Rs.3,00,000/-
• ________ is an example of intangible asset.=Goodwill
• Goods sent to the customers on approval basis should be treated as sales.=False
• Features of Sunk cost are . . .=Indicates historical cost , Not relevant in decision making process , Incurred in past
• Profitability statement indicates the amount of assets & liabilities.=False
• A business is an activity carried out with the intention of earning the profit.=True
• Identify the steps involved in selecting the optimum product mix, when the limiting factor is number of labour hours and sales demand.=For each product find the contribution per unit and per labour hour , Award ranks to each of the products based on contribution per limiting factor , Priority is given to fulfill the market demand of the product which gives maximum contribution per labour hour.
• The ideal budget period for a company engaged in generation and distribution of electricity is one year.=False
• The ________ adjustment is necessary to relfect the cost for the use of fixed asset during the year.=Depreciation
• According to Reducing Balance Method, the depreciation is provided at a predetermined percentage on the balance of cost of asset after deduction of the depreciation previously charged.=True
• Crane expenses should be apportioned on the basis of ________.=Number of hours crane worked in the department
• Essentials for effective implementation of budgetary control system are=Commitment of top management , Clearly defined objectives , Continous budget education
• Commission payable to General Manager is 10 % of the net profits. If the net profit before charging commission is Rs.29,200/-, then what will be the amount of his net profit after commission?=Rs.26,545.45
• A forecast is mere estimate of what is likely to happen, but ________ is the action plan to be followed.=BudgetThe combination in which different products are sold by a company is known as ________.=sales mix
• The reporting method used in the costing system should be based on the principle of=Management by exception
• Balance sheet indicates the financial status of the business at given period.=True
• The wages paid to maintenance department workers who do repair work principally for production departments but also on the vehicles in the distribuiton department shoud be charged as:=Service costs
• M/s Vivek Enterprises has paid rent relating to the residence of Mr. Vivek, proprietor of Vivek Enterprises. This payment should be treated as=Drawings
• Measurement of ________ gives an idea of the degree of mobility of labour.=Labour turnover
• 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.=Rs.8,279.63
• Total cost=Cost of finished goods, Non operating income=Profit on sale of investment,Selling and distribution overheads=Advertisement expenses,Factory overheads=Repair for factory building
• Control on purchase of material is exercised by the storekeeper.=False
• A company wishes to earn a 15% profit margin on selling price when quoting for a job. Which of the following is the profit margin of cost which will achieve the required profit margin ?=0.1765
• Economical use of labour, materials and facilities can achieved with the help of ________.=Budgetary control
• Financial Accounting discloses the financial performance & financial statements of the business as a whole.=True
• Management Accounting is the process of analysis and interpretation of financial data collected with help of financial accounting and cost accounting=True
• P&L statement which is a period statement & relates to a certain period tells about results of operations.=True
• Cost Accounting is concerned with calculation of the profitability and state of affairs of the organization as a whole.=False
• Financial accounting may deal with the ascertainment of cost & calculation of profitability of the individual product.=False
• 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.=True
• Financial Accounting primarily protects the interests of the outsiders dealing with organization in various capacities.=True
• Financial Accounting= Systematic recording of business transactions , Cost Accounting= Ascertainment of cost ,Management Accounting =Analyzing & interpretation of financial data ,Accounting =Art of interpreting & classifying business transaction ,Book Keeping= Recording of business transactions
• Bills Payable= Amount payable to supplier ,Bills Receivable = Amount received from the customer,Trade Discount= Not accounted for in the books of Accounts ,Cash Discount= Accounted for in the books of Accounts ,Bad debts= Amount not received from customer
• Amount invested in purchasing Fixed Asset is a revenue expenditure.=False
• Going Concern Concept =Indefinite longer period , Not likely to close down in shorter period , This affects the values of asset and liabilities
• Cost of asset is 1,20,000, estimated scrap value 20,000, cost of assets subjected to depreciation 2,00,000, rate of depreciation is 10%. Calculate depreciation for 3 yrs as per the reducing balance m
• =20,000,18,000,16,200
• Profit & Loss A/C credit side has=Gross profit , Commission received , Interested received
• Juhi started business with Rs borrowed capital of Rs. 1,00,000 with 10% interest per year. What is the total amount of the capital
• =1,10,000
• Cheques issued but not yet presented – the balance as per the bank pass book will be higher.=True
• This cost indicates historical cost which is incurred in past.=Sunk cost
• Labour cost is the cost of __________ paid to employees of the organization.=Remuneration
• Company having opening stock of Rs. 1,80,000 purchase Rs. 8,00,000. Freight Inward Rs, 35000 & closing stock Rs. 2,00,000, having direct wages Rs. 2,35,000. What will be prime cost.=10,50,000
• For the proper interpretation and presentation of cost the overhead further classified as=Factory overheads , Office and administration overheads , Selling & distribution overhead
• Valuation of returns indicates the material returned by store department to production department=False
• The wage payment system should take into consideration the external obligations such as the Minimum wages Act and the agreement entered into by the organization with the workers=True
• A good wage payment system will punish the workers for the matters beyond the control of the workers.=False
• These are the features of fixed overheads=total cost remains the same , per unit cost may vary , not dependent on volume of output
• Under marginal costing technique only fixed costs are considered as relevant for decision making.=False
• Product mix refers to the proportion in which various products of a company can be sold.=True
• The cost that varies in direct proportion with the level of activity is called
• #NAME?
• Basic assumptions made by marginal costing are
• #NAME?
• Calculate Volume Variance, If budgeted production is 20,000 units, actual production is 22,000 units and Standard rate per unit is Rs.1.5/-.
• =Rs.3,000/- ( Favorable )
• Calculate Sales Price Variance, If actual price is Rs.5.40/- per unit, Standard price is Rs.5/- per unit and actual sales volume is 500 units.
• #NAME?
• Standard Costs are used as tool for=Cost Control
• Standard Costing specifically relates to the function of
• #NAME?
• Uniform Costing disturbs the healthy competition in the industry=False
• Uniform Costing Methods may be advantageously applied=In single organization having number of branches. , Number of companies in same industry. , Similar Industries such as cotton, jute etc.
• The following factors affects the budgeted advertisement cost=Percentage of profits , Availability of funds , Competitors policy
• In Cash budget , Operating cash outflow includes=Payment to Creditors , Cash purchases of raw material , Wages/salaries
• Characteristics of budget can be said to be
• #NAME?
• Like initial formation expenses, ________ and R & D are the examples of Deferred Revenue Expenditure=Initial Advertisement
• If ________ is not provided, the asset may appear in the Balance Sheet at an ________ amount=depreciation,overstated
• If ________ books are the books which record the transactions in the chronological order, ________ is the book where transactions of a similar nature are pooled together=subsidiary, ledger
• While selecting source of supply ________ epartment may call for the ________ from the prospective suppliers
• #NAME?
• Preventive costs of labour turnover refers to all the costs which may be incurred by the organisation to keep workers happy and ________ them from ________ the job=discourage,leaving
• .Under the differential time rate method the wages are paid at Rs. 1.50 per hour between ________ efficiency and Rs.1.25 per hour between ________ efficiency=101% to 125 %,80% to90%
• Expenditure like general lighting are apportioned considering ________ as a base and expenditure like depreciation are apportioned considering ________ as a base.=number of light points,value of assets
• ________ and ________ are examples of element wise classification overhead costs=Idirect material,indirect labour