Gat Subject-4-101

4
Gat Subject (Management Sciences – Accounting-Management -Economics)

Question: 924 direct wages should always be classified
1. as variable costs
2. as fixed costs
3. as semi-fixed
4. according to their actual behavior
5.
Question: 928 The First in First out (FIFO) materials pricing system charges issues at
1. the price of the most recent batch in stock

2. the price of the first component used in the period
3. the average price of goods in stock
4. the price of the oldest batch in stock
5.
Question: 933 The Last in First out (LIFO) system will
1. value stocks at current values

2. understate product in times of rising prices
3. tend to produce realistic product costs
4. make cost comparisons between jobs easier
5.
Question: 940 When Activity Based Costing is used it is probable the
1. all products will cost more

2. high volume product will tend to be costed lower
3. direct costs will be a smaller proportion of total costs
4. more costs will be charghed to products which are produced for stock
5.
Question: 942 the use of backflush accounting means that
1. conversion costs cannot be carried forward in stock values

2. stocks cannot occur
3. raw material costs will be reduced
4. costs are attributed to stock and cost of sales when the finished goods are made
5.
Question: 943 Unit costs are extensively used in the public sector. This is because
1. they are a rough and ready guide to efficiency

2. they are a good measure of the quality of service provided
3. they allow for regional differences
4. they enable public sector organizations to stay within the set cash limits
5.
Made By Farhan Qadeer (M.Sc. Management and Finance, Birmingham City University, UK)
Lecturer (University of The Lahore)
Email: [email protected]
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Question: 944 which of the following firms are most likely to use process costing
1. a car manufacturer
2. a sugar refinery
3. a builder
4. a departmental store
5.
Question: 946 Activity Based Costing absorbs overheads into products
1. by treating most of them as long-term variable costs

2. by ignoring the volume of production
3. according to the usage of support overheads
4. by only producing on demand
5.
Question: 948 Significant Digit Codes are
1. where some of the digits are part of the description

2. only used for raw materials
3. to enable a code to be self-checking
4. a means of combing expenditure and location codes
5.
Question: 952 Check digit variations is
1. the process of checking invoices for correct calculations

2. a method of making code numbers self checking
3. to enable codes to be self-indexing
4. the encoding of invoices with internal codes
5.
Question: 956 which of the following firms would be most likely to use job costing
1. a paint manufacturer
2. a sugar refinery
3. a firm of architects
4. a car manufacturers
5.
Following list gives the correct choice for the answer of the accounting mcqs.
924. D 928 . D 933 . C 940 . B 942 . D 943 . A 944 . B 946 . C 948 . A 952 . B 956 .
C
Question: 960 Labor turnovers can be expressed as a ratio as follows
1. Number of leavers
2. Number replaced
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3. Numbers of employees at the end
4. Number of leavers in a period
5.
Question: 965 A cost drivers is
1. the amount of overhead caused by an activity

2. a unit of activity which causes costs
3. a long term variable costs
4. equivalent to a cost centre
5.
Question: 969 Prime cost includes
1. Direct labour,direct materials and direct expenses

2. All direct costs plus factory overheads
3. Direct materials plus total overheads
4. Direct labor plus factory overheads
5.
Question: 974 A cost center is
1. A unit of production in relation to which costs are ascertained

2. A location which is responsible for controlling direct costs
3. Part of the overhead system by which costs are gathered together
4. Any location or department which incurs cost
5.
Question: 981 Cost apportionments is carried out by
1. Charging each cost unit a realistic proportion of overheads

2. charging whole items of cost to centers
3. Ensuring that each period carries its amount of cost by making accruals or prepayment s
4. Dividing common costs among centers in proportion to the benefit received
5.
Question: 990 Overhead absorption is done so that
1. common costs are shared among cost centres,in portion to the benefit received
2. The total amount of overheads for the firm can be calculated
3. The total overheads for a cost centre can be calculated
4. Each unit of the product carries a share of overheads
5.
Question: 998 Expenditure on steel used in the product would be classified into which of the following
categories
1. Direct material/cost unit
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2. direct material/production overheads
3. in direct material/cost unit
4. prime cost/production overhead
5.
Question: 1005 A firms’ uses direct labor a basis for overhead absorption if large fluctuations in labor house are
experiences
1. this is a reason to use predetermined overhead rate

2. this will mean that overheads will be under or over absorbed for the year
3. different amounts of overhead will be charged to jobs with the same labor hours
4. it will be better to use a machine hour rate
5.
Question: 1039 A predetermined overhead rate using machine hours as a basis
1. is calculated by dividing actual overhead by budgeted machine hours

2. results in the over absorption of overhead
3. is inferior to a rate based on labor hours
4. results in charging similar overheads to jobs with similar machine hours
5.
Question: 1043 the costing associated with a typical site based contract
1. means that more costs can be identified as direct

2. requires some estimate to be made of interim profits
3. means that the contract account will be credited with materials at the end of thee contract
4. includes all of these
5.
Answers to the questions of accounting on this page
952 . B 956 . C 960 . B 965 . B 969 . A 974 . C 981 . D 990 . D 998 . A 1005 . A 1039
.D 1043 . D
Question: 1046 Using process costing the amount of cost transferred to finished goods stock is the cost of
1. the equivalent production for the period

2. the units completed during the period
3. the units started and completed during the period
4. the units in the opening Finished Goods stocks
5.
Question: 1054 Double loop feedback
1. is information designed to ensures that operations conform to plans

2. is designed to assess how well the control system operates and how relevant current pains are
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3. is information passed up two layers of the organization
4. is information that is double checked for accuracy
5.
Question: 1057 the distance A represents
1. contribution at activity level X

2. profit at activity level X
3. the amount of variable costs at activity level X
4. the margin of safety
5.
Question: 1061 the distance represents
1. contribution at activity level Y

2. the amount of variable costs at activity level Y
3. the level of sales at activity level Y
4. the amount of variable costs at activity level Y
5.
Question: 1069 which of the following are possible causes of the changes in the graph at activity level Z
1. an increase in sales value causing an increase in contribution

2. a decrease in fixed costs causing an increase in variable costs
3. an increase in total fixed costs and a decrease in variable costs per unit
4. an increase in total variable costs and a decrease in fixed costs per unit
5.
Question: 1078 what do the lines C and D represent
1. Fixed costs and variable costs respectively

2. Total costs and variable costs respectively
3. Variable cost and fixed costs respectively
4. Sales revenue and total costs respectively
5.
Question: 1081 if the total expenditure on cost type X was expressed as a cost per unit of the product X would
be classified as variable if
1. the cost per unit changed with the level of activity

2. the cost per unit was affected by inflation
3. the cost per unit remained constant with changes in the level of activity
4. the total expenditure on X remained the same
5.
Question: 1085 the main purpose of cost accounting is to
1. maximize profits
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2. help in inventory valuation
3. provide information to management for decision-making
4. aid in the fixation of selling prices
5.
Question: 1086 one of the most important tools in cost planning is
1. direct cost
2. budget
3. cost sheet
4. marginal costing
5.
Question: 1088 the purpose of cost accounting is to provide information for
1. preparing costing P& L A/c

2. cost control
3. locating factors leading to wastages and losses

4. assessing the profitability and financial position of the firm
5.
1039 . D 1043 . D 1046 . C 1054 . A 1057 . A 1061 . D 1069 . C 1078 . B 1081 . C 1085 .
C 1086 . B 1088 . B
Question: 1089 Fixed cost per unit increases when
1. variable cost per unit increases

2. variable cost per unit decreases
3. Production volume increases
4. production volume decreases
5.
Question: 1091 Variable cost per unit
1. varies when output varies

2. remains constant
3. increases when output increases
4. decreases when output decreases
5.
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Question: 1093 Increase in total variable cost is due to
1. increase in fixed cost

2. increase in sales
3. increase in production
4. increase in total cost
5.
Question: 1095 an example of variable cost is
1. property taxes
2. interest on capital
3. direct material cost
4. depreciation of machinery
5.
Question: 1100 an example of fixed cost is
1. direct material cost

2. works managers salary
3. depreciation of machinery
4. chargeable expenses
5.
Question: 1102 Cost accounting concepts include all of following except
1. Planning
2. controlling
3. profit sharing
4. product costing
5.
Question: 1104 the three major elements of product costs are all but
1. direct materials
2. Factory overhead
3. direct labor
4. indirect labor
5.
Question: 1111 Cost of goods produced includes
1. production cost and finished goods inventory

2. production cost and work-in-progress
3. production cost, work-in-progress and finished goods inventory
4.
5.
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Question: 1117 Cost of goods sold includes
1. cost of production and work-in-progress

2. cost of production and finished goods inventory
3. cost production, work-in-progress and finished goods inventory
4.
5.
Question: 1123 an overstatement of work-in-progress at the end of a period will
1. overstate cost of goods produced

2. understate current assets
3. understate gross profit
4. overstate net profit
5.
1086 . B 1088 . B 1089 . D 1091 . B 1093 . C 1095 . C 1100 . B 1102 . C 1104 . D 1111 .
B 1117 . B 1123 . D
Question: 1117 Cost of goods sold includes
1. cost of production and work-in-progress

2. cost of production and finished goods inventory
3. cost production, work-in-progress and finished goods inventory
4.
5.
Question: 1123 an overstatement of work-in-progress at the end of a period will
1. overstate cost of goods produced

2. understate current assets
3. understate gross profit
5.
Question: 1126 Conversion cost is equal to the total of
1. material cost and indirect wages

2. material cost and indirect wages
3. direct wages and factory overhead
4. material cost and factory overhead
5.
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Question: 1127 multiple costing methods is used in
1. oil refinery
2. car manufacturing company
3. sugar mill
4. multi-product company
5.
Question: 1128 Toy manufacturing company should use
1. unit costing
2. job costing
3. batch costing
4. multiple costing
5.
Question: 1129 Electricity generating company should use
1. unit costing
2. process costing
3. batch costing
4. multiple costing
5.
Question: 1130 Job costing is used in
1. paper mills
2. chemical works
3. printing press
4. textile mill
5.
Question: 1131 Output costing is employed in
1. mining quarries
2. steel production
3. brick kilns
4. all of these
5.
Question: 1132 Contract costing is used in
1. ship-building
2. airplane industries
3. automobile industries
4. none of these
5.
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Question: 1167 Direct material is a
1. Fixed cost
2. variable cost
3. semi variable cost
4.
5.
Question: 1172 Direct material is a
1. manufacturing cost
2. Administration
3. Selling and distribution cost
4. Any of the above
5.
Question: 1174 in manufacturing industries, the most important element of cost is
1. Material
2. Labor
3. Overheads
4.
5.
1117 . B 1123 . D 1126 . C 1127 . B 1128 . C 1129 . D 1130 . C 1131 . D 1132 . An 1167
.B 1172 . An 1174 . A
Question: 1176 which of the following is an accounting record
1. Bill of Material
2. Bin card
3. stores ledger
4. All of these
5.
Question: 1180 which of the following documents is used for issuing materials to productions departments
1. purchase Requisition Note

2. stores Requisition note
3. Goods Received Note
4. stores Credit Note
5.
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Question: 1183 which of following is considered to be a normal loss of materials
1. Loss due to accidents

2. pilferage
3. Loss due to breaking the bulk
4. Loss due to careless handling of materials
5. All of these
Question: 1186 According to which of the following methods of pricing, issues are close to current economic
values
1. Last-in-first-out price
2. First-in-first-out price
3. Highest-in-first-out price
4. Weighted average price
5.
Question: 1187 in which of the following methods of pricing costs lag behind the current economic values
1. Last-in-first-out price.
2. First-in -first-out price.
3. Replacement price.
4. Weighted average price.
5.
Question: 1192 which of the following methods of stock control aims at concentrating efforts on selected items
of materials
1. perpetual inventory system

2. Materials turnover
3. Maximum, minimum and re-order level setting
4. ABC analysis
5.
Question: 1193 in base stock method of pricing the material issues, the term base stock represents the
1. Quantity of stock being issued

2. stock in balance
3. Minimum stock
4. Maximum stock
5.
Question: 1194 which of the following items of cost should NOT be treated as NOT be treated as direct material
1. Electricity representing 90% of the total cost

2. Sand paper used in production
3. Thread used in stitching garments
4. All of the above
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5.
Question: 1195 Continuous stock-taking is a part of
1. Annual stock-taking
2. Perpetual inventory system
3. ABC analysis
4. periodic inventory system
5.
Question: 1197 the classification of items in ABC analysis is made on the basis of
1. Investment value of materials

2. Consumption value of materials
3. Quantity of materials consumed
4. All of these
1172 . An 1174 . An 1176 . C 1180 . B 1183 . C 1186 . An 1187 . B 1192 . D 1193 .
C 1194 . D 1195 . B 1197 . D
Question: 1202 in which of the following methods, issues of materials are priced at a pre-determined rate
1. Inflated price method

2. Standard price method
3. Replacement price method
4. Specific price method
5.
Question: 1204 in which of the following methods, materials are issued at the price prevailing at the time of
issue
1. Inflated price method

2. Standard price method
3. Replacement price method
5.
Question: 1205 the storekeeper should initiate a purchase requisition when stock reaches
1. Minimum leveled
2. maximum level
3. re-order level
4. overage level
5.
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Question: 1207 which of the following material losses should be transferred to costing profit and loss account
1. Loss by evaporation
2. Loss due to improper storage of materials
3. Loss due to breaking the bulk
4. All of these
5.
Question: 1210 when material prices fluctuate widely, the method of pricing that gives absurd results is
1. Simple average price

3. Moving average price
4. Inflated price
5.
Question: 1212 when prices fluctuate widely, the method that will smooth out the effect of fluctuations is
1. simple average
2. weighted average
3. FIFO
4. LIFO
5.
Question: 1213 in which of the following methods, the charge to production is at actual cost

2. standard price
3. Replacement price
4. FIFO
5.
Question: 1294 Expected annual usage of a particular raw material is 2,00,000 units and the economic order
quantity is 10,000 units The invoice cost of each unit is RS.500 and the cost to place one order is RS.80. The
average inventory is
1. 1,00,000 units
2. 5,ooo units
3. 10,000 units
4. 7,500 units
5.
Question: 1297 taking the data in Q.3.21 above, the estimated annual ordering cost is
1. RS.1,600
2. RS.10,000
3. RS.3,200
4. RS.5,000
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5.
Question: 1300 On the basis of data given in Q 3.21 above, number of orders to be placed in each year are
1. 10
2. 50
3. 20
4. 100
5.
1195 . B 1197 . D 1202 . B 1204 . C 1205 . B 1207 . B 1210 . A 1212 . B 1213 . D 1294 .
B 1297 . A 1300 . B
Question: 1300 On the basis of data given in Q 3.21 above, number of orders to be placed in each year are
1. 10
2. 50
3. 20
4. 100
5.
Question: 1304 when material prices are showing a rising trend, which method of pricing will show lower cost
of production
1. FIFO
2. LIFO
3. Weighted average
5.
Question: 1307 in periods of rising prices, which method of pricing shows higher stock values
1. FIFO
2. LIFO
3. Weighted average
5.
Question: 1309 in which method, prices charged to production are at the current prices prevailing in the market
1. FIFO
2. LIFO
3. Weighted average
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5.
Question: 1312 when prices are showing a falling tendency, which method of pricing of material issues will
show higher closing stock value
1. FIFO
2. LIFO
3. Weighted average
5.
Question: 1313 When production is below standard specification or quality and cannot be rectified by incurring
additional cost, it is called
1. Defectives
2. Spoilage
3. Waste
4. Scrap
5.
Question: 1315 Materials losses are due to some of the following reasons
1. Fore accident
2. Theft
3. Breaking the bulk
4. Evaporation
5. pilferage
Question: 1319 Documents used in a material control system include the following
1. Purchase Requisition Note

2. Stores Requisition Note
3. Bill of Materials
4. Goods Received Note
5. Purchase order
Question: 1321 at what amount materials issued on 8-1-1997 will be charged if FIFO method is used
1. RS.1,550
2. RS.1,575
3. RS1,700
4. RS1,750
5.
Question: 1323 at what amount materials issued will be charged igloo method is used
1. RS.1,550
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2. RS.1,575
3. RS.1,700
4. RS.1,750
5.
Question: 1325 at what amount materials issued will be charged if simple average price is used
1. RS.1,550
2. RS1,575
3. RS.1,610
4. RS.1,700
5.
1297 . A 1300 . B 1304 . A 1307 . A 1309 . D 1312 . B 1313 . B 1315 . A 1319 . D 1321
.B 1323 . C 1325 . B
Question: 1329 at what amount materials issued will be charged if weighted average price is used
1. RS.1,575
2. RS.1,610
3. RS.1,625
4. None of these
5.
Question: 1330 at what amount materials issued will be charged if replacement price method is used
1. RS.1,400
2. RS.1,700
3. RS.2,100
4. RS. 1,750
5.
Question: 1335 what will be the value of closing stock under FIFO method
1. RS 600
2. RS 675
3. RS 700
4. None of these
5.
Question: 1336 what will be the value of closing under LIFO method
1. RS.600
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2. RS.675
3. RS.690
4. RS.750
5.
Question: 1337 what will be the value of closing stock under simple average method
1. RS.600
2. RS.690
3. RS.725
4. RS.750
5.
Question: 1339 what will be the value of closing stock if weighted average method is applied
1. RS.600
2. RS.690
3. RS.725
4. RS.750
5.
Question: 1340 what will be the value of closing stock if replacement price method if used
1. RS.100
2. RS.300
3. RS.200
4. None of these
5.
Question: 1344 in which of following incentive plans of wages payment, wages on time basis are NOT
guaranteed
1. Halsey plan
2. Rowan plan
3. Taylors differential piece rate system
4. Gantt's task and bonus system
5.
Question: 1427 in which of the following incentive plan of wages payment, wages on time basis are NOT
guaranteed?
1. Halsey plan
2. Rowan plan
3. Taylor's differential piece rate system
4. Gantt's task and bonus system
5.
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Question: 1429 which of the following methods of wage payment is most suitable where quality and accuracy
of work is of primary importance?
1. piece rate system

2. differential piece work system
3. time rate system
4. Halsey premium system
5.
1323 . C 1325 . B 1329 . B 1330 . C 1335 . D 1336 . A 1337 . C 1339 . B 1340 . B 1344 .
C 1427 . C 1429 . B
Question: 1430 Cost of idle time arising due to non-availability of raw material is
1. charged to costing profit and loss A/C

2. charged to factory overheads
3. recovered by inflating the wage rate
4. all of these
5.
Question: 1432 when overtime is required for meeting urgent orders, overtime premium should be
1. charged to costing profit and loss A/c

2. charged to overhead costs
3. charged to respective jobs
4. all of these
5.
Question: 1433 Time and motion study is conducted by the
1. time keeping department

2. payroll department
3. personnel department
4. engineering department
5.
Question: 1435 Labor productivity is measured by comparing
1. actual time with standard time

2. total output with total man hours
3. added value for the product with total wage cost
4. none of the above
5.
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Question: 1436 when standard outputs is 10 units per hour and actual output is 12 units per hour , the
efficiency is
1. 80%
2. 120%
3. 100%
4. none of these
5.
Question: 1438 Wages sheet is prepared by
1. time keeping department

2. payroll department
3. personnel department
4. cost accounting department
5.
Question: 1443 given that for a job, standard time is 8 hours, actual 6 hour and the time rate is Rs 2per hour
what is the total wages under halsey premium plan
1. Rs 18
2. Rs 14
3. Rs 16
4. Rs12
5.
Question: 1449 using data as given in Q. 314 above, what will be the amount of wages under time rate system
1. RS. 12
2. RS.14
3. 16
4. 18.
5.
Question: 1451 using data as given in Q. 314 above, what will be the amount of bonus under rowan plan
1.
2. RS. 2
3. RS. 3
4. RS. 4
5. None of the above
Question: 1453 using data as given in Q 3.14 above, what is the amount of bonus under Halsey plan
1. RS. 2
2. RS.3
3. RS.4
4. Nil
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5.
1427 . C 1429 . B 1430 . A 1432 . C 1433 . D 1435 . D 1436 . C 1438 . C 1443 . C 1449 .
A 1451 . B 1453 . A
Question: 1457 Standard output is 100 units per day of 8 hours and the piece rates are 20 piece per unit under
Taylor's differential piece rate system, what will be amount of wages if a worker produces 95 unit in a day
1. RS.14.00
2. RS.14.25
3. 18.50
4. 19.00
5.
Question: 1459 given the data in 3.19 above, what will be the amount of wages under Taylor's differential piece
rate system, if a worker produces 101 units ohm a day
1. RS.15.15
2. RS.20.00
3. 20.15
4. 20.20
5.
Question: 1460 Comparing Rowan and Halsey premium plans, it is seen that when the time saved is less than
50% of the time saved,
1. Rowan plan allows more wages to a worker than Halsey plan

2. Rowan plan allows less wages to a worker than Halsey plan
3. Rowan and Halsey plan allow equal wages to a worker
4.
5.
Question: 1461 when time saved is 40% of the standard time, Halsey plan allows
1. more wages than Rowan plan

2. less wages than Rowan plan
3. equal wages as compared to Rowan plan
4.
5.
Question: 1463 Standard time is 60 hours and guaranteed time rate is 30 paisa per hour what is the amount of
wages if job is completed n 48 hours? Rowan plan is in use
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1. RS.24.00
2. RS.26.80
3. RS.17.28
4. RS.20.40
5.
Question: 1464 which of the following a group incentive plans
1. priestman plan
2. Badaux plan
3. Halsey weir plan
4. All of these
5.
Question: 1466 Packing cost is
1. production cost
2. selling cost
3. distribution cost
4. It may be any of the above
5.
Question: 1468 Directors' remuneration and expenses from a part of
1. production overhead
2. selling overhead
3. administration overhead
4. distribution overhead
5.
Question: 1471 Salary of a foreman should be classified as a
1. fixed overhead
2. variable overhead
3. semi-fixed or semi-variable overhead
4.
5.
Question: 1472 Charging to a cost centre those overheads that result soleoy from existence of that cost centre
is known as
1. allocation
2. apportionment
3. absorption
4. allotment
5.
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1451 . B 1453 . A 1457 . B 1459 . D 1460 . A 1461 . B 1463 . C 1464 . A 1466 . D 1468 .
B 1471 . C 1472 . A
Question: 1476 Absorption means
1. charging of overheads to cost centers

2. charging of overheads to cost units
3. charging of overheads to cost centers or cost units
4.
5.
Question: 1481 Administration overheads are recovered as a percentage of
1. direct materials
2. direct wages
3. prime cost
4. works cost
5.
Question: 1484 which of the following is NOT is selling overhead
1. Insurance to cover sold goods while in transit

2. Royalty on sales
3. Legal costs for debt realization
4. Distribution of samples
5.
Question: 1488 which method of absorption of factory overheads do you suggest in a concern which produced
only one uniform type of product
1. percentage of direct wages basis

2. Direct labor hour rate
3. Machine hour rate
4. A rate per unit of output
5. Any of the above
Question: 1490 When the amount of under-or over-absorption is significant, it should be disposed of by
1. Transferring to Costing profit and Loss A/C.

2. the use of supplementary rates
3. carrying over as a deferred charge to the next accounting year
4.
5.
Question: 1493 idle capacity of a plant refers to the difference between
1. maximum capacity and practical capacity

2. practical capacity and normal capacity
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3. practical capacity and capacity based on sales expectancy
4. maximum capacity and actual capacity
5.
Question: 1496 Maximum possible productive capacity of a plant, when no operating time is lost, is its
1. practical capacity
2. Theoretical capacity
3. Normal capacity
4. Capacity based on sales expectancy
5.
Question: 1499 the capacity which is based on the long term average of the sales expectancy level is known as
1. practical capacity
2. Actual capacity
3. Normal capacity
4. None of these
5.
Question: 1502 when the amount of overhead absorbed is less than the amount of overhead incurred, it is
called
1. under-absorption of overhead
2. over-absorption of overhead
3. proper absorption of overhead
4.
5.
Question: 1506 Bad debt is an example of
1. production overhead
2. Administration overhead
3. selling overhead
4. Distribution overhead
1471 . C 1472 . A 1476 . B 1481 . D 1484 . A 1488 . D 1490 . B 1493 . C 1496 . C 1499 .
C 1502 . A 1506 . C
Question: 1508 Number of workers employed is used as a basis for the apportionment of
1. time office costs

2. canteen expenses
3. personnel department expenses
4. any of these
5.
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Question: 1518 in which of the following methods of providing depreciation, the amount of depreciation goes
on decreasing with the age of the asset
1. Reducing balance method

2. sum of digits method
3. Annuity method
4. (a) and (b) above
5.
Question: 1544 Selling and distribution overheads are absorbed on the basis of
1. Rate per unit

2. percentage on selling price of each unit
3. Any of these
4.
5.
Question: 1549 the difference over a period of time, between actual factory overhead and absorbed factory
will usually be minimum when the predetermined overhead rate is based on
1. normal capacity
2. maximum capacity
3. direct labor hours
4. machine hours
Question: 1553 A monopolies will shut down its plant in the short run if
1. It is making a loss.
2. Marginal revenue is less than marginal cost.
3. Marginal revenue less than average variable cost at all levels of output.
4. Average revenue is less than average variable cost at all levels of output.
5. Average revenue is less than marginal cost at all levels of output.
Question: 1555 A company found that the differences in product costs resulting from the application of pre-
determined overhead rates rather than actual overhead rates were immaterial even though actual production
was substantially less than planned production the most likely explanation is that
1. factory overhead was mainly composed of variable costs

2. several products were produced simultaneously
3. fixed factory overhead was a significant cost
4. costs of factory overhead items were substantially larger than anticipated
5.
Question: 1560 Under-absorbed factory overhead costs are
1. excess variable factory overhead costs

2. factory cost not allocated to units produced
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3. fixed factory costs not allocated to unit produced
4. cost that cannot be controlled
Question: 1567 if a per-determined factory overhead rate is not employed and the volume of production is
reduced from the level planned, the cost per unit would be expected to
1. remain unchanged for fixed costs and increase for variable costs
2. increase for fixed cost and remain unchanged for variable costs
3. increase for fixed costs and decrease for variable costs
4. decrease for fixed costs and decrease for variable costs
5.
Question: 1569 the least suitable basis for applying overhead is
1. materials consumed
2. direct labor cost
3. direct labor hours
4. machine hours
5.
Question: 1571 Excess plant capacity means
1. temporary idleness of plant

2. greater production capacity than a company can use
3. the difference between theoretical capacity and actual capacity
4.
1508 . D 1518 . D 1544 . D 1549 . A 1553 . D 1555 . C 1560 . E 1567 . B 1569 . A 1571 .
B
Question: 1571 Excess plant capacity means
1. temporary idleness of plant

2. greater production capacity than a company can use
3. the difference between theoretical capacity and actual capacity
4.
5.
Question: 1573 the concept of ideal capacity of plant as used in cost accounting is its
1. theoretical maximum capacity

2. Best capacity for normal production.
3. Capacity used for standard setting.
4. Capacity below which production should not fall.
5.
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Question: 1580 pre-determined overhead recovery rate is Rs 3 per hour and pre-determined hours are 50,000
Actual hours worked are 55,000 and actual overhead Rs 1,70,000. What is the amount of under or over-
absorption of overhead
1. RS.20000 over-absorption
2. RS. 20,000 over-absorption
3. RS.5000 under-absorption
4. RS.5,000 over-absorption
5.
Question: 1583 in Q. 3.34, what is the amount of pre-determined overhead
1. RS.1,50,000
2.
3. rs.1,65,000
4. cannot be computed
5. None of these
Question: 1585 what is the amount of absorbed overhead in Q 3.34
1. RS. 1,50,000
2. RS. 1,65,000
3. RS. 15,000
4. RS 20,000
5.
Question: 1592 In Q 3,37, which method should be used to treat under/over absorbed amount in cost accounts
1. Tr. to costing P& L A/c

2. Use of supplementary rate
3. Carry over to next year
4. Any of the above
5.
Question: 1594 In Q 3.37, what is the predetermined number of machine hours
1. 16,000
2. 12,000
3. Cannot be known
4. None of these
5.
Question: 1599 A machine purchased for Rs 20,000 is discarded because of obsolescence and sold for Rs 5,000
after three years of service, resulting in a loss of Rs 3,000.This loss should be
1. treated as production cost

2. transferred to costing P& L A/c in the year of sale
3. spread over the years of the remaining expected life of the machine
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4. Either(b)or(c)
5.
Question: 1603 the principal factors to be considered on designing a cost system include
1. Manufacturing process
2. desires of management
3. nature of business
4. company organization structure
5. all of the above
Question: 1606 the most suitable cost system where the products differ in type of materials used and work
performed is
1. job costing
2. Batch costing
3. operating costing
4. None of these
5.
Question: 1609 in shoe manufacture, the most suitable cost system is
1. job costing
2. Batch costing
3. Contract costing
4. None of these
5.
1573 . A 1580 . C 1583 . A 1585 . B 1592 . B 1594 . B 1599 . B 1603 . E 1606 . A 1609 .
B
Question: 1606 the most suitable cost system where the products differ in type of materials used and work
performed is
1. job costing
2. Batch costing
4. None of these
5.
Question: 1609 in shoe manufacture, the most suitable cost system is
1. job costing
2. Batch costing
3. Contract costing
4. None of these
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5.
Question: 1611 job costing is used in
1. Repair shops
2. printing presses
3. Furniture making
4. Automobile garages
5. All of these
Question: 1613 Most of the expenses are direct in
1. job costing
2. batch costing
3. contract costing
4. All of these
5.
Question: 1616 when a contract is not completed at the end of the accounting year, profit on incomplete
contract is
1. transferred to profit and loss Account

2. transferred to reserve
3. transferred profit to profit and loss Account and partly to reserve
4.
5.
Question: 1618 when a contract is not completed at the end of the year, loss on incomplete contract is
1. transferred to profit and loss Account

2. transferred to work-in-progress
3. transferred partly to profit and Loss Account and partly to work-in progress
4.
5.
Question: 1622 when contract id 40% complete, the amount of profit to be taken credit for is usually
1. the amount of profit estimated

2. 40% the estimated profit
3. 1/3of the estimate profit multiplied by cash ratio
4.
5.
Question: 1627 in contract accounts, the amount of work-in-progress consists of
1. cost of work uncompleted

2. cost of work uncompleted
3. the amount of profit not transferred to profit and Loss Account
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4. (a) and(B) above
5. (a)(b) and(C)
Question: 1630 cost-plus contract is usually entered in to those where
1. cost can be easily estimated

2. it is not possible to compute the cost in advance with a reasonable degree of accuracy
3. contractor wants to earn a higher amount of profit
4.
5.
Question: 1631 Contract price is not fixed in case of
1. Cost-plus contracts
2. Escalation clause
3. De-escalation clause
4. All of the above
5.
Question: 1632 Contract price is not fixed in case of
1. Cost-plus contracts
2. Escalation clause
3. De-escalation clause
4. All of the above
5.
Question: 1633 Cost plus contract is useful from the point view of
1. contractor
2. contracted
3. both contractor and contractee
4.
5.
1606 . A 1609 . B 1611 . E 1613 . C 1616 . C 1618 . A 1622 . C 1627 . E 1630 . B 1631 .
D 1632 . D 1633 . C
Question: 1633 Cost plus contract is useful from the point view of
1. contractor
2. contractee
3. both contractor and contractee
4.
5.
Question: 1634 In contract costing, contract account is prepared by the
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1. contractor
2. contractee
3. both by contractor and contractee
4.
5.
Question: 1635 In a building contract of Rs. 2,40,000, at the end of the work certified is Rs. 1,60,000 and
estimated profit is Rs. 15,000. what is the amount of profit to be credited to profit and LOSS Account assuming
cash ratio is 80%
1. RS.15,000
2. RS. 12,000
3. RS. 8,000
4.
5.
Question: 1636 Economic batch quantity is that size of the batch of production where
1. average cost is minimum

2. total cost is minimum
3. set-up cost of machine is minimum
4. carrying cost is minimum
5.
Question: 1637 Production order means
1. an order received from a customer for the production of a specific item

2. instructions to the shops to proceed with the production of the product
3. an order to the store-keeper to issue necessary materials for production
4.
5.
Question: 1638 In contract costing, valuation of which of the following does not include an element of profit
1. work in progress certified

2. work in progress uncertified
3. Both(a) and(b)
4. Neither(a)nor(b)
5.
Question: 1641 A contract of RS.5,00,000 is 55% complete as certified it shows a notional loss of RS 20,000.
Accounting treatment of this loss is
1. Transfer 2/3 of this loss to P&L A/c

2. Transfer 2/3 X cash ratio of this loss to P&L A/c
3. Transfer 55% of this loss to P&L A/c
4. Transfer entire amount of loss to P&L A/c
5.
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Question: 1652 Direct cost chargeable to contract does not include
1. Materials
2. Labor
3. Supervision
4. Storage lost
5. both(c)and (d)
Question: 1655 Which of the following items is not written on the credit side of the contract account
1. work in progress-certified and uncertified

2. Materials returned
3. Cash received from contractee
4. plant at site
5.
Question: 1659 The type of process loss that should not affect the cost of inventories is
1. abnormal loss
2. normal loss
3. seasonal loss
4. standard loss
5.
Question: 1663 During Jan. 1997, Marconi L.t.d. had total manufacturing cost of Rs.1,80,000. The business
completed 14,000 units of product, of which 4,000 units were half completed in Dec 1996 and started
production on an additional 6,000 units that production cost per unit was
1. RS.18
2. RS.16.36
3. RS.12
4. RS.9
1634 . A 1635 . C 1636 . B 1637 . B 1638 . B 1641 . D 1652 . D 1655 . C 1659 . A 1663
.C
Question: 1668 100 units are introduced in a process in which normal loss is 15 units If actual output is also 100
units, than there is
1. no abnormal loss or abnormal gain

2. an abnormal loss
3. an abnormal gain
4.
5.
Question: 1670 50 units are processed at a total cost of RS.80, normal loss being 10% Each unit carries a scrap
value of 25 paisa. If output is 40 units, the value of abnormal loss will be
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1. RS. 1.25
2. RS.8.00
3. RS.8.75
4. RS.8.88.
5.
Question: 1676 Given the data in Q.3.5 above, the normal cost of unit is
1. RS.0.25
2. RS.1.60
3. RS.1.78
4. RS.1.75
5.
Question: 1678 A factories transferred out 8,800 completed and closing stock was 800 units 50% completed.
Assuming FIFO method, the equivalent production during the period was
1. 8,900 units
2. 9,100 units
3. 9,300 units
4. 9,500 units
5.
Question: 1682 in a factory, the equivalent production (using FIFO method) was 7,500 units during a period
which had 500 units 60% complete on hand at the start and 600 units 75% complete at the end of the period.
How many units were introduced during the period
1. 6,750
2. 6,850
3. 7,050
4. 7,150
5.
Question: 1685 An under-statement of ending work-in-progress inventory will
1. understate cost of goods produced

2. understate net profit
3. overstate gross profit
4. overstate current assets
5.
Question: 1688 An over-statement of beginning work-in-progress inventory will
1. understate cost of goods sold

2. understate the profit
4. overstate gross profit
5.
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Question: 1689 When units are lost at end of the production process, the cost is charged to
1. factory overhead
2. selling expense
3. work-in-progress
4. completed units
5.
Question: 1691 The term Economic Batch Quantity is used in relation to
1. Operating costing
2. Batch costing
3. process costing
4. Unit costing
5.
Question: 1698 Input in a process is 4,000 units and normal loss is 20%. When finished output in the process is
only 3240 units, there is an
1. abnormal loss of 40 units

2. abnormal gain of 40 units
3. neither abnormal loss nor abnormal gain
4.
5.
1668 . C 1670 . C 1676 . D 1678 . A 1682 . B 1685 . B 1688 . B 1689 . D 1691 . B 1698 .
B
Question: 1700 In Q.3.14 further assuming scrap value of loss is RS.5 per unit, the amount of sales from scrap is
1. RS.3,800
2. RS. 4,000
3. RS. 200
4. None of these
5.
Question: 1704 Further assuming (in Q. 3.14 and Q 3.15) the cost assigned to abnormal gain of 40 units is RS.
280, the amount to be transferred to costing profit and loss account
1. RS.280
2. RS.200
3. RS.80
4. RS.360
5.
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Question: 1705 Hopeless Company, which uses FIFO method in process costing, began the current year with
300 units 50% completed, transferred out 5,000 completed units during the year ended with 500 units 70%
completed Equivalent production for the period was
1. 5,000
2. 4,700
3. 5,200
4. 5,800
5.
Question: 1706 Classification and accumulation of costs by fixed and variable costs is of special importance in
1. process costing
2. unit costing
3. operation costing
5. none of these
Question: 1708 Joint product manufacturing is fundamental in
1. automobile industry
2. oil refineries
3. engineering company
4. All of the above
5.
Question: 1709 Individual products, each of a significant sales value, produced simultaneously from the same
raw material, should be known as
1. by-products
2. main products
3. joint products
4. common products
5.
Question: 1712 Total manufacturing costs are divided by the total number of units produced to obtain a cost
per unit under the
1. average unit cost method

2. sales value method
3. physical unit measurement method
4.
5.
Question: 1714 which of the following are virtually always subsequent costs
1. raw material costs

2. direct labor costs
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3. selling and distribution cost
4. None of these
5.
Question: 1720 When by-products are of small total value, its accounting should by
1. apportioning a part of joint cost to by-products

2. realizable value of by-products should be treated as miscellaneous income and transferred to P&L A/c
3. realizable value of by-products should be apportioned over the main products
4. Any of these
5.
Question: 1723 Net realizable value of by-products at the split off point should be calculated by reverse cost
method when
1. BY products are of small total value

2. BY-products are of considerable sales value
3. BY-products require further processing for their sale
4.
5.
1700 . A 1704 . C 1705 . C 1706 . D 1708 . B 1709 . C 1712 . A 1714 . C 1720 . B 1723 .
C
Question: 1723 Net realizable value of by-products at the split off point should be calculated by reverse cost
method when
1. BY products are of small total value

2. BY-products are of considerable sales value
3. BY-products require further processing for their sale
4.
5.
Question: 1729 Cost per unit is the average cost is applicable in
1. Job costing
2. Operating costing
3. Multiple costing
4. Contract costing
5.
Question: 1732 Trimmings in timber industry should be treated as a
1. waste
2. scrap
3. by-product
4. joint product
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5.
Question: 1735 Which of the following methods of accounting of by-products should be applied when the by-
product is to be utilized in the undertaking itself as material for some other process

2. Other income method
3. Opportunity cost method
4.
5. Reverse cost method
Question: 1737 Credit is given to the process account at a pre-determined value of the by-product under the
1. Standard cost method

2. opportunity cost method
3. Reserve cost method
5.
Question: 1742 The primary purpose of apportioning joint costs of a processing centre to various products
produced is to
1. develop accurate processing cost variances product-wise

2. report more correct standard product costs for comparative analysis
3. establish inventor cost assigned to unsold units
4. record accurate cost of sales by product lines
Question: 1823 Given: input 1,000 units, Cost production RS 1,850 per Normal loss 10% of input, Actual loss 50
units, Scrap value Rs 0.50 per unit. What is the abnormal loss/gain
1. 50 units abnormal loss

2. 50 units abnormal gain
3. 100 units abnormal gain
4. 100 units abnormal loss
5.
Question: 1826 In Q3.35,what is the cost per unit
1. Rs. 2.18
2. Rs. 2.05
3. Rs. 2
4. RS. 1.89
5.
Question: 1828 Output of a process was 2,500 units, normal loss is 10% of input and abnormal loss 200 units.
How many units were introduced in the process
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1. 2,700
2. 3,000
3. 3,200
4. 3,500
5.
Question: 1842 In Q 3.37, What is the quantity of total loss
1.
2. 2700 units
3. 300 units
4. 350 units
5. 500 units
Question: 1843 when quantity sold is 18,000 units, opening stock 2,000 units and closing stock 3,000 units,
what is the quantity produced
1. 16,000 units
2. 17,000 units
3. 19,000 units
4. 20,000 units
5.
1729 . B 1732 . B 1735 . C 1737 . A 1742 . D 1823 . An 1826 . C 1828 . B 1842 . D 1843
.C
Question: 1845 A transport company is running 3 bases with 50 passengers each, covering a distance of 100 km
daily. what is the number of passenger km. per day
1. 5,000
2. 300
3. 15,000
4. 150
5.
Question: 1847 Cost and financial accounts are reconciled under
1. Integral system
2. Non-integral system
3. Under both (a)and (b)
4. None of these
5.
Question: 1852 Which of the following accounts make the cost ledger self-balancing
1. overhead adjustment account

2. Costing P.& L. account
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3. Cost Ledger control account
5.
Question: 1855 Costing profit and Loss account does not record the
1. sales value of goods

2. balance of overhead adjustment account
3. balance of cost of sales account
4. balance of stores ledger control account
5.
Question: 1866 Purchases for special jobs is debited to
1. Work-in-progress ledger control account

2. Cost ledger control account
3. Stores ledger control
4.
5.
Question: 1871 Integral accounts eliminate the necessity of operating
1. Cost Ledger Control account

2. stores ledger control account
3. Overhead adjustment account
4. All of these
5.
Question: 1874 Which of the following items is not included in cost accounts
1. Interest received on bank deposits

2. Dividend paid on share capital
3. Damages payable at law
4. Debenture interest
5. all of these
Question: 1879 Which following items is included in cost accounts
1. Transfer to general reserve

2. Notional rent
3. Rent receivable
5.
Question: 1885 When costing loss is RS. 5,600, administrative overhead under-absorbed being RS. 400, the loss
as per financial accounts should be
1. RS. 5,600
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2. RS.6,000
3. RS. 5,200
4.
5.
Question: 1889 Depreciation charged in costing is RS.12,500 and in financial books is RS.11,200.What will be
the financial profit when costing profit is RS.5,000
1. RS. 5,000
2. RS. 3,700
3. RS. 6,300
4.
5.
1845 . B 1847 . B 1852 . C 1855 . D 1866 . A 1871 . A 1874 . E 1879 . C 1885 . B 1889 .
C
Question: 1891 Profit as per financial books is Rs. 72,000.What will be the profit as per costing books when
selling and distribution expenses, actual as well as predetermined, are RS. 2,500
1. RS. 72,000
2. RS.70,500
3. RS. 69,500
4.
5.
Question: 1895 Which of the following items is not included in financial books
1. Heavy donations
2. Loss on the sale of fixed assets
3. Notional rent
4. Interest on borrowed capital
5. all of these
Question: 1897 Which of the following items shall be added to costing profit to arrive at financial profit
1. Under-absorption of words overhead

2. Interest on debentures paid
3. Rent receivable
4. Income tax paid
5. All of the above
Question: 1913 Which of the following account will always have debit balance
1. Overhead adjustment account

2. work in progress ledger control account
3. Cost ledger control account.
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4. Factory overhead control account
5.
Question: 1916 The amount of total direct labor cost that should have been charged to all the individual
production orders worked on during January should be
1. RS. 40,000
2. RS. 33,000
3. RS. 41,000
4. RS. 55,000
5. RS. 30,000
Question: 1918 The January 31 balance of work in progress control account should be
1. RS. 36,000
2. RS. 75,000
3. RS.76,000
4. RS. 77,000
5. RS. 35,000
Question: 1919 The January 31 balance of finish Goods Control Account should be
1. RS. 25,000
2. RS. 20,000
3. RS. 5,000
4. RS. 10,000
5. RS. 30,000
Question: 1932 The cost of goods sold during January was
1. RS. 40,000
2. RS. 10,000
3. RS. 20,000
4. RS. 30,000
5. RS. 50,000
Question: 1943 The amount of under-applied or over-applied cost for January
1. Under-applied by RS. 1,000

2. under-applied by rs. 2,000
3. over-applied by RS. 1,000
4. Over-applied by RS. 2,000
5. Neither under-applied nor over-applied
Question: 1955 in flexible budgeting
1. statements included in the budget report vary from period to period

2. budget standards may be adjusted at will
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3. reporting dates vary according to the activity level reported upon
4. planned activity level is adjusted to the actual activity level before the budget comparison report is
prepared
5.
1891 . A 1895 . C 1897 . C 1913 . B 1916 . B 1918 . A 1919 . E 1932 . C 1943 . B 1955 .
D
Question: 1963 The fixed-variable cost classification has a special significance in the preparation of
1. Flexible budget
2. Master budget
3. cash budget
4. capital budget
5.
Question: 1966 If a company wishes to establish a factory overhead budget system in levels, it should prepare a
1. Flexible budget
2. Master budget
3. cash budget
4. Fixed budget
5.
Question: 1968 Of little or no relevance in evaluating the performance of an activity would be
1. Flexible budget
2. Flexed budget
3. difference between planned and actual results
4. planning and control of activities
5.
Question: 1994 The budget for a specific activity level during a year was Rs. 50,000, while actual costs for the
same period was Rs. 45,000. Considering these facts, it can be said that the plant manager has done a better
than expected job in controlling the costs if
1. the cost is variable and actual production was 80% of budgeted production
2. the cost is variable and actual production was 90% of budgeted production
3. the cost is variable and actual production equaled budgeted production
4.
5.
Question: 1997 THE budget that is set first and all the other budgets are subordinate to it, is
1. Cash budget
2. Master budget
3. capital expenditure budget
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4. Budget for the key factor
5. sales budget
Question: 1999 The success of a flexible budget depends upends upon careful study and classification of
expenses into
1. historical and predetermined

2. manufacturing, administrative and selling is
3. fixed, variable and semi-variable
4.
5.
Question: 2000 one of the most important tools of cost planning is
1. cost sheet
2. unit cost
3. direct cost
4. budget
5.
Question: 2001 A is a prediction of what will happen as a result of a given set of circumstances
1. Forecast
2. Budget
3. Marginal cost
4. None of these
5.
Question: 2002 A budget which lays more stress on control aspect is a an
1. operating budget
2. responsibility budget
3. flexible budget
4. financial budget
5.
Question: 2003 which of the following is usually a long-term budget
1. Sales budget
2. cash budget
3. capital expenditure budget
4. fixed budget
1963 . A 1966 . A 1968 . D 1994 . C 1997 . D 1999 . C 2000 . D 2001 . A 2002 . B 2003
.C
Question: 2004 A budget representing fixed assets expenditure during the budget period is
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1. Fixed budget
2. Capital expenditure budget
3. Long term cash budget
4. Master budget
5.
Question: 2005 The budgeted fixed cost is
1. RS. 30,000
2. RS. 40,000
3. RS. 50,000
4. RS. 80,000
5.
Question: 2006 The standard volume per month on which the budgeted overhead rate is based is
1. 3,000 tons
2. 5,000 tons
3. RS. 5,500 tons
4. 7,000 tons
5.
Question: 2008 The budgeted fixed overhead cost per ton is
1. RS. 10
2. RS. 20
3. RS.21.36
4. RS. 17.14
5.
Question: 2009 The amount of overhead absorbed in March is
1. RS. 80,000
2. RS. 1,20,000
3. RS. 1,10,000
4. RS. 1,17,500
5.
Question: 2010 The expenditure variance in March is
1. RS. 7,500(A)
2. RS.12,500(A)
3. RS. 10,000(A)
4. Nil
5.
Question: 2011 Total overhead variance in March is
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1. RS. 7,500
2. RS. 12,500
3. RS. 10,000
4. RS. 20,000
5.
Question: 2012 What is the raw material cost per unit at the actual production level
1. RS. 10.08
2. RS. 16.80
3. RS. 8.40
4. None of these
5.
Question: 2013 What is the total cost of direct labor at actual production level
1. RS. 3,00.000
2. RS. 2,40,000
3. None of these
4.
5.
Question: 2014 What is the fixed works overhead total amount when output of 1,00,000 units
1. RS. 4,00,000
2. RS. 2,40,000
3. RS. 6,00,000
4. None of these
2004 . B 2005 . C 2006 . B 2008 . A 2009 . C 2010 . B 2011 . A 2012 . A 2013 . C 2014 .
B
Question: 2015 What is the fixed works overhead per unit when output is 60,000 units
1. RS. 6
2. RS. 7
3. RS. 8
4. None of these
5.
Question: 2016 What is the variable works overhead per unit at actual production level
1. RS. 4
2. RS. 3
3. RS. 2
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4. None of these
5.
Question: 2017 what is the total administrative overhead per unit at actual production level
1. RS. 2.45
2. RS 1.90
3. RS. 1,60
4. None of these
5.
Question: 2018 what is the total selling overhead per unit at 60,000 output
1. RS 0.80
2. RS 0.90
3. RS 1.07
4. None of these
5.
Question: 2019 what is the prime cost at 60,000 output level
1. RS 13.58
2. RS 13.48
3. RS.18.00
4. None of these
5.
Question: 2042 production required in the month of July 1996 is
1. 1,100 units
2. 1,150 units
3. 1,350 units
5.
Question: 2045 production required in the month of August 1996 is
1. 1,100 units
2. 1,150 units
3. 1,350 units
4. None of these
5.
Question: 2048 production required in the month of September 1996 is
1. 1,400 units
2. 1,150 units
3. 1,850 units
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4. None of these
5.
Question: 2049 production required in the month of October 1996 is
1. 1,800 units
2. 2,000 units
3. 2,200 units
4. None of these
5.
Question: 2051 production required in the month of November 1996 is
1. 1,800 units
2. 2,200 units
3. 2,400 units
4. None of these
2015 . D 2016 . A 2017 . A 2018 . C 2019 . B 2042 . A 2045 . D 2048 . B 2049 . C 2051
.C
Question: 2052 production required in the month of December 1996 is
1. 1,800 units
2. 2,200 units
3. 2,400 units
4. None of these
5.
Question: 2054 production required for the six months ending December 1996 is
1. 11,000 units
2. 2,200 units
3. 2,400 units
4. None of these
5.
Question: 2057 Closing stock at the end of December will be
1. 1,000 units
2. 1,100 units
3. 1,150 units
4. None of these
5.
Question: 2060 The cost of product as determined under standard cost system is
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1. fixed cost
2. historical cost
3. direct cost
4. pre-determined cost
5.
Question: 2061 In evaluating deviations of actual from standard cost, the probable technique used is
1. variable regression
2. variance analysis
3. trend analysis
4. linear progression
5.
Question: 2063 The type of standard that is best suited from cost control point of views is
1. Theoretical standard
2. Expected standard
3. Normal standard
4. Basic standard
5.
Question: 2069 which of the following standards can be attained under the most favorable conditions possible
1. Theoretical standard
2. Expected standard
3. Normal standard
4. Basic standard
5.
Question: 2071 one purpose of standard costs may be described as
1. promoting and measuring performance

2. setting costs of manufacture
3. controlling and reducing costs
4. simplifying production operations
5.
Question: 2072 A company using theoretical standard cost system should expect that
1. most variances will be strongly motivated to attain the standards

2. employees will be strongly motivated to attain the standards
3. a large incentive bonus will be paid
4. costs will be controlled better if lower standards were used
5.
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Question: 2077 A company controls its production costs by comparing its actual monthly production cost with
the expected levels. Any significant deviations from these expected levels are investigated and evaluated as a
basis for corrective action. The quantitative technique that is most probably being used is
1. time series or trend regression analysis

2. differential calculus
3. standard cost variance analysis
4. correlation analysis
2052 . D 2054 . B 2057 . A 2060 . D 2061 . B 2063 . B 2069 . A 2071 . C 2072 . A 2077 .
C
Question: 2077 A company controls its production costs by comparing its actual monthly production cost with
the expected levels. Any significant deviations from these expected levels are investigated and evaluated as a
basis for corrective action. The quantitative technique that is most probably being used is
1. time series or trend regression analysis

2. differential calculus
3. standard cost variance analysis
4. correlation analysis
5.
Question: 2080 In standard costing system, labor rate variance is obtained by multiplying the
1. actual rate by the difference between actual hours and standard hours
2. actual hours by the difference between actual rate and standard rate
3. standard rate by the difference between standard hours and actual hours
4.
5.
Question: 2082 if standard hours are 400 @Re 1 per hour and actual hours are 380 @ Rs. 1.25 per hour, the
labor rate variance is
1. Rs. 20(Favorable)
2. RS.25(FAVOURABLE)
3. RS. 100(Adverse)
4. RS. 95 (Adverse)
5. None of these
Question: 2084 Labor efficiency variance in the above Q.3.10 is
1. RS. 20(Favorable)
3. RS. 100 (unfavorable)
4. RS. 95 (unfavorable)
5. None of these
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Question: 2092 in standard costing, the material price variance is obtained by multiplying the
1. actual price by the difference between actual quantity purchased and standard quantity allowed
2. actual quantity consumed by the difference between actual price and standard price
3. standard price by the difference between standard quantity purchased and standard quantity allowed
4. standard quantity by the difference between actual price and standard price
5.
Question: 2101 if actual material cost is 900 units at Rs. 8 per unit and standard material cost in 1,000 units at
RS. 6 per unit, the material cost variance is
1. RS. 2,400 (Favorable)

2. RS. 2,400(Adverse)
3. R.s. 1,200 (Favorable)
4. RS. 1,200 (Adverse)
5.
Question: 2102 The material price variance in the above Q. 3.13 is
4. RS. 2,400(Favorable)
5.
Question: 2103 Material usage variance in the above Q. 3.13 is
1. RS.600(Favorable)
2. Rs. 1,000(Adverse)
4. R.s. 2,400(Favorable)
5.
Question: 2106 standard costing will produce the same financial statement results as actual or conventional
costing when standard cost variances are distributed to
1. cost of goods sold

2. income or Expense account
3. cost of goods sold and inventory
4. a balance sheet account
5.
Question: 2107 Material mix variance is a sun-variance of
1. Material cost variance

2. Material price variance
3. Material quantity variance
4. Material yield variance
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5.
Question: 2109 Material cost variance is RS. 550(A) and material price variance RS. 150(F), the material usage
variance should be
1. RS. 400(A)
2. RS. 700(A)
3. RS. 400(F)
4. RS. 700(F)
2072 . A 2077 . C 2080 . B 2082 . D 2084 . A 2092 . B 2101 . D 2102 . C 2103 . A 2106 .
C 2107 . C 2109 . B
Question: 2110 Overhead Budget variance is a sub-variance of
1. overhead volume variance

2. overhead efficiency variance
3. overhead cost variance
4. None of these
5.
Question: 2111 idle time a variance is a sub-variance of
1. overhead efficiency variance

2. Labor cost variance
3. Labor time variance
4. Labor efficiency variance
5.
Question: 2112 Material price variance is Rs. 300(A), material mix variance RS. 150(A) and material sub-usage
variance is RS. 50(A). The material cost variance is
1. RS. 400(A)
2. RS. 450(A)
3. RS. 500(A)
5.
Question: 2113 in Q.322 above, the material quantity variance is
1. RS. 50(A)
2. RS. 100(A)
3. RS. 300(A)
4. RS. 250(A)
5.
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Question: 2114 Overhead budget variance is RS. 700(A), overhead efficiency variance is RS. 300(F).what is the
amount of variable overhead cost variance
1. RS. 1,000(F)
2. RS. 400(A)
3. RS. 400(F)
4. RS. 1,000(A)
5.
Question: 2115 The type of variance not computed for factory overhead is
1. controllable
2. volume
3. equivalent production
4. idle capacity
5.
Question: 2116 standard costing can be used along with
1. Marginal costing
2. Absorption costing
3. job and process costing
4. All of the above
5.
Question: 2117 standard cost are useful in all of the following except
1. reducing costs
2. speeding up preparation of operating reports
3. establishing records
4. costing inventories
5.
Question: 2118 At the end of a financial year Hot shot company had several substantial variances from
standard variable manufacturing costs the one for which there is the strongest justification for allocation
between inventories and cost of goods sold is the one attributable to
1. additional costs of raw materials acquired under a speculative purchase contract

2. a breakdown of equipment
3. increased labor rates won by the union as a result of strike during the year
4. overestimates of production activity for the period resulting from failure to predict an unusual decline
in the market for the company' s product
5.
Question: 2119 controllable variances are best disposed of by transferring to

2. inventories of work-in progress and finished goods
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3. cost of goods sold and inventories
4. costing profit and Loss A/c
2107 . C 2109 . B 2110 . C 2111 . D 2112 . A 2113 . B 2114 . B 2115 . C 2116 . D 2117 .
C 2118 . C 2119 . D
Question: 2120 Uncontrollable variances are best disposed of by transferring to

2. inventories of work-in -progress and finished goods
3. cost of goods sold and inventories
4. costing profit and Loss A/c
5.
Question: 2126 overhead cost variance may be analyzed into
1. two variances
2. three variances
3. four three variances
4. any of the above
5.
Question: 2127 Which of the following statement best explains the difference between standard costing and
budgetary controls
1. Budget is a projection of financial accounts whereas standard cost is a projection of cost accounts
2. variances are analyzed under standard costing but not under budgetary control
3. The budget, as a statement of expected costs, is used for forecasting of finance, if certain performances
are achieved
4. Budgetary control is more intensive than standard costing
5.
Question: 2128 Fixed overhead expenditure variance is the difference between
1. Budgeted overhead and actual overhead

2. Standard overhead and actual overhead
3. Absorbed overhead and budgeted overhead
4. Absorbed overhead and standard overhead
5.
Question: 2129 Variable overhead expenditure variance is the difference between
1. Budgeted overhead and actual overhead

2. Standard overhead and actual overhead
3. Absorbed overhead and budgeted overhead
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4. Absorbed overhead and standard overhead
5.
Question: 2130 Calendar variance is a sub-variance of
1. Expenditure variance
2. Efficiency variance
3. variable overhead cost variance
4. volume variance
5.
Question: 2131 Total sales margin variance is the difference between
1. Actual profit and standard profit

2. Actual profit and budgeted profit
3. Actual sales and budgeted sales
4. None of these
5.
Question: 2132 which of the following variance id always adverse
1. sales margin mix variance

2. Fixed overhead capacity
3. idle time variance
4. None of these
5.
Question: 2133 which of the following variances is always favorable
1. overhead volume variance

2. sales value mix variance
3. calendar variance
4. None of these
5.
Question: 2134 sales volume variance is RS 9,000(F)and sales value variance is RS 5,000(F). what are the sales
price variance RS 5,000(F)what is the sales price variance
1. RS. 14,000(F)
2. RS. 4,000(A)
3. RS. 4,000(F)
4. None of these
5.
2120 . C 2126 . D 2127 . C 2128 . A 2129 . B 2130 . D 2131 . B 2132 . D 2133 . D 2134 .
B
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Question: 2135 Fixed overhead cost variance is expenditure variance is RS 200(A), calendar variance RS
500(F).what is the volume variance
1. RS. 2,700(A)
2. RS. 1,900(A)
3. Rs. 2,200(A),
4. Rs. 2,500(f)
5.
Question: 2136 what is the material price variance as per Q. 3.41
1. RS 400(F)
2. RS 400(A)
3. RS 440(F)
4. RS 440(A)
5.
Question: 2137 What is the material quantity variance in Q 3.41
1. RS 960(A)
2. RS 960(f)
3. RS 1,000(A)
4. RS 1,000(F)
5.
Question: 2138 The material price variance in Q 3.46 is
1. RS. 100(Adverse)
3. RS. 110(Adverse)
5. None of the preceding responses is correct
Question: 2139 Material mixture variance in Q 3,46 is
1. Rs 110(Adverse)
2. RS. 100 (Favorable)
3. RS. 210(Adverse)
4. Rs. 408 (FAVOURABLE)
5. cannot be computed from the given data
Question: 2140 Labor efficiency variance in Q 3,46 is
1. ES. 152(Adverse)
3. RS. 560(Adverse)
4. RS 480(Favorable)
5.
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Question: 2141 Labor rate variance in Q3.46 is
1. RS. 152(Adverse)
2. Rs. 560(Favorable)
3. RS. 560(Adverse)
5.
Question: 2142 Labor cost variance in Q 3.46 is
2. RS. 560(Adverse)
3. RS. 152(Adverse)
4. RS. 408(Adverse)
5. none of the preceding responses is correct
Question: 2143 in Q 3.53, what is the expenditure variance
1. RS. 2,000(A)
2. RS 4,000(A)
3. RS 2,000(F)
4. RS 4,000(F)
5.
Question: 2144 In Q 3.53, what is the volume variance
1. RS 2,000(A)
2. RS 4,000(A)
3. RS6,000(A)
4. RS 8,000(A)
2135 . C 2136 . C 2137 . C 2138 . E 2139 . E 2140 . B 2141 . A 2142 . E 2143 . A 2144 .
C
Question: 2145 Contribution margin is also known as
1. marginal income
2. gross profit
3. net income
4. new profit
5.
Question: 2146 product costs under marginal costing include
1. prime costs only

2. prime costs and variable overhead
3. prime costs and fixed overhead
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4. material cost and variable overhead
5.
Question: 2147 Period costs are
1. variable costs
2. fixed costs
3. prime cost
4. overhead costs
5.
Question: 2148 One of the primary differences between marginal costing absorption costing is regarding the
treatment of
1. direct materials
2. variable overheads
3. fixed overheads
4. prime cost
5.
Question: 2149 A costing method in which the fixed factory overheads are added to inventory valuation is
1. direct costing
2. marginal costing
3. absorption costing
4. none of these
5.
Question: 2150 Profit shown by absorption costing will tend to exceed profit shown by marginal costing
method if
1. units produced exceed units sold

2. variable manufacturing costs decreases
3. units sold exceeds units produced
4. fixed manufacturing costs decrease
5.
Question: 2151 Absorption costing differs from marginal costing in the
1. fact that standard costs can be used with absorption costing but not with marginal costing
2. amount of fixed costs that will be incurred
3. kinds of activities for which each can be used
4. amount of costs assigned to individual units of products
5.
Question: 2152 Under the marginal costing concept, unit product cost would most likely be increased by
1. a decrease in the number of units produced
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2. an increase in the number of units produced
3. an increase in the commission paid to salesman for each unit sold
4. an increase in the remaining useful life of factory machinery depreciated on written down value
method
5.
Question: 2153 Contribution margin is equal to
1. sales - fixed cost - profit

2. profit + variable cost
3. fixed cost - loss
5.
Question: 2154 Reporting under marginal costing is accomplished by
1. eliminating the work in progress inventory account

2. including only variable costs in income statement
3. matching variable costs against revenue and treating fixed costs as period costs
4. treating all costs as period costs
5.
C 2145 . A 2146 . B 2147 . B 2148 . C 2149 . C 2150 . A 2151 . D 2152 . C 2153 .
C 2154 . C
Question: 2155 Profit / Volume ratio is an indicator of
1. the volume of sales

2. the volume of profit
3. the rate at which goods are sold
4. the of profit
5. all of these
Question: 2156 There will be no difference in profit as shown by marginal costing and that of absorption
costing when
1. opening and closing stock of finished goods remain constant

2. closing stock of finished goods is more than it s opening stock
3. opening stock of finished goods is more than its closing stock
5.
Question: 2157 when fixed cost id Rs. 3,000 and sales RS.50,000, the P/V ratio will be
1. 14%
2. 20%
3. 25%
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4. p/v ratio cannot be computed from the data given
5.
Question: 2158 when p/v ratio is 40% and sales value RS 10,000 the variable cost will be
1. RS. 4,000
2. RS. 6000
3. RS. 10,000
4. variable cost cannot be calculated from the data given
5.
Question: 2159 if net profit is 10% and p/v ratio is 50%, the margin of safety will be
1. 10%
2. 20%
3. 50%
4. margin of safety cannot be computed
5.
Question: 2160 The margin of safety may be improved by
1. increasing sales volume

2. increasing selling price
3. lowering variable cost
4. lowering fixed costs
5. All of these
Question: 2161 an item whose entire amount is usually a differential cost is
1. factory overhead
2. period cost
3. direct cost
4. conversion cost
5.
Question: 2162 As part of the data presented on support of a proposal to increase the production of car radios,
the sales manager of XYZ Electronics reported the total additional cost required for the proposed increased level
of production the increase in total cost is known as
1. opportunity
2. out-of-pocket cost
3. controllable cost
4. differential cost
5.
Question: 2163 Alto palo company has temporary unused production capacity. the idle plant facilities can be
used to manufacture a low margin item. the low margin item should be produced, if it can sold for more than it’s
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1. fixed costs
2. variable costs
3. prime costs
4. indirect costs
5.
Question: 2164 Cost-volume-profit analysis is most important for the determination of the
1. volume of operations necessary to break even

2. variable revenues necessary to equal fixed costs
3. relationship between revenues and costs at various level of operations
4. sales revenue necessary to equal fixed costs
5.
2155 . D 2156 . A 2157 . B 2158 . B 2159 . B 2160 . E 2161 . C 2162 . D 2163 . B 2164 .
C
question: 2165 if net profit is 10% and p/v ratio is 50%, the margin of safety will be
1. 10%
2. 20%
3. 50%
4. margin of safety cannot be computed
5.
Question: 2166 The alternative that would decrease the contribution margin per unit t he most is a 20%
1. decrease in selling price

2. increase in selling price
3. increase in variable costs
4. decrease in variable cost
5.
Question: 2167 when referring to margin of safety, one has the following in mind
1. the excess of budgeted or actual sales over fixed costs

2. the excess of actual sales over break-even sales
3. the excess of actual sales over budgeted sales
4. the excess of sales revenue over variable cost
5.
Question: 2168 The conventional break-even analysis does not assume that
1. selling price per unit will remain fixed

2. total fixed costs remain the same
3. variable cost per unit will vary
4. productivity per worker will remain unchanged
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5.
Question: 2169 if fixed costs decrease while variable cost per unit remain constant, the new break-even point
on relation to the old break-even point will be
1. indeterminate
2. unchanged
3. higher
4. lower
5.
Question: 2170 if fixed costs decrease while the variable cost per unit remain constant, the new contribution
margin in relation to old contribution margin will be
1. indeterminate
2. unchanged
3. higher
4. lower
5.
Question: 2171 when margin of safety is 20% and contribution sales ratio is 60% the profit will be
1. 30%
2. 33% 1/3%
3. 12%
5.
Question: 2172 when fixed cost is RS. 20,000 and margin of safety is RS.10,000, the p/v ratio will be
1. 200%
2. 50%
3. 33%
5.
Question: 2173 when sales jumped from RS. 4,00,000 and profit increased by Rs. 40,000, the p/v ratio is
1. 7.5%
2. 10%
3. 40%
5.
Question: 2174 when total fixed cost is RS. 50,000 and variable cost to sales is 75%, the break-even point id
1. RS. 37,500
2. RS. 12,500
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3. RS. 2,00,000
4. cannot be determined
5.
2165 . B 2166 . A 2167 . B 2168 . C 2169 . D 2170 . B 2171 . C 2172 . D 2173 . C 2174 .
C
Question: 2175 on sales of RS.2,00,000. fixed cost is RS. 30,000 and p/v ratio is 40% what is the profit
1. RS50,000
2. RS. 80,000
3. RS. 12000
4. None of these
5.
Question: 2176 In the chart given in 3.32 above, the horizontal line OL represents
1. sales
2. fixed cost
3. total cost
4. profit
5.
Question: 2177 In break-even chart, x-axis represents
1. value of sales in rupee value

2. volume of sales in units
3. volume of production in units
4. production capacity in percentage
5. Any of these
Question: 2182 In break-even chart, Y-axis represents
1. volume of sales in units

2. volume of sales in rupees
3. cost and sales in rupees
4. value of production in rupees
5. Any of these
Question: 2187 when it is desired to read contribution margin in break-even chart, than
1. variable cost should be first plotted and fixed cost should be superimposed thereon
2. fixed cost should not be first plotted and variable cost should be superimposed thereon
3. fixed cost should not be plotted at all in the chart
4.
5.
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Question: 2206 when sales are RS. 8000 and P/V is 80% the amount of variable cost is
1. RS. 64,000
2. RS. 16,000
3. Rs. 48,000
4. cannot be known
5.
Question: 2210 In order to earn a profit of RS. 10,000, when fixed cost is RS. 20,000 and P/v ratio 20% the
amount of sales should be
1. RS. 40,000
2. RS. 30,000
3. RS. 1,00,000
4. RS. 1,50,000
5.
Question: 2212 WHEN PROFIT CHANGES BY R.s. 20,000, The sales changes by RS. 25,000, the P/V ratio is
1. 20%
2. 80%
3. 25%
4. cannot be calculated
5.
Question: 2213 when sales volume increases
1. break-even point increases

2. total profit will increase
3. total loss will increase
4. All of the above
5.
Question: 2216 which of the following would cause the greatest increase in the unit contribution margin
1. 20% decrease in fixed cost

2. 20% increase in selling price
3. 20% decrease in variable cost
4.
5.
2175 . A 2176 . A 2177 . E 2182 . C 2187 . A 2206 . C 2210 . D 2212 . B 2213 . B 2216
.B
Question: 2217 what does area ALO represent in diagram in Q. 3.43
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1. profit
2. Fixed cost
3. variable cost
4. contribution
5.
Question: 2220 what does area ALO represent in diagram in Q. 3.43
1. profit
2. Loss
3. contribution
4.
5.
Question: 2224 what is represented by CD in diagram in Q. 3.43
1. key factors
2. variable cost
3. Contribution
4. Margin of safety
5.
Question: 2228 which of the following is NOT an assumption of break-even chart
1. Fixed cost does not change in total amount

2. variable cost does not change in total amount
3. selling price does not change per unit
4. company has no stocks
5.
Question: 2233 In calculating cash break-even point, which costs are taken into account
1. Fixed cost requiring cash

2. variable costs requiring cash
3. Both fixed and variable costs requiring cash
4. cash fixed cost and all variable costs including credit
5.
Question: 2237 which of the following is not depicted on a break-even chart
1. profit/Loss at different level of output

2. sales to earn given profit
3. contribution
4. P/V ratio
5.
Question: 2239 In a break-even chart, angle of incidence is formed by the inter-section of
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1. sale line and variable cost line
2. sale line and total cost line
3. variable costs and fixed cost lines
4. variable cost and total cost lines
5.
Question: 2271 who has the authority to investigate and regulate all matters of account connected with the
police, and all persons concerned shall be bound to give reasonable aid and facilities to conducting such
investigations and to confirm to his orders consequent thereto
1. provincial police officer

2. capital city police officer
3. city police officer
4. All of these
5.
Question: 2544 A harmonium enclosed in a sheath is called
1. hormocyst
2. hormogonium
3. trichome
4. trichogyne
5.
Question: 3807 A debit balance on Amitie's account in your sales ledger means that
1. Amitabh owes you the money

2. you owe Amitabh the money
3. Amitabh has just paid you that amount of money
4. Amitabh has returned that amount of goods to you
5.
2217 . A 2220 . B 2224 . D 2228 . B 2233 . C 2237 . D 2239 . B 2271 . D 2544 . A 3807 .
A
Question: 3811 A debit balance on the rates account after the yearly transfer to the profit and loss account
indicates
1. an asset and an accrual

2. an asset and a prepayment
3. a liability and an accrual
4. a liability and a prepayment
5.
Question: 3820 which one of the following normally has a debit balance?
1. The capital account
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2. A creditor's account
3. The motor vehicles account
4. A loan account
5.
Question: 3822 which one of the following normally has a debit balance?
1. The capital account

2. A creditor's account
3. The motor vehicles account
4. A loan account
5.
Question: 3823 Which of the following normally has a credit balance?
1. The machinery account

2. The purchases account
3. The stock account
4. The sales account
5.
Question: 3830 which one of the following statement is correct?
1. A proprietor's will remain constant if he only withdraws this Net profit each year and does not
introduce any new capital.
2. A proprietor's capital will increase if his drawings are higher than his Net profit and he does not
introduce any new capital.
3. A proprietor's capital will decrease if his Net profit is greater than his drawings and does not introduce
any new capital
4. A proprietor's capital will remain constant if he only withdraws his Net profit each year, but also
introduces new capital.
5.
Question: 3832 Gross profit equals
1. sales minus closing stock

2. purchases minus closing stock
3. nit profit minus expenses
4. sales minus cost of goods sold
5.
Question: 3835 Cost of sales equals
1. sales minus purchases

2. purchases minus returns out plus closing stock
3. sales plus opening stock minus (purchases plus closing stock)
4. opening stock minus closing stock minus returns out
5.
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Question: 3836 Net profit equals
1. gross profit minus expenses

2. sales minus cost of sales
3. sales minus expenses
4. capital minus expenses
5.
Question: 3837 A man buys Rs. 40,000 worth of goods and sells of them for R.s. 50,000. His gross profit is
1. Rs. 10,000
2. Rs. 20,000
3. Rs. 30,000
4. Rs. 40,000
5.
Question: 3839 If sales are Rs. 10,000, expenses Rs. 2,000 and net profit is 10% of sales, the gross profit is
1. Rs. 3,000
2. Rs. 9,000
3. Rs. 10,100
4. Rs. 11,000
5.
3811 . B 3820 . C 3822 . C 3823 . D 3830 . A 3832 . D 3835 . D 3836 . A 3837 . B 3839 .
A
Question: 3840 If the gross profit is Rs. 5000 and the net profit is 25% of the gross profit ,the expenses must be
1. Rs. 1,250
2. Rs. 3,750
3. Rs. 4,150
4. Rs. 6,250
5.
Question: 3841 If sales are Rs. 6,000, gross profit is 20% of sales and net profit is 10% of sales the expenses are
1. Rs. 600
2. Rs. 1,200
3. Rs. 2,400
4. Rs. 4,800
5.
Question: 3842 An operating statement is similar to a
1. trial balance
2. balance sheet
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3. trading profit and loss account
4. bank reconciliation statement
5.
Question: 3843 Net sales equals’ sales minus
1. returns outwards
3. returns inwards
4. carriage on sales
5.
Question: 3844 The turnover is
1. Rs. 99,000
2. Rs. 99,500
3. Rs. 1,00.500
4. Rs. 1,01,000
5.
Question: 3845 The gross profit as a percentage of net sales is approximately
1. 10%
2. 20%
3. 30%
4. 40%
5.
Question: 3846 The net cost of purchases for the year was
1. Rs. 69,000
2. Rs. 70.000
3. Rs.71,000
4. Rs.73,000
5.
Question: 3847 Returns outwards amounted to
1. Rs. 500
2. Rs. 1,000
3. Rs. 1,500
4. Rs. 2,000
5.
Question: 3848 If the purchases had been under cast by Rs. 10,000 the gross profit would be
1. Rs. 31,500
2. Rs. 41,500
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3. Rs. 51,500
4. Rs. 61,500
5.
Question: 3849 The cost of goods sold is
1. Rs. 59,000
2. Rs. 69,000
3. Rs. 71,000
4. Rs. 89,000
5.
3840 . B 3841 . A 3842 . C 3843 . C 3844 . C 3845 . D 3846 . A 3847 . D 3848 . A 3849 .
A
Question: 3850 Net profit as a percentage of net sales is approximately
1. 5%
2. 10%
3. 15%
4. 20%
5.
Question: 3851 Expenses for the year total
1. Rs. 29,000
2. Rs. 30,000
3. Rs. 31,000
4. Rs. 32,000
5.
Question: 3852 A balance sheet is a
1. statement of debtors and creditors

2. statement of income and expenditure the year
3. statement of cash received and paid throughout the year
4. Financial statement of a business' wealth on a particular scale
5.
Question: 3853 which one of the following is fixed asset for a builder's merchant?
1. Cash
2. Stock
3. Debtors
4. Type wirer
5.
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Question: 3854 Which one of the following is garage's current asset?
1. A breakdown van
2. The managing director's private car
3. The condense in the saleroom
4. A customer's car in for repair
5.
Question: 3855 Net current assets are the same as
1. working capital
2. total assets minus current liabilities
3. fixed assets minus current liabilities
4. capital minus current liabilities
5.
Question: 3856 A proprietor's capital of
1. opening capital plus drawing minus net profit

2. total assets minus external liabilities
3. current assets minus working capital
4. opening capital plus net profit plus creditors
5.
Question: 3857 which one of the following is usually a current liability?
1. Mortgage
2. Bank loan
3. Bank over drat
4. Rent Paid in advance
5.
Question: 3858 The percentage return on the owner's opening capital for the past year was
1. 15%
2. 20%
3. 25%
4. 30%
5.
Question: 3859 The working capital is
1. Rs. 20,000
2. Rs. 30,000
3. Rs. 50,000
4. Rs. 1,70,000
5.
Cell: +92333-4881302
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3850 . B 3851 . D 3852 . D 3853 . D 3854 . C 3855 . A 3856 . B 3857 . C 3858 . C 3859 .
A
Question: 3860 The owner's capital employed in the business at the date of the balance sheet is
1. Rs. 1,20,000
2. Rs. 1,40,000
3. RS. 1,90,000
4. Rs. 2,13,500
5.
Question: 3861 The business' external liabilities are
1. Rs. 50,000
2. Rs. 73,500
3. Rs. 1,20,000
4. Rs. 1,40,000
5.
Question: 3862 The interest on the loan paid during the year was
1. Rs. 2,500
2. RS. 5,000
3. Rs. 7,500
4. Rs. 10,000
5.
Question: 3863 The book value of the fixed assets is
1. RS. 50,000
2. RS. 1,70,000
3. RS. 2,20,000
4. RS. 2,70,000
5.
Question: 3864 The net assets figure is
1. RS. 73,500
2. RS. 1,40,000
3. RS, 1,90,000
4. RS. 2,13,500
5.
Question: 3865 The years' rent for the business is
1. RS. 1000
2. RS. 2000
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3. RS. 3000
4. RS. 4000
5.
Question: 3887 The percentage return on total assets employed was approximately
1. 9%
2. 14%
3. 20%
4. 25%
5.
Question: 3888 select your answer by means of the following code
1. if 1, 2 and 3 are correct

2. if 1 and 2 only are correct
3. if only 1 is correct
5.
Question: 3890 In a balance sheet the balance of the fixed assets accounts are usually included at
1. cost
2. book value
3. scarp value
4. replacement value
5.
Question: 3892 which one of the following would usually be regarded as a current liability?
1. A liability due for payment within 12 months

3860 . B 3861 . B 3862 . B 3863 . B 3864 . C 3865 . D 3887 . B 3888 . D 3890 . B 3892 .
A
Question: 3894 Net assets equals
1. current assets minus current liabilities

2. fixed assets minus current liabilities
3. total assets minus current liabilities
4. fictitious assets minus current liabilities
5.
Question: 3903 which one of the following not a book of original entry
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1. The cash book
2. The journal
3. The ledger
4. The sales day of book
5.
Question: 3904 Day books are used
1. because of the requirements of the law

2. to avoid numerous entries in the general ledger
3. because the double entry system would not work with- out you must
4. because the Institute of Charters Account states that you must
5.
Question: 3905 which one of the following is book of original entry and is also part of the ledger?
1. The cash book

2. The journal
3. The sales day book
4. The purchase day book
5.
Question: 3906 The main source of information for the sales day book is obtained from
1. invoices received
2. credit notes sent out
3. invoices sent out
4. credit notes sent
5. the till roll
Question: 3907 The main source of information for the purchase day book is obtained from
1. invoice received
3. credit notes received
4. debit notes sent out
5.
Question: 3908 The main source of information for the sales returns day book is obtained from
4. debit notes received
5.
Question: 3910 The main source of information for the purchase returns day book is obtained from
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2. invoices sent
4. debit notes sent out
5.
Question: 3912 The totals of the sales day book are transferred to the
1. debit side of the sales account

2. credit side of the sales account
3. debit side of the sales control account
4. journal proper
5.
Question: 3914 The totals of the purchase returns day books are transferred to the
1. debit side of the returns inwards account

2. debit side of the returns out wards account
3. credit side of the returns inwards account
4. credit side of the returns outwards account
5.
3894 . C 3903 . C 3904 . B 3905 . A 3906 . B 3907 . A 3908 . C 3910 . C 3912 . B 3914 .
D
Question: 3916 which one of the following is centered in the journal proper?
1. purchases and returns of stock

2. sales and returns of stock
3. cash transactions
4. opening entries of a new business
5.
Question: 4032 which one of the following is entered in the journal proper?
1. purchase of fixed assets for cash

2. purchase of fixed assets on credit
3. purchase of stock on credit
4. purchase of stock for cash
5.
Question: 4035 which one of the following is entered in the journal proper?
1. The sale of an asset for cash

2. The withdrawal of cash for private use
3. cash discount given to a customer
4. The correction of errors made in the ledger
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5.
Question: 4037 An entry in the journal should include
1. the name of the account to be debited

2. the name of the account to be credited
3. A description of the transaction
4.
5.
Question: 4040 A trial balance is
1. a balance of the bank account

2. The balance of the bank account
3. a rough draft of the final accounts
4. a list of the balances in the ledger
5.
Question: 4043 The main purposes of a trial balance is to
1. help balance the bank account

2. check the arithmetical accuracy of the double entry
3. help check the arithmetical accuracy of the double entry
4. help check the bank account with the bank statement
5.

5.
Question: 4051 which of the following errors would normally be revealed by a trial balance?
1. A transaction is completely omitted from the books

2. A sale to smith brothers is entered in smith and Co.Ltd. account
3. A purchase of stock for resale has been entered in an asset account
4. The sale of an asset has only been entered on one side of the books
5.
Question: 4055 A suspense account is opined when the
1. trading account does not balance

2. profit and loss account does not balance
3. trial balance does not balance
4. bank account does not balance
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5.

5.
3916 . D 4032 . B 4035 . D 4037 . A 4040 . D 4043 . C 4046 . A 4051 . D 4055 . C 4059
.D
Question: 4066 if the straight line method of depreciation is used the depreciation charge is
1. a fixed percentage of the cost of the asset each year

2. a percentage of the book value of the asset each year
3. always 10% of the cost of the asset each year
4. a fluctuating percentage of the cost of the asset each year
5.
Question: 4069 Firms charge depreciation each year
1. to ensure there is enough money in the firm to replace the asset

2. to spread the cost of the asset over its working life
3. to reduce the profit and thus reduce the dividends they can pay to shareholders
4. because the law states they must
5.
Question: 4071 which of the following assets is most likely to appreciate rather than depreciate
1. plant and machinery

2. Land and buildings
3. Motor vehicles
4. Fixtures and fittings
5.
Question: 4073 Depreciation is caused by
1. obsolescence
2. wear and tear
3. passage of time
4.
5.
Question: 4085 which of the following methods can be used to calculate depreciation?
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1. straight line
2. Reducing balance
3. revaluation
4.
5.
Question: 4092 The companies Acts state that companies' Final published Accounts must show
1. depreciation charged during past year

2. the balance on the provision for depreciation account
3. the method of calculating depreciation
4.
5.
Question: 4094 Another name for the Equal Installment method of depreciation is the
1. reducing balance method

2. sinking fund method
3. straight line method
4. revaluation method
5.
Question: 4098 An asset is purchased for Rs. 11000. The scrap value is Rs. 1,000 and it is expected to last ten
years. The amount of straight depreciation charged each year would be
1. RS. 900
2. RS. 1,000
3. RS. 1,100
4. RS. 1,200
5.
Question: 4104 A firm buys an asset for RS. 10,000 and depreciates it using the diminishing balance method.
which of the following amounts world be the second year’s depreciation charge at 10% per annum
1. RS. 800
2. RS. 810
3. RS. 900
4. RS. 1,000
5.
Question: 4107 On 1st January a firm’s loose tools are valued at RS. 4,500. A year later they are revalued at RS.
3000. The depreciation charge for the year is
1. RS. 500
2. RS. 1,000
3. RS. 1,500
4. RS. 3,OOO
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4066 . A 4069 . B 4071 . B 4073 . A 4085 . A 4092 . B 4094 . C 4098 . B 4104 . C 4107 .
C
Question: 4110 The book value of a motor van on 1st January is RS. 20,000.Two years later the book value is Rs.
10,000.. The straight line depreciation rate of charge each years is
1. 12%
2. 25%
3. 33%
4. 50%
5.
Question: 4114 The vehicles in a company's feet usually last three years. it would probably charge depreciation
on a fixed installment basis at a rate of
1. 25% per annum

2. 33% per annum
3. 50% per annum
4. 665% per annum
5.
Question: 4116 A firm buys a lathe for Rs. 20,000 on 1st January and another one for RS.24,000 on 1st July.
Deprecation is charged at the rate of 10% per annum or cost, using the basis of one month's ownership needs
one month's depreciation. The total depreciation charge on the 31 December should be
1. RS. 2,200
2. RS. 3,200
3. RS. 3,600
4. RS.4,400
5.
Question: 4119 An asset cost RS. 12,000 and is expected to last ten years, so depreciation is charged at RS.
1,200 per year. How-ever, after ten years the asset is still in use. Which of the following would be the future
charge for depreciation?
1. Continue to charge RS. 1,200per year depreciation

2. Credit profit and loss account with RS. 1,200 every year the asset continues to be in use.
3. Stop charging depreciation after the ten years
4. Reduce the depreciation charge on another asset
5.
Question: 4121 A firm's assets at total RS. 1,00,000. The total depreciation charged to date is RS.45,000. The
book value of the assets is
1. RS. 45,000
2. RS. 55,000
3. RS. 1,00,000
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4. RS. 1,45,000
5.
Question: 4125 A firm's assets at cost total Rs.1,00,000 .The total depreciation.2,40,000. charged to date is
Rs.2,40000. Depreciation was charged at the rate of 10% annum by the straight line method. It decided to
change its method to diminishing balance at 10% per annum, with retrospective effect. The total difference in
the profits over the three years would be
1. RS, 6,690
2. Rs, 6,960
3. RS. 9,660
4. RS. 9,690
5.
Question: 4174 If the provision for bad debts account is adjusted at the end of this financial year to equal 5% of
the debtors. the balance on the total debtors account at 31st December must have been
1. RS. 10,000
2. RS. 25,000
3. RS. 40,000
4. RS. 50,000
5.
Question: 4175 The nit figure for debtors which appeared in the balance sheet at the end of the previous year
was
1. RS. 47,500
2. RS. 48,000
3. RS. 51,500
4. RS. 52,500
5.
Question: 4176 If the RS. 1,000 bad debts had not been written off, the overall effect on the profit for the year
of all the entries relating to debtors, debts and provision for bad debts is
1. a decrease of TS. 1,500

2. a decrease of RS. 1,500
3. an increase of RS. 500
4. an increase of RS. 1,500
5.
Question: 4183 If the Rs. 1,000 bad debts had not been written off, the overall effect on the profit for the year
of all the entries relating to debtors, bad provision for bad debts would have been
1. nil
2. a decrease of Rs. 500
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4110 . B 4114 . B 4116 . B 4119 . C 4121 . B 4125 . B 4174 . C 4175 . A 4176 . B 4183 .
C
Question: 4186 If the Rs. 1,000 bad debts had not been written off, the overall effect on the profit for the year
of all the entries relating to debtors, bad provision for bad debts would have been
1. nil
2. a decrease of Rs. 500
5.
Question: 4190 Which one of the following statements about debtors, bad debts and provisions for bad debts
in the incorrect?
1. Debtors usually appear as a current asset in the balance in the balance sheet
2. provisions for bad debts usually have a debit balance in ledger
3. The bad debts account usually has a debit balance in the ledger
4. An increase in the provision for bad debts account will reduce the profit of the firm
5.
Question: 4191 which one of the following types of business is likely to have the largest amount of 'bad debts' ?
1. A Chinese take away

2. A newsagent
3. A bank
4. A supermarket
5.
Question: 4193 If the sales ledger control has a debit balance of RS. 39,400 it means that
1. there is RS. 39,400 in the bank account

2. customers owe you RS. 39,500
3. you owe supplies R.s. 39500
4. you owe expenses totaling RS. 39,400
5.
Question: 4197 If the purchase ledger control has a credit balance of RS. 48,000 it means that
1. your bank account is overdrawn by RS. 48,000 customers

2. customers owe you RS. 48,000
3. you owe suppliers RS. 48,000
4. you owe expenses totaling RS. 48,000
5.
Question: 4200 The total of the returns out wards for the month should be entered on the
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1. debit side of the purchase control account
2. credit side of the purchase control account
3. credit side of the sales control account
5.
Question: 4201 Additional freight costs charged control account

5.
Question: 4202 Cash discounts received should be entered on the

5.
Question: 4207 At the end of the financial year, once the balances on the control account are agreed with the
total balances from their respective ledgers, they should appear in the balance sheet as
1. fictitious assets and debentures

2. debtors' and creditors' balance
3. fixed assets and long term liabilities
4. fixed assets and share capital
5.
Question: 4210 A cherub received which has now been dishonored should be entered on the

4186 . C 4190 . B 4191 . D 4193 . B 4197 . C 4200 . A 4201 . D 4202 . C 4207 . B 4210
.D
Question: 4217 Assuming that it reconciles with the cash book, a credit balance on a bank statement on the
31st December would appear in the balance sheet as a
1. current asset
2. current liability
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3. fixed asset
4. long term liability
5.
Question: 4220 when the monthly bank statement is out which one of the following would appear?
1. cherubs written but not yet presented for payment

2. credit transfer received from customers
3. payment into the band not yet credited
4. A sales ledger balance written off as a bad debt
5.
Question: 4224 which one of the following be entered in the cash book and not on the bank statement ?
1. Bank charges
2. A dishonored cherub
3. payments into the bank but not yet credited
4. A credit transfer received from a customer
5.
Question: 4225 when drawing up a bank reconciliation statement, if you start with a debit balance as per the
bank statement, the unrepresented cherubs should be
1. added
2. subtracted
3. multiplied
4. divided
5.
Question: 4228 when drawing up a bank reconciliation statement, if you start with a debit balance in the cash
book , bank charges should be
1. added
2. subtracted
3. multiplied
4. divided
5.
Question: 4233 The petty cash is kept on the IMPREST system and the balance at the start of the month is Rs.
1,000. If petty cash expenses during the month of Rs.720 are incurred, the amount received from the cashier at
the start of the next month should be
1. Rs.280
2. Rs.720
3. Rs.1,000
4. Rs.1,720
5.
Cell: +92333-4881302
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Question: 4234 The main purpose of petty cash is
1. to pay employees wages

2. to pay suppliers for their goods
3. as change for the till
4. to pay small day to day business expenses
5.
Question: 4236 Under the immprest system the petty cash is
1. increased every week

2. reduced every week
3. always restored to the original amount
4. used up completely before being restored
5.
Question: 4237 A receipts and payments account is similar to
1. an income and expenditure account

2. a statement of affairs
3. a cash or bank account
4. a profit and loss account
5.
Question: 4238 A club's income and expenditure account performs the same function as a firm's
1. trading profit and loss account

2. balance sheet
3. bank account
4. petty cash book
5.
4217 . A 4220 . B 4224 . C 4225 . A 4228 . B 4233 . B 4234 . D 4236 . C 4237 . C 4238 .
A
Question: 4239 A club's balance sheet may be referred to as its
1. income and expenditure account

2. receipts and payments account
3. accumulated fund
4. statement of affairs
5.
Question: 4240 A club's loss is often referred to as
1. a balance
2. a deficit
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3. a surplus
4. drawing
5.
Question: 4241 The amount of member's subscriptions paid advance is
1. as asset
2. an expense
3. a liability
4. a surplus
5.
Question: 4242 If a club owned a bar, the amount of profit or made by the bar in a financial year would be
shown in the

3. balance sheet
4. bank account
5.
Question: 4243 A club's capital may be referred to as its
1. bank balance
2. assets
3. accumulated fund
4. surplus
5.
Question: 4244 A club has 100 members and the subscription is Rs.10 per year. All have paid the right amount
except three members who paid Rs.20 each because they owed for the previous year, and one member who
also paid for next year . The income from subscriptions for the year in the income and expenditure account
should be
1. Rs.960
2. Rs.1,000
3. Rs.1,030
4. Rs.1,040
5.
Question: 4245 Depreciation written off the snooker table should be entered in the
1. receipts and payments account only

2. receipts and payments account and the income and expenditure account
3. receipts and payments account and the statement of affairs
4. income and expenditure account and the statement
5.
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Question: 4246 Rs.4,000 spent on a snooker table should be entered in the

3. receipts and payments account and the statement affairs
4. income and expenditure account and the statement of affairs
5.
Question: 4247 The rate of turnover of stock is the
1. total value of turnover

2. average stock divided by the cost of sales
3. numbers of times the average stock is sold
4. average of the opening and closing stock
5.
Question: 4248 The cost of goods sold is the
1. average stock divided by the rate of turnover of stock

2. average stock multiplied by the turnover
3. rate of turnover of stock divided by the average stock
4. average stock multiplied by the rate of turnover of stock
4239 . D 4240 . B 4241 . C 4242 . B 4243 . C 4244 . B 4245 . D 4246 . C 4247 . C 4248 .
D
Question: 4249 Which one of the following is most likely to have the lowest rate of stock turn?
1. a super market
2. a greengrocer
3. a newsagent
4. a jeweler
5.
Question: 4250 If a supermarket marks up its goods for resale by 10% on cost, the gross profit made on Rs.
1,000 worth of purchased should be
1. Rs.100
2. Rs.900
3. Rs.1,000
4. Rs.1,100
5.
Question: 4252 During a year a store makes a gross profit of Rs.80,000 which is 20% of the cost of goods sold.
The sales mast therefore be
1. Rs. 4,00,000
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2. Rs. 4,80,000
3. Rs. 4,00,000
4. Rs. 1,00,000
5.
Question: 4253 During a year a store's sales are Rs.5,00,000 and expenses are 20% of the gross profit. If 25% is
added to the cost price of goods to obtain the selling price, the net profit is
1. Rs. 25,000
2. Rs. 55,000
3. Rs. 80,000
4. Rs. 1,00,000
5.
Question: 4254 A trader starts a business with Rs.10000 cash and a van worth Rs.5000. At the end of his first
year he has Rs.2000 in the bank, stock worth Rs.5,000, debtors valued Rs.2,000 and the van which is now worth
Rs.Rs.4,000. If he has withdrawn Rs.2,000 from the business during the year for private expenses, he has made
1. a loss of Rs.1,000
2. neither a profit nor a loss
3. a profit of Rs.1,000
4. a profit of Rs.2,000
5.
Question: 4257 A store's make up is the
1. gross profit expressed as a percentage of the cost of goods sold

2. gross profit expressed as a percentage of the sales
3. not profit expressed as a percentage of the cost of goods sold
4. net profit expressed as a percentage of the sales
5.
Question: 4258 A store's margin is the
1. gross profit expressed as a percentage of the cost goods sold

2. gross profit expressed as a percentage of the sales
3. net profit expressed as a percentage of the cost goods sold
4. net profit expressed as a percentage of the sales
5.
Question: 4259 A trader uses his business bank account and writes cherubs totaling Rs 25,000 for his private
use. He also takes stock valued at Rs.9,000 from the shelves for his own use, and decides to give his daughter
one of the firm's typewriters valued at Rs.1,200 as she is starting a secretarial course at the local college. His
drawings for the year total
1. Rs. 25,000
2. Rs. 26,200
3. Rs. 34,000
4. Rs. 35,200
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5.
Question: 4260 if a store's mark up is 25% the margin must be
1. 5%
2. 10%
3. 15%
4. 20%
5.
Question: 4261 Ten people formed a partnership and contributed Rs.100 each to the venture. The total capital
was used to purchase goods which were resold at a markup of 100% on cost. If expenses were 25% of sales and
the net profit was distributed equally to the partners, each partner has increased his initial capital by
1. 25%
2. 50%
3. 75%
4. 100%
5.
4249 . D 4250 . A 4252 . B 4253 . C 4254 . B 4257 . A 4258 . B 4259 . D 4260 . D 4261 .
B
Question: 4266 A firm owes Rs. 200 to trade creditors at the start in the year and Rs.300 at the end. Purchases
on credit during the year totaled Rs.10,000. If suppliers allowed a total of Rs. 500 cash discount during the year,
the amount paid so the creditors have been
1. Rs. 9,200
2. Rs. 9,400
3. Rs. 9,600
4. Rs. 9,200
5.
Question: 4267 A firm's debtors fell from Rs.1,000 at the start of the year to Rs.900 at the end. the total of the
sales day book was Rs.7,900 and the cash book showed that Rs. 7,700 was received from debtors during the
year. Assuming a bad debt of Rs. 100 was written off, the cash discount allowed to credit customers during the
year must have amounted to
1. Rs. 200
2. Rs. 400
3. Rs. 700
4. Rs. 900
5.
Question: 4268 the main purpose of a manufacturing account is to find the
1. cost of overheads
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2. cost of raw materials used
3. cost of production
4. gross profit
5.
Question: 4270 Which one of the following is not an overhead?
1. cost of raw materials

2. depreciation of plant and machinery
3. rent and rates of the factory
4. foreman's wages
5.
Question: 4272 An alternative expression for indirect expenses is
1. prime cost
2. production cost
3. work in progress
4. overheads
5.
Question: 4273 Which one of the following would not be included in the prime cost?
1. manufacturing wages
2. direct power
3. direct factory expenses
4. heating and lighting of the factory
5.
Question: 4275 The prime cost consists of
1. wages plus overheads

2. materials plus overheads
3. all direct factory expenses
4. indirect factory expense
5.
Question: 4286 A bank reconciliation statement reconciles the
1. ledger with the journals

2. petty cash book with the bank account
3. bank statement with the cash book
4. day books with the bank statement
5.
Question: 4287 Assuming that it reconciles with the cash book, a credit balance on a bank statement on the
31st December would appear in the balance sheet as a
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1. current asset
2. current liability
3. fixed asset
4. long term liability
5.
Question: 4288 when the monthly bank statement is sent out which one of the following would appear?
1. cherubs written but not yet presented for payment

2. credit transfer received from customers
3. payment into the bank not yet credited
4. A sales ledger balance written off as a bad debt
4266 . B 4267 . A 4268 . C 4270 . A 4272 . D 4273 . D 4275 . C 4286 . C 4287 . A 4288 .
B
Question: 4289 work in progress at the end of the financial year is
1. included in the present year's production cost

2. not included in the present year's production cost
3. included in the previous year's production cost
4. added to the cost of raw materials
5.
Question: 4290 work in progress at the end of the financial year is
1. included in the present year's production cost

2. not included in the present year's production cost
3. included in the previous year's production cost
4. added to the cost of raw materials
5.
Question: 4291 If the prime cost is Rs. 40,000 overheads R.s. 60,000, work in progress at 1st January Rs. 10,000
and work in progress at 31st December RS. 20,000 the cost of the year's production of finished goods is
1. RS. 90,000
2. RS. 1, 00,000
3. RS. 1,10,000
4. RS. 1,30,000
5.
Question: 4292 Depreciation of plant and machinery is usually classified as
1. a financial cost
2. an overhead cost
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3. a selling cost
4. an administration cost
5.
Question: 4293 If a manufacturing company gas to pay a royalty for every unit it produces, this would probably
be classified as
1. an indirect cost
2. a direct cost
3. an overhead
4. a cost of materials
5.
Question: 4294 Which one of the following is usually classified as a variable cost in the short term?
1. cost of materials used

2. factory rates
3. factory rent
4. foreman's wages
5.
Question: 4295 which one of the following is usually classified as a fixed cost in the short term?
1. Direct labor costs

2. power for the factory machinery
3. cost of materials used
4. factory rent and rates
5.
Question: 4296 In a manufacturing firm's trading account the cost of production figure replaces the

2. closing stock of finished goods
3. purchase of finished goods
4. gross profit
5.
Question: 4297 The cost of raw materials used is
1. Rs. 5,00,000
2. Rs. 6,00,000
3. RS. 6,50,000
4. RS. 6,70,000
5.
Question: 4298 The prime cost is
1. RS. 6,00,000
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2. RS. 670,000
3. RS. 11,00,000
4. RS. 14,20,000
5.
4289 . B 4290 . B 4291 . A 4292 . B 4293 . B 4294 . A 4295 . D 4296 . C 4297 . B 4298 .
C
Question: 4299 The total factory overheads are
1. RS.2,30,000
2. RS. 3,20,000
3. RS. 14,10,000
4. RS. 14,20,000
5.
Question: 4300 The cost of the year's production of finished goods is
1. RS. 11,00,000
2. RS. 14,10,000
3. RS. 14,20,000
4. RS. 14,60,000
5.
Question: 4301 The work in progress at the start of the year was
1. RS. 10,000
2. RS. 30,000
3. RS. 40,000
4. RS. 50,000
5.
Question: 4302 The indirect wages for the year totaled
1. RS. 10,000
2. RS. 20,000
3. RS. 30,000
4. RS. 40,000
5.
Question: 4303 If the accountant had forgotten to take in to account that RS. 5,000 paid for forgotten to take
into account that RS. 5,000 paid for factory rates was for the following year, the production cost would have
been
1. RS. 14,05,000
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2. RS. 14,10,000
3. RS. 15,000
4. RS. 14,20,000
5.
Question: 4304 At the end of the financial year a partner's drawing current account are transferred to the
1. credit side of the partner's capital account

2. credit side of the partner's current account
3. debit side of the partnership bank account
4. debit side of the partner's
5.
Question: 4305 After the final accounts have been prepared, a debit balance on a partner's current account
means that the
1. partner is owed that amount by partnership

2. partnership's bank account is overdrawn
3. partner is in debt to the partnership for that amount
4. partnership has no working capital
5.
Question: 4306 If one partner received a salary which is credited to him at the end of the year, the share of the
profit available for distribution will be
1. increased
2. decreased
3. unchanged
4. non-existent
5.
Question: 4314 which one of the following would be entered in the cash book and not on the bank statement
1. Bank charges
2. A dishonored cherub
3. payment into the bank but not yet credited
4. A credit transfer received from a customer
5.
Question: 4315 when drawing up a bank reconciliation statement, if you start with a debit balance as per the
bank statement, the unprecedented cheques should be
1. added
2. subtracted
3. multiplied
4. divided
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4299 . B 4300 . B 4301 . C 4302 . C 4303 . A 4304 . D 4305 . C 4306 . B 4314 . C 4315 .
A
Question: 4316 when drawing up a bank reconciliation statement, if you start with a debit balance in the cash
book, the bank charges should be
1. added
2. subtracted
3. multiplied
4. divided
5.
Question: 4317 when the monthly bank statement is sent out which one of the following would not appear
1. Interest charged by the bank

2. A dishonored cheque
3. A direct debit
4. A payment from petty cash
5.
Question: 4318 The petty cash is kept on the Imprest system and the balance at the start of the month is RS.
1,000. If petty cash expenses during the month of RS. 720 are incurred, the amount received from the cashier at
the start of the next month should be
1. RS. 280
2. RS. 720
3. RS. 1,000
4. RS. 1,720
5.
Question: 4319 The main purpose of petty
1. to pay employees, wages

2. to pay suppliers for their goods
3. as change for the till
4. to pay small day to day business expenses
5.
Question: 4351 An analytical petty cash book
1. Lists different petty expenses under their relevant headings

2. is used instead of three column cash book
3. is not part of the double entry system
4. is always run on the imprest system
5.
Question: 4353 Under the Imprest system the cash is
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1. increased every week
2. reduced every week
3. always restored to the original amount
4. used op completely before being restored
5.
Question: 4355 A receipts and payments account is similar to
1. an income and expenditure account

2. a statement of affairs
3. a cash or bank account
4. a profit and loss account
5.
Question: 4358 A club's income and expenditure account performs the same function as a firm's
1. trading, profit and loss account

2. balance sheet
3. bank account
4. petty cash book
5.
Question: 4359 A club's balance sheet may be referred to as its

3. accumulated fund
4. statement of affairs
5.
Question: 4360 A club's capital may be referred to as its
1. bank balance
2. assets
3. accumulated fund
4. surplus
5.
4316 . B 4317 . D 4318 . B 4319 . D 4351 . A 4353 . C 4355 . C 4358 . A 4359 . D 4360 .
C
Question: 4362 A club's loss is often referred to as
1. a balance
2. a deficit
3. a surplus
4. drawings
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97
5.
Question: 4366 The amount of member's subscriptions paid in advance is
1. an asset
2. an expense
3. a liability
4. a surplus
5.
Question: 4368 I a club owned a bar, the amount of profit or loss made by the bar in a financial year would be
shown in the

3. balance sheet
4. bank account
5.
Question: 4372 A club has 100 members and the subscription is RS. 10 per year. All have paid the right amount
except three members who paid RS. 20each because they owed for the previous year, and one member who
also paid for next year. The income from subscriptions for the year in the income and expenditure account
should be
1. RS. 960
2. RS. 1,000
3. RS. 1,030
4. RS. 1,040
5.
Question: 4373 RS. 4,000 spent on a snooker table should be entered in the

5.
Question: 4374 Depreciation written off the snooker table should be entered on the

5.
Question: 4375 During the year the cash figure has increased by
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1. RS. 820
2. RS. 1,000
3. RS.1,820
4. RS.2,790
5.
Question: 4376 The accumulated fund at the beginning of the club's second year amounted to
1. RS. 820
2. RS.1,000
3. RS. 1,820
4. RS. 2,790
5.
Question: 4377 Rent owing at the end of the year amounted to
1. nil
2. RS. 50
3. RS. 350
4. RS. 400
5.
Question: 4378 Rates owing at the end of the year amounted to
1. nil
2. RS. 30
3. RS. 100
4. RS. 130
5.
4362 . B 4366 . C 4368 . B 4372 . B 4373 . C 4374 . D 4375 . B 4376 . A 4377 . B 4378 .
A
Question: 4379 The amount owed to creditors for supplies of sweets at 31 December was
1. RS. 30
2. RS. 210
3. RS. 420
4. RS. 600
5.
Question: 4381 The book value of fixed assets at 31st December amounted to
1. RS. 20
2. RS. 70
3. RS.90
4. RS. 110
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99
5.
Question: 4382 If the donations had been 'capitalized,' the accumulated fund at 31st December would have
been
1. RS. 700
2. RS. 820
3. RS. 1,520
4. RS. 1,740
5.
Question: 4383 If the donations had been 'capitalized,' the surplus would have been
1. RS. 120
2. RS. 700
3. RS.820
4. RS.1,520
5.
Question: 4384 The current assets at 31st December amounted to
1. RS. 1,000
2. RS. 1,040
3. RS. 1,070
4. RS. 1,110
5.
Question: 4386 The rate of turnover of stock is the
1. total value of turnover

2. average stock divide by the cost of sales
3. number of times the average stock is sold
4. average of the opening and closing stock
5.
Question: 4389 The cost of goods sold is the
1. average stock divided by the rate of turnover of stock

2. average stock multiplied by the turnover
3. rate of turnover of stock divided by the average stock
4. average stock multiplied by the rate of turnover of stock
5.
Question: 4392 which one of the following is most likely to have the lowest rate of stock turn?
1. A super market
2. A greengrocer
3. A news agent
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100
4. A jeweler
5.
Question: 4398 If a supermarket marks up its goods for resale by 10% on cost, the gross profit made on RS.
1,000 worth of purchased should be
1. RS. 100
2. RS. 900
3. RS. 1,000
4. RS. 1,100
5.
Question: 4399 which one of the following is most likely to have the lowest rate of stock turn?
1. A super market
2. A greengrocer
3. A news agent
4. A jeweler
5.
4379 . B 4381 . C 4382 . B 4383 . A 4384 . C 4386 . C 4389 . D 4392 . D 4398 . A 4399 .
D
Question: 4401 The amount owed to creditors for supplies of sweets at 31 December was
1. RS. 30
2. RS. 210
3. RS. 420
4. RS. 600
5.
Question: 4404 During a year a store makes a gross profit of RS. 80,000 which is 20% of the cost of goods sold
The sales mast therefore be
1. RS. 4,000,000
2. 4,80,000
3. RS. 5,20,000
4. RS. 1,00,000
5.
Question: 4411 During a year a store's sales are R.s. 5,00,000 and expenses are 20% of the gross profit. If 25% is
added to the cost price of goods to obtain the selling price, the net profit is
1. RS. 25,000
2. RS. 55,000
3. RS. 80,000
4. RS. 1,00.000
Cell: +92333-4881302
101
4398 . A 4399 . D 4401 . B 4404 . B 4411 . C
M
A
N
A
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4

Gat Subject (Management Sciences – Accounting-Management -Economics)

1. the price of the most recent batch in stock

Question: 933 The Last in First out (LIFO) system will

1. value stocks at current values

Question: 940 When Activity Based Costing is used it is probable the

1. all products will cost more

Question: 942 the use of backflush accounting means that

1. conversion costs cannot be carried forward in stock values

1. they are a rough and ready guide to efficiency

Question: 946 Activity Based Costing absorbs overheads into products

1. by treating most of them as long-term variable costs

Question: 948 Significant Digit Codes are

1. where some of the digits are part of the description

Question: 952 Check digit variations is

1. the process of checking invoices for correct calculations

Question: 960 Labor turnovers can be expressed as a ratio as follows

Question: 965 A cost drivers is

1. the amount of overhead caused by an activity

Question: 969 Prime cost includes

1. Direct labour,direct materials and direct expenses

Question: 974 A cost center is

1. A unit of production in relation to which costs are ascertained

Question: 981 Cost apportionments is carried out by

1. Charging each cost unit a realistic proportion of overheads

Question: 990 Overhead absorption is done so that

1. Direct material/cost unit

1. this is a reason to use predetermined overhead rate

Question: 1039 A predetermined overhead rate using machine hours as a basis

1. is calculated by dividing actual overhead by budgeted machine hours

1. means that more costs can be identified as direct

Answers to the questions of accounting on this page

1. the equivalent production for the period

Question: 1054 Double loop feedback

1. is information designed to ensures that operations conform to plans

Question: 1057 the distance A represents

1. contribution at activity level X

Question: 1061 the distance represents

1. contribution at activity level Y

1. an increase in sales value causing an increase in contribution

Question: 1078 what do the lines C and D represent

1. Fixed costs and variable costs respectively

1. the cost per unit changed with the level of activity

Question: 1085 the main purpose of cost accounting is to

Question: 1086 one of the most important tools in cost planning is

Question: 1088 the purpose of cost accounting is to provide information for

1. preparing costing P& L A/c

3. locating factors leading to wastages and losses

Answers to the questions of accounting on this page

Question: 1089 Fixed cost per unit increases when

1. variable cost per unit increases

Question: 1091 Variable cost per unit

1. varies when output varies

1. increase in fixed cost

Question: 1095 an example of variable cost is

Question: 1100 an example of fixed cost is

1. direct material cost

Question: 1102 Cost accounting concepts include all of following except

Question: 1111 Cost of goods produced includes