Management Accounting - A21

Multiple Choice Multiple Answer
Question Cost control procedure deals with :-
Correct Answer Establishment of plans , Comparison of actual and
planed performance , Computation of variance
Your Answer Establishment of plans , Computation of profit ,
Comparison of actual and planed performance

True/False
Question The labour cost which can be identified with the
individual cost centre is known as the Direct Labour Cost.
Correct Answer True
Your Answer True

True/False
Question Under the Rowan plan bonus is a fixed percentage.
Correct Answer False
Your Answer False

Multiple Choice Single Answer
Question Which of the following is the most efficient use of the
clock card?
Correct Answer To facilitate payment for time spent on the work
premises
Your Answer To facilitate payment for time spent on the work
premises

Multiple Choice Single Answer
Question It is said that adoption of uniform costing creates
customer confidence because :-
Correct Answer Prices are reliable
Your Answer Prices are reliable

Select The Blank
Question Profit = Contribution per unit X ________.
Correct Answer Margin of safety (units)
Your Answer Sales (units)

True/False
Question Accounting is an art of recording, classifying &
summarizing in a significant manner.
Correct Answer True
Your Answer True

Multiple Choice Multiple Answer
Question Techniques of management accounting include:-
Correct Answer Marginal costing , Budgetary control , Standard
costing
Your Answer Marginal costing , Budgetary control , Standard costing


Multiple Choice Single Answer
Question An important feature of management accounting is :-
Correct Answer Optimizing the use of resources
Your Answer Considers only historical data

True/False
Question Category C items, as per the ABC analysis, usually refers
to indirect material.
Correct Answer True
Your Answer False

Multiple Choice Single Answer
Question A withdrawal of Rs.500/- from Mr.Jone's account on 2nd
October, 2004 has been entered by the bank in the pass book of Mr.Johny's
account.' If you are preparing the bank reconciliation statement
considering the balance as per pass book as on 31st October,2004 is
Rs.2,250/- for Mr.Johny, find out the balance as per his bank book.
Correct Answer Rs.1,750/- (debit)
Your Answer Rs.1,750/- (debit)

Multiple Choice Multiple Answer
Question These are the preventive costs of labour turnover :-
Correct Answer Cost of maintaining good relations with the workers
, Cost of medical services , Cost of welfare facilities
Your Answer Cost of maintaining good relations with the workers ,
Cost of medical services , Cost of welfare facilities

Multiple Choice Multiple Answer
Question The causes of idle time can be analyzed as :-
Correct Answer Administrative causes , Productive causes , Economic
causes
Your Answer Administrative causes , Productive causes , Economic
causes

Select The Blank
Question Baum Differential Plan is a combination of Taylor's
differential piece rate system and Halsey system and is also known as
________.
Correct Answer Milwankee plan
Your Answer Milwankee plan

Multiple Choice Single Answer
Question 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?
Correct Answer Rent received in advance account
Your Answer Rent received in advance account
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Multiple Choice Multiple Answer
Question The operating profit as per cost statement may differ from
the profit as per Profit and Loss Account due to existence of :-
Correct Answer Interest on loans taken from other , Interest on
loans granted to others , Depreciation on plant and machinery
Your Answer Depreciation on plant and machinery , Preliminary
expenses written off , Interest on loans taken from other , Interest on
loans granted to others

True/False
Question Accounting is an art of recording, classifying &
summarizing in a significant manner.
Correct Answer True
Your Answer True

Select The Blank
Question The variance that attempts to ascertain the effect of
change in sales volume on the difference between actual and budgeted
contribution is known as ________ variance.
Correct Answer Sales margin volume
Your Answer Total sales margin

Multiple Choice Multiple Answer
Question In practical circumstances, control ledgers may be
maintained for the following categories:-
Correct Answer Sundry debtors , Sundry creditors , Advance to Staff

Your Answer Sundry debtors , Sundry creditors , Advance to Staff

True/False
Question All cash sales are recorded in the sales register.
Correct Answer False
Your Answer True

Select The Blank
Question If the profit of Y Ltd. is Rs.10,000/- and its profit
volume ratio is 10%, then its margin of safety will be Rs.________.
Correct Answer 100,000/-
Your Answer 100,000/-

Select The Blank
Question ________ 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.
Correct Answer Ledger
Your Answer Ledger

Multiple Choice Single Answer
Question A good purchase system, for materials, prevents production
hold-ups due to:-
Correct Answer Lack of material
Your Answer Lack of material

True/False
Question According to last-in-first-out method of material issue
pricing, issues prices are close to current economic values.
Correct Answer True
Your Answer True

True/False
Question Profitability statement indicates the amount of assets &
liabilities.
Correct Answer False
Your Answer False

Match The Following
Question Correct Answer Your Answer

Dividend paid Profit and loss appropriation account Profit and loss
appropriation account

Freight inwards Manufacturing account Manufacturing account

Sales Trading account Trading account

Freight outwards Profit and loss account Profit and loss account


Multiple Choice Multiple Answer
Question Which of the following is likely to be a contributory
factor to the incidence of excess expenditure on material cost?
Correct Answer 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
Your Answer The level of control of the used of material in the
production cycle , An increase in the maximum material inventory level ,
The incorrect choice of purchase order quantity , Failure to control the
issue of materials from stores

Multiple Choice Multiple Answer
Question Labour turnover means :-
Correct Answer Influx and exit of employees , Quantitative
measurement of instability of working force , Rate of change in the average
working force
Your Answer Influx and exit of employees , Quantitative measurement
of instability of working force , Rate of change in the average
working force

True/False
Question GAIL having monopoly in the CNG (Compressed Natural Gas)
market can implement the Uniform costing system.
Correct Answer False
Your Answer False

True/False
Question A fixed budget is useful only when the actual level of
activity corresponds to the budgeted level of activity.
Correct Answer True
Your Answer True

True/False
Question One of the major drawback of the contribution approach to
costing is that it ignores fixed cost.
Correct Answer True
Your Answer False

Select The Blank
Question Non-trading income is disclosed on the credit side of
________ account.
Correct Answer Profit and loss
Your Answer Profit and loss

True/False
Question Balance sheet indicates the expenditure & income from the
business.
Correct Answer False
Your Answer False

Select The Blank
Question Graphically, fixed cost line will be ________ the
'x-axis'.
Correct Answer Parallel to
Your Answer Parallel to

Select The Blank
Question Depreciation is caused by use factor, obsolescence and
________.
Correct Answer Time factor
Your Answer Time factor

Select The Blank
Question Loans which are borrowed from financial institutions are
to be paid off in 8 years, should be disclosed as ________ in the
balance sheet.
Correct Answer Long term liabilities
Your Answer Current liabilities

Multiple Choice Single Answer
Question Which of the following documents contains information as
to quantity and value of material stock?
Correct Answer Stores ledger
Your Answer Material requisition note

Multiple Choice Multiple Answer
Question Direct Cost includes :-
Correct Answer Direct material , Direct labour , Direct expenses
Your Answer Direct material , Direct labour , Direct expenses

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

Multiple Choice Multiple Answer
Question Select the steps to be followed while preparing bank
reconciliation statement :-
Correct Answer 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
Your Answer 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

True/False
Question The process of accounting split into three steams i.e.
financial, cost, management accounting.
Correct Answer True
Your Answer True

Multiple Choice Single Answer
Question What will be the impact of following transactions on the
cost of a lathe machine : (a) Transport charges on the lathe machine
were debited to Carriage inward account, Rs.1,100/- (b) Cost of installing
the machine stands debited to miscellaneous expenses account, Rs.200/-

Correct Answer Cost will increase by Rs.1,300/-
Your Answer Cost will decrease by Rs.900/-

True/False
Question Bank charges debited in the pass book represent clerical
mistake on the part of the bank employees.
Correct Answer False
Your Answer True

Select The Blank
Question If the time booked as per the job cards is less than the
attendance time it indicates ________ during which the worker has not
done any work though he was present in the factory.
Correct Answer Idle time
Your Answer Idle time

Multiple Choice Multiple Answer
Question Special aspects of co-partnership include:-
Correct Answer Workers are granted ownership rights , Indirect
monetary remuneration , The morale of the workers is increased
Your Answer Workers are granted ownership rights , The morale of
the workers is increased , The workers are rewarded for individual
efficiency

True/False
Question One of the main objection to the contribution approach of
costing is that it ignores fixed cost.
Correct Answer True
Your Answer False

True/False
Question If the physical stock is less than the stock as per the
stores ledger, such shortage should be treated as an issue of material.
Correct Answer True
Your Answer False

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

True/False
Question Malik started business by contributing cash Rs.50,000/-
and his personal car worth Rs.25,000/-; thus his capital account should
be credited with Rs.75,000/-.
Correct Answer True
Your Answer True

Multiple Choice Single Answer
Question 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 dishonored cheque, originally received from Mr.A. The fact
of dishonor was not recorded in the bank book. Find the balance as per
pass book.
Correct Answer Rs.128/- (overdraft)
Your Answer Rs.106/- (credit)

Match The Following
Question Correct Answer Your Answer

Differential Cost Increase or Decrease in cost Increase or Decrease in
cost

Sunk Cost Historical Cost Historical Cost

Cost Centre Facilitate the fixation of responsibility Facilitate the
fixation of responsibility

Cost Control Process of controlling costs of operations Process of
controlling costs of operations


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

Multiple Choice Single Answer
Question In a factory Beduax Point Premium system is in operation.
The following are the particulars with regard to a job in a factory :
allowed time for the job =600 B's; time taken = 480 minutes (or B's);
rate = Rs.12/- per hour. Calculate the amount of bonus.
Correct Answer Rs.114/-
Your Answer Rs.104/-

Multiple Choice Multiple Answer
Question The quarterly production of a company's product which has
a steady market is 20,000 units. Each unit of product requires 0.5 kg
of raw material. The cost of placing one order for raw material is
Rs.100/- and the inventory carrying cost is Rs.2/- per kg per annum. The
lead time for procurement of raw material is 36 days and a safety stock of
1,000 kg of raw materials is maintained by the company. The company
has been able to negotiate the following discount structure with the raw
material supplier : For order quantity below 7,000 kg -discount per
order is NIL. For order quantity between 7,000 kg and 8,000 kg., discount
per order is Rs.400/-. For order quantity between 8,000 kg and 16,000
kg., discount per order is Rs.2,000/-. For order quantity between 16,000
kg and 30,000 kg., discount per order is Rs.3,200/-. Find the
statements which indicate the correct costs for the different order sizes.
Correct Answer If order size is 6,667 units, total cost is
Rs.6,867/- , If order size is 10,000 units, total cost is Rs.8,400/- , If order
size is 20,000 units, total cost is Rs.17,000/-
Your Answer If order size is 10,000 units, total cost is Rs.8,400/-
, If order size is 20,000 units, total cost is Rs.17,000/- , If order
size is 5,000 units, total cost is Rs.5,400/-

Select The Blank
Question Computation of gross wages, deductions and net wages
payable is the function of the ________ department.
Correct Answer Personnel
Your Answer Personnel

Select The Blank
Question ________ system of wage payment is a combination of Halsey
system and Gantt system.
Correct Answer Diemer
Your Answer Diemer

Multiple Choice Single Answer
Question Standard labour cost of producing 500 metre of cloth has
been specified as 20 hours work by skilled workers @ Rs.15/- per hour
and 30 hours work by unskilled workers @ Rs.10/- per hour. For producing
500 metre cloth they worked for 30 hours each they were paid at the
rate of Rs.17/- per hour and Rs.10/- per hour, respectively. Calculate
labour mix variance.
Correct Answer Rs.30/- (Adverse)
Your Answer Rs.60/- (Adverse)

Multiple Choice Single Answer
Question Salary given in trial balance Rs. 5000/-, and Rs. 2,000/-
is yet to be paid . The outstanding salary account will be disclosed in
the :-
Correct Answer Balance Sheet - liability side
Your Answer Balance Sheet - liability side

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

Multiple Choice Multiple Answer
Question Different types of tenders are :-
Correct Answer Singly tender , Open tender , Global tender
Your Answer Singly tender , Open tender , Global tender

Multiple Choice Multiple Answer
Question Causes for adverse material price variance are:-
Correct Answer Uneconomical size of purchase orders , Failure to
avail discounts allowed by suppliers. , Excessive freight charges
Your Answer Uneconomical size of purchase orders , Failure to avail
discounts allowed by suppliers. , Excessive freight charges

Select The Blank
Question 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.
Correct Answer Normal
Your Answer Normal